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REVENUE
 6 Months Ended
Jun. 30, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 6 - REVENUE

 

Revenue Recognition and Contract Accounting

 

The Company generates revenue from four sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology systems; (3) Technical Support; and (4) Consulting Services which is included in the unaudited consolidated statements of operations line-item Services and consulting.

 

Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follow:

 

Contract Assets

 

Contract assets on uncompleted contracts represent revenues recognized in excess of billings and/or cash received on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenue based on the ratio of cost incurred to total estimated costs.

 

At June 30, 2022 and December 31, 2021, contract assets on uncompleted contracts consisted of the following:

 

        
  

 June 30,

2022

  

December 31,

2021

 
Cumulative revenues recognized  $2,018,047   $5,266,930 
Less: Billings or cash received   (1,315,675)   (5,263,481)
Contract assets  $702,372   $3,449 

 

Contract Liabilities

 

Contract liabilities, on uncompleted contracts represent billings and/or cash received that exceed accumulated revenues recognized on uncompleted contracts accounted for under the cost-to-cost input method, which recognizes revenues based on the ratio of the cost incurred to total estimated costs.

 

Contract liabilities, services and consulting revenues represent billings or cash received in excess of revenue recognizable on service agreements that are not accounted for under the cost to cost method.

 

At June 30, 2022 and December 31, 2021, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following:

 

        
  

June 30,

2022

  

December 31,

2021

 
Billings and/or cash receipts on uncompleted contracts  $6,340,948   $4,273,726 
Less: Cumulative revenues recognized   (2,431,095)   (3,041,088)
Contract liabilities, technologies systems   3,909,853    1,232,638 
Contract liabilities, services and consulting   1,105,597    596,673 
Total contract liabilities  $5,015,450   $1,829,311 

 

The Company expects to recognize all contract liabilities within 12 months from the consolidated balance sheet date.

 

Disaggregation of Revenue

 

The Company is following the guidance of ASC 606-10-55-296 and 297 for disaggregation of revenue. Accordingly, revenue has been disaggregated according to the nature, amount, timing and uncertainty of revenue and cash flows. We are providing qualitative and quantitative disclosures.

 

Qualitative:

 

  1. We have four distinct revenue sources:

 

a.Technology Systems (Turnkey, engineered projects);

 

b.AI Technology (Associated maintenance and support services);

 

c.Technical Support (Licensing and professional services related to auditing of data center assets); and

 

d.Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems).

 

  2. We currently operate in North America including the USA, Mexico and Canada.

 

  3. Our customers include rail transportation, commercial, government, banking and IT suppliers.

 

  4. Our contracts are fixed price and fall into two duration types:

 

  a. Turnkey engineered projects and professional service contracts that are less than one year in duration and are typically two to three months in length; and

 

  b. Maintenance and support contracts ranging from one to five years in length.

 

  5.

Transfer of goods and services are over time.

 

  6.   Goods delivered at point in time.

 

  Quantitative:

 

For the Three Months Ended June 30, 2022

  

                    
Segments  Rail   Commercial   Government   Artificial Intelligence   Total 
Primary Geographical Markets                    
                     
North America  $3,315,171   $26,697   $38,737   $236,537   $3,617,142 
                          
Major Goods and Service Lines                         
                          
Turnkey Projects  $2,675,426   $—   $18,517   $—   $2,693,943 
Maintenance and Support   639,745    26,697    20,220    150,435    837,097 
                          
Algorithms   —    —    —    86,102    86,102 
   $3,315,171   $26,697   $38,737   $236,537   $3,617,142 
                          
Timing of Revenue Recognition                         
                          
Goods transferred over time  $2,675,426   $—   $18,517   $—   $2,693,943 
Goods delivered at point in time   —    —    —    86,102    86,102 
Services transferred over time   639,745    26,697    20,220    150,435    837,097 
   $3,315,171   $26,697   $38,737   $236,537   $3,617,142 

 

 

For the Three Months Ended June 30, 2021

 

Segments  Rail   Commercial   Government   Banking   IT Suppliers   Artificial Intelligence   Total 
Primary Geographical Markets                            
                             
North America  $466,628   $57,600   $116,727   $2,932   $795   $3,986   $648,668 
                                    
Major Goods and Service Lines                                   
                                    
Turnkey Projects  $3,895   $—   $96,506   $—   $—   $—   $100,401 
Maintenance and Support   462,733    57,600    20,221    2,932    —    3,986    547,472 
                                    
Software License   —    —    —    —    795    —    795 
                                    
   $466,628   $57,600   $116,727   $2,932   $795   $3,986   $648,668 
                                    
Timing of Revenue Recognition                                   
                                    
Goods transferred over time  $3,895   $—   $96,506   $—   $—   $—   $100,401 
                                    
Services transferred over time   462,733    57,600    20,221    2,932    795    3,986    548,267 
   $466,628   $57,600   $116,727   $2,932   $795   $3,986   $648,668 

 

For the Six Months Ended June 30, 2022

  

                     
Segments  Rail   Commercial   Government   Artificial Intelligence   Total 
Primary Geographical Markets                    
                     
North America  $4,322,444   $43,997   $190,879   $499,138   $5,056,458 
                          
Major Goods and Service Lines                         
                          
Turnkey Projects  $3,196,081   $(498)  $150,438   $—   $3,346,021 
Maintenance and Support   1,126,363    44,495    40,441    281,847    1,493,146 
                          
Algorithms   —    —    —    217,291    217,291 
   $4,322,444   $43,997   $190,879   $499,138   $5,056,458 
                          
Timing of Revenue Recognition                         
                          
Goods transferred over time  $3,196,081   $(498)  $150,438   $—   $3,346,021 
Goods delivered at point in time   —    —    —    217,291    217,291 
Services transferred over time   1,126,363    44,495    40,441    281,847    1,493,146 
   $4,322,444   $43,997   $190,879   $499,138   $5,056,458 

 

 

For the Six Months Ended June 30, 2021

 

Segments  Rail   Commercial   Government   Banking   IT Suppliers   Artificial Intelligence   Total 
Primary Geographical Markets                            
                             
North America  $2,224,074   $113,442   $145,287   $25,761   $133,772   $161,086   $2,803,422 
                                    
Major Goods and Service Lines                                   
                                    
Turnkey Projects  $1,327,217   $—   $104,845   $1,537   $—   $—   $1,433,599 
Maintenance and Support   896,857    113,442    40,442    24,224    —    3,986    1,078,951 
Data Center Auditing Services   —    —    —    —    130,592    —    130,592 
Software License   —    —    —    —    3,180    —    3,180 
Algorithms   —    —    —    —    —    157,100    157,100 
   $2,224,074   $113,442   $145,287   $25,761   $133,772   $161,086   $2,803,422 
                                    
Timing of Revenue Recognition                                   
                                    
Goods transferred over time  $1,327,217   $—   $104,845   $1,537   $130,592   $157,100    1,721,291 
Goods delivered point in time   —    —    —    —    —    —    — 
Services transferred over time   896,857    113,442    40,442    24,224    3,180    3,986    1,082,131 
   $2,224,074   $113,442   $145,287   $25,761   $133,772   $161,086   $2,803,422