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REVENUE AND CONTRACT ACCOUNTING | 9 Months Ended
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Sep. 30, 2023
Revenue from Contract with Customer [Abstract] |
REVENUE AND CONTRACT ACCOUNTING | NOTE 6 - REVENUE AND CONTRACT ACCOUNTING 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 consolidated statements of operations line-item Services and Consulting. Contract assets and contract liabilities on uncompleted contracts for revenues recognized over time are as follows: Contract Assets Contract assets on uncompleted contracts represent cumulative 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 September 30, 2023 and December 31, 2022, contract assets on uncompleted contracts consisted of the following:
Schedule of contract assets on uncompleted contracts |  |  |  |  |  |
|  | September 30, 2023 |  |  | December 31, 2022 |
Cumulative revenues recognized |  | $ | 8,594,322 |  |  | $ | 5,934,205 |
Less: Billings or cash received |  |  | (7,247,591 | ) |  |  | (5,508,483 | )
Contract assets |  | $ | 1,346,731 |  |  | $ | 425,722 |
Contract Liabilities Contract liabilities on uncompleted contracts represent billings and/or cash received that exceed cumulative 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 on services and consulting revenues represent billings and/or cash received in excess of revenue recognized on service agreements that are not accounted for under the cost-to-cost input method. At September 30, 2023 and December 31, 2022, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following:
Schedule of contract liabilities on uncompleted contracts |  |  |  |  |  |
|  | September 30, 2023 |  |  | December 31, 2022 |
Billings and/or cash receipts on uncompleted contracts |  | $ | 972,908 |  |  | $ | 4,355,470 |
Less: Cumulative revenues recognized |  |  | (199,976 | ) |  |  | (4,144,018 | )
Contract liabilities, technology systems |  |  | 772,932 |  |  |  | 211,452 |
Contract liabilities, services and consulting |  |  | 815,996 |  |  |  | 746,545 |
Total contract liabilities |  | $ | 1,588,928 |  |  | $ | 957,997 |
Contract liabilities at December 31, 2022 were $957,997; of which $211,452 for technology systems and $636,822 in services and consulting have been recognized as of September 30, 2023. The Company expects to recognize all contract liabilities within 12 months from the respective 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 services & maintenance 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 one to two quarters in length; and
| b. | Maintenance and support contracts ranging from one to five years in length.
Quantitative: For the Three Months Ended September 30, 2023
Schedule of disaggregation of revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segments |  | Rail |  |  | Commercial |  |  | Government |  |  | Artificial Intelligence |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 1,333,556 |  |  | $ | 19,220 |  |  | $ | — |  |  | $ | 178,147 |  |  | $ | 1,530,923 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 705,849 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 705,849 |
Maintenance and Support |  |  | 627,707 |  |  |  | 19,220 |  |  |  | — |  |  |  | — |  |  |  | 646,927 |
Algorithms |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 178,147 |  |  |  | 178,147 |
|  | $ | 1,333,556 |  |  | $ | 19,220 |  |  | $ | — |  |  | $ | 178,147 |  |  | $ | 1,530,923 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 705,849 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 705,849 |
Services transferred over time |  |  | 627,707 |  |  |  | 19,220 |  |  |  | — |  |  |  | 178,147 |  |  |  | 825,074 |
|  | $ | 1,333,556 |  |  | $ | 19,220 |  |  | $ | — |  |  | $ | 178,147 |  |  | $ | 1,530,923 |
For the Three Months Ended September 30, 2022
Segments |  | Rail |  |  | Commercial |  |  | Government |  |  | Artificial Intelligence |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 3,765,312 |  |  | $ | 32,821 |  |  | $ | 23,245 |  |  | $ | 200,860 |  |  | $ | 4,022,238 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 2,689,393 |  |  | $ | — |  |  | $ | 3,024 |  |  | $ | — |  |  | $ | 2,692,417 |
Maintenance and Support |  |  | 1,075,919 |  |  |  | 32,821 |  |  |  | 20,221 |  |  |  | 183,378 |  |  |  | 1,312,339 |
Algorithms |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17,482 |  |  |  | 17,482 |
|  | $ | 3,765,312 |  |  | $ | 32,821 |  |  | $ | 23,245 |  |  | $ | 200,860 |  |  | $ | 4,022,238 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 2,689,393 |  |  | $ | — |  |  | $ | 3,024 |  |  | $ | — |  |  | $ | 2,692,417 |
Goods delivered at point in time |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17,482 |  |  |  | 17,482 |
Services transferred over time |  |  | 532,250 |  |  |  | 32,821 |  |  |  | 20,221 |  |  |  | 183,378 |  |  |  | 768,670 |
Services delivered at point in time |  |  | 543,669 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 543,669 |
|  | $ | 3,765,312 |  |  | $ | 32,821 |  |  | $ | 23,245 |  |  | $ | 200,860 |  |  | $ | 4,022,238 |
For the Nine Months Ended September 30, 2023
Segments |  | Rail |  |  | Commercial |  |  | Government |  |  | Artificial Intelligence |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 5,247,291 |  |  | $ | 90,432 |  |  | $ | 11,353 |  |  | $ | 596,194 |  |  | $ | 5,945,270 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 3,390,555 |  |  | $ | 13,552 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,404,107 |
Maintenance and Support |  |  | 1,856,736 |  |  |  | 76,880 |  |  |  | 11,353 |  |  |  | — |  |  |  | 1,944,969 |
Algorithms |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 596,194 |  |  |  | 596,194 |
|  | $ | 5,247,291 |  |  | $ | 90,432 |  |  | $ | 11,353 |  |  | $ | 596,194 |  |  | $ | 5,945,270 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 3,390,555 |  |  | $ | 13,552 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,404,107 |
Services transferred over time |  |  | 1,856,736 |  |  |  | 76,880 |  |  |  | 11,353 |  |  |  | 596,194 |  |  |  | 2,541,163 |
|  | $ | 5,247,291 |  |  | $ | 90,432 |  |  | $ | 11,353 |  |  | $ | 596,194 |  |  | $ | 5,945,270 |
For the Nine Months Ended September 30, 2022
Segments |  | Rail |  |  | Commercial |  |  | Government |  |  | Artificial Intelligence |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 8,087,759 |  |  | $ | 76,818 |  |  | $ | 214,124 |  |  | $ | 699,995 |  |  | $ | 9,078,696 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 5,885,477 |  |  | $ | (498 | ) |  | $ | 153,462 |  |  | $ | — |  |  | $ | 6,038,441 |
Maintenance and Support |  |  | 2,202,282 |  |  |  | 77,316 |  |  |  | 60,662 |  |  |  | 465,223 |  |  |  | 2,805,483 |
Algorithms |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 234,772 |  |  |  | 234,772 |
|  | $ | 8,087,759 |  |  | $ | 76,818 |  |  | $ | 214,124 |  |  | $ | 699,995 |  |  | $ | 9,078,696 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 5,885,477 |  |  | $ | (498 | ) |  | $ | 153,462 |  |  | $ | — |  |  | $ | 6,038,441 |
Goods delivered at point in time |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 234,772 |  |  |  | 234,772 |
Services transferred over time |  |  | 1,545,578 |  |  |  | 77,316 |  |  |  | 60,662 |  |  |  | 465,223 |  |  |  | 2,148,779 |
Services delivered at point in time |  |  | 656,704 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 656,704 |
|  | $ | 8,087,759 |  |  | $ | 76,818 |  |  | $ | 214,124 |  |  | $ | 699,995 |  |  | $ | 9,078,696 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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