XML 28 R17.htm IDEA: XBRL DOCUMENT
v3.25.2

REVENUE AND CONTRACT ACCOUNTING | 6 Months Ended
--- | ---
Jun. 30, 2025
Revenue from Contract with Customer [Abstract] |
REVENUE AND CONTRACT ACCOUNTING | NOTE 10 – REVENUE AND CONTRACT ACCOUNTING Revenue Recognition and Contract Accounting The Company generates revenue from five sources: (1) Technology Systems; (2) AI Technology which is included in the consolidated statements of operations line-item Technology Systems; (3) Technical Support; (4) Consulting Services which is included in the consolidated statements of operations line-item Services and Consulting; and (5) Hosting which is included in the consolidated statement of operations line-item Hosting. 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 June 30, 2025 and December 31, 2024, contract assets on uncompleted contracts consisted of the following:
Schedule of contracts assets on uncompleted contracts |  |  |  |  |  |
|  | June 30, 2025 |  |  | December 31, 2024 |
Cumulative revenues recognized |  | $ | 10,011,557 |  |  | $ | 9,916,761 |
Less: Billings or cash received |  |  | (9,280,987 | ) |  |  | (9,280,987 | )
Contract assets |  | $ | 730,570 |  |  | $ | 635,774 |
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 June 30, 2025 and December 31, 2024, contract liabilities on uncompleted contracts and contract liabilities on services and consulting consisted of the following:
Schedule of contract liabilities on uncompleted contracts |  |  |  |  |  |
|  | June 30, 2025 |  |  | December 31, 2024 |
Billings and/or cash receipts on uncompleted contracts |  | $ | 1,264,658 |  |  | $ | 1,264,658 |
Less: Cumulative revenues recognized |  |  | (872,309 | ) |  |  | (861,024 | )
Contract liabilities, technology systems |  |  | 392,349 |  |  |  | 403,634 |
Contract liabilities, services and consulting |  |  | 8,594,782 |  |  |  | 11,401,384 |
Total contract liabilities, current |  | $ | 8,987,131 |  |  | $ | 11,805,018 |
Total contract liabilities, non-current |  | $ | 8,111,642 |  |  | $ | 11,016,134 |
Contract Liabilities Current
Schedule of contract liabilities current |  |  |  |  |  |
|  | June 30, 2025 |  |  | December 31, 2024 |
Total contract liabilities, current |  | $ | 2,870,631 |  |  | $ | 3,188,518 |
Total contract liabilities, current – related parties |  |  | 6,116,500 |  |  |  | 8,616,500 |
Total contract liabilities, current |  | $ | 8,987,131 |  |  | $ | 11,805,018 |
Contract Liabilities Non-Current
|  | June 30, 2025 |  |  | December 31, 2024 |
Total contract liabilities, non-current |  | $ | 6,303,392 |  |  | $ | 7,399,634 |
Total contract liabilities, non-current – related parties |  |  | 1,808,250 |  |  |  | 3,616,500 |
Total contract liabilities, non-current |  | $ | 8,111,642 |  |  | $ | 11,016,134 |
Current Contract liabilities at December 31, 2024 were $11,805,018; of which $11,286 for technology systems and $5,856,262 in services and consulting have been recognized as of June 30, 2025. The Company expects to recognize all current contract liabilities within 12 months from the respective consolidated balance sheet date. In May 2024, the Company recorded an initial deferred revenue as a contract liability in the amount of $11,161,428 of which $199,008 related to a pilot program was immediately recognized as revenue (See Note 4) and another $1,370,303 was recognized in 2024. During the six months ended June 30, 2025, the Company recognized revenue of $1,096,242 from this deferred revenue. This contract liability resulted from a five-year contract with a customer where the Company received non-monetary consideration recorded as intangible assets (See Note 4). This transaction was accounted for under ASC 606-10-32-21 through ASC-606-10-32-24, Non-Cash Consideration. The performance obligations, which include various support and maintenance services, will be recognized as revenue pro-rata over time during the five-year contract term. The current contract liabilities of $2,192,484 for just this contract as of June 30, 2025 relate to the portion of the contract value the Company expects to recognize pro-rata within the next twelve months. The non-current contract liabilities of $6,303,392 as of June 30, 2025 represent the portion of the contract value that is expected to be recognized pro-rata beyond the next twelve months. If the Digital Image License Agreement is terminated prior to the completion of the five-year term, then the customer will pay for the maintenance and support services annually in cash. In December 2024, the Company entered into a series of contracts with Fortress which are considered related party transactions under which the Company will deploy and operate a fleet of mobile gas turbines and balance-of-plant inventory, providing management, sales and operations functions to Sawgrass in connection with the assets. In exchange for services performed under the Asset Management Agreement (“AMA”), the Company will invoice monthly under this cost plus fee contract. The Company received an advance cash payments and common units in Sawgrass (see Note 6). Sawgrass paid the Company $5.0 million in cash upon execution of the contract, which will be applied ratably on a monthly basis against amounts incurred under the AMA for a period of 12 months in 2025. In the event that the AMA is terminated within the first 12 months, any balance remaining of the advanced funds would be credited in full to Duos. As of June 30, 2025 the balance pertaining to this contract is $2,500,000 for services performed and relates to the portion of the contract value the Company expects to recognize pro-rata within the next six months. The Company invoiced $6,866,903 in revenue under the AMA for the six months ended June 30, 2025 of which $2,500,000 was amortization of the deferred revenue. The Company also concluded that the arrangement with Sawgrass is within the scope of ASC 606, Revenue from contracts with customers, and the common units issued to the Company by Sawgrass Parent represented non-cash consideration. The initial carrying value as of December 31, 2024 of $7.2 million was measured equal to the fair value of the common units received for future services to be performed under the AMA. The Company recorded $7.2 million of contract liabilities for services to be performed under the AMA which will be recognized over a period of two years (see Note 6). For the six months ended June 30, 2025, the Company recognized revenue in the amount of $1,808,250 associated with the AMA services. The Company initially recorded the equity method investment in Sawgrass of $7.2 million, equal to the fair value of the common units. The Company will fully recognize $5.0 million in revenue pertaining to the AMA during 2025. As of June 30, 2025, the balance in contract liabilities pertaining to the non-monetary (see Note 4) transaction agreement is as follows:
Schedule of balance in contract liabilities non-monetary transaction |  |  |  |
Calendar Year |  |  | Amount |
| 2025 |  |  | $ | 1,096,242 |
| 2026 |  |  |  | 2,192,484 |
| 2027 |  |  |  | 2,192,484 |
| 2028 |  |  |  | 2,192,484 |
| 2029 |  |  |  | 822,181 |
| Total Contract Liabilities |  |  | $ | 8,495,875 |
As of June 30, 2025, the balance in contract liabilities pertaining to the value of the equity method (see Note 6) interest will be recognized as revenue as follows:
Schedule of balance in contract liabilities equity method interest |  |  |  |
Calendar Year |  |  | Amounts |
| 2025 |  |  | $ | 1,808,250 |
| 2026 |  |  |  | 3,616,500 |
| Contract Liability |  |  | $ | 5,424,750 |
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 five distinct revenue sources: a. Technology Systems (Turnkey, engineered projects); b. AI Technology (Associated maintenance and support services); c. Technical Support (Operational support, asset management of power generation systems); d. Consulting Services (Predetermined algorithms to provide important operating information to the users of our systems); and e. Hosting (Deployment and operation of edge data centers, providing customers with cabinet space and related infrastructure service). 2. We currently operate in North America including the USA, Mexico and Canada. 3. Our customers include rail transportation, and commercial. 4. Our technology systems and equipment projects fall into two types: a. Transfer of goods and services over time. b. Goods delivered at point in time. 5. 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 June 30, 2025
Schedule of disaggregation of revenue |  |  |  |  |  |  |  |  |  |  |  |
Segments |  | Technologies |  |  | Data Center Hosting & Related Services |  |  | Asset Management |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 967,638 |  |  | $ | 8,000 |  |  | $ | 4,760,403 |  |  | $ | 5,736,041 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 41,397 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,397 |
Maintenance and Support |  |  | 926,241 |  |  |  | 8,000 |  |  |  | 4,760,403 |  |  |  | 5,694,644 |
|  | $ | 967,638 |  |  | $ | 8,000 |  |  | $ | 4,760,403 |  |  | $ | 5,736,041 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 41,397 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,397 |
Services transferred over time |  |  | 926,241 |  |  |  | 8,000 |  |  |  | 4,760,403 |  |  |  | 5,694,644 |
|  | $ | 967,638 |  |  | $ | 8,000 |  |  | $ | 4,760,403 |  |  | $ | 5,736,041 |
For the Three Months Ended June 30, 2024
Segments |  | Technologies |  |  | Data Center Hosting & Related Services |  |  | Asset Management |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 1,510,496 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,510,496 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 264,999 |  |  | $ | — |  |  | $ | — |  |  | $ | 264,999 |
Maintenance and Support |  |  | 1,245,497 |  |  |  | — |  |  |  | — |  |  |  | 1,245,497 |
|  | $ | 1,510,496 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,510,496 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 264,999 |  |  | $ | — |  |  | $ | — |  |  | $ | 264,999 |
Services transferred over time |  |  | 1,245,497 |  |  |  | — |  |  |  | — |  |  |  | 1,245,497 |
|  | $ | 1,510,496 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,510,496 |
For the Six Months Ended June 30, 2025
Segments |  | Technologies |  |  | Data Center Hosting & Related Services |  |  | Asset Management |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 2,005,073 |  |  | $ | 8,000 |  |  | $ | 8,675,153 |  |  | $ | 10,688,226 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 106,081 |  |  | $ | — |  |  | $ | — |  |  | $ | 106,081 |
Maintenance and Support |  |  | 1,898,992 |  |  |  | 8,000 |  |  |  | 8,675,153 |  |  |  | 10,582,145 |
|  | $ | 2,005,073 |  |  | $ | 8,000 |  |  | $ | 8,675,153 |  |  | $ | 10,688,226 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 106,081 |  |  | $ | — |  |  | $ | — |  |  | $ | 106,081 |
Services transferred over time |  |  | 1,898,992 |  |  |  | 8,000 |  |  |  | 8,675,153 |  |  |  | 10,582,145 |
|  | $ | 2,005,073 |  |  | $ | 8,000 |  |  | $ | 8,675,153 |  |  | $ | 10,688,226 |
For the Six Months Ended June 30, 2024
Segments |  | Technologies |  |  | Data Center Hosting & Related Services |  |  | Asset Management |  |  | Total |
Primary Geographical Markets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America |  | $ | 2,581,176 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,581,176 |
Major Goods and Service Lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Turnkey Projects |  | $ | 534,854 |  |  | $ | — |  |  | $ | — |  |  | $ | 534,854 |
Maintenance and Support |  |  | 2,046,322 |  |  |  | — |  |  |  | — |  |  |  | 2,046,322 |
|  | $ | 2,581,176 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,581,176 |
Timing of Revenue Recognition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goods transferred over time |  | $ | 534,854 |  |  | $ | — |  |  | $ | — |  |  | $ | 534,854 |
Services transferred over time |  |  | 2,046,322 |  |  |  | — |  |  |  | — |  |  |  | 2,046,322 |
|  | $ | 2,581,176 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,581,176 |
Revision of Disaggregation of Revenue For the three and six months ended June 30, 2025 and 2024, the Company has revised the presentation of disaggregated revenue compared to the presentation included in our Form 10-Q for the quarter ended June 30, 2024. The revision was made to better align with the nature, timing, and uncertainty of revenue and cash flows arising from our contracts with customers. Comparative amounts for the prior period have been reclassified where necessary to conform to the current period presentation. These changes did not impact consolidated revenue previously reported.

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration