Quarterly report pursuant to Section 13 or 15(d)

REVENUE

v3.22.2
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