Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 09, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | Alpine 4 Holdings, Inc. | ||
Entity Central Index Key | 0001606698 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | true | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Ex Transition Period | true | ||
Entity Common Stock Shares Outstanding | 12,500,200 | ||
Entity Public Float | $ 463,512,811 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-55205 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 46-5482689 | ||
Entity Interactive Data Current | Yes | ||
Entity Address Address Line 1 | 2525 E Arizona Biltmore Circle | ||
Entity Address Address Line 2 | Suite 237 | ||
Entity Address City Or Town | Phoenix | ||
Entity Address State Or Province | AZ | ||
Entity Address Postal Zip Code | 85016 | ||
City Area Code | 480 | ||
Local Phone Number | 702-2431 | ||
Security 12b Title | Class A Common Stock | ||
Trading Symbol | ALPP | ||
Security Exchange Name | NASDAQ | ||
Auditor Name | MaloneBailey, LLP | ||
Auditor Location | Houston, Texas | ||
Auditor Firm Id | 206 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash | $ 3,715,666 | $ 277,738 |
Restricted cash | 0 | 444,845 |
Accounts receivable, net | 11,875,176 | 6,484,869 |
Contract assets | 877,904 | 717,421 |
Inventory, net | 25,981,905 | 2,666,602 |
Prepaid expenses and other current assets | 1,955,907 | 32,301 |
Total current assets | 44,406,558 | 10,623,776 |
Property and equipment, net | 28,096,562 | 19,299,286 |
Intangible assets, net | 36,777,245 | 7,743,084 |
Right of use assets, net | 1,460,206 | 581,311 |
Goodwill | 21,937,634 | 2,084,982 |
Other non-current assets | 357,118 | 401,744 |
TOTAL ASSETS | 133,035,323 | 40,734,183 |
CURRENT LIABILITIES: | ||
Accounts payable | 7,744,957 | 4,854,467 |
Accrued expenses | 5,074,006 | 2,872,202 |
Contract liabilities | 6,359,449 | 233,485 |
Notes payable, current portion | 5,690,524 | 4,281,118 |
Notes payable, related parties | 0 | 238,651 |
Convertible notes payable, current portion, net of discount of $0 and $1,343,624 | 0 | 562,242 |
Line of credit, current portion | 4,473,489 | 2,819,793 |
Financing lease obligation, current portion | 649,343 | 639,527 |
Operating lease obligation, current portion | 428,596 | 334,500 |
Total current liabilities | 30,420,364 | 16,835,985 |
Notes payable, net of current portion | 8,426,105 | 15,201,450 |
Convertible notes payable, net of current portion | 0 | 1,100,635 |
Line of credit, net of current portion | 5,640,051 | 0 |
Financing lease obligations, net of current portion | 15,319,467 | 15,687,176 |
Operating lease obligations, net of current portion | 1,066,562 | 269,030 |
Deferred tax liability | 51,308 | 428,199 |
TOTAL LIABILITIES | 60,923,857 | 49,522,475 |
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized | 0 | 0 |
Additional paid-in capital | 131,293,861 | 30,991,978 |
Accumulated deficit | (59,200,693) | (39,795,401) |
Total stockholders' equity (deficit) | 72,111,466 | (8,788,292) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 133,035,323 | 40,734,183 |
Series B Preferred Stock | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized | 5 | 5 |
Series C Preferred Stocks | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized | 0 | 171 |
Series D Preferred Stocks | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Preferred stock, $0.0001 par value, 5,000,000 shares authorized | 7 | 0 |
Common Class A | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Class A Common stock, $0.0001 par value, 195,000,000 shares authorized, 161,798,817 and 126,363,158 shares issued and outstanding at December 31, 2021 and 2020 | 16,182 | 12,636 |
Common Class B | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Class A Common stock, $0.0001 par value, 195,000,000 shares authorized, 161,798,817 and 126,363,158 shares issued and outstanding at December 31, 2021 and 2020 | 854 | 902 |
Common Class C | ||
STOCKHOLDERS' EQUITY (DEFICIT): | ||
Class A Common stock, $0.0001 par value, 195,000,000 shares authorized, 161,798,817 and 126,363,158 shares issued and outstanding at December 31, 2021 and 2020 | $ 1,250 | $ 1,417 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument, Unamortized Discount | $ 0 | $ 1,343,624 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 100 | 100 |
Preferred Stock, Shares Issued | 5 | 5 |
Preferred Stock, Shares Outstanding | 5 | 5 |
Series C Preferred Stocks | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 2,028,572 | 2,028,572 |
Preferred Stock, Shares Issued | 10,149 | 1,714,286 |
Preferred Stock, Shares Outstanding | 10,149 | 1,714,286 |
Series D Preferred Stocks | ||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 |
Preferred Stock, Shares Authorized | 1,628,572 | 1,628,572 |
Preferred Stock, Shares Issued | 78,674 | 78,674 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Class C | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 15,000,000 | 15,000,000 |
Common Stock, Shares, Issued | 12,500,200 | 14,162,267 |
Common Stock, Shares, Outstanding | 12,500,200 | 14,162,267 |
Common Class A | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 195,000,000 | 195,000,000 |
Common Stock, Shares, Issued | 161,798,817 | 126,363,158 |
Common Stock, Shares, Outstanding | 161,798,817 | 126,363,158 |
Common Class B | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 8,548,088 | 9,023,088 |
Common Stock, Shares, Outstanding | 8,548,088 | 9,023,088 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Revenues, net | $ 51,640,813 | $ 33,454,349 |
Costs of revenues | 43,942,815 | 28,090,722 |
Gross Profit | 7,697,998 | 5,363,627 |
Operating expenses: | ||
General and administrative expenses | 27,889,130 | 9,695,891 |
Research and development | 1,464,918 | 0 |
Impairment loss of intangible asset and goodwill | 367,519 | 1,561,600 |
Total operating expenses | 29,721,567 | 11,257,491 |
Loss from operations | (22,023,569) | (5,893,864) |
Other income (expenses) | ||
Interest expense | (3,834,742) | (5,463,597) |
Change in value of derivative liability | 0 | 2,298,609 |
Gain on extinguishment of debt | 803,079 | 344,704 |
Gain on forgiveness of debt | 5,987,523 | |
Change in fair value of contingent consideration | 0 | 500,000 |
Impairment loss on equity investment | (1,350,000) | 0 |
Other income | 635,526 | 71,224 |
Total other income (expenses) | 2,241,386 | (2,249,060) |
Loss before income tax | (19,782,183) | (8,142,924) |
Income tax (benefit) | (376,891) | (93,051) |
Net loss | $ (19,405,292) | $ (8,049,873) |
Weighted average shares outstanding : | ||
Basic | 164,216,808 | 132,987,390 |
Diluted | 164,216,808 | 139,611,790 |
Basic loss per share | $ (0.12) | $ (0.06) |
Diluted loss per share | $ (0.12) | $ (0.06) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Total | Series C Preferred Stock | Class A Common Stock | Series D Preferred Stocks | Series B Preferred Stock | Class B Common Stock | Class C Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 100,070,161 | 5,000,000 | 9,955,200 | ||||||
Balance, amount at Dec. 31, 2019 | $ (11,970,142) | $ 0 | $ 10,007 | $ 0 | $ 0 | $ 500 | $ 996 | $ 19,763,883 | $ (31,745,528) |
Issuance of shares of common stock for cash, shares | 11,513,935 | ||||||||
Issuance of shares of common stock for cash, amount | 674,469 | 0 | $ 1,151 | 0 | 0 | 0 | 0 | 673,318 | 0 |
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 12,861,995 | ||||||||
Issuance of shares of common stock for convertible note payable and accrued interest, amount | 1,929,300 | 0 | $ 1,286 | 0 | 0 | 0 | $ 0 | 1,928,014 | 0 |
Issuance of shares of common stock for debt settlement, shares | 1,617,067 | 1,617,067 | |||||||
Issuance of shares of common stock for debt settlement, amount | 330,528 | 0 | $ 162 | 0 | 0 | 0 | $ 162 | 330,204 | 0 |
Issuance of shares of common stock for penalty interest, shares | 300,000 | ||||||||
Issuance of shares of common stock for penalty interest, amount | 44,700 | 0 | $ 30 | 0 | 0 | $ 0 | 0 | 44,670 | 0 |
Issuance of shares of common stock for deferred compensation, shares | 4,023,088 | ||||||||
Issuance of shares of common stock for deferred compensation, amount | 603,463 | 0 | 0 | 0 | 0 | $ 402 | $ 0 | 603,061 | 0 |
Issuance of shares of common stock for compensation, shares | 2,590,000 | ||||||||
Issuance of shares of common stock for compensation, amount | 240,093 | 0 | 0 | 0 | $ 0 | 0 | $ 259 | 239,834 | 0 |
Issuance of shares of series B preferred stock for services, shares | 5 | ||||||||
Issuance of shares of series B preferred stock for services, amount | 5 | $ 0 | 0 | 0 | $ 5 | 0 | 0 | 0 | 0 |
Issuance of shares of series C preferred stock for acquisition, shares | 1,714,286 | ||||||||
Issuance of shares of series C preferred stock for acquisition, amount | 5,848,013 | $ 171 | 0 | 0 | 0 | 0 | 0 | 5,847,842 | 0 |
Share-based compensation expense | 78,652 | 0 | 0 | 0 | 0 | 0 | 0 | 78,652 | 0 |
Beneficial conversion feature on convertible notes | 1,482,500 | 0 | 0 | 0 | 0 | 0 | 0 | 1,482,500 | 0 |
Net loss | (8,049,873) | $ 0 | $ 0 | 0 | $ 0 | $ 0 | $ 0 | 0 | (8,049,873) |
Balance, shares at Dec. 31, 2020 | 1,714,286 | 126,363,158 | 5 | 9,023,088 | 14,162,267 | ||||
Balance, amount at Dec. 31, 2020 | (8,788,292) | $ 171 | $ 12,636 | 0 | $ 5 | $ 902 | $ 1,417 | 30,991,978 | (39,795,401) |
Issuance of shares of common stock for cash, shares | 18,428,827 | ||||||||
Issuance of shares of common stock for cash, amount | 76,492,993 | 0 | $ 1,844 | 0 | 0 | 0 | 0 | 76,491,149 | 0 |
Issuance of shares of common stock for convertible note payable and accrued interest, shares | 7,384,018 | ||||||||
Issuance of shares of common stock for convertible note payable and accrued interest, amount | 1,886,896 | 0 | $ 740 | 0 | 0 | 0 | 0 | 1,886,156 | 0 |
Issuance of shares of common stock for compensation, shares | 199,018 | ||||||||
Issuance of shares of common stock for compensation, amount | 261,525 | 0 | $ 21 | 0 | 0 | 0 | 0 | 261,504 | 0 |
Issuance of shares of series C preferred stock for acquisition, amount | 6,653,309 | 0 | 0 | 143 | 0 | 0 | 0 | 6,653,166 | 0 |
Share-based compensation expense | 36,538 | 0 | 0 | 0 | 0 | 0 | 0 | 36,538 | 0 |
Beneficial conversion feature on convertible notes | 92,428 | 0 | 0 | 0 | 0 | 0 | 0 | 92,428 | 0 |
Net loss | (19,405,292) | 0 | $ 0 | 0 | 0 | 0 | $ 0 | 0 | (19,405,292) |
Conversion of Class C to Class A, shares | 1,617,067 | (1,617,067) | |||||||
Conversion of Class C to Class A, amount | 0 | $ 162 | 0 | $ 0 | $ (162) | 0 | 0 | ||
Conversion of Class B to Class A, shares | 475,000 | 475,000 | |||||||
Conversion of Class B to Class A, amount | 0 | 0 | $ 48 | 0 | 0 | $ (48) | $ 0 | 0 | 0 |
Repurchase of class C common stock, shares | 45,000 | ||||||||
Repurchase of class C common stock, amount | (185,850) | 0 | $ 0 | $ 0 | 0 | 0 | $ (5) | (185,845) | 0 |
Issuance of shares of series D preferred stock for acquisition, shares | 1,432,244 | ||||||||
Issuance of shares of common stock and warrants for acquisition, shares | 4,922,471 | ||||||||
Issuance of shares of common stock and warrants for acquisition, amount | 15,067,211 | 0 | $ 492 | $ 0 | 0 | 0 | 0 | 15,066,719 | 0 |
Conversion of series D preferred stock to Class A, shares | 1,066,868 | (1,353,570) | |||||||
Conversion of series D preferred stock to Class A, amount | 0 | $ 0 | $ 105 | $ (136) | 0 | 0 | 0 | 31 | 0 |
Conversion of series C preferred stock to Class A, shares | (1,704,137) | 1,342,390 | |||||||
Conversion of series C preferred stock to Class A, amount | 0 | $ (171) | $ 134 | $ 0 | $ 0 | $ 0 | $ 0 | 37 | 0 |
Balance, shares at Dec. 31, 2021 | 10,149 | 161,798,817 | 78,674 | 5 | 8,548,088 | 12,500,200 | |||
Balance, amount at Dec. 31, 2021 | $ 72,111,466 | $ 0 | $ 16,182 | $ 7 | $ 5 | $ 854 | $ 1,250 | $ 131,293,861 | $ (59,200,693) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (19,405,292) | $ (8,049,873) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,395,864 | 1,844,634 |
Amortization | 1,659,705 | 225,628 |
Gain on extinguishment of debt | (803,079) | (344,704) |
Gain on forgiveness of debt | (5,987,523) | 0 |
Change in fair value of derivative liabilities | 0 | (2,298,609) |
Common stock issued for services | 0 | 240,093 |
Preferred stock issued for services | 0 | 5 |
Change in fair value of contingent consideration | 0 | (500,000) |
Bad debt expense | 3,028,757 | 88,305 |
Non-cash adjustment to debt booked to interest expense | 0 | 79,211 |
Stock issued for penalties | 0 | 44,700 |
Employee stock compensation | 298,063 | 78,652 |
Amortization of debt discounts | 1,436,052 | 985,709 |
Issuance of convertible debentures for interest | 0 | 105,000 |
Operating lease expense | 412,898 | 272,262 |
Impairment loss on equity investment | 1,350,000 | 0 |
Impairment loss of intangible asset and goodwill | 367,519 | 1,561,600 |
Write off of inventory | 237,192 | 127,919 |
Change in current assets and liabilities: | ||
Accounts receivable | (4,235,353) | 3,951,827 |
Inventory | (6,795,719) | (184,766) |
Contract assets | (160,483) | (49,697) |
Prepaid expenses and other assets | (87,950) | (256,682) |
Accounts payable | 725,596 | (634,489) |
Accrued expenses | 614,399 | 940,098 |
Contract liabilities | 332,032 | 63,445 |
Operating lease liability | (429,529) | (260,565) |
Deposits | 0 | (12,509) |
Deferred tax | (376,891) | (93,051) |
Net cash used in operating activities | (25,423,742) | (2,075,857) |
INVESTING ACTIVITIES: | ||
Capital expenditures | (3,571,253) | (75,670) |
Cash paid for acquisitions | (37,324,035) | (2,513,355) |
Cash paid for equity investment | (350,000) | 0 |
Cash assumed in acquisition | 81,442 | 453,876 |
Net cash used in investing activities | (41,163,846) | (2,135,149) |
FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock | 76,492,993 | 674,469 |
Proceeds from issuances of notes payable, related parties | 0 | 47,000 |
Proceeds from issuances of notes payable, non-related party | 16,078 | 4,654,817 |
Proceeds from issuances of convertible notes payable | 408,000 | 1,482,500 |
Proceeds from line of credit | 11,967,717 | 0 |
Repurchase of common stock | (185,850) | 0 |
Proceeds from financing lease | 0 | 2,000,000 |
Repayments of notes payable, related party | (238,651) | (290,003) |
Repayments of notes payable, non-related parties | (7,161,807) | (2,101,825) |
Repayments of convertible notes payable | (1,688,464) | (335,896) |
Repayment of line of credit | (9,392,165) | (996,331) |
Cash paid on financing lease obligations | (637,180) | (503,628) |
Net cash provided by financing activities | 69,580,671 | 4,631,103 |
NET INCREASE IN CASH AND RESTRICTED CASH | 2,993,083 | 420,097 |
CASH AND RESTRICTED CASH, BEGINNING BALANCE | 722,583 | 302,486 |
CASH AND RESTRICTED CASH, ENDING BALANCE | 3,715,666 | 722,583 |
CASH PAID FOR: | ||
Interest | 1,973,818 | 3,504,227 |
Income taxes | 54,058 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Penalty interest added to debt | 0 | 15,000 |
Common stock issued for convertible note payable and accrued interest | 1,886,896 | 1,929,300 |
Common stock issued for debt settlement | 0 | 330,528 |
Issuance of note payable for acquisition | 0 | 2,300,000 |
ROU asset and operating lease obligation recognized under Topic 842 | 95,029 | 193,541 |
Common stock issued to settle unpaid salaries | 0 | 603,463 |
Equipment purchased on financing lease | 0 | 756,990 |
Other asset reclassified to fixed asset | 0 | 86,471 |
Interest added to note payable - related party | 0 | 139,834 |
Issuance of shares of series C preferred stock for acquisition | 0 | 5,848,013 |
Beneficial conversion feature on convertible notes | 92,428 | 1,482,500 |
Reduction of acquisition note payable for uncollectible accounts | 0 | 150,044 |
Common stock issued for acquisition | 15,067,211 | 0 |
Remeasurement of finance lease liability | 279,287 | 0 |
Mortgage on property purchase | 4,680,000 | 0 |
Accounts receivable converted to equity investment | 1,000,000 | 0 |
Issuance of shares of series D preferred stock for acquisition | 6,653,309 | 0 |
Notes payables issued to the Sellers for the purchase of DTI | 2,000,000 | 0 |
Conversion of series D preferred stock for common stock | 136 | 0 |
Conversion of series C preferred stock for common stock | $ 171 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation Alpine 4 Holdings, Inc. (together with its subsidiaries, the “Company,” “we,” or “our”), was incorporated under the laws of the State of Delaware on April 22, 2014. The Company was formed to serve as a vehicle to affect an asset acquisition, merger, exchange of capital stock, or other business combination with a domestic or foreign business. On March 2, 2021, the Company changed its name from Alpine 4 Technologies Ltd. to Alpine 4 Holdings, Inc. Effective April 1, 2016, the Company purchased all of the outstanding capital stock of Quality Circuit Assembly, Inc., a California corporation (“QCA”). Effective January 1, 2019, the Company purchased all of the outstanding capital stock of Morris Sheet Metal Corp., an Indiana corporation (“MSM”), JTD Spiral, Inc. a wholly owned subsidiary of MSM, an Indiana corporation, Morris Enterprises LLC, an Indiana limited liability company and Morris Transportation LLC, an Indiana limited liability company (collectively “Morris”). Effective November 6, 2019, the Company purchased all of the outstanding capital stock and units of Deluxe Sheet Metal, Inc., an Indiana corporation, and DSM Holding, LLC, an Indiana limited liability company, and purchased certain real estate from Lonewolf Enterprises, LLC, an Indiana limited liability company (collectively “Deluxe”). Effective February 21, 2020, the Company purchased all of the outstanding units of Excel Fabrication, LLC., an Idaho Limited Liability Company (“Excel”). Effective December 15, 2020, the Company purchased the assets of Impossible Aerospace Corporation, a Delaware corporation (“IA”). Effective February 8, 2021, the Company purchased the assets of Vayu (US), Inc., a Delaware corporation (“Vayu”). On May 5, 2021, the Company acquired all of the outstanding shares of stock of Thermal Dynamics, Inc., a Delaware corporation (“TDI”). On May 10, 2021, the Company acquired all of the outstanding membership interests of KAI Enterprises, LLC, a Florida limited liability company, the sole asset of which was all of the outstanding membership interests of Alternative Laboratories, LLC, a Delaware limited liability company (“Alt Labs”). On October 20, 2021, the Company acquired 100% of the outstanding shares of Identified Technologies Corporation, a Delaware corporation (“Identified Technologies”). On November 29, 2021, the Company, and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 3, Inc. (“AC3”), entered into a merger agreement with ElecJet Corp., (“ElecJet”) and the three ElecJet shareholders. Pursuant to the agreement, AC3 merged with and into ElecJet with ElecJet being the surviving entity following the merger. On December 9, 2021, the Company, and A4 Technologies, Inc., a wholly owned subsidiary of the Company (“A4 Technologies”), entered into a Membership Interest Purchase Agreement with DTI Services Limited Liability Company (doing business as RCA Commercial Electronics), (“DTI”), Direct Tech Sales LLC, (also having an assumed business name of RCA Commercial Electronics), (“Direct Tech”), PMI Group, LLC, (“PMI”), Continu.Us, LLC, (“Continu.Us”), Solas Ray, LLC, (“Solas”), and the individual owners of the interests of the various entities. DTI, Direct Tech, PMI, Continu.Us, and Solas were each referred to in the Membership Interest Purchase Agreement collectively as “RCA.” Pursuant to the MIPA, the Company acquired all of the outstanding membership interests of RCA. As of the date of this Report, the Company was a holding company owning, directly or indirectly, fourteen companies: – A4 Corporate Services, LLC; – ALTIA, LLC; – Quality Circuit Assembly, Inc.; – Morris Sheet Metal, Corp; – JTD Spiral, Inc.; – Excel Construction Services, LLC; – SPECTRUMebos, Inc.; – Vayu (US) – Thermal Dynamics International, Inc.; – Alternative Laboratories, LLC.; – Identified Technologies, Corp.; – ElecJet Corp.; – DTI Services Limited Liability Company (doing business as RCA Commercial Electronics); and – Global Autonomous Corporation Basis of presentation The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Liquidity The Company’s financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board (the “FASB”), Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. As shown in the accompanying consolidated financial statements, the Company has incurred significant recurring losses and negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. While the Company experienced a loss for the year ended December 31, 2021, of $19.4 million, and had a negative cash flow used in operations, there were several significant one-time / non-recurring items included in the $19.4 million net loss. These non-recurring items totaled $8.4 million, consisting of $612 thousand in new acquisitions expenses captured in professional fees, and other costs, $1.8 million for repurchase of restricted stock units in March 2021, $3.0 million in write off of accounts receivables, $367 thousand in write off of intangibles and goodwill, $1.2 million to management for bonuses, and $1.4 million for a loss on equity investment. The Company received a total of approximately $76.4 million in 2021 in the following two transactions: – The Company raised approximately $67.1 million in net proceeds in connection with a registered direct offering of its stock and; – The Company raised approximately $9.3 million in net proceeds in connection with an equity line of credit financing arrangement. As of December 31, 2021, the Company has positive working capital of approximately $14.0 million. The Company has also secured bank financing totaling $18.8 million ($18.3 million in Lines of Credit and $0.5 million in capital expenditures lines of credit availability) of which $6.4 million was unused at December 31, 2021. The Company plans to continue to generate additional revenue (and improve cash flows from operations) partly from the acquisitions of six operating companies which closed in 2021 combined with improved gross profit performance from the existing operating companies. The Company also plans to continue to raise funds through debt financing and the sale of shares through its planned at-the-market offering. Based on the capital raise as indicated above and management’s plans to improve cash flows from operations, management believes the Company has sufficient working capital to satisfy the Company’s estimated liquidity needs for the next 12 months. Because of the above factors, the Company believes that this alleviates the substantial doubt in connection with the Company's ability to continue as a going concern. However, there is no assurance that management’s plans will be successful due to the current economic climate in the United States and globally. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2021 and 2020. Significant intercompany balances and transactions have been eliminated. Use of estimates The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of long-lived assets, reserves for accounts receivable and inventory, valuation allowance for deferred tax assets, fair values assigned to intangible assets acquired, and impairment of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2022 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2022 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2021. Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. Advertising Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. Cash Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2021, and 2020, the Company had no cash equivalents. As of December 31, 2021, and 2020, the Company had $0 and $444,845 in restricted cash, respectively, for amounts held in escrow. The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows. December 31, 2021 December 31, 2020 Cash $ 3,715,666 $ 277,738 Restricted cash — 444,845 Total cash and restricted cash shown in statement of cash flows $ 3,715,666 $ 722,583 Major Customers The Company had no customers that made up over 10% of accounts receivable as of December 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. For the year ended December 31, 2021, the Company had two customers that each made up 11% of total revenues. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues. For the year ended December 31, 2021, the Company had 9% of total revenues made up of government contracts. Major Customer by Segment Manufacturing The manufacturing segment had two customers that made up 31% and 20%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the manufacturing segment had four customer that made up a total of 65% of total manufacturing revenues. Aerospace The aerospace segment had one customer that made up 57% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the aerospace segment had two customers that made up 26% and 10%, respectively, of total aerospace revenues. Construction The construction segment had two customers that made up over 25% and 17%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the construction segment had two customers that made up 28% and 18%, respectively, of total construction revenues. Defense Of the defense segment 100% of accounts receivables and defense revenues were related to government contracts. Technologies The Company had two customers that made up 14% and 30% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the technology segment had two customers that made up 22% and 12%, respectively, of total technologies revenues. Accounts Receivable The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2021 and 2020, allowance for bad debt was $199,936 and $49,914, respectively. During the year ended December 31, 2021, the Company wrote off $3,028,757 to bad debts expense. Inventory Inventory for all subsidiaries is valued at weighted average. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2021 and 2020 consists of: December 31, 2021 December 31, 2020 Raw materials $ 8,322,867 $ 1,584,651 Work in process 2,480,979 573,806 Finished goods 16,391,616 508,145 27,195,462 2,666,602 Reserve (1,213,557 ) — Inventory, net $ 25,981,905 $ 2,666,602 Property and Equipment Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Automobiles and trucks $ 1,251,187 $ 918,602 Machinery and equipment 8,870,391 5,436,847 Office furniture and fixtures 167,581 119,546 Buildings and improvements 23,630,250 16,167,000 Total Property and equipment 33,919,409 22,641,995 Less: Accumulated depreciation (5,822,847 ) (3,342,709 ) Property and equipment, net $ 28,096,562 $ 19,299,286 Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 3.) Purchased Intangibles and Other Long-Lived Assets The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer list 3-15 years Non-compete agreements 1 to 5 years Software development 5 years Patents 17 years Proprietary technology 15 years Intangible assets consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Software $ 128,474 $ 278,474 Non-compete agreement 1,415,457 205,457 Customer list 11,111,187 2,031,187 Patents, trademarks, and licenses 7,810,107 5,800,137 Proprietary technology 18,343,756 — Total intangible assets 38,808,981 8,315,255 Less: Accumulated amortization (2,031,736 ) (572,171 ) Intangibles, net $ 36,777,245 $ 7,743,084 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows: Years Ending December 31, 2022 $ 3,211,040 2023 3,203,540 2024 3,183,678 2025 2,577,846 2026 2,553,554 Thereafter 22,047,587 Total $ 36,777,245 Other Long-Term Assets Other long-term assets consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Deposits $ 149,517 $ 293,327 Other 207,601 108,417 $ 357,118 $ 401,744 Impairment of Long-Lived Assets The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During the year ended December 31, 2021, due to the significant impact of COVID-19, the Company determined that the customer list for Excel was impaired and took a charge to earnings of $359,890. During the year ended December 31, 2020, due to the loss of significant customers and the impact of COVID-19, the Company determined that the customer list for APF and Deluxe was impaired and took a charge to earnings of $671,500 and $450,000, respectively. Goodwill In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2021 and 2020, the reporting units with goodwill were QCA, Morris, Excel, Alt Labs, TDI, Identified Technology, ElecJet, and RCA. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2021, the Company determined that the goodwill for Excel was impaired and took a charge to earnings of $7,629. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100. Leases The Company accounts for its leases under ASC 842, Leases (“ASC 842”). Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term. Fair Value Measurement Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes payable and lines of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of December 31, 2021 and 2020, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis. Equity Investments The Company’s equity investments consist of investment in one private company in which the Company does not have the ability to exercise significant influence over their operating and financial activities. This investment is carried at cost as there is no market for the common stock and LLC membership units, accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, in accordance with the ASC 321 guidelines, the Company recognized a lost on impairment for the entire value of $1,350,000. The Company has adopted the provisions of ASU 2016-01 and values the investment using the measurement alternative, defined as costs, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. Research and Development The Company focuses on quality control and development of new products and the improvement of existing products. All costs related to research and development activities are expensed as incurred. During the year ended December 31, 2021, research and development cost totaled $1,464,918. Revenue Recognition On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: · executed contracts with the Company’s customers that it believes are legally enforceable; · identification of performance obligations in the respective contract; · determination of the transaction price for each performance obligation in the respective contract; · allocation the transaction price to each performance obligation; and · recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. QCA and Alt Labs QCA and Alt Labs are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. ElecJet ElecJet is a research and development of battery technology and development/sales of battery consumer products and recognizes revenue when the products have been shipped to the customer. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Identified Technologies IDT provides drone software and data for industrial job sites and recognizes revenue when the service has been provided to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial Direct Tech Sales RCA is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America. RCA recognizes revenue when the products have been shipped to the customer which is also when title transfers. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Morris Deluxe, Excel and Thermal Dynamics For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. The following table presents our revenues disaggregated by type: Year ended December 31, 2021 2020 Sale of goods Circuit boards and cables $ 15,700,902 $ 12,602,910 Dietary supplements 11,674,220 — Electronics 1,543,469 — Total sale of goods 28,918,591 12,602,910 Sale of services Construction contracts 22,462,399 20,851,439 Drone 3D mapping 259,823 — Total sale of services 22,722,222 20,851,439 Total revenues $ 51,640,813 $ 33,454,349 Earnings (loss) per share Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (8,049,873 ) 132,987,390 $ (0.06 ) Effect of Dilutive Securities Convertible debt — — — (1,001,192 ) 6,624,400 — Dilute EPS Loss available to stockholders plus assumed conversions $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (9,051,065 ) 139,611,790 $ (0.06 ) Stock-based compensation The Company follows the guidelines in ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executives, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. Income taxes The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. Related Party Disclosure ASC 850, Related Party Disclosures Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Leases | Note 3 – Leases The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate. As of December 31, 2021, the future minimum finance and operating lease payments are as follows: Years Ending December 31, Finance Leases Operating Leases 2022 $ 1,904,458 $ 504,885 2023 1,927,351 516,405 2024 1,954,170 528,059 2025 1,882,226 97,338 2026 1,869,656 — Thereafter 16,768,517 — Total payments 26,306,378 1,646,687 Less: imputed interest (10,337,568 ) (151,529 ) Total obligation 15,968,810 1,495,158 Less: current portion (649,343 ) (428,596 ) Non-current capital leases obligations $ 15,319,467 $ 1,066,562 Finance Leases On April 5, 2018, the Company acquired APF. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from APF was sold for $1,900,000, and leased back to the company for a period of 15 years at a monthly rate of $15,833, subject to an annual increase of 2% throughout the term of the lease. The Company had no gain or loss resulting from the sale of the property, and the resulting lease qualifies as a capital lease. As a result, the Company has capitalized the cost of the building and the resulting capital lease obligation liability of $1,900,000. The payments related to this lease are reflected in the table above. As of October 1, 2020, the APF building lease was modified, assignment of the building was transferred to Excel Fabrication, LLC (“Excel”), and Quality Circuit Assembly, Inc. (“QCA”). As part of the modification, the lease was extended through 2037 and the payment terms were amended effective January 15, 2021. As a result of this amendment, the Company remeasured the finance lease liability and recorded an additional $279,287 to the related asset and finance lease liability on the date of the modification. On January 1, 2019, the Company acquired Morris. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Morris was sold for $3,267,000, and leased back to the company for a period of 15 years at a monthly rate of $27,500, subject to an annual increase of 2% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On November 6, 2019, the Company acquired Deluxe. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Deluxe was sold for $9,000,000, and leased back to the company for a period of 15 years at a monthly rate of $75,000, subject to an annual increase of 2.5% throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. On February 21, 2020, the Company acquired Excel. In order to fund a portion of the acquisition price, the Company simultaneously entered into a sale leaseback transaction with a third-party lender whereby the building acquired from Excel was sold for $2,000,000, and leased back to the Company for a period of 15 years at a monthly rate of $18,700 for the first five years, subject to annual increases throughout the term of the lease. The transaction did not qualify as a sale and leaseback transaction under Topic 842 and as such was accounted for as a financing lease. The payments related to this lease are reflected in the table above. During the year ended December 31, 2020, the Company entered into three finance leases for equipment totaling $756,990. Each has a 60 month term with an interest rate ranging from 6.7% to 9%. Operating Leases The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheet as of December 31, 2021: Classification on Balance Sheet December 31, 2021 December 31, 2020 Assets Operating lease assets Operating lease right of use assets $ 1,460,206 $ 581,311 Total lease assets $ 1,460,206 $ 581,311 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 428,596 $ 334,500 Noncurrent liabilities Operating lease liability Long-term operating lease liability 1,066,562 269,030 Total lease liability $ 1,495,158 $ 603,530 During the year ended December 31, 2020, the Company amended its lease for its office space in Phoenix, Arizona through March 2025. As a result of this amendment, the Company remeasured the right of use asset and liability and recorded an additional $193,541 in right of use asset on the date of the modification. During the year ended December 31, 2021, the Company amended its lease for the warehouse in San Jose, California through September 30, 2022 with monthly lease payments of $31,746. On May 3, 2021, the Company entered into a lease agreement for the building on 4740 Cleveland in Ft. Myers, Florida. The lease had a term of 72 months with monthly payments ranging from $40,833 to $49,583 from May 2021 to July 2021 and $58,333 from August 2021 through the end of the term. The Company determined the lease to be an operating lease and recognized a right-of-use asset and operating lease liability of $3,689,634 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 3.96%. This lease was terminated on August 27, 2021, when the Company purchased the building. In December 2021, the Company acquired RCA. As part of this purchase the Company entered into a lease agreement for office and warehouse space under a non-cancellable operating lease. The lease has a term of 89 months with monthly payments ranging from $31,350 to $35,207. The Company determined the lease to be an operating lease and recognized a right-of-use asset of $1,196,764 and operating lease liability of $1,226,128 based on the present value of the minimum lease payments discounted using an incremental borrowing rate of 4%. The lease expense for the years ended December 31, 2021 and 2020 was $386,056 and $373,884, respectively. The cash paid under operating leases during the years ended December 31, 2021 and 2020 was $402,688 and $362,771, respectively. At December 31, 2021, the weighted average remaining lease terms were 3.2 years and the weighted average discount rate was 10%. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Debt | Note 4 – Debt In May 2018, APF secured a line of credit with Crestmark, providing for borrowings up to $1,000,000 at a variable interest rate, collateralized by APF’s outstanding accounts receivable. In February 2019 the Company moved the Crestmark line of credit to FSW with a variable interest and collateralized by APF’s accounts receivable. In January 2020 the Company received a default notice from Crestmark regarding noncompliance with certain loan covenants, including but not limited to, QCA’s failure to maintain a tangible net worth as contained in the loan agreement. QCA’s credit line with Crestmark totaled $2,800,000 and was restructured from an ABL line of credit to a ledger line of credit. In addition, a minimum interest of 7.75% interest was imposed; an exit fee of 1% through January 31, 2021 and the financial covenant replaced with a requirement for QCA to maintain a free cash flow of at least $1.00 beginning with QCA’s financial statements as of January 31, 2020. As of December 31, 2021, the outstanding balance was paid off and the line of credit was closed. On February 22, 2018, the Company issued a $3,000,000 note payable under the Amended and Restated Secured Promissory Note with the seller of VWES. The note is secured by the assets of VWES and bears interest at 7% per annum and is due in semi-annual payments of $150,000 commencing on June 1, 2018, through June 1, 2020. The remaining principal and accrued interest is due on the 3-year anniversary. The Company is not current on its payments on the note. In August 2020, the company filed a lawsuit against Alan Martin regarding his note payable . The balance as of December 31, 2021, was $2,857,500 and accrued interest of $1,170,861 which is reflective in the current liabilities. The default rate is 10% and the daily late charge is $575. On April 5, 2018, the Company issued two secured promissory notes in the aggregate principal amount of $1,950,000 (“Secured APF Notes”) as part of the consideration for the purchase of APF. The Secured APF Notes are secured by the equipment, customer accounts and intellectual property of the Company, and all of the products and proceeds from any of the assets of APF. The Secured APF Notes bear interest at 4.25% per annum and have aggregate monthly payments of $19,975 for the first 23 months, with a balloon payment due in April 2020 for the remaining principal and interest outstanding. During the year ended December 31, 2020, the Company amended both of the notes. The noteholders forgave all $450,000 of the $450,000 convertible notes (See Note 6) in exchange for an increase in their notes payable of $67,617. The principal amount of their notes payable was amended to $1,689,000 at 0% interest with weekly payments of $4,086 and the balance to be paid on May 27, 2022. The Company recognized a gain on settlement of debt of $382,384 related to these transactions. As of December 31, 2021, the balance of these notes were paid in full. On May 3, 2018, the Company entered into an equipment note with a lender for total borrowings of $630,750, which is secured by the equipment of APF. The note bears interest at 11.75% per annum and is payable in weekly payments of $3,795 commencing on the loan date through May 4, 2022. As of December 31, 2021, the balance of this note has been paid in full. In connection with the Morris acquisition in January 2019, the Company issued three subordinated secured promissory notes for an aggregate of $3,100,000. The notes bear interest at 4.25% per annum, require monthly payment for the first 35 months of $31,755 with any remaining principal and accrued interest due on the 3 year-anniversary. The Company also issued three supplemental notes payable for an aggregate of $350,000. The notes bear interest at 4.25% per annum and are due on the 1-year anniversary. In May 2020, the Company amended the three supplemental notes of $116,667 each with the sellers of Morris. The notes were due January 1, 2020. Each of the new notes as of the date of amendment had accrued interest of $2,703. This was added to the note resulting in the principal amount of each of the new notes equaling to $119,370. The amendment required an initial payment of $30,000 for each note, which was made on May 23, 2020, and 8 monthly installments of $10,000 with one final payment of $13,882 through January 2021. The amended notes have an interest rate of 6%. The Company is current on all of the respective subordinated notes and the supplemental notes have been paid in full as of the date of this report. As of December 31, 2021, the outstanding balance on these notes was $2,374,062. In connection with the Deluxe acquisition in November 2019, the Company issued two subordinated secured promissory notes to the seller. The first note for $1,900,000 bears interest at 4.25% per annum, require monthly payment for the first 35 months of $19,463 with any remaining principal and accrued interest due on the 3 year-anniversary. The second note for $496,343 bears interest at 8.75% and is due in January 2020. In January 2020, the Company entered into a debt conversion agreement with the seller which fully settled the second note. On April 8, 2021, the Company entered into a settlement agreement with the seller wherein the outstanding balance on the first note amounting to $1,883,418 including accrued interest and net other costs was settled in full through a payment of approximately $887,000 and the exchange of 1,617,067 shares of the Company’s Class C common shares held by the seller for the same number of shares of the Company’s Class A common stock. The Company recognized a gain on extinguishment of debt totaling $803,079 during the year ended December 31, 2021 as a result of the settlement of the note. In connection with the Excel acquisition in February 2020, the Company issued a subordinated secured promissory note to the seller. The note for $2,300,000 bears interest at 4.25% per annum, requires monthly interest only payments for 48 months and is due February 2024. The ending balance for this loan as of December 31, 2021 was $2,062,318. In November 2019, in connection with the termination of the lease for the San Diego building, the Company issued the landlord a note payable. The note is for $2,740,000, bears interest at 7% with monthly payments starting at $15,984 and is due in November 2034. As of December 31, 2021, the outstanding balance of the term note was paid in full. In January 2020, the Company entered into a $200,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $3,333 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full. In connection with the Excel acquisition, the Company entered into a $425,000 term note with Celtic Capital, Inc. The note is subject to annual interest which is the greater of 13% or 11% plus the 3 month LIBOR rate and requires monthly payments of $7,083 over a period of 60 months. As of December 31, 2021, the outstanding balance of the term note was paid in full . In October 2019 Morris entered into an equipment finance note for $107,997 with an interest rate of 9.4% for 48 monthly payments with Bryn Mawr Equipment Finance Inc. The Company was current on this note as of December 31, 2021. The Company issued a $48,000 note in January 2020 to a private investor with an interest rate of 15% with a due date of 1 year. As of December 31, 2021, the balance of this note has been paid in full. In connection with the RCA acquisition in December 2021, the Company issued two subordinated secured promissory notes for an aggregate of $2,000,000. The notes bear interest at 3.75% per annum, require monthly payment of $19,590 for a term of 120 months. As of December 31, 2021, the Company was current on all of the respective subordinated notes. In April and May 2020, the Company received seven loans under the Paycheck Protection Program of the U.S. Coronavirus Aid, Relief and Economic Security (“CARES”) Act totaling $3,896,107. During the year ended December 31, 2021, the Company also acquired four loans totaling $1,799,725 due to acquisitions. The loans have terms of 24 months and accrue interest at 1% per annum. The Company paid $88,159 for the loan assumed in connection with the Impossible acquisition, and the remaining $356,690 was forgiven. The remaining ten loans were forgiven as provided by the CARES Act during the year ended December 31, 2021. The Company recognized a gain on forgiveness of debt of $5,987,523. The Company also assumed an Economic Injury Disaster Loan (EIDL) in connection with the Vayu acquisition, which was still outstanding as of December 31, 2021. During 2021, the Company entered into four revolving lines of credit totaling $18.3 million and two capital expenditures lines of credit totaling $0.5 million. The revolving lines of credit used as of December 31, 2021, totaled $10.1 million with an interest rate ranging from prime plus 2.50% - 4.25% and a term of one to two years. As of December 31, 2021, the Company had $6.4 million in additional funds available to borrow. On August 27, 2021 the Company entered into $4.7 million agreement for the purchase of a building located at 4740 Cleveland in Ft. Myers, Florida. The loan bears interest at a rate of 3.95% per annum for a term of 10 years and requires monthly payments of $24,722. The loan is secured by the building and a guarantee by the Company. As of the December 31, 2021, the Company was current with this obligation. The outstanding balances for the loans as of December 31, 2021 and 2020 were as follows: December 31, 2021 December 31, 2020 Lines of credit, current portion $ 4,473,489 $ 2,819,793 Equipment loans, current portion 61,640 245,388 Term notes, current portion 5,628,884 4,035,730 Total current 10,164,013 7,100,911 PPP loans — 4,340,956 Line of credit, net of current portion 5,640,051 — Long-term portion of equipment loans and term notes 8,426,105 10,860,494 Total notes payable $ 24,230,169 $ 22,302,361 Future scheduled maturities of outstanding debt are as follows: Years Ending December 31, 2022 $ 10,098,065 2023 5,940,544 2024 3,844,706 2025 129,849 2026 135,072 Thereafter 4,081,933 Total $ 24,230,169 |
Notes Payable, Related Parties
Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Notes Payable, Related Parties | Note 5 – Notes Payable, Related Parties At December 31, 2021 and 2020, notes payable due to related parties consisted of the following: December 31, 2021 December 31, 2020 Notes payable; non-interest bearing; due upon demand; unsecured $ — $ 3,000 Series of notes payable, bearing interest at rates from 3% to 20% per annum, with maturity dates from July 2018 to July 2020, unsecured — 235,651 Total notes payable - related parties $ — $ 238,651 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Convertible Notes Payable | Note 6 – Convertible Notes Payable At December 31, 2021 and 2020, convertible notes payable consisted of the following: December 31, 2021 December 31, 2020 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 10% per annum, with due dates ranging from December 2016 through June 2017. Of the outstanding principal and interest balances $7,500 was paid out in cash and the remaining balances were converted during the year ended December 31, 2021. $ — $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see below. The outstanding principal and interest balances were fully paid in cash during the year ended December 31, 2021. — 1,291,463 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company’s Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increase the interest rate to 15% and effect a floor in the conversion price of $0.15 per share. The outstanding principal and interest balance of the note was converted during the year ended December 31, 2021. — 7,538 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company’s Class A common stock at a fixed price of $0.15 per share. The outstanding principal balance of the note was converted during the year ended December 31, 2021. — 200,000 In December 2020 and January 2021, the Company issued convertible notes to individual investors totaling to $1,890,500. The notes are due three to six months from the date of issuance; accrue interest at 5 – 6.25% per annum and are convertible into shares of the Company’s Class A common stock at a fixed rate of $0.25 to $3.00. Of the outstanding principal balance of the notes $389,500 was paid in cash and the remaining balances were converted during the year ended December 31, 2021. — 1,482,500 Total convertible notes payable — 3,006,501 Less: discount on convertible notes payable — (1,343,624 ) Total convertible notes payable, net of discount — 1,662,877 Less: current portion of convertible notes payable — (562,242 ) Long-term portion of convertible notes payable $ — $ 1,100,635 (A) In May and June 2020 the Company amended the following seller notes: – The convertible note with Jeff Moss with a $720,185 balance as of May 4, 2020 was amended to extend the maturity date to May 4, 2027 at 5% interest with weekly payments of $2,605. The principal balance was increased to $798,800 and the balance outstanding at December 31, 2021 and 2020 was $0 and $735,329, respectively. – The convertible note with Mr. Hargreaves with a $551,001 balance as of June 5, 2020 was amended to extend the maturity date to June 5, 2026 at 6% interest with weekly payments of $2,316. The principal balance was increased to $605,464 and the balance outstanding at December 31, 2021 and 2021 was $0 and $556,135, respectively. A loss on extinguishment of debt of $192,272 was recognized on these transactions. The discounts on convertible notes payable arise from stock issued with notes payable, and beneficial conversion features. During the years ended December 31, 2021 and 2020, the Company issued convertible notes with a fixed conversion price. The beneficial conversion feature related to these convertible notes that have been recorded as a discount on the convertible notes and as a component of equity was $92,428 and $1,482,500 for the years ended December 31, 2021, and 2020, respectively. The discounts are being amortized over the terms of the convertible notes payable. Amortization of debt discounts during the years ended December 31, 2021 and 2020 amounted to $1,436,052 and $985,709, respectively, and is recorded as interest expense in the accompanying consolidated statements of operations. There was no remaining unamortized discount balance for these notes as of December 31, 2021. A summary of the activity in the Company’s convertible notes payable is provided below: Balance outstanding, December 31, 2019 $ 2,783,806 Issuance of convertible notes payable for cash 1,482,500 Non-cash extinguishment (2,470 ) Repayment of notes (335,896 ) Conversion of notes payable to common stock (1,525,544 ) Penalty interest added to convertible note 15,000 Convertible note issued for interest 192,272 Settlement of convertible note (450,000 ) Amortization of debt discounts 985,709 Discount from beneficial conversion feature (1,482,500 ) Balance outstanding, December 31, 2020 1,662,877 Issuance of convertible notes payable for cash 408,000 Repayment of notes (1,688,464 ) Conversion of notes payable to common stock (1,726,037 ) Amortization of debt discounts 1,436,052 Discount from beneficial conversion feature (92,428 ) Balance outstanding, December 31, 2021 $ — |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Stockholders' Equity | Note 7 – Stockholders’ Equity Preferred Stock The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock. Series B Preferred Stock The Company is authorized to issue 100 shares of Series B preferred stock. The Series B Preferred Stock has a $1.00 stated value and does not accrue dividends. The Series B has the following voting rights: · If at least one share of Series B Preferred Stock is issued and outstanding, then the total aggregate issued shares of Series B Preferred Stock at any given time, regardless of their number, shall have that number of votes (identical in every other respect to the voting rights of the holders of all classes of Common Stock or series of preferred stock entitled to vote at any regular or special meeting of stockholders) equal to two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock. · If more than one share of Series B Preferred Stock is issued and outstanding at any time, then each individual share of Series B Preferred Stock shall have the voting rights equal to: Two hundred percent (200%) of the total voting power of all holders of the Company’s common and preferred stock then outstanding, but not including the Series B Preferred Stock divided by the number of shares of Series B Preferred Stock issued and outstanding at the time of voting. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company for each share of Series B Preferred Stock then held by the Holder an amount equal to the Stated Value, and all other amounts in respect thereof then due and payable before any distribution or payment shall be made to the holders of any Junior Securities. The Series B Preferred Stock shall be convertible into shares of the Company’s Class A Common Stock only as follows: · In the event that the Holder of Series B Preferred Stock ceases to be a director of the Company, upon such director’s resignation or removal from the board by any means, the shares of Series B Preferred Stock held by such resigning or removed director shall convert automatically into that same number of shares of Class A Common Stock (i.e. on a one-for-one share basis). · Shares of Series B Preferred Stock converted into Class A Common Stock, canceled, or redeemed, shall be canceled and shall have the status of authorized but unissued shares of undesignated preferred stock. As of December 31, 2021 and 2020, 5 and 5 shares of Series B Preferred Stock were outstanding and were issued to officers for services rendered. Series C Preferred Stock The Company designated 2,028,572 shares of Series C Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series C Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series C Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock. Voting Rights - The Series C Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series C Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series C Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series C Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series C Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series C Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series C Preferred Stock. Conversion - The Series C Preferred Stock shall be convertible automatically into shares of the Company’s Class A Common Stock (the “Automatic Conversion”) as follows: · Each share of Series C Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). · The number of shares of the Company’s Class A Common Stock into which the Series C Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series C Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class C Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 120-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series C Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series C Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. During the year ended December 31, 2020, the Company issued 1,714,286 shares of Series C Preferred Stock in connection with the acquisition of assets of IA that were valued at $5,848,013. As of December 31, 2021, 1,704,137 these shares were converted to Class A common stock. As of December 31, 2021 and 2020, 10,149 and 1,714,286 shares of Series C Preferred Stock were outstanding. Series D Preferred Stock The Company designated 1,628,572 shares of Series D Preferred Stock with a stated value of $3.50 per share. No dividends will accrue on the Series D Preferred Stock. If dividends are declared on the Company’s Class A, Class B, or Class C Common Stock, the holders of the Series D Preferred Stock will participate in such dividends on a per share basis, pari passu with the Classes of Common Stock. Voting Rights - The Series D Preferred Stock will vote together with the Class A Common Stock on a one-vote-for-one-Preferred-share basis. As long as any shares of Series D Preferred Stock are outstanding, the Company may not, without the affirmative vote or written consent of the holders of a majority of the then outstanding shares of the Series D Preferred Stock, (a) alter or change the powers, preferences or rights given to the Series D Preferred Stock or alter or amend the Certificate of Designation, (b) amend its Certificate of Incorporation or other charter documents in any manner that adversely affects any rights of the holders of the Series D Preferred Stock, or (c) enter into any agreement or arrangement with respect to any of the foregoing. Liquidation - Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series D Preferred Stock shall participate on a per share basis with the holders of the Class A, Class B, and Class C Common Stock of the Company, and shall be entitled to share equally, on a per share basis, all assets of the Company of whatever kind available for distribution to the holders of all classes of the Common Stock. The Company shall mail written notice of any such Liquidation, not less than 45 days prior to the payment date stated therein, to each record holder of Series D Preferred Stock. Conversion - The Series D Preferred Stock shall be convertible automatically into shares of the Company’s Class A Common Stock (the “Automatic Conversion”) as follows: · Each share of Series D Preferred Stock will automatically convert into shares of the Company’s Class A Common Stock on the earlier to occur of (a) the fifth day after the twenty-four month anniversary of the original issue date or (b) the fifth day after the date on which the Company’s Class A Common Stock first trades on a national securities exchange (including but not limited to NASDAQ, NYSE, or NYSE American but excluding OTCQX Market) (such date, the “Automatic Conversion Date”). · The number of shares of the Company’s Class A Common Stock into which the Series D Preferred Stock shall be converted shall be determined by multiplying the number of shares of Series D Preferred Stock to be converted by the $3.50 stated value, and then dividing that product by the Conversion Price. The Conversion Price shall be equal to the Variable Weighted Average Price (“VWAP”) of the five Trading Days prior to the Automatic Conversion Date. “VWAP” shall be defined as the volume weighted average price of the Company’s Class A Common Stock on the OTC Markets or other stock exchange or trading medium where such shares are traded as reported by Bloomberg, L.P. using the VWAP function. If for any reason, VWAP cannot be thus determined, “VWAP” shall mean the average closing or last sale prices over the five Trading Days prior to the Automatic Conversion Date of the Company’s Class A Common Stock on the OTC Markets or such other exchange or trading medium. Restrictions on Resales of Class A Common Stock - The sale of shares of the Company’s Class A Common Stock issued at the time of conversion by any holder into the market or to any private purchaser shall be limited to not more than twenty-five percent (25%) of all conversion shares received by such holder at the time of the automatic conversion in any given 90-day period. Company Redemption Rights -At any time on or prior to the Automatic Conversion Date, the Company shall have the right to redeem all (but not less than all) shares of the Series D Preferred Stock issued and outstanding at any time after the original issue date, upon three (3) business days’ notice, at a redemption price per share of Series D Preferred Stock then issued and outstanding (the “Corporation Redemption Price”), equal to the stated value of $3.50 per share. Registration Rights -The shares issued on conversion of the Series D Preferred Stock have piggyback registration rights beginning on that date which his six months after the date on which the Company’s Class A Common Stock trades on a national securities exchange, and are subject to standard underwriter holdback limitations During the year ended December 31, 2021, the Company issued 1,432,224 shares of Series D Preferred Stock in connection with the acquisition of assets of Vayu that were valued at $6,653,309. As of December 31, 2021, 1,353,570 of these shares were converted to Class A common stock. As of December 31, 2021 and 2020, 78,674 and 0 shares of Series D Preferred Stock were outstanding. Common Stock Pursuant to the Amended and Restated Certificate of Incorporation, the Company is authorized to issue three classes of common stock: Class A common stock, which has one vote per share, Class B common stock, which has ten votes per share and Class C common stock, which has five votes per share. Any holder of Class B common stock may convert his or her shares at any time into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. Any holder of Class C common stock may convert 25% of his or her shares at any time after the 3rd to 6th anniversary into shares of Class A common stock on a share-for-share basis. Otherwise the voting rights of the two classes of common stock will be identical. The Company had the following transactions in its common stock during the year ended December 31, 2021: · On February 11, 2021, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors to purchase 8,333,333 shares of the Company’s Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company’s Class A Common Stock equal to 5% of the number of shares sold in the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. Net proceeds from the sale of shares amounted to approximately $45 million. · In February 2021, the Company issued 1,524,064 shares of Class A common stock to an investor for cash for total proceeds approximately of $9.3 million. · During the year ended December 31, 2021, the Company issued 7,384,018 shares of Class A common stock for the conversion of total debt and accrued liabilities totaling $1,886,896. · On March 17, 2021, the Company repurchased 45,000 shares of Class C common stock for $185,850. · On May 5, 2021, the Company issued 281,223 shares of Class A common stock that were valued at $1,102,394 in connection with the acquisition of TDI. · On May 10, 2021, the Company issued 361,787 shares of Class A common stock that were valued at $1,432,677 in connection with the acquisition of Alt Labs. · On April 30, 2021, the Company issued 1,617,067 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class C common stock by the holder of the Class C common stock. · On May 17, 2021, the Company issued 350,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock. · On November 15, 2021, the Company issued 125,000 shares of Class A common stock for no additional consideration upon conversion of that number of shares of Class B common stock by the holder of the Class B common stock. · On October 20, 2021, the Company issued 888,881 shares of Class A common stock that were valued at $3,617,746 in connection with the acquisition of Identified Technology. · On November 9, 2021, the Company issued 2,409,248 shares of Class A common stock for no additional consideration upon conversion of 1,704,137 shares of Series C Preferred Stock and 1,353,570 shares of Series D Preferred Stock. · On November 26, 2021, the Company closed on a registered direct offering where it sold to certain investors a total of 8,571,430 shares of the Company’s Class A common stock and 4,285,715 warrant to purchase shares of Class A common stock for net proceeds of $22,189,152. · On November 29, 2021, the Company issued 1,803,279 shares of Class A common stock that were valued at $4,562,993 in connection with the ElecJet acquisition. · On November 29, 2021, the Company granted 590,194 contingent shares of Class A common stock that were valued at $1,800,092 in connection with the ElecJet acquisition. As of December 31, 2021, these shares were not yet issued. · On December 9, 2021, in connection with the acquisition of DTI Services Limited Liability Company, the Company issued 1,587,301 shares of its Class A Common Stock that were valued at $3,682,538. · On December 20, 2021, the Company issued 100,000 shares of Class A common stock in connection with the HWT legal proceedings. · On December 29, 2021, the Company issued 99,018 shares of Class A common stock to management in connection with the acquisition of DTI Services Limited Liability Company. The Company had the following transactions in its common stock during the year ended December 31, 2020: · issued 11,513,935 shares of Class A common stock for cash for total proceeds of $674,469; · issued 12,861,995 shares of Class A common stock for the conversion of convertible debt and accrued interest of $1,929,300; · issued 1,617,067 shares of Class A common stock and 1,617,067 shares of Class C common stock to the Seller of Deluxe for the settlement of debt of $485,120; the fair value of the stock was $330,528. The Company recognized a gain on the settlement of debt of $154,592; · issued 300,000 shares of Class A common stock with a fair value of $44,700 to a noteholder as penalty interest; · issued 4,023,088 shares of Class B common stock to settle unpaid salaries of $603,463; and · issued 2,590,000 shares of Class C common stock for compensation valued at $240,093. The value was determined based on the market value of the Company common stock on the grant date. Stock Options The Company has issued stock options to purchase shares of the Company’s Class A common stock issued pursuant to the Company’s 2016 Stock Option and Stock Award Plan (the “Plan”). The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant and on each modification date. The following summarizes the stock option activity for the years ended December 31, 2021 and 2020: Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 1,790,000 $ 0.19 8.10 $ 176,445 Granted — Forfeited — Exercised — Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Granted — Forfeited — Exercised — Outstanding at December 31, 2021 1,790,000 $ 0.19 6.09 $ 3,098,055 Vested and expected to vest at December 31, 2021 1,790,000 $ 0.19 6.09 $ 3,098,055 Exercisable at December 31, 2021 1,622,625 $ 0.20 6.04 $ 2,785,595 The following table summarizes information about options outstanding and exercisable as of December 31, 2021: Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price $ 0.05 979,000 6.38 $ 0.05 822,250 $ 0.05 0.10 85,000 6.28 0.10 74,375 0.10 0.13 388,500 5.58 0.13 388,500 0.13 0.26 114,000 5.34 0.26 114,000 0.26 0.90 223,500 5.27 0.90 223,500 0.90 1,790,000 1,622,625 During the years ended December 31, 2021 and 2020, stock option expense amounted to $36,538 and $78,652, respectively. Unrecognized stock option expense as of December 31, 2021 amounted to $7,210, which will be recognized over a period extending through December 2022. Warrants The following summarizes the warrant activity for the year ended December 31, 2021: Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 277,001 $ 1.01 1.23 $ — Granted — Forfeited (2,001 ) 1.01 Exercised — Outstanding at December 31, 2020 275,000 $ 1.01 0.23 $ 723,250 Granted 5,527,778 3.32 4.62 Forfeited (275,000 ) 1.01 Exercised — Outstanding at December 31, 2021 5,527,778 $ 3.32 4.62 $ — Vested and expected to vest at December 31, 2021 5,527,778 $ 3.32 4.62 $ — Exercisable at December 31, 2021 5,099,207 $ 3.34 4.62 $ — The following table summarizes information about warrants outstanding and exercisable as of December 31, 2021: Warrants Outstanding Warrants Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price $ 6.60 416,667 3.13 $ 6.60 416,667 $ 6.60 2.25 396,825 2.94 2.52 396,825 2.52 3.10 4,285,715 4.90 3.10 4,285,715 3.1 3.08 428,571 4.90 3.08 — — 5,527,778 5,099,207 During the year ended December 31, 2021, the Company issued 416,667 warrants to a placement agent in connection with sale of its common stock The warrants have an exercise price of $6.60, are exercisable as of August 16, 2021 and expire on February 16, 2025. The Company issued another 428,571 warrants to a placement agent in connection with the sale of its common stock. The warrants have an exercise price of $3.08, are exercisable as of May 26,2022 and expire November 22, 2026. The Company issued another 396,825 warrants in connection to the RCA acquisition. The warrants have an exercise price of $2.52, are exercisable as of December 9, 2021 and expire December 9, 2024. The fair value of the 416,667, 428,571, and the 396,825 warrants, issued to the placement agent and RCA sellers during the year ended December 31, 2021, are $2,498,637, $902,414, and $668,863 respectively and was determined using the Black-Scholes option pricing model with the following assumptions: Stock price $ 2.51-7.03 Risk-free interest rate 0.01 - 1.02 % Expected life of the options 2-5 years Expected volatility 159-347 % Expected dividend yield 0 % |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Business Combination | Note 8 – Business Combinations Excel On February 21, 2020, the Company purchased Excel. This acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below. Purchase Allocation Cash $ 174,283 Accounts receivable 1,943,480 Inventory 9,075 Property and equipment 2,958,190 Customer list 410,000 Goodwill 7,629 Accounts payable (340,151 ) Accrued expenses and other current liabilities (262,506 ) $ 4,900,000 The purchase price was paid as follows: Cash $ 2,600,000 Seller notes 2,300,000 $ 4,900,000 Simultaneous with the purchase of Excel, a building, owned by Excel prior to the acquisition, was sold in a sale-leaseback transaction agreement, whereby the building was leased from the buyer for 15 years. The proceeds from the sale-leaseback of $2,000,000 were used to fund the cash consideration to the seller. The building and the lease is being treated as a financing lease (see Note 3). Impossible Aerospace On November 13, 2020, the Company and a newly formed and wholly owned subsidiary of the Company named ALPP Acquisition Corporation 1, Inc. a Delaware corporation (“Merger Sub”), entered into a merger agreement (the “Agreement”) with IA pursuant to which IA merged with and into Merger Sub. The IA acquisition closed on December 15, 2020, and the Company added IA to the Company’s aerospace services portfolio of companies. Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of IA is in fact an asset purchase. Of the consideration given for the IA purchase more than 95% is concentrated in a single asset or a group of assets in Intellectual Property. And as such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was fair value of the preferred series C stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed of were as follows at the purchase date: Purchase Allocation Cash $ 453,876 Inventory 199,438 Property and equipment 108,753 Patent 5,800,138 Non-solicitation covenant 105,457 Accrued expenses and other current liabilities (374,799 ) SBA loan (PPP funds) (444,850 ) $ 5,848,013 The purchase price was paid as follows: Series C Preferred Stock $ 5,848,013 $ 5,848,013 Vayu (US) Effective February 8, 2021, the Company purchased the assets of Vayu. Under the provision of ASC 805, the Company had to determine whether this acquisition was a business combination or an asset (or a group of assets) acquisition. In doing so, the Company determined that the acquisition of Vayu was in fact an asset purchase. Of the consideration given for the Vayu acquisition more than 95% was concentrated in a single asset or a group of assets in Intellectual Property. As such, the Company accounted for this acquisition as an asset acquisition in accordance with ASC 805-10-20. Accordingly, the assets acquired are initially recognized at the consideration paid, which was the fair value of the series D preferred stock issued, including direct acquisition costs, of which there were none. The cost is allocated to the group of assets acquired based on their relative fair values. The assets acquired and liabilities assumed were as follows at the acquisition date: Purchase Allocation Cash $ 81,442 Property and equipment 50,000 Intellectual property 7,133,756 Non-compete agreement 90,000 Accrued expenses and other current liabilities (564,039 ) SBA loan (PPP funds) (137,850 ) $ 6,653,309 The purchase price was paid as follows: Series D Preferred Stock (1,432,244 shares) $ 6,653,309 $ 6,653,309 TDI On May 5, 2021, the Company closed on the acquisition of TDI. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below. Purchase Allocation Accounts receivable $ 1,408,682 Property and equipment 111,789 Customer list 3,840,000 Non-compete agreement 120,000 Goodwill 6,426,786 Other asset 91,000 Accounts payable (786,151 ) Accrued expenses and other current liabilities (53,857 ) Contract liabilities (3,637,122 ) Notes payable (64,733 ) $ 7,456,394 The purchase price was paid as follows: Class A Common Stock (281,223 shares) $ 1,102,394 Cash 6,354,000 $ 7,456,394 Alt Labs On May 10, 2021, the Company closed on the acquisition of Alt Labs. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below. Purchase Allocation Accounts receivable $ 397,441 Inventory 2,621,653 Property and equipment 1,739,441 Customer list 1,250,000 Proprietary technology 3,670,000 Non-compete agreement 20,000 Goodwill 6,072,439 Other assets 390,502 Accounts payable (397,441 ) Accrued expenses and other current liabilities (411,830 ) Contract liabilities (1,754,290 ) Noted payable (1,695,238 ) $ 11,902,677 The purchase price was paid as follows: Class A Common Stock (1,617,067 shares) $ 1,432,677 Cash 10,470,000 $ 11,902,677 On May 4, 2021, the Company also entered into an agreement to acquire the 100% membership interest in 4740 Cleveland LLC (“Cleveland”), a Florida limited liability company that is the owner of the building currently being leased by Alt Labs, for a total purchase price of $7,000,000. In connection with this agreement, the Company placed in escrow the amount of $1,400,000 which will be applied to the purchase price upon closing. The Company closed on the purchase of the building in August 2021. Identified Technologies On October 20, 2021, the Company acquired Identified Technologies. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below. Purchase Allocation Accounts receivable $ 90,858 Other asset 27,469 Proprietary technology 1,650,000 Tradename 210,000 Goodwill 1,913,310 Non-compete agreement 90,000 Accrued expenses and other current liabilities (363,856 ) $ 3,617,781 The purchase price was paid as follows: Cash $ 35 Class A Common Stock (888,881 shares) 3,617,746 $ 3,617,781 ElectJet On November 29, 2021, the Company acquired ElecJet. The acquisition was considered an acquisition of a business under ASC 805. A summary of the purchase price allocation at fair value is presented below. Purchase Allocation Cash $ 27,466 Accounts receivable 30,000 Inventory 95,000 Proprietary technology 5,890,000 Non-compete agreement 200,000 Goodwill 4,934,269 Accrued expenses and other current liabilities (113,742 ) $ 11,062,993 The purchase price was paid as follows: Cash $ 6,500,000 Class A Common Stock (1,803,279) 4,562,993 $ 11,062,993 DTI Services (doing business as RCA Commercial Electronics) On December 13, 2021, the Company closed the acquisition of RCA. The acquisition was considered an acquisition of a business under ASC 805. The business combination accounting is not yet complete and the amounts assigned to assets acquired and liabilities assumed are provisional. Therefore, this may result in future adjustments to the provisional amounts as new information is obtained about fact and circumstances that existed at the acquisition date. A summary of the purchase price allocation at fair value is presented below: Purchase Allocation Accounts receivable $ 3,409,230 Other current assets 1,259,556 Inventory 14,040,123 Property and equipment 761,370 Customer list 4,700,000 Trademark 1,800,000 Non-compete agreement 690,000 Goodwill 213,477 ROU asset 1,196,764 Accounts payable (951,302 ) Accrued expenses and other current liabilities (677,720 ) Customer deposits (153,201 ) Operating lease liability (1,226,128 ) Line of credit (4,710,768 ) $ 20,351,401 The purchase price was paid as follows: Cash $ 14,000,000 Class A Common Stock (1,587,301 shares) 3,682,538 Warrants (396,825 shares) 668,863 Seller notes 2,000,000 $ 20,351,401 The following are the unaudited pro forma results of operations for the years ended December 31, 2021 and 2020, as if Excel, IA, Vayu, TDI, Alt Labs, Identified Technology, Electjet, and RCA had been acquired on January 1, 2020. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the dates indicated. Pro Forma Combined Financials (unaudited) Years Ended December 31, 2021 2020 Sales $ 98,321,144 $ 102,892,997 Cost of goods sold 75,523,745 78,037,039 Gross profit 22,797,399 24,855,958 Operating expenses 38,544,880 26,956,730 Loss from operations (15,747,481 ) (2,100,772 ) Net loss from continuing operations (12,066,492 ) (4,048,628 ) Loss per share (0.07 ) (0.03 ) |
Equity Investments
Equity Investments | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Equity Investments | Note 9 – Equity Investments AmplifeiIntl LLC On September 15, 2021, A4 Manufacturing, Inc. entered into a Membership Interest Purchase Agreement acquiring approximately a 9% membership interest in AmplifeiIntl LLC (also doing business as Happinss) (“Amplifei”). The membership interest is non-voting and the Company does not have the ability to exercise significant influence over operating and financial activities. The equity investment is being valued using cost as there is no market for the membership units, and accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, the Company determined there was an impairment on this investment and took a loss against earnings of $1,350,000. The membership interest was paid for as follows: Accounts receivable owed from Amplifei $ 1,000,000 Cash 350,000 Total $ 1,350,000 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Income Taxes | Note 10 – Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against the remaining net deferred tax assets as of December 31, 2021 and 2020 based on estimates of recoverability. The Company determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. The Company’s deferred tax assets, liabilities, and valuation allowance have been adjusted to reflect the impact of the new tax law. The following is a reconciliation of the difference between the effective and statutory income tax rates for years ended December 31: 2021 2020 Amount Percent Amount Percent Federal statutory rates $ (4,075,111 ) 21.0 % $ (1,690,473 ) 21.0 % State income taxes (1,164,318 ) 6.0 % (482,992 ) 6.0 % Permanent differences (870,407 ) 4.5 % (495,960 ) 6.2 % Valuation allowance against net deferred tax assets 5,732,945 (29.5 )% 2,576,374 (32.0 )% Effective rate $ (376,891 ) 1.9 % $ (93,051 ) 1.2 % The significant components of the deferred tax assets at December 31, 2021 and 2020, are summarized below: 2021 2020 Deferred income tax asset Net operation loss carryforwards $ 12,652,193 $ 6,559,060 Total deferred income tax asset 12,652,193 6,559,060 Less: valuation allowance (12,652,193 ) (6,559,060 ) Total deferred income tax asset $ — $ — The significant components of the deferred tax liabilities at December 31, 2021 and 2020, are summarized below: 2021 2020 Deferred income tax liabilities: Book to tax differences in intangible assets $ 51,308 $ 428,199 Total deferred income tax liability $ 51,308 $ 428,199 The deferred tax liability is mostly made up of the difference between book and tax values for property and equipment and intangible assets. The Company has recorded as of December 31, 2021 and 2020 a valuation allowance of $12,652,193 and $6,559,060, respectively, as management believes that it is more likely than not that the deferred tax assets will not be realized in future years. Management has based its assessment on the Company’s lack of profitable operating history. The Company annually conducts an analysis of its tax positions and has concluded that it had no uncertain tax positions as of December 31, 2021 and 2020. The Company has net operating loss carry-forwards of approximately $44.5 million. Such amounts are subject to IRS code section 382 limitations and begin to expire in 2029. The tax years from 2017 to 2020 are still subject to audit. |
Industry Segments
Industry Segments | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Industry Segments | Note 11 – Industry Segments The Company discloses segment information that is consistent with the way in which management operates and views its business. Effective during the quarter ended September 30, 2021, the Company has reduced its reportable segments to five operating segments as represented by the Company’s four silos: A4 Construction Services, Inc.; A4 Manufacturing, Inc.; A4 Aerospace Corporation; A4 Technologies, Inc; and A4 Defense Systems, Inc. The Company’s reportable segments for the years ended December 31, 2021 and 2020: Years Ended December 31, 2021 2020 Revenue Construction Services $ 17,995,023 $ 20,851,439 Manufacturing 27,375,122 12,602,910 Defense 4,467,376 — Technologies 1,543,469 — Aerospace 259,823 — $ 51,640,813 $ 33,454,349 Gross profit Construction Services $ (478,031 ) $ 2,587,850 Manufacturing 6,508,230 2,775,777 Defense 1,073,636 — Technologies 456,558 — Aerospace 137,605 — $ 7,697,998 $ 5,363,627 Income (loss) from operations Construction Services $ (6,216,775 ) $ (1,821,309 ) Manufacturing (2,158,492 ) (998,038 ) Defense (282,882 ) — Technologies (162,491 ) — Aerospace (4,942,951 ) — Unallocated and eliminations (8,259,978 ) (3,074,517 ) $ (22,023,569 ) $ (5,893,864 ) Depreciation and amortization Construction Services $ 1,138,364 $ 1,414,875 Manufacturing 1,279,952 619,505 Aerospace 1,027,153 — Technologies 83,132 — Defense 191,740 — Unallocated 335,228 35,882 $ 4,055,569 $ 2,070,262 Interest Expenses Construction Services $ 997,870 $ 2,404,714 Manufacturing 547,202 724,342 Aerospace 4,545 — Technologies 15,347 — Defense 825 — Unallocated 2,268,953 2,334,541 $ 3,834,742 $ 5,463,597 Net income (loss) Construction Services $ (3,380,894 ) $ (3,596,516 ) Manufacturing (654,963 ) (1,366,239 ) Aerospace (4,494,300 ) — Technologies (177,838 ) — Defense (270,289 ) — Unallocated (10,427,008 ) (3,087,118 ) $ (19,405,292 ) $ (8,049,873 ) As of December 31, 2021 As of December 31, 2020 Total Assets Construction Services $ 13,985,561 $ 28,991,044 Manufacturing 39,964,186 10,731,936 Aerospace 17,078,926 — Technologies 39,516,284 — Defense 11,982,580 — Unallocated 10,507,786 1,011,203 $ 133,035,323 $ 40,734,183 Goodwill Construction Services $ 113,592 $ 1,963,761 Manufacturing 8,036,200 121,221 Aerospace 1,913,310 — Technologies 5,447,746 — Defense 6,426,786 — $ 21,937,634 $ 2,084,982 Accounts receivable, net Construction Services $ 4,193,243 $ 4,501,401 Manufacturing 3,192,030 1,983,468 Aerospace 119,774 — Technologies 2,998,945 — Defense 1,371,184 — $ 11,875,176 $ 6,484,869 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Contingencies | Note 12 - Commitments and Contingencies Licensing Agreement DTI has entered into licensing agreements with RCA Trademark Management for the licensing rights to the respective trademarks in the United States of America and Canada. The RCA licensing agreement was amended with Technicolor as licensor and expires December 31, 2024. DTI agrees to pay a royalty fee of 2.50% on net sales of the licensed products with a minimum annual payment of $420,000 for the years ended 2020 and 2021, $440,000 for the year ended 2022, and $460,000 for the year ended 2023, and $480,000 for the year ended 2024. Warranty Service Agreement DTI entered into a warranty service agreement to provide certain warranty services for a lighting supplier through December 31, 2024, except for one class of customer through 2030. In exchange for these services DTI receives annual payments as follows: Years Ending December 31, 2022 $ 75,712 2023 66,626 2024 59,964 Total $ 202,302 Royalty Agreement On November 28, 2021, the Company entered into a Royalty Agreement with the sellers of ElecJet. Upon closing the Company desires to build its initial factory (“Factory”) to manufacture batteries in the territory of the United States. The Company agrees to pay the sellers 1.5% of net sales for batteries produced by the Factory. Royalty payments shall continue to be paid for a period of ten years from the starting date, or until the total of the royalty payments equals $50 million, whichever occurs first. Legal Proceedings From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. As of the date of this Report, the Company was not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows, except as set forth below. In June 2020, the Company’s subsidiary Excel Fabrication, LLC filed a lawsuit against Fusion Mechanical, LLC, in the Fifth Judicial District Court, State of Idaho (Case Number CV42-20-2246). The Company claimed tortious interference and trade secret violations by the defendant. The defendant filed a motion to dismiss, which was denied by the Court. The defendant filed a second motion to dismiss and the Company filed a memorandum in response to the second motion to dismiss, for which a hearing was held on May 10, 2021. On June 11, 2021, the court issued a decision narrowing the claims of the plaintiffs to three items, breach of contract, good faith and fair dealings, and intentional interference for economic advantage. These were the Company’s three main points of contention. As of the date of this Report, discovery was proceeding. The Company intends to pursue vigorously its claims. In August 2020, the Company filed a lawsuit, in the United States District Court, District of Arizona (Case No.2:20-cv-01679-DJH), against Alan Martin, the seller of Horizon Well Testing LLC (“HWT”) dba Venture West Energy Services, LLC. The Company brought claims for breach of contract, including but not limited to breaches of the seller’s representations and warranties in the purchase agreement in connection with the acquisition of HWT. The defendant answered and counterclaimed, claiming breach by the Company of its obligation to issue a promissory note (to be issued in connection with the acquisition of HWT). As of the date of this Report, the discovery period had ended but no trial date had been scheduled. A summary judgement motion was filed on December 22, 2021, which was pending as of the date of this Report. In May 2021, the Company and several shareholders filed a lawsuit, in the United States District Court for the District of Arizona (Case number 2:21-cv-00886-MTL) against Fin Capital LLC (“Fin Cap”), and Grizzly Research LLC (“Grizzly”) alleging securities fraud, tortious interference with business expectancy and libel and slander for disseminating false and misleading statements about Alpine 4 and its employees to manipulate the stock price and further their own financial interests. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Basis of Presentation | |
Subsequent Events | Note 13 – Subsequent Events In March 2022, the Company secured another $4.2 million in lines of credit for Alt Labs. The line of credit accrues interest at a rate of 2.5% above the greater of the prime rate or 3.25%. The line of credit matures on March 8, 2024. This line is secured by substantially all assets of the Alt Labs. In January 2022, the Company issued 72,152 shares of Class A common stock for no additional consideration upon conversion of 10,149 shares of Series C Preferred Stock and 78,674 shares of Series D Preferred Stock. In March 2022, the Company issued 39,386 shares of Class A Common Stock to management in connection with the acquisition of DTI Services Limited Liability Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Policies) | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries as of December 31, 2021 and 2020. Significant intercompany balances and transactions have been eliminated. |
Use of Estimates | The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, the Company could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. This applies in particular to useful lives of long-lived assets, reserves for accounts receivable and inventory, valuation allowance for deferred tax assets, fair values assigned to intangible assets acquired, and impairment of long-lived assets. Actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, the Company’s future financial statement presentation, financial condition, results of operations and cash flows will be affected. The ultimate impact from COVID-19 on the Company’s operations and financial results during 2022 will depend on, among other things, the ultimate severity and scope of the pandemic, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, and the speed with which the economy recovers. The Company is not able to fully quantify the impact that these factors will have on the Company’s financial results during 2022 and beyond. COVID-19 did have a negative impact on the Company’s financial performance in 2021. |
Reclassification | Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. |
Advertising | Advertising costs are expensed when incurred. All advertising takes place at the time of expense. We have no long-term contracts for advertising. Advertising expense for all periods presented were not significant. |
Cash | Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. As of December 31, 2021, and 2020, the Company had no cash equivalents. As of December 31, 2021, and 2020, the Company had $0 and $444,845 in restricted cash, respectively, for amounts held in escrow. The following table sets forth a reconciliation of cash, and restricted cash reported in the consolidated statements of cash flows that agrees to the total of those amounts presented in the consolidated statements of cash flows. December 31, 2021 December 31, 2020 Cash $ 3,715,666 $ 277,738 Restricted cash — 444,845 Total cash and restricted cash shown in statement of cash flows $ 3,715,666 $ 722,583 |
Major Customers | The Company had no customers that made up over 10% of accounts receivable as of December 31, 2021. The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020. For the year ended December 31, 2021, the Company had two customers that each made up 11% of total revenues. For the year ended December 31, 2020, the Company had one customer that made up 10% of total revenues. For the year ended December 31, 2021, the Company had 9% of total revenues made up of government contracts. Major Customer by Segment Manufacturing The manufacturing segment had two customers that made up 31% and 20%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the manufacturing segment had four customer that made up a total of 65% of total manufacturing revenues. Aerospace The aerospace segment had one customer that made up 57% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the aerospace segment had two customers that made up 26% and 10%, respectively, of total aerospace revenues. Construction The construction segment had two customers that made up over 25% and 17%, respectively, of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the construction segment had two customers that made up 28% and 18%, respectively, of total construction revenues. Defense Of the defense segment 100% of accounts receivables and defense revenues were related to government contracts. Technologies The Company had two customers that made up 14% and 30% of accounts receivable as of December 31, 2021. For the year ended December 31, 2021, the technology segment had two customers that made up 22% and 12%, respectively, of total technologies revenues. |
Accounts Receivable | The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2021 and 2020, allowance for bad debt was $199,936 and $49,914, respectively. During the year ended December 31, 2021, the Company wrote off $3,028,757 to bad debts expense. |
Inventory | Inventory for all subsidiaries is valued at weighted average. Management compares the cost of inventory with its net realizable value and an allowance is made to write down inventory to net realizable value, if lower. Inventory is segregated into three areas, raw materials, work-in-process and finished goods. Inventory, net at December 31, 2021 and 2020 consists of: December 31, 2021 December 31, 2020 Raw materials $ 8,322,867 $ 1,584,651 Work in process 2,480,979 573,806 Finished goods 16,391,616 508,145 27,195,462 2,666,602 Reserve (1,213,557 ) — Inventory, net $ 25,981,905 $ 2,666,602 |
Property and Equipment | Property and equipment are carried at cost less depreciation. Depreciation and amortization are provided principally on the straight-line method over the estimated useful lives of the assets, which range from ten years to 39 years as follows: Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years Maintenance and repair costs are charged against income as incurred. Significant improvements or betterments are capitalized and depreciated over the estimated life of the asset. Property and equipment consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Automobiles and trucks $ 1,251,187 $ 918,602 Machinery and equipment 8,870,391 5,436,847 Office furniture and fixtures 167,581 119,546 Buildings and improvements 23,630,250 16,167,000 Total Property and equipment 33,919,409 22,641,995 Less: Accumulated depreciation (5,822,847 ) (3,342,709 ) Property and equipment, net $ 28,096,562 $ 19,299,286 Included in Buildings and improvements in the above table are two buildings of $9,000,000 and $2,000,000 related to sale leaseback transactions in connection with the acquisitions of Deluxe and Excel. (See Note 3.) |
Purchased Intangibles and Other Long-lived Assets | The Company amortizes intangible assets with finite lives over their estimated useful lives, which range between five and fifteen years as follows: Customer list 3-15 years Non-compete agreements 1 to 5 years Software development 5 years Patents 17 years Proprietary technology 15 years Intangible assets consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Software $ 128,474 $ 278,474 Non-compete agreement 1,415,457 205,457 Customer list 11,111,187 2,031,187 Patents, trademarks, and licenses 7,810,107 5,800,137 Proprietary technology 18,343,756 — Total intangible assets 38,808,981 8,315,255 Less: Accumulated amortization (2,031,736 ) (572,171 ) Intangibles, net $ 36,777,245 $ 7,743,084 Expected amortization expense of intangible assets over the next 5 years and thereafter is as follows: Years Ending December 31, 2022 $ 3,211,040 2023 3,203,540 2024 3,183,678 2025 2,577,846 2026 2,553,554 Thereafter 22,047,587 Total $ 36,777,245 Other long-term assets consisted of the following as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Deposits $ 149,517 $ 293,327 Other 207,601 108,417 $ 357,118 $ 401,744 |
Impairment of Long-lived Assets | The Company accounts for long-lived assets in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. During the year ended December 31, 2021, due to the significant impact of COVID-19, the Company determined that the customer list for Excel was impaired and took a charge to earnings of $359,890. During the year ended December 31, 2020, due to the loss of significant customers and the impact of COVID-19, the Company determined that the customer list for APF and Deluxe was impaired and took a charge to earnings of $671,500 and $450,000, respectively. |
Goodwill | In financial reporting, goodwill is not amortized, but is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that result in an impairment review include significant changes in the business climate, declines in our operating results, or an expectation that the carrying amount may not be recoverable. We assess potential impairment by considering present economic conditions as well as future expectations. All assessments of goodwill impairment are conducted at the individual reporting unit level. As of December 31, 2021 and 2020, the reporting units with goodwill were QCA, Morris, Excel, Alt Labs, TDI, Identified Technology, ElecJet, and RCA. The Company used qualitative factors according to ASC 350-20-35-3 to determine whether it is more likely than not that the fair value of goodwill is less than its carrying amount. During the year ended December 31, 2021, the Company determined that the goodwill for Excel was impaired and took a charge to earnings of $7,629. During the year ended December 31, 2020, the Company determined that the goodwill for APF was impaired, as the company ceased operating as of August 31, 2020 and took a charge to earnings of $440,100. |
Fair Value Measurement | Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible notes, notes payable and lines of credit. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements. The carrying value of long-term debt approximates fair value since the related rates of interest approximate current market rates. As of December 31, 2021 and 2020, the Company had no financial assets or liabilities that were required to be fair valued on a recurring basis. |
Equity Investments | The Company’s equity investments consist of investment in one private company in which the Company does not have the ability to exercise significant influence over their operating and financial activities. This investment is carried at cost as there is no market for the common stock and LLC membership units, accordingly, no quoted market price is available. The investment is tested for impairment, at least annually, and more frequently upon the occurrences of certain events. As of December 31, 2021, in accordance with the ASC 321 guidelines, the Company recognized a lost on impairment for the entire value of $1,350,000. The Company has adopted the provisions of ASU 2016-01 and values the investment using the measurement alternative, defined as costs, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. |
Research and Development | The Company focuses on quality control and development of new products and the improvement of existing products. All costs related to research and development activities are expensed as incurred. During the year ended December 31, 2021, research and development cost totaled $1,464,918. |
Revenue Recognition | On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. Revenue is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements: · executed contracts with the Company’s customers that it believes are legally enforceable; · identification of performance obligations in the respective contract; · determination of the transaction price for each performance obligation in the respective contract; · allocation the transaction price to each performance obligation; and · recognition of revenue only when the Company satisfies each performance obligation. The following is a summary of the revenue recognition policy for each of the Company’s subsidiaries. QCA and Alt Labs QCA and Alt Labs are contract manufacturers and recognize revenue when the products have been built and control has been transferred to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed. For all periods presented, management determined that the warranty and returns would be immaterial. ElecJet ElecJet is a research and development of battery technology and development/sales of battery consumer products and recognizes revenue when the products have been shipped to the customer. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Identified Technologies IDT provides drone software and data for industrial job sites and recognizes revenue when the service has been provided to the customer. If a deposit for product or service is received prior to completion, the payment is recorded to deferred revenue until such point the product or services meets our revenue recognition policy. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial Direct Tech Sales RCA is engaged in the design, manufacture and wholesale distribution of commercial LED lighting and electronics such as televisions, mounting solutions, projectors and screens, audio equipment, digital signage, mobile audio and video systems, and all wire and connecting products throughout the United States of America. RCA recognizes revenue when the products have been shipped to the customer which is also when title transfers. Management assesses the materiality and likelihood of warranty work and returns, and records reserves as needed, but have determined that the warranty and returns would be immaterial. Morris Deluxe, Excel and Thermal Dynamics For our construction contracts, revenue is generally recognized over time as our performance creates or enhances an asset that the customer controls as it is created or enhanced. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. For certain of our revenue streams, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an output method as the customer receives and consumes the benefits of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicate a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. Contract Assets and Contract Liabilities The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenues recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. In addition, many of our time and materials arrangements, are billed pursuant to contract terms that are standard within the industry, resulting in contract assets being recorded, as revenue is recognized in advance of billings. Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the consolidated balance sheets. Contract liabilities from our construction contracts arise when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. Contract Retentions As of December 31, 2021 and 2020, accounts receivable included retainage billed under terms of our contracts. These retainage amounts represent amounts which have been contractually invoiced to customers where payments have been partially withheld pending the achievement of certain milestones, satisfaction of other contractual conditions or completion of the project. The following table presents our revenues disaggregated by type: Year ended December 31, 2021 2020 Sale of goods Circuit boards and cables $ 15,700,902 $ 12,602,910 Dietary supplements 11,674,220 — Electronics 1,543,469 — Total sale of goods 28,918,591 12,602,910 Sale of services Construction contracts 22,462,399 20,851,439 Drone 3D mapping 259,823 — Total sale of services 22,722,222 20,851,439 Total revenues $ 51,640,813 $ 33,454,349 |
Earnings (loss) per share | Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. The only potentially dilutive securities outstanding during the periods presented were the convertible debt and options. The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2021 and 2020: For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (8,049,873 ) 132,987,390 $ (0.06 ) Effect of Dilutive Securities Convertible debt — — — (1,001,192 ) 6,624,400 — Dilute EPS Loss available to stockholders plus assumed conversions $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (9,051,065 ) 139,611,790 $ (0.06 ) |
Stock-based compensation | The Company follows the guidelines in ASC 718-10 Compensation-Stock Compensation, which requires companies to measure the cost of employee and non-employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period. The Company may issue compensatory shares for services including, but not limited to, executives, management, accounting, operations, corporate communication, financial and administrative consulting services. The Company determines the grant date fair value of the options using the Black-Scholes option-pricing model. |
Income taxes | The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with operating loss and tax credit carry forwards not expiring unused, and tax planning alternatives. The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve, and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. |
Related Party Disclosure | ASC 850, Related Party Disclosures |
Recent Accounting Pronouncements | In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Reconciliation of cash, and restricted | December 31, 2021 December 31, 2020 Cash $ 3,715,666 $ 277,738 Restricted cash — 444,845 Total cash and restricted cash shown in statement of cash flows $ 3,715,666 $ 722,583 |
Schedule of Inventory, Current | December 31, 2021 December 31, 2020 Raw materials $ 8,322,867 $ 1,584,651 Work in process 2,480,979 573,806 Finished goods 16,391,616 508,145 27,195,462 2,666,602 Reserve (1,213,557 ) — Inventory, net $ 25,981,905 $ 2,666,602 |
Schedule of Property and Equipment, Estimated Useful Lives | Automobiles & Trucks 5 to 7 years Buildings and improvements 39 years Leasehold Improvements 15 years or time remaining on lease (whichever is shorter) Machinery and equipment 10 years |
Property, Plant and Equipment | December 31, 2021 December 31, 2020 Automobiles and trucks $ 1,251,187 $ 918,602 Machinery and equipment 8,870,391 5,436,847 Office furniture and fixtures 167,581 119,546 Buildings and improvements 23,630,250 16,167,000 Total Property and equipment 33,919,409 22,641,995 Less: Accumulated depreciation (5,822,847 ) (3,342,709 ) Property and equipment, net $ 28,096,562 $ 19,299,286 |
Schedule of Finite Lived Intangible Assets, Estimated Useful Lives | Customer list 3-15 years Non-compete agreements 1 to 5 years Software development 5 years Patents 17 years Proprietary technology 15 years |
Schedule of Intangible Assets | December 31, 2021 December 31, 2020 Software $ 128,474 $ 278,474 Non-compete agreement 1,415,457 205,457 Customer list 11,111,187 2,031,187 Patents, trademarks, and licenses 7,810,107 5,800,137 Proprietary technology 18,343,756 — Total intangible assets 38,808,981 8,315,255 Less: Accumulated amortization (2,031,736 ) (572,171 ) Intangibles, net $ 36,777,245 $ 7,743,084 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Years Ending December 31, 2022 $ 3,211,040 2023 3,203,540 2024 3,183,678 2025 2,577,846 2026 2,553,554 Thereafter 22,047,587 Total $ 36,777,245 |
Schedule of Other Assets, Noncurrent | December 31, 2021 December 31, 2020 Deposits $ 149,517 $ 293,327 Other 207,601 108,417 $ 357,118 $ 401,744 |
Schedule of Revenues Disaggregated by Sales Type | Year ended December 31, 2021 2020 Sale of goods Circuit boards and cables $ 15,700,902 $ 12,602,910 Dietary supplements 11,674,220 — Electronics 1,543,469 — Total sale of goods 28,918,591 12,602,910 Sale of services Construction contracts 22,462,399 20,851,439 Drone 3D mapping 259,823 — Total sale of services 22,722,222 20,851,439 Total revenues $ 51,640,813 $ 33,454,349 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | For the Year Ended December 31, 2021 For the Year Ended December 31, 2020 Net loss Shares Per Share Amount Net loss Shares Per Share Amount Basic EPS Loss available to stockholders $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (8,049,873 ) 132,987,390 $ (0.06 ) Effect of Dilutive Securities Convertible debt — — — (1,001,192 ) 6,624,400 — Dilute EPS Loss available to stockholders plus assumed conversions $ (19,405,292 ) 164,216,808 $ (0.12 ) $ (9,051,065 ) 139,611,790 $ (0.06 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Future Minimum Lease Payments for Capital Leases | Years Ending December 31, Finance Leases Operating Leases 2022 $ 1,904,458 $ 504,885 2023 1,927,351 516,405 2024 1,954,170 528,059 2025 1,882,226 97,338 2026 1,869,656 — Thereafter 16,768,517 — Total payments 26,306,378 1,646,687 Less: imputed interest (10,337,568 ) (151,529 ) Total obligation 15,968,810 1,495,158 Less: current portion (649,343 ) (428,596 ) Non-current capital leases obligations $ 15,319,467 $ 1,066,562 |
Schedule of Right of Use Assets and Lease Liabilities | Classification on Balance Sheet December 31, 2021 December 31, 2020 Assets Operating lease assets Operating lease right of use assets $ 1,460,206 $ 581,311 Total lease assets $ 1,460,206 $ 581,311 Liabilities Current liabilities Operating lease liability Current operating lease liability $ 428,596 $ 334,500 Noncurrent liabilities Operating lease liability Long-term operating lease liability 1,066,562 269,030 Total lease liability $ 1,495,158 $ 603,530 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Notes Payable | December 31, 2021 December 31, 2020 Lines of credit, current portion $ 4,473,489 $ 2,819,793 Equipment loans, current portion 61,640 245,388 Term notes, current portion 5,628,884 4,035,730 Total current 10,164,013 7,100,911 PPP loans — 4,340,956 Line of credit, net of current portion 5,640,051 — Long-term portion of equipment loans and term notes 8,426,105 10,860,494 Total notes payable $ 24,230,169 $ 22,302,361 |
Future Scheduled Maturities of Outstanding Notes Payable to Third Parties | Years Ending December 31, 2022 $ 10,098,065 2023 5,940,544 2024 3,844,706 2025 129,849 2026 135,072 Thereafter 4,081,933 Total $ 24,230,169 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Notes Payable, Related Parties | December 31, 2021 December 31, 2020 Notes payable; non-interest bearing; due upon demand; unsecured $ — $ 3,000 Series of notes payable, bearing interest at rates from 3% to 20% per annum, with maturity dates from July 2018 to July 2020, unsecured — 235,651 Total notes payable - related parties $ — $ 238,651 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Convertible Notes Payable | December 31, 2021 December 31, 2020 Series of convertible notes payable issued prior to December 31, 2016, bearing interest at rates of 8% - 10% per annum, with due dates ranging from December 2016 through June 2017. Of the outstanding principal and interest balances $7,500 was paid out in cash and the remaining balances were converted during the year ended December 31, 2021. $ — $ 25,000 Secured convertible notes payable issued to the sellers of QCA on April 1, 2016 for an aggregate of $2,000,000, bearing interest at 5% per annum, due in monthly payments starting on July 1, 2016 and due in full on July 1, 2019. On August 6 and 11, 2019, the Company extended the due date of the two notes to December 31, 2020 and December 31, 2022, respectively. In May and June 2020, these convertible notes were amended -- see below. The outstanding principal and interest balances were fully paid in cash during the year ended December 31, 2021. — 1,291,463 On December 7, 2018, the Company entered into a variable convertible note for $130,000 with net proceeds of $122,200. The note is due September 7, 2019 and bears interest at 12% per annum. The note is immediately convertible into shares of the Company’s Class A common stock at a discount of 40% to the lowest trading closing prices of the stock for 20 days prior to conversion. This note was amended in November 2019 to increase the principal amount by $180,000 due to penalty interest; increase the interest rate to 15% and effect a floor in the conversion price of $0.15 per share. The outstanding principal and interest balance of the note was converted during the year ended December 31, 2021. — 7,538 On November 14, 2019, the Company issued convertible note for $200,000. The note is due November 13, 2020 and bears interest at 15% per annum. The note is immediately convertible into shares of the Company’s Class A common stock at a fixed price of $0.15 per share. The outstanding principal balance of the note was converted during the year ended December 31, 2021. — 200,000 In December 2020 and January 2021, the Company issued convertible notes to individual investors totaling to $1,890,500. The notes are due three to six months from the date of issuance; accrue interest at 5 – 6.25% per annum and are convertible into shares of the Company’s Class A common stock at a fixed rate of $0.25 to $3.00. Of the outstanding principal balance of the notes $389,500 was paid in cash and the remaining balances were converted during the year ended December 31, 2021. — 1,482,500 Total convertible notes payable — 3,006,501 Less: discount on convertible notes payable — (1,343,624 ) Total convertible notes payable, net of discount — 1,662,877 Less: current portion of convertible notes payable — (562,242 ) Long-term portion of convertible notes payable $ — $ 1,100,635 |
Schedule of Acitivity of Convertible Notes Payable | Balance outstanding, December 31, 2019 $ 2,783,806 Issuance of convertible notes payable for cash 1,482,500 Non-cash extinguishment (2,470 ) Repayment of notes (335,896 ) Conversion of notes payable to common stock (1,525,544 ) Penalty interest added to convertible note 15,000 Convertible note issued for interest 192,272 Settlement of convertible note (450,000 ) Amortization of debt discounts 985,709 Discount from beneficial conversion feature (1,482,500 ) Balance outstanding, December 31, 2020 1,662,877 Issuance of convertible notes payable for cash 408,000 Repayment of notes (1,688,464 ) Conversion of notes payable to common stock (1,726,037 ) Amortization of debt discounts 1,436,052 Discount from beneficial conversion feature (92,428 ) Balance outstanding, December 31, 2021 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Stock option activity | Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 1,790,000 $ 0.19 8.10 $ 176,445 Granted — Forfeited — Exercised — Outstanding at December 31, 2020 1,790,000 $ 0.19 7.09 $ 6,176,855 Granted — Forfeited — Exercised — Outstanding at December 31, 2021 1,790,000 $ 0.19 6.09 $ 3,098,055 Vested and expected to vest at December 31, 2021 1,790,000 $ 0.19 6.09 $ 3,098,055 Exercisable at December 31, 2021 1,622,625 $ 0.20 6.04 $ 2,785,595 |
Summary of options outstanding and exercisable | Options Outstanding Options Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price $ 0.05 979,000 6.38 $ 0.05 822,250 $ 0.05 0.10 85,000 6.28 0.10 74,375 0.10 0.13 388,500 5.58 0.13 388,500 0.13 0.26 114,000 5.34 0.26 114,000 0.26 0.90 223,500 5.27 0.90 223,500 0.90 1,790,000 1,622,625 |
Schedule of warrant activity | Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2019 277,001 $ 1.01 1.23 $ — Granted — Forfeited (2,001 ) 1.01 Exercised — Outstanding at December 31, 2020 275,000 $ 1.01 0.23 $ 723,250 Granted 5,527,778 3.32 4.62 Forfeited (275,000 ) 1.01 Exercised — Outstanding at December 31, 2021 5,527,778 $ 3.32 4.62 $ — Vested and expected to vest at December 31, 2021 5,527,778 $ 3.32 4.62 $ — Exercisable at December 31, 2021 5,099,207 $ 3.34 4.62 $ — |
Summary of warrants outstanding and exercisable | Warrants Outstanding Warrants Exercisable Exercise Price Number of Shares Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price $ 6.60 416,667 3.13 $ 6.60 416,667 $ 6.60 2.25 396,825 2.94 2.52 396,825 2.52 3.10 4,285,715 4.90 3.10 4,285,715 3.1 3.08 428,571 4.90 3.08 — — 5,527,778 5,099,207 |
Option pricing model assumptions | Stock price $ 2.51-7.03 Risk-free interest rate 0.01 - 1.02 % Expected life of the options 2-5 years Expected volatility 159-347 % Expected dividend yield 0 % |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Purchase Allocation Cash $ 174,283 Accounts receivable 1,943,480 Inventory 9,075 Property and equipment 2,958,190 Customer list 410,000 Goodwill 7,629 Accounts payable (340,151 ) Accrued expenses and other current liabilities (262,506 ) $ 4,900,000 Cash $ 2,600,000 Seller notes 2,300,000 $ 4,900,000 Purchase Allocation Cash $ 453,876 Inventory 199,438 Property and equipment 108,753 Patent 5,800,138 Non-solicitation covenant 105,457 Accrued expenses and other current liabilities (374,799 ) SBA loan (PPP funds) (444,850 ) $ 5,848,013 Series C Preferred Stock $ 5,848,013 $ 5,848,013 Purchase Allocation Cash $ 81,442 Property and equipment 50,000 Intellectual property 7,133,756 Non-compete agreement 90,000 Accrued expenses and other current liabilities (564,039 ) SBA loan (PPP funds) (137,850 ) $ 6,653,309 Series D Preferred Stock (1,432,244 shares) $ 6,653,309 $ 6,653,309 Purchase Allocation Accounts receivable $ 1,408,682 Property and equipment 111,789 Customer list 3,840,000 Non-compete agreement 120,000 Goodwill 6,426,786 Other asset 91,000 Accounts payable (786,151 ) Accrued expenses and other current liabilities (53,857 ) Contract liabilities (3,637,122 ) Notes payable (64,733 ) $ 7,456,394 Class A Common Stock (281,223 shares) $ 1,102,394 Cash 6,354,000 $ 7,456,394 Purchase Allocation Accounts receivable $ 397,441 Inventory 2,621,653 Property and equipment 1,739,441 Customer list 1,250,000 Proprietary technology 3,670,000 Non-compete agreement 20,000 Goodwill 6,072,439 Other assets 390,502 Accounts payable (397,441 ) Accrued expenses and other current liabilities (411,830 ) Contract liabilities (1,754,290 ) Noted payable (1,695,238 ) $ 11,902,677 Class A Common Stock (1,617,067 shares) $ 1,432,677 Cash 10,470,000 $ 11,902,677 Purchase Allocation Accounts receivable $ 90,858 Other asset 27,469 Proprietary technology 1,650,000 Tradename 210,000 Goodwill 1,913,310 Non-compete agreement 90,000 Accrued expenses and other current liabilities (363,856 ) $ 3,617,781 Cash $ 35 Class A Common Stock (888,881 shares) 3,617,746 $ 3,617,781 Purchase Allocation Cash $ 27,466 Accounts receivable 30,000 Inventory 95,000 Proprietary technology 5,890,000 Non-compete agreement 200,000 Goodwill 4,934,269 Accrued expenses and other current liabilities (113,742 ) $ 11,062,993 Cash $ 6,500,000 Class A Common Stock (1,803,279) 4,562,993 $ 11,062,993 Purchase Allocation Accounts receivable $ 3,409,230 Other current assets 1,259,556 Inventory 14,040,123 Property and equipment 761,370 Customer list 4,700,000 Trademark 1,800,000 Non-compete agreement 690,000 Goodwill 213,477 ROU asset 1,196,764 Accounts payable (951,302 ) Accrued expenses and other current liabilities (677,720 ) Customer deposits (153,201 ) Operating lease liability (1,226,128 ) Line of credit (4,710,768 ) $ 20,351,401 Cash $ 14,000,000 Class A Common Stock (1,587,301 shares) 3,682,538 Warrants (396,825 shares) 668,863 Seller notes 2,000,000 $ 20,351,401 |
Business Acquisition, Pro Forma Information | Pro Forma Combined Financials (unaudited) Years Ended December 31, 2021 2020 Sales $ 98,321,144 $ 102,892,997 Cost of goods sold 75,523,745 78,037,039 Gross profit 22,797,399 24,855,958 Operating expenses 38,544,880 26,956,730 Loss from operations (15,747,481 ) (2,100,772 ) Net loss from continuing operations (12,066,492 ) (4,048,628 ) Loss per share (0.07 ) (0.03 ) Accounts receivable owed from Amplifei $ 1,000,000 Cash 350,000 Total $ 1,350,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Effective Income Tax Rate Reconciliation | 2021 2020 Amount Percent Amount Percent Federal statutory rates $ (4,075,111 ) 21.0 % $ (1,690,473 ) 21.0 % State income taxes (1,164,318 ) 6.0 % (482,992 ) 6.0 % Permanent differences (870,407 ) 4.5 % (495,960 ) 6.2 % Valuation allowance against net deferred tax assets 5,732,945 (29.5 )% 2,576,374 (32.0 )% Effective rate $ (376,891 ) 1.9 % $ (93,051 ) 1.2 % |
Schedule of Deferred Tax Assets and Liabilities | 2021 2020 Deferred income tax asset Net operation loss carryforwards $ 12,652,193 $ 6,559,060 Total deferred income tax asset 12,652,193 6,559,060 Less: valuation allowance (12,652,193 ) (6,559,060 ) Total deferred income tax asset $ — $ — 2021 2020 Deferred income tax liabilities: Book to tax differences in intangible assets $ 51,308 $ 428,199 Total deferred income tax liability $ 51,308 $ 428,199 |
Industry Segments (Tables)
Industry Segments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Tables) | |
Schedule of Segment Reporting Information, by Segment | Years Ended December 31, 2021 2020 Revenue Construction Services $ 17,995,023 $ 20,851,439 Manufacturing 27,375,122 12,602,910 Defense 4,467,376 — Technologies 1,543,469 — Aerospace 259,823 — $ 51,640,813 $ 33,454,349 Gross profit Construction Services $ (478,031 ) $ 2,587,850 Manufacturing 6,508,230 2,775,777 Defense 1,073,636 — Technologies 456,558 — Aerospace 137,605 — $ 7,697,998 $ 5,363,627 Income (loss) from operations Construction Services $ (6,216,775 ) $ (1,821,309 ) Manufacturing (2,158,492 ) (998,038 ) Defense (282,882 ) — Technologies (162,491 ) — Aerospace (4,942,951 ) — Unallocated and eliminations (8,259,978 ) (3,074,517 ) $ (22,023,569 ) $ (5,893,864 ) Depreciation and amortization Construction Services $ 1,138,364 $ 1,414,875 Manufacturing 1,279,952 619,505 Aerospace 1,027,153 — Technologies 83,132 — Defense 191,740 — Unallocated 335,228 35,882 $ 4,055,569 $ 2,070,262 Interest Expenses Construction Services $ 997,870 $ 2,404,714 Manufacturing 547,202 724,342 Aerospace 4,545 — Technologies 15,347 — Defense 825 — Unallocated 2,268,953 2,334,541 $ 3,834,742 $ 5,463,597 Net income (loss) Construction Services $ (3,380,894 ) $ (3,596,516 ) Manufacturing (654,963 ) (1,366,239 ) Aerospace (4,494,300 ) — Technologies (177,838 ) — Defense (270,289 ) — Unallocated (10,427,008 ) (3,087,118 ) $ (19,405,292 ) $ (8,049,873 ) As of December 31, 2021 As of December 31, 2020 Total Assets Construction Services $ 13,985,561 $ 28,991,044 Manufacturing 39,964,186 10,731,936 Aerospace 17,078,926 — Technologies 39,516,284 — Defense 11,982,580 — Unallocated 10,507,786 1,011,203 $ 133,035,323 $ 40,734,183 Goodwill Construction Services $ 113,592 $ 1,963,761 Manufacturing 8,036,200 121,221 Aerospace 1,913,310 — Technologies 5,447,746 — Defense 6,426,786 — $ 21,937,634 $ 2,084,982 Accounts receivable, net Construction Services $ 4,193,243 $ 4,501,401 Manufacturing 3,192,030 1,983,468 Aerospace 119,774 — Technologies 2,998,945 — Defense 1,371,184 — $ 11,875,176 $ 6,484,869 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Schedule of Warranty Service Agreement | Years Ending December 31, 2022 $ 75,712 2023 66,626 2024 59,964 Total $ 202,302 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Oct. 20, 2021 | |
Net loss | $ 19,400 | |
Non-recurring items | 8,400 | |
Acquisitions expenses | 612 | |
Repurchase of restricted stock units costs | 1,800 | |
Loss on equity investment | 1,400 | |
Amount for bonus to management | 1,200 | |
Proceeds from lines of credit and direct stock offering | 76,400 | |
Proceeds from sale of stock | 67,100 | |
Proceeds From Lines Of Credit | 9,300 | |
Working capital | 14,000 | |
Line of credit | 18,300 | |
Secured bank financing | 18,800 | |
Capital expenditures lines of credit | 500 | |
Unused secured bank financing | 6,400 | |
Write off of accounts receivables | 3,000 | |
Write off of intangibles and goodwill | $ 367 | |
Identified Technologies Corporation | ||
Owenership acquired | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Cash and Restricted Cash Schedule Of Reconciliation Of Cash Cash Equivalents And Restricted Cash Table (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Cash | $ 3,715,666 | $ 277,738 |
Restricted cash | 0 | 444,845 |
Total cash and restricted cash shown in statement of cash flows | $ 3,715,666 | $ 722,583 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Inventory Schedule of Inventory Current (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Raw materials | $ 8,322,867 | $ 1,584,651 |
Work in process | 2,480,979 | 573,806 |
Finished goods | 16,391,616 | 508,145 |
Inventory, gross | 27,195,462 | 2,666,602 |
Reserve | (1,213,557) | 0 |
Inventory, net | $ 25,981,905 | $ 2,666,602 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Property and Equipment Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment, Useful Life | 39 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Useful Life | 15 years |
Machinery and Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Maximum | Automobiles & Trucks | |
Property, Plant and Equipment, Useful Life | 7 years |
Minimum | Automobiles & Trucks | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Property and Equipment Property Plant and Equipment (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Total Property and equipment | $ 33,919,409 | $ 22,641,995 |
Less: Accumulated depreciation | (5,822,847) | (3,342,709) |
Property and equipment, net | 28,096,562 | 19,299,286 |
Machinery and Equipment | ||
Total Property and equipment | 8,870,391 | 5,436,847 |
Automobiles & Trucks | ||
Total Property and equipment | 1,251,187 | 918,602 |
Building Improvements | ||
Total Property and equipment | 23,630,250 | 16,167,000 |
Furniture and Fixtures | ||
Total Property and equipment | $ 167,581 | $ 119,546 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies Purchased Intangibles and Other Longlived Assets Schedule of Finite Lived Intangible Assets Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Finite-Lived Intangible Asset, Useful Life | 17 years |
Proprietary Technology | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Maximum | Customer List | |
Finite-Lived Intangible Asset, Useful Life | 15 years |
Maximum | Noncompete Agreements | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Minimum | Customer List | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Minimum | Noncompete Agreements | |
Finite-Lived Intangible Asset, Useful Life | 1 year |
Software Development | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Purchased Intangibles and Other Longlived Assets Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Total Intangible assets | $ 38,808,981 | $ 8,315,255 |
Less: Accumulated amortization | (2,031,736) | (572,171) |
Intangibles, net | 36,777,245 | 7,743,084 |
Proprietary Technology | ||
Total Intangible assets | 18,343,756 | 0 |
Software | ||
Total Intangible assets | 128,474 | 278,474 |
Noncompete Agreements | ||
Total Intangible assets | 1,415,457 | 205,457 |
Customer List | ||
Total Intangible assets | 11,111,187 | 2,031,187 |
Patents, Trademarks, and Licenses | ||
Total Intangible assets | $ 7,810,107 | $ 5,800,137 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Purchased Intangibles and Other Longlived Assets Schedule of FiniteLived Intangible Assets Future Amortization Expense (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
2022 | $ 3,211,040 | |
2023 | 3,203,540 | |
2024 | 3,183,678 | |
2025 | 2,577,846 | |
2026 | 2,553,554 | |
Thereafter | 22,047,587 | |
Total | $ 36,777,245 | $ 7,743,084 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies Purchased Intangibles and Other Longlived Assets Schedule of Other Assets Noncurrent (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Other non-current assets | $ 357,118 | $ 401,744 |
Deposits | ||
Other non-current assets | 149,517 | 293,327 |
Other | ||
Other non-current assets | $ 207,601 | $ 108,417 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies Earnings (loss) per share Computation of basic and diluted EPS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Loss available to stockholders, Basic | $ (19,405,292) | $ (8,049,873) |
Weighted Average Number of Shares Outstanding, Basic | 164,216,808 | 132,987,390 |
Income (loss) per share, Basic | $ (0.12) | $ (0.06) |
Convertible debt, Effect of Dilutive Securities | $ (1,001,192) | |
Convertible debt shares, Effect of Dilutive Securities | 6,624,400 | |
Income (loss) available to stockholders plus assumed conversions, Diluted | $ (19,405,292) | $ (9,051,065) |
Weighted Average Number of Shares Outstanding, Diluted | 164,216,808 | 139,611,790 |
Earnings Per Share, Diluted | $ (0.12) | $ (0.06) |
Summary of Significant Accou_13
Summary of Significant Accounting Policies Revenues Disaggregated by Sales Type (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues, net | $ 51,640,813 | $ 33,454,349 |
Total sale of goods | 28,918,591 | 12,602,910 |
Total sale of services | 22,722,222 | 20,851,439 |
Circuit Boards and Cables | ||
Total sale of goods | 15,700,902 | 12,602,910 |
Dietary Supplements | ||
Total sale of goods | 11,674,220 | 0 |
Electronics | ||
Total sale of goods | 1,543,469 | 0 |
Construction Contracts | ||
Total sale of services | 22,462,399 | 20,851,439 |
Drone 3D Mapping | ||
Total sale of services | $ 259,823 | $ 0 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies Cash and Restricted Cash Schedule Of Reconciliation Of Cash Cash Equivalents And Restricted Cash (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Restricted cash | $ 0 | $ 444,845 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies Major Customers (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable Concentration Risk | ||
Concentration Risk, Customer | The Company had one customer that made up 21% of accounts receivable as of December 31, 2021 | The Company had two customers that made up 10% and 8%, respectively, of accounts receivable as of December 31, 2020 |
Revenues Concentration Risk | ||
Concentration Risk, Customer | the Company had one customer that made up 11% of total revenues | the Company had one customer that made up 10% of total revenues |
Concentration Risk Government | the Company had 9% of total revenues made up of government contracts |
Summary of Significant Accou_16
Summary of Significant Accounting Policies Accounts Receivable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Allowance for bad debts | $ 199,936 | $ 49,914 |
Write off for bad debt | $ 3,017,022 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies Property and Equipment Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Property, Plant and Equipment, Useful Life | ten years to 39 years | |
Sale leaseback transactions | $ 9,000,000 | $ 2,000,000 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies Purchased Intangibles and Other Longlived Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Consolidated Balance Sheets | |
Intangible asset useful life | five and fifteen years |
Summary of Significant Accou_19
Summary of Significant Accounting Policies Impairment of Longlived Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Impairment loss | $ 367,519 | $ 1,561,600 |
Customer List APF | ||
Impairment of Long-Lived Assets | 671,500 | |
Customer List Deluxe | ||
Impairment of Long-Lived Assets | $ 450,000 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Impairment of goodwill | $ 7,629 | $ 440,100 |
Summary of Significant Accou_21
Summary of Significant Accounting Policies Leases (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Consolidated Balance Sheets | |
Initial term of lease | 12 months |
Summary of Significant Accou_22
Summary of Significant Accounting Policies Equity Investments (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Consolidated Balance Sheets | |
Equity investments impairment loss | $ 1,350,000 |
Summary of Significant Accou_23
Summary of Significant Accounting Policies Research and Development (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Consolidated Balance Sheets | |
Research and development costs | $ 1,464,918 |
Leases (Details)
Leases (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finance Leases | ||
2022 | $ 1,904,458 | |
2023 | 1,927,351 | |
2024 | 1,954,170 | |
2025 | 1,882,226 | |
2026 | 1,869,656 | |
Thereafter | 16,768,517 | |
Finance Lease, Liability, Payment, Due | 26,306,378 | |
Imputed Interest on Capital Lease | (10,337,568) | |
Total obligation | 15,968,810 | |
Financing lease obligation, current portion | (649,343) | |
Financing lease obligations, net of current portion | 15,319,467 | |
Operating Leases | ||
2022 | 504,885 | |
2023 | 516,405 | |
2024 | 528,059 | |
2025 | 97,338 | |
2026 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 1,646,687 | |
Less imputed interest | (151,529) | |
Total obligation | 1,495,158 | $ 603,530 |
Less:Operating lease obligation, current portion | (428,596) | (334,500) |
Operating lease obligations, net of current portion | $ 1,066,562 | $ 269,030 |
Leases (Details 1)
Leases (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Operating lease right of use assets | $ 1,460,206 | $ 581,311 |
Total lease assets | 1,460,206 | 581,311 |
Operating lease obligation, current portion | 428,596 | 334,500 |
Operating lease obligations, non-current | 1,066,562 | 269,030 |
Total obligation | $ 1,495,158 | $ 603,530 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | May 03, 2021 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Operating lease expense | $ 386,056 | $ 373,884 | ||
Additional finance lease liability | $ 279,287 | 279,287 | ||
Payment of Operating lease | $ 402,688 | 362,771 | ||
Finance Lease, Weighted Average Remaining Lease Term | 3 years 2 months 12 days | |||
Monthly lease payments | $ 31,746 | |||
Finance Lease, Weighted Average Discount Rate, Percent | 10.00% | 10.00% | ||
Right of use asset | $ 1,460,206 | $ 1,460,206 | 581,311 | |
Total obligation | 1,495,158 | 1,495,158 | $ 603,530 | |
Property Subject to Operating Lease | Building | ||||
Payment of Operating lease | $ 58,333 | |||
Right of use asset | 3,689,634 | 3,689,634 | ||
Payment of Operating lease minimum | 40,833 | |||
Payment of Operating lease maximum | $ 49,583 | |||
Discounted incremental borrowing rate | 3.96% | |||
Lease term | 72 years | |||
Lease termination date | Aug. 27, 2021 | |||
Phoenix | ||||
Right of use asset | 193,541 | 193,541 | ||
RCA | Operating Lease | ||||
Right of use asset | 1,196,764 | 1,196,764 | ||
Total obligation | 1,226,128 | $ 1,226,128 | ||
Payment of Operating lease minimum | 31,350 | |||
Payment of Operating lease maximum | $ 35,207 | |||
Discounted incremental borrowing rate | 4.00% | |||
Lease term | 89 years |
Debt (Details)
Debt (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Notes payable, current portion | $ 10,164,013 | $ 7,100,911 |
Notes Payable | 24,230,169 | 22,302,361 |
Long-term Debt | 24,230,169 | |
Lines of Credit | ||
Notes payable, current portion | 4,473,489 | 2,819,793 |
Short Term Notes | ||
Notes payable, current portion | 5,628,884 | 4,035,730 |
Equipment Loans | ||
Notes payable, current portion | 61,640 | 245,388 |
Merchant Loans | ||
Notes payable, current portion | 5,640,051 | 0 |
Equipment, Noncurrent | ||
Long-term Debt | 8,426,105 | 10,860,494 |
PPP loans | ||
Long-term Debt | $ 0 | $ 4,340,956 |
Debt (Details 1)
Debt (Details 1) | Dec. 31, 2021USD ($) |
Debt (Details) | |
2022 | $ 10,098,065 |
2023 | 5,940,544 |
2024 | 3,844,706 |
2025 | 129,849 |
2026 | 135,072 |
Thereafter | 4,081,933 |
Total | $ 24,230,169 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Apr. 08, 2021 | May 03, 2018 | Apr. 05, 2018 | Aug. 27, 2021 | May 31, 2020 | Feb. 29, 2020 | Jan. 31, 2020 | Nov. 30, 2019 | Oct. 31, 2019 | Jan. 31, 2019 | May 31, 2018 | Feb. 22, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Agreement for purchase of building | $ 4,700,000 | |||||||||||||
Additional funds borrow | $ 6,400,000 | |||||||||||||
Due to acquisitions | 1,799,725 | |||||||||||||
Revolving lines of credit | 18,300,000 | |||||||||||||
Capital expenditures lines of credit | 500,000 | |||||||||||||
Lines of credit | 100,000 | |||||||||||||
Periodic payments | $ 19,590 | |||||||||||||
Notes bear interest rate | 3.95% | 3.75% | ||||||||||||
Aggregate secured promissory notes | $ 2,000,000 | |||||||||||||
Loan term | 10 years | 24 years | ||||||||||||
Accrue interest rate | 1.00% | |||||||||||||
Monthly payments of debt | $ 24,722 | |||||||||||||
(Gain) loss on extinguishment of debt | $ 5,987,523 | |||||||||||||
Credit line | 18,300,000 | |||||||||||||
Notes Payable | $ 24,230,169 | $ 22,302,361 | ||||||||||||
Merchant Agreements | ||||||||||||||
Interest rate | 13.00% | |||||||||||||
Minimum | ||||||||||||||
Line of credit facility interest rate | 2.50% | |||||||||||||
Maximum | ||||||||||||||
Line of credit facility interest rate | 4.25% | |||||||||||||
Investor [Member] | ||||||||||||||
Principal amount | $ 48,000 | |||||||||||||
Interest rate | 15.00% | |||||||||||||
Due date | Jan. 31, 2020 | |||||||||||||
Secured APF Notes | ||||||||||||||
Periodic payments | $ 19,975 | $ 4,086 | ||||||||||||
(Gain) loss on extinguishment of debt | 382,384 | |||||||||||||
Principal amount | $ 1,950,000 | $ 1,689,000 | ||||||||||||
Interest rate | 4.25% | 0.00% | ||||||||||||
Notes Payable | $ 67,617 | |||||||||||||
Due date | Apr. 30, 2020 | May 27, 2022 | ||||||||||||
Debt forgiven | $ 450,000 | |||||||||||||
Equipment note | ||||||||||||||
Periodic payments | $ 3,795 | |||||||||||||
Principal amount | $ 630,750 | |||||||||||||
Interest rate | 11.75% | |||||||||||||
Due date | May 4, 2022 | |||||||||||||
Promissory Notes | Excel | ||||||||||||||
Principal amount | $ 2,300,000 | |||||||||||||
Interest rate | 4.25% | |||||||||||||
Notes Payable | 2,062,318 | |||||||||||||
San Diego building | ||||||||||||||
Periodic payments | $ 15,984 | |||||||||||||
Principal amount | $ 2,740,000 | |||||||||||||
Interest rate | 7.00% | |||||||||||||
Due date | Nov. 30, 2034 | |||||||||||||
APF | ||||||||||||||
Principal amount | $ 1,000,000 | |||||||||||||
Credit line | $ 2,800,000 | |||||||||||||
Minimum interest | 7.75% | |||||||||||||
Exit fee | 1.00% | |||||||||||||
VWES | ||||||||||||||
Periodic payments | $ 150,000 | |||||||||||||
Principal amount | $ 3,000,000 | |||||||||||||
Accrued interest | 1,170,861 | |||||||||||||
Interest rate | 7.00% | |||||||||||||
Notes Payable | $ 2,857,500 | |||||||||||||
Default rate | 10.00% | |||||||||||||
Daily late charge | $ 575 | |||||||||||||
Morris | ||||||||||||||
Principal amount | $ 107,997 | |||||||||||||
Interest rate | 9.40% | |||||||||||||
Morris | Promissory Notes | ||||||||||||||
Periodic payments | $ 31,755 | 13,882 | ||||||||||||
Principal amount | $ 116,667 | $ 3,100,000 | $ 119,370 | |||||||||||
Interest rate | 4.25% | 6.00% | ||||||||||||
Notes Payable | $ 350,000 | |||||||||||||
Due date | Jan. 1, 2020 | Jan. 31, 2021 | ||||||||||||
Repayment of debt | $ 30,000 | |||||||||||||
Accrued interest | $ 2,703 | |||||||||||||
Deluxe | Celtic Capital | ||||||||||||||
Periodic payments | $ 3,333 | |||||||||||||
Principal amount | 200,000 | |||||||||||||
Deluxe | First note | ||||||||||||||
Periodic payments | $ 19,463 | |||||||||||||
(Gain) loss on extinguishment of debt | $ 803,079 | |||||||||||||
Principal amount | $ 1,883,418 | $ 1,900,000 | ||||||||||||
Interest rate | 4.25% | |||||||||||||
Payment of other cost | $ 887,000 | |||||||||||||
Class C common stock shares held by seller | 1,617,067 | |||||||||||||
Deluxe | Second Note | ||||||||||||||
Principal amount | $ 496,343 | |||||||||||||
Interest rate | 8.75% | |||||||||||||
Due date | Jan. 31, 2020 | |||||||||||||
Excel | Celtic Capital | ||||||||||||||
Periodic payments | 7,083 | |||||||||||||
Principal amount | $ 425,000 |
Notes Payable, Related Partie_2
Notes Payable, Related Parties (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Notes payable, related parties, current portion | $ 0 | $ 238,651 |
Notes Payable 1 | ||
Notes payable, related parties, current portion | 0 | 3,000 |
Notes Payable 2 | ||
Notes payable, related parties, current portion | $ 0 | $ 235,651 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Total convertible notes payable | $ 0 | $ 3,006,501 |
Less: discount on convertible notes payable | 0 | (1,343,624) |
Total convertible notes payable, net of discount | 0 | 1,662,877 |
Less: current portion of convertible notes payable | 0 | (562,242) |
Long-term portion of convertible notes payable | 0 | 1,100,635 |
Convertible Notes Payable 1 | ||
Total convertible notes payable | 0 | 25,000 |
Convertible Notes Payable 2 | ||
Total convertible notes payable | 0 | 1,291,463 |
Convertible Notes Payable 3 | ||
Total convertible notes payable | 0 | 7,538 |
Convertible Notes Payable 4 | ||
Total convertible notes payable | 0 | 200,000 |
Convertible Notes Payable 5 | ||
Total convertible notes payable | $ 0 | $ 1,482,500 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Convertible Notes Payable, net of discount at beginning | $ 1,662,877 | $ 2,783,806 |
Issuance of convertible notes payable for cash | 408,000 | 1,482,500 |
Non-cash extinguishment | (2,470) | |
Repayment of notes | (1,688,464) | (335,896) |
Conversion of notes payable to common stock | (1,726,037) | (1,525,544) |
Penalty interest added to convertible note | 15,000 | |
Convertible note issued for interest | 192,272 | |
Settlement of convertible note | (450,000) | |
Amortization of debt discounts | 1,436,052 | 985,709 |
Discount from beneficial conversion feature | (92,428) | (1,482,500) |
Convertible Notes Payable, net of discount at Ending | $ 0 | $ 1,662,877 |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details Narrative) - USD ($) | Jun. 05, 2020 | Jun. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Amortization of debt discounts | $ 1,436,052 | $ 985,709 | ||
Beneficial conversion feature | 92,428 | 1,482,500 | ||
Periodic payments | 19,590 | |||
Total convertible notes payable | 0 | 3,006,501 | ||
(Gain) loss on extinguishment of debt | 5,987,523 | |||
Jeff Moss | ||||
Interest rate | 5.00% | |||
Principal amount | 720,185 | 798,800 | ||
Periodic payments | $ 2,605 | |||
Total convertible notes payable | 0 | 735,329 | ||
Due date | May 4, 2027 | |||
Dwight Hargreaves | ||||
Interest rate | 6.00% | |||
Principal amount | $ 551,001 | 605,464 | ||
Periodic payments | $ 2,316 | |||
Total convertible notes payable | 0 | $ 556,135 | ||
Due date | Jun. 5, 2026 | |||
(Gain) loss on extinguishment of debt | $ 192,272 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders Equity (Details) | |||
Options outstanding, beginning balance | 1,790,000 | 1,790,000 | |
Options Granted | 0 | 0 | |
Options, Forfeited | 0 | 0 | |
Options Exercised | 0 | 0 | |
Options outstanding, ending balance | 1,790,000 | 1,790,000 | 1,790,000 |
Options Vested and expected to vest | 1,790,000 | ||
Options, Exercisable | 1,622,625 | 1,622,625 | |
Weighted average price per share - beginning balance | $ 0.19 | $ 0.19 | |
Weighted average price per share - ending balance | 0.19 | $ 0.19 | $ 0.19 |
Weighted average price per share - Vested and Expected to Vest | 0.19 | ||
Weighted average price per share - Exercisable | $ 0.20 | ||
Weighted Average Remaining Contractual Term, Options, Outstanding | 6 years 1 month 2 days | 7 years 1 month 2 days | 8 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Options, Vested and Expected to Vest | 6 years 1 month 2 days | ||
Weighted Average Remaining Contractual Term, Options, Exercisable | 6 years 14 days | ||
Options, Outstanding at beginning, Intrinsic Value | $ 6,176,855 | $ 176,445 | |
Options, Outstanding at end Intrinsic Value | 3,098,055 | $ 6,176,855 | $ 176,445 |
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 3,098,055 | ||
Options, Exercisable, Intrinsic Value | $ 2,785,595 |
Stockholders Equity (Details 1)
Stockholders Equity (Details 1) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Options outstanding, beginning balance | 1,790,000 | 1,790,000 | 1,790,000 |
Options exercisable | 1,622,625 | 1,622,625 | |
Weighted average price per share - beginning balance | $ 0.19 | $ 0.19 | $ 0.19 |
Options exercisable, weighted average exercise price | $ 0.20 | ||
Stock Option 1 | |||
Options outstanding, beginning balance | 979,000 | ||
Options exercisable | 822,250 | ||
Options outstanding, weighted average remaining contractual life (Years) | 6 years 4 months 17 days | ||
Weighted average price per share - beginning balance | $ 0.05 | ||
Options exercisable, weighted average exercise price | $ 0.05 | ||
Stock Option 2 | |||
Options outstanding, beginning balance | 85,000 | ||
Options exercisable | 74,375 | ||
Options outstanding, weighted average remaining contractual life (Years) | 6 years 3 months 10 days | ||
Weighted average price per share - beginning balance | $ 0.10 | ||
Options exercisable, weighted average exercise price | $ 0.10 | ||
Stock Option 3 | |||
Options outstanding, beginning balance | 388,500 | ||
Options exercisable | 388,500 | ||
Options outstanding, weighted average remaining contractual life (Years) | 5 years 6 months 29 days | ||
Weighted average price per share - beginning balance | $ 0.13 | ||
Options exercisable, weighted average exercise price | $ 0.13 | ||
Stock Option 4 | |||
Options outstanding, beginning balance | 114,000 | ||
Options exercisable | 114,000 | ||
Options outstanding, weighted average remaining contractual life (Years) | 5 years 4 months 2 days | ||
Weighted average price per share - beginning balance | $ 0.26 | ||
Options exercisable, weighted average exercise price | $ 0.26 | ||
Stock Option 5 | |||
Options outstanding, beginning balance | 223,500 | ||
Options exercisable | 223,500 | ||
Options outstanding, weighted average remaining contractual life (Years) | 5 years 3 months 7 days | ||
Weighted average price per share - beginning balance | $ 0.90 | ||
Options exercisable, weighted average exercise price | $ 0.90 |
Stockholders Equity (Details 2)
Stockholders Equity (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Options outstanding, beginning balance | 1,790,000 | 1,790,000 | |
Warrants, Granted | 0 | 0 | |
Options, Forfeited | 0 | 0 | |
Warrants, Exercised | 0 | 0 | |
Options outstanding, ending balance | 1,790,000 | 1,790,000 | 1,790,000 |
Options Vested and expected to vest | 1,790,000 | ||
Options, Exercisable | 1,622,625 | 1,622,625 | |
Weighted average price per share - beginning balance | $ 0.19 | $ 0.19 | |
Warrants weighted average exercise price granted | 3.32 | ||
Warrants weighted average exercise price forfeited | 1.01 | 1.01 | |
Weighted average price per share - ending balance | 0.19 | $ 0.19 | $ 0.19 |
Weighted average price per share - Vested and Expected to Vest | 0.19 | ||
Weighted average price per share - Exercisable | $ 0.20 | ||
Weighted Average Remaining Contractual Term, Options, Outstanding | 6 years 1 month 2 days | 7 years 1 month 2 days | 8 years 1 month 6 days |
Weighted Average Remaining Contractual Term, Options, Vested and Expected to Vest | 6 years 1 month 2 days | ||
Weighted Average Remaining Contractual Term, Options, Exercisable | 6 years 14 days | ||
Options, Outstanding at beginning, Intrinsic Value | $ 6,176,855 | $ 176,445 | |
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 3,098,055 | ||
Options, Outstanding at end Intrinsic Value | 3,098,055 | $ 6,176,855 | $ 176,445 |
Options, Exercisable, Intrinsic Value | $ 2,785,595 | ||
Warrants | |||
Options outstanding, beginning balance | 275,000 | 277,001 | |
Warrants, Granted | 5,527,778 | 0 | |
Options, Forfeited | (275,000) | (2,001) | |
Warrants, Exercised | 0 | 0 | |
Options outstanding, ending balance | 5,527,778 | 275,000 | 277,001 |
Options Vested and expected to vest | 5,527,778 | ||
Options, Exercisable | 5,099,207 | ||
Weighted average price per share - beginning balance | $ 1.01 | $ 1.01 | |
Warrants weighted average exercise price granted | 3.32 | ||
Warrants weighted average exercise price forfeited | 1.01 | 1.01 | |
Weighted average price per share - ending balance | 3.32 | $ 1.01 | $ 1.01 |
Weighted average price per share - Vested and Expected to Vest | 3.32 | ||
Weighted average price per share - Exercisable | $ 3.34 | ||
Weighted Average Remaining Contractual Term, Options, Outstanding | 4 years 7 months 13 days | 2 months 23 days | 1 year 2 months 23 days |
Weighted Average Remaining Contractual Term, granted | 4 years 7 months 13 days | 4 years 7 months 13 days | |
Weighted Average Remaining Contractual Term, Options, Vested and Expected to Vest | 4 years 7 months 13 days | ||
Weighted Average Remaining Contractual Term, Options, Exercisable | 4 years 7 months 13 days | ||
Options, Outstanding at beginning, Intrinsic Value | $ 723,250 | $ 0 | |
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | 0 | ||
Options, Outstanding at end Intrinsic Value | 0 | $ 723,250 | $ 0 |
Options, Exercisable, Intrinsic Value | $ 0 |
Stockholders Equity (Details 3)
Stockholders Equity (Details 3) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of Shares, Warrants Outstanding | 5,527,778 |
Number of Shares, Warrants Exercisable | 5,099,207 |
Warrants | |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 6.60 |
Warrants | 3.08 | |
Number of Shares, Warrants Outstanding | 428,571 |
Number of Shares, Warrants Exercisable | 0 |
Warrants outstanding, weighted average remaining life | 4 years 10 months 24 days |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 0 |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.08 |
Warrants | 2.25 | |
Number of Shares, Warrants Outstanding | 396,825 |
Number of Shares, Warrants Exercisable | 396,825 |
Warrants outstanding, weighted average remaining life | 2 years 11 months 8 days |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 2.52 |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 2.52 |
Warrants | 3.10 | |
Number of Shares, Warrants Outstanding | 4,285,715 |
Number of Shares, Warrants Exercisable | 4,285,715 |
Warrants outstanding, weighted average remaining life | 4 years 10 months 24 days |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 3.1 |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 3.10 |
Warrants | 6.60 | |
Number of Shares, Warrants Outstanding | 416,667 |
Number of Shares, Warrants Exercisable | 416,667 |
Warrants outstanding, weighted average remaining life | 3 years 1 month 17 days |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 6.60 |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 6.60 |
Stockholders Equity (Details 4)
Stockholders Equity (Details 4) | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Expected dividend yield | 0.00% |
Minimum | |
Stock price | $ 2.51 |
Risk-free interest rate | 0.01% |
Expected life of the options | 2 years |
Expected volatility | 159.00% |
Maximum | |
Stock price | $ 7.03 |
Risk-free interest rate | 1.02% |
Expected life of the options | 5 years |
Expected volatility | 347.00% |
Stockholders Equity (Details Na
Stockholders Equity (Details Narrative) - USD ($) | Dec. 09, 2021 | Nov. 09, 2021 | May 10, 2021 | May 05, 2021 | Feb. 11, 2021 | Dec. 29, 2021 | Dec. 20, 2021 | Nov. 29, 2021 | Nov. 26, 2021 | Nov. 15, 2021 | Oct. 20, 2021 | May 17, 2021 | Apr. 30, 2021 | Mar. 17, 2021 | Feb. 28, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||||||||||
Stock Options Expense | $ 36,538 | $ 78,652 | |||||||||||||||
Net proceeds from sale of shares | $ 45,000,000 | ||||||||||||||||
Unrecognized stock option expense | 7,210 | ||||||||||||||||
Securities purchase agreement description | investors to purchase 8,333,333 shares of the Company’s Class A common stock for aggregate gross proceeds of approximately $50 million. A.G.P./Alliance Global Partners served as the placement agent and received a cash fee of 7% of the aggregate gross proceeds and warrants to purchase shares of the Company’s Class A Common Stock equal to 5% of the number of shares sold in the offering with an exercise price of $6.60 per share and are not exercisable until August 16, 2021. | ||||||||||||||||
Issuance of shares of series D preferred stock for acquisition | 6,653,309 | 0 | |||||||||||||||
Shares issued for acquisition, value | 6,653,309 | 5,848,013 | |||||||||||||||
Common stock issued, amount | 76,492,993 | $ 674,469 | |||||||||||||||
Stock issued for debt conversion, Amount | 0 | ||||||||||||||||
(Gain) loss on extinguishment of debt | $ 5,987,523 | ||||||||||||||||
Warrants | |||||||||||||||||
Warrant exercise price | $ 6.60 | ||||||||||||||||
Issued warrants to a placement agent in connection with sale of its common stock | 416,667 | ||||||||||||||||
Warrants | December 9, 2021 | |||||||||||||||||
Warrants issued | $ 396,825 | ||||||||||||||||
Warrant exercise price | $ 2.52 | ||||||||||||||||
Warrants | May 26,2022 | |||||||||||||||||
Warrants issued | $ 428,571 | ||||||||||||||||
Warrant exercise price | $ 3.08 | ||||||||||||||||
Series B Preferred Stock | |||||||||||||||||
Preferred Stock, Shares Authorized | 100 | 100 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 | |||||||||||||||
Preferred Stock, Shares Issued | 5 | 5 | |||||||||||||||
Preferred Stock, Shares Outstanding | 5 | 5 | |||||||||||||||
Series C Preferred Stocks | |||||||||||||||||
Preferred Stock, Shares Authorized | 2,028,572 | 2,028,572 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 | |||||||||||||||
Preferred Stock, Shares Issued | 10,149 | 1,714,286 | |||||||||||||||
Preferred Stock, Shares Outstanding | 10,149 | 1,714,286 | |||||||||||||||
Stock issued for debt conversion, shares | 1,353,570 | ||||||||||||||||
Series C Preferred Stocks | TDI | |||||||||||||||||
Shares issued for acquisition, shares | 281,223 | ||||||||||||||||
Shares issued for acquisition, value | $ 1,102,394 | ||||||||||||||||
Series D Preferred Stocks | |||||||||||||||||
Preferred Stock, Shares Authorized | 1,628,572 | 1,628,572 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 3.50 | $ 3.50 | |||||||||||||||
Preferred Stock, Shares Issued | 78,674 | 78,674 | |||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | |||||||||||||||
Stock issued for debt conversion, shares | 1,704,137 | ||||||||||||||||
Shares issued for acquisition, shares | 1,432,224 | ||||||||||||||||
Common Class B | |||||||||||||||||
Stock issued for debt conversion, shares | 200,000 | ||||||||||||||||
Issuance of shares of common stock for settlement of unpaid salaries, amount | $ 603,463 | ||||||||||||||||
Issuance of shares of common stock for settlement of unpaid salaries, shares | 4,023,088 | ||||||||||||||||
Common Class C | |||||||||||||||||
Stock issued for settlement of debt, shares | 1,617,067 | ||||||||||||||||
Stock issued for settlement of debt, Amount | $ 485,120 | ||||||||||||||||
Fair value of stock | 330,528 | ||||||||||||||||
(Gain) loss on extinguishment of debt | $ (154,592) | ||||||||||||||||
Common sotck shares repurchase, shares | 45,000 | ||||||||||||||||
Common stock shares repurchase, value | $ 185,850 | ||||||||||||||||
Shares issued for compensation, shares | 2,590,000 | ||||||||||||||||
Shares issued for compensation, value | $ 240,093 | ||||||||||||||||
Number of shares converted | 200,000 | ||||||||||||||||
Common Class A | |||||||||||||||||
Stock issued for debt conversion, shares | 7,384,018 | 12,861,995 | |||||||||||||||
Common stock issued, shares | 2,409,248 | 125,000 | 350,000 | 1,617,067 | 1,524,064 | 11,513,935 | |||||||||||
Common stock issued, amount | $ 9,300,000 | $ 674,469 | |||||||||||||||
Stock issued for debt conversion, Amount | $ 1,886,896 | $ 1,929,300 | |||||||||||||||
Stock issued for settlement of debt, shares | 1,617,067 | ||||||||||||||||
Stock issued for settlement of debt, Amount | $ 485,120 | ||||||||||||||||
Fair value of stock | 330,528 | ||||||||||||||||
(Gain) loss on extinguishment of debt | $ (154,592) | ||||||||||||||||
Stock issued for penalty, shares | 300,000 | ||||||||||||||||
Stock issued for penalty, Amount | $ 44,700 | ||||||||||||||||
Common Class A | HWT Legal Proceeding [Member] | |||||||||||||||||
Shares issued for acquisition, shares | 100,000 | ||||||||||||||||
Common Class A | DTI Services | |||||||||||||||||
Shares issued for acquisition, shares | 99,018 | ||||||||||||||||
Series C Preferred Stock | Alt Labs | |||||||||||||||||
Shares issued for acquisition, shares | 361,787 | ||||||||||||||||
Shares issued for acquisition, value | $ 1,432,677 | ||||||||||||||||
Series C Preferred Stock | Identified Technology. | |||||||||||||||||
Shares issued for acquisition, shares | 888,881 | ||||||||||||||||
Shares issued for acquisition, value | $ 3,617,746 | ||||||||||||||||
Series C Preferred Stock | DTI Services Limited Liability | |||||||||||||||||
Shares issued for acquisition, shares | 1,587,301 | ||||||||||||||||
Shares issued for acquisition, value | $ 3,682,538 | ||||||||||||||||
Series C Preferred Stock | ElecJet | |||||||||||||||||
Shares issued for acquisition, shares | 1,803,279 | ||||||||||||||||
Shares issued for acquisition, value | $ 4,562,993 | ||||||||||||||||
Common Class A | Investor [Member] | |||||||||||||||||
Common stock issued, shares | 8,571,430 | ||||||||||||||||
Common stock issued, amount | $ 22,189,152 | ||||||||||||||||
Black-Scholes option pricing model | |||||||||||||||||
Decription of fair value warrants, issued to the placement agent and RCA sellers | The fair value of the 416,667, 428,571, and the 396,825 warrants, issued to the placement agent and RCA sellers during the year ended December 31, 2021, are $2,498,637, $902,414, and $668,863 respectively and was determined using the Black-Scholes option pricing model | ||||||||||||||||
Impossible Aerospace | |||||||||||||||||
Shares issued for acquisition, shares | 1,714,286 | ||||||||||||||||
Shares issued for acquisition, value | $ 5,848,013 |
Business Combination (Details)
Business Combination (Details) - Excel | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Cash | $ 174,283 |
Accounts receivable | 1,943,480 |
Inventory | 9,075 |
Property and equipment | 2,958,190 |
Customer list | 410,000 |
Goodwill | 7,629 |
Accounts payable | 340,151 |
Accrued expenses and other current liabilities | 262,506 |
Purchase price | 4,900,000 |
Total | 4,900,000 |
Seller Notes | |
Purchase price | 2,300,000 |
Cash | |
Purchase price | $ 2,600,000 |
Business Combination (Details 1
Business Combination (Details 1) - Impossible Aerospace | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Cash | $ 453,876 |
Inventory | 199,438 |
Property and equipment | 108,753 |
Patent | 5,800,138 |
Non-solicitation covenant | 105,457 |
SBA loan (PPP funds) | (444,850) |
Accrued expenses and other current liabilities | 374,799 |
Total | 5,848,013 |
Purchase price | 5,848,013 |
Series C Preferred Stocks | |
Purchase price | $ 5,848,013 |
Business Combination (Details 2
Business Combination (Details 2) - Vayu | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Cash | $ 81,442 |
Property and equipment | 50,000 |
Intellectual property | 7,133,756 |
Non-compete agreement | 90,000 |
Accrued expenses and other current liabilities | 564,039 |
SBA loan (PPP funds) | (137,850) |
Total | 6,653,309 |
Purchase price | 6,653,309 |
Series D Preferred Stock | |
Purchase price | $ 6,653,309 |
Business Combination (Details 3
Business Combination (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 21,937,634 | $ 2,084,982 |
TDI | ||
Accounts receivable | 1,408,682 | |
Property and equipment | 111,789 | |
Customer list | 3,840,000 | |
Non-compete agreement | 120,000 | |
Goodwill | 6,426,786 | |
Other asset | 91,000 | |
Accounts payable | 786,151 | |
Accrued expenses and other current liabilities | 53,857 | |
Contract liabilities | (3,637,122) | |
Notes payable | (64,733) | |
Total | 7,456,394 | |
Purchase price | 7,456,394 | |
TDI | Class A Common Stock | ||
Purchase price | 1,102,394 | |
TDI | Cash | ||
Purchase price | $ 6,354,000 |
Business Combination (Details 4
Business Combination (Details 4) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 21,937,634 | $ 2,084,982 |
Alt Labs | ||
Accounts receivable | 397,441 | |
Inventory | 2,621,653 | |
Property and equipment | 1,739,441 | |
Customer list | 1,250,000 | |
Proprietary technology | 3,670,000 | |
Non-compete agreement | 20,000 | |
Goodwill | 6,072,439 | |
Other asset | 390,502 | |
Accounts payable | 397,441 | |
Accrued expenses and other current liabilities | 411,830 | |
Contract liabilities | (1,754,290) | |
Notes payable | (1,695,238) | |
Total | 11,902,677 | |
Purchase price | 11,902,677 | |
Alt Labs | Class A Common Stock | ||
Purchase price | 1,432,677 | |
Alt Labs | Cash | ||
Purchase price | $ 10,470,000 |
Business Combination (Details 5
Business Combination (Details 5) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 21,937,634 | $ 2,084,982 |
Identified Technologies | ||
Accounts receivable | 90,858 | |
Other asset | 27,469 | |
Proprietary technology | 1,650,000 | |
Tradename | 210,000 | |
Goodwill | 1,913,310 | |
Non-compete agreement | 90,000 | |
Accrued expenses and other current liabilities | 363,856 | |
Total | 3,617,781 | |
Purchase price | 3,617,781 | |
Identified Technologies | Class A Common Stock | ||
Purchase price | 3,617,746 | |
Identified Technologies | Cash | ||
Purchase price | $ 35 |
Business Combination (Details 6
Business Combination (Details 6) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 21,937,634 | $ 2,084,982 |
ElectJet | ||
Cash | 27,466 | |
Accounts receivable | 30,000 | |
Inventory | 95,000 | |
Proprietary technology | 5,890,000 | |
Non-compete agreement | 200,000 | |
Goodwill | 4,934,269 | |
Accrued expenses and other current liabilities | 113,742 | |
Total | 11,062,993 | |
Purchase price | 11,062,993 | |
ElectJet | Class A Common Stock | ||
Purchase price | 4,562,993 | |
ElectJet | Cash | ||
Purchase price | $ 6,500,000 |
Business Combination (Details 7
Business Combination (Details 7) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | $ 21,937,634 | $ 2,084,982 |
DTI Services | ||
Accounts receivable | 3,409,230 | |
Other asset | 1,259,556 | |
Inventory | 14,040,123 | |
Property and equipment | 761,370 | |
Customer list | 4,700,000 | |
Trademark | 1,800,000 | |
Non-compete agreement | 690,000 | |
Goodwill | 213,477 | |
ROU asset | 1,196,764 | |
Accounts payable | 951,302 | |
Accrued expenses and other current liabilities | 677,720 | |
Customer deposits | (153,201) | |
Operating lease liability | (1,226,128) | |
Line of credit | 4,710,768 | |
Total | 20,351,401 | |
Purchase price | 20,351,401 | |
DTI Services | Class A Common Stock | ||
Purchase price | 3,682,538 | |
DTI Services | Cash | ||
Purchase price | 14,000,000 | |
DTI Services | Warrants | ||
Purchase price | 668,863 | |
DTI Services | Seller Notes | ||
Purchase price | $ 2,000,000 |
Business Combination (Details 8
Business Combination (Details 8) - DTI Services - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sales | $ 98,321,144 | $ 102,892,997 |
Cost of goods sold | 75,523,745 | 78,037,039 |
Gross profit | 22,797,399 | 24,855,958 |
Operating expenses | 38,544,880 | 26,956,730 |
Loss from operations | (15,747,481) | (2,100,772) |
Net loss from continuing operations | $ (12,066,492) | $ (4,048,628) |
Loss per share | $ (0.07) | $ (0.03) |
Business Combination (Details N
Business Combination (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Bargain purchase gain | $ 7,000,000 |
Escrow amount | 1,400,000 |
Excel | |
Sale-leaseback | $ 2,000,000 |
Sale-leaseback transaction agreement term | 15 years |
Equity Investments (Details)
Equity Investments (Details) - AmplifeiIntl LLC | Dec. 31, 2021USD ($) |
Accounts receivable | $ 1,000,000 |
Cash | 350,000 |
Total interest paid | $ 1,350,000 |
Equity Investments (Details Nar
Equity Investments (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Consolidated Balance Sheets | |
Impairment of investment | $ 1,350,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Federal Statutory Income Tax Rate, Amount | $ (4,075,111) | $ (1,690,473) |
State Income Taxes, Amount | (1,164,318) | (482,992) |
Permanent differences, Amount | (870,407) | (495,960) |
Valuation allowance against net deferred tax assets, Amount | 5,732,945 | 2,576,374 |
Effective rate, Amount | $ (376,891) | $ (93,051) |
Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
State Income Taxes, Percent | 6.00% | 6.00% |
Permanent differences, Percent | 4.50% | 6.20% |
Valuation allowance against net deferred tax assets, Percent | (29.50%) | (32.00%) |
Effective rate, Percent | 1.90% | 1.20% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 12,652,193 | $ 6,559,060 |
Deferred Tax Assets, Gross | 12,652,193 | 6,559,060 |
Deferred Tax Assets, Valuation Allowance | (12,652,193) | (6,559,060) |
Total deferred income tax asset | 0 | 0 |
Book to tax differences in intangible assets | 51,308 | 428,199 |
Total deferred income tax liability | $ 51,308 | $ 428,199 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Balance Sheets | ||
Valuation allowance | $ 12,652,193 | $ 6,559,060 |
Uncertain tax positions | 0 | $ 0 |
Operating Loss Carryforwards | $ 44,500,000 |
Industry Segments (Details)
Industry Segments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 51,640,813 | $ 33,454,349 | |
Gross Profit | 7,697,998 | 5,363,627 | |
Loss from operations | (22,023,569) | (5,893,864) | |
Interest expense | 3,834,742 | 5,463,597 | |
Net loss | $ (19,405,292) | $ (8,049,873) | |
Warrants | |||
Issued warrants to a placement agent in connection with sale of its common stock | 416,667 | ||
Warrants | May 26,2022 | |||
Exercise price | $ 3.08 | ||
Issued another warrants to a placement agent in connection with the sale of its common stock | 428,571 | ||
Warrants | August 16, 2021 | |||
Issued warrants to a placement agent in connection with sale of its common stock | 416,667 | ||
Exercise price | $ 6.60 | ||
Technologies | |||
Revenue | $ 1,543,469 | $ 0 | |
Gross Profit | 456,558 | 0 | |
Loss from operations | (162,491) | 0 | |
Depreciation and amortization | 83,132 | 0 | |
Interest expense | 15,347 | 0 | |
Net loss | (177,838) | 0 | |
Total Assets | 39,516,284 | 0 | |
Goodwill | 5,447,746 | 0 | |
Accounts receivable, net | 2,998,945 | 0 | |
Construction Services | |||
Revenue | 17,995,023 | 20,851,439 | |
Gross Profit | (478,031) | 2,587,850 | |
Loss from operations | (6,216,775) | (1,821,309) | |
Depreciation and amortization | 1,138,364 | 1,414,875 | |
Interest expense | 997,870 | 2,404,714 | |
Net loss | (3,380,894) | (3,596,516) | |
Total Assets | 13,985,561 | 28,991,044 | |
Goodwill | 113,592 | 1,963,761 | |
Accounts receivable, net | 4,193,243 | 4,501,401 | |
Manufacturing | |||
Revenue | 27,375,122 | 12,602,910 | |
Gross Profit | 6,508,230 | 2,775,777 | |
Loss from operations | (2,158,492) | (998,038) | |
Depreciation and amortization | 1,279,952 | 619,505 | |
Interest expense | 547,202 | 724,342 | |
Net loss | (654,963) | (1,366,239) | |
Total Assets | 39,964,186 | 10,731,936 | |
Goodwill | 8,036,200 | 121,221 | |
Accounts receivable, net | 3,192,030 | 1,983,468 | |
Defense | |||
Revenue | 4,467,376 | 0 | |
Gross Profit | 1,073,636 | 0 | |
Loss from operations | (282,882) | 0 | |
Depreciation and amortization | 191,740 | 0 | |
Interest expense | 825 | 0 | |
Net loss | (270,289) | 0 | |
Total Assets | 11,982,580 | 0 | |
Goodwill | 6,426,786 | 0 | |
Accounts receivable, net | 1,371,184 | 0 | |
Aerospace | |||
Revenue | 259,823 | 0 | |
Gross Profit | 137,605 | 0 | |
Depreciation and amortization | 1,027,153 | 0 | |
Interest expense | 4,545 | 0 | |
Net loss | (4,494,300) | 0 | |
Total Assets | 17,078,926 | ||
Goodwill | 1,913,310 | ||
Accounts receivable, net | 119,774 | 0 | |
Loss from operations | (4,942,951) | 0 | |
Total Consolidated | |||
Revenue | 51,640,813 | 33,454,349 | |
Gross Profit | 7,697,998 | 5,363,627 | |
Loss from operations | (22,023,569) | (5,893,864) | |
Depreciation and amortization | 4,055,569 | 2,070,262 | |
Interest expense | 3,834,742 | 5,463,597 | |
Net loss | (19,405,292) | (8,049,873) | |
Total Assets | 133,035,323 | 40,734,183 | |
Goodwill | 21,937,634 | 2,084,982 | |
Accounts receivable, net | 11,875,176 | 6,484,869 | |
Unallocated | |||
Loss from operations | (8,259,978) | (3,074,517) | |
Depreciation and amortization | 335,228 | 35,882 | |
Interest expense | 2,268,953 | 2,334,541 | |
Net loss | (10,427,008) | (3,087,118) | |
Total Assets | $ 10,507,786 | $ 1,011,203 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2021USD ($) |
Commitments and Contingencies | |
2022 | $ 75,712 |
2023 | 66,626 |
2024 | 59,964 |
Total | $ 202,302 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) | Dec. 31, 2021USD ($) |
Licensing Agreement | |
2020 | $ 420,000 |
2021 | 420,000 |
2022 | 440,000 |
2023 | 460,000 |
2024 | $ 480,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | ||
Mar. 31, 2022 | Jan. 31, 2022 | Jan. 31, 2022 | |
Secured lines of credit | $ 4.2 | ||
Ownership outstanding shares percentage | 71.43% | ||
Series C Preferred Stock | |||
Conversion of shares | 10,149 | ||
Series D Preferred Stock | |||
Conversion of shares | 78,674 | ||
Class A Common Stock | |||
Stock issued | 39,386 |