| Significant Accounting Policies | Note 2. Significant Accounting Policies Basis of Presentation and Principles of Consolidation: The Company prepares its consolidated
financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.
GAAP”) as determined by the Financial Accounting Standards Board (the “FASB”), including Accounting Standards
Codification (“ASC”) 810, Consolidation Reclassifications Certain reclassifications have been made to the
fiscal year 2023 audited consolidated financial statements to conform to the presentation in the three months ended March 31, 2024. The
reclassifications had no impact on consolidated net loss, total consolidated assets, total consolidated liabilities, or consolidated stockholders’
equity. Risk and Uncertainties The Company is subject to certain risks and uncertainties
and believes changes in any of the following areas could have a material adverse effect on the Company’s future consolidated financial
position or consolidated results of operations or cash flows: new product development, including market receptivity; litigation or claims
against the Company based on intellectual property, patent, product regulation or other factors; competition from other products; general
economic conditions; the ability to attract and retain qualified employees; and, ultimately, to sustain profitable operations. Use of Estimates: These unaudited condensed consolidated
financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements,
and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates required to be
made by management include the valuation of goodwill and intangible assets, deferred tax assets, equity-based transactions and
liquidity assessment. Actual results may differ from these estimates. Cash and Cash Equivalents Highly liquid investments with a maturity of three months or less when purchased
are considered to be cash equivalents. The Company maintains its cash in mutual funds and deposit and money market accounts with high
quality financial institutions which, at times, may exceed federally insured limits. As of March 31, 2024 and December 31 2023, the Company
had $4.3 million and $2.1 million, respectively, in cash equivalents invested in mutual funds. The Company has not experienced any losses
on these deposits and believes it is not exposed to significant credit risk on cash. Revenue The Company recognizes revenue in accordance with
ASC 606 – Revenue from Contracts with Customers
1. Identify the contract
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognize revenue when performance obligations are satisfied The revenue the Company has recognized in the
three months ended March 31, 2024 and 2023 were primarily derived from contracts to perform professional services. Revenue from time and
materials-based contracts is recognized as the direct hours worked during the period times the contractual hourly rate, plus direct materials
and other direct costs as appropriate, plus negotiated materials handling burdens, if any. Revenue from units-based contracts is recognized
as the number of units delivered or performed during the period times the contractual unit price. Revenue from fixed price contracts is
recognized as work is performed with estimated profits recorded on a percentage of completion basis. The Company has no cost-plus type
contracts at this time. The Company includes depreciation and amortization
expenses in manufacturing overhead, which is a component of cost of revenue. However, at the present time manufacturing overhead, including
depreciation and amortization expense related to production equipment, is not material and the primary components of cost of revenue are
direct labor and direct materials, with a small amount of shipping expenses. Accounts Receivable Accounts receivable consists of amounts due from
customers for work performed on contracts. The Company records accounts receivable at their net realizable value. Periodically the Company
evaluates its accounts receivable to establish a provision for credit losses, when deemed necessary, based on the history of past write-offs,
collections and current credit conditions. The customer accounts receivable as of March 31, 2024 and December 31, 2023 are considered
fully collectible and thus management has not recorded a provision for credit losses. Provision for Credit Losses The Company estimates losses on loans and other
financial instruments in accordance with Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial
Instruments. ASU 2016-13 introduces the current expected credit losses (“CECL”) methodology for estimating allowances for
credit losses. The CECL framework requires the Company to measure all expected credit losses for financial assets held at the reporting
date based on historical experience, current conditions and reasonable and supporting forecasts. Under CECL, the allowance for credit
losses is measured as the difference between the financial asset’s cost basis and the net amount expected to be collected on the
financial asset. CECL allows us to use information about past events including historical loan loss experience, current conditions, and
reasonable and supportable forecasts to assess the collectability of the financial assets. The receivables for financial assets as of
March 31, 2024 and December 31, 2023 are not considered fully collectible and thus management has recorded a provision for credit losses.
See Note 9, Loan Receivable Inventory Inventory is stated at the lower of cost or net realizable value. Cost
is determined on a standard cost basis which approximates actual cost on a first in-first out method. Lower of cost or net realizable
value is evaluated by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce
the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory and
are charged to cost of revenue. Once the cost of the inventory is reduced, a new lower-cost basis for that inventory is established, and
subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Factors
influencing these adjustments include changes in demand, product life cycle and development plans, component cost trends, product pricing,
physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates. Operating Leases The Company determines if an arrangement is a
lease at inception. Operating lease right-of-use (“ROU”) assets are included in right-of-use assets, net on the consolidated
balance sheets. The current and long-term components of operating lease liabilities are included in the current operating lease liabilities
and noncurrent operating lease liabilities, respectively, on the consolidated balance sheets. Operating lease ROU assets and operating lease
liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company’s
leases do not provide an implicit rate, and the Company uses an incremental borrowing rate based on the information available at the commencement
date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense
for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less
are not recorded on the consolidated balance sheet. All of our operating leases are comprised of office space leases, and as of March
31, 2024 and December 31, 2023, we had no finance leases. Business Combinations and Valuation of Goodwill We account for business combinations under the
acquisition method of accounting. This method requires the recording of acquired assets and assumed liabilities at their acquisition date
fair values. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill.
Results of operations related to business combinations are included prospectively beginning with the date of acquisition and transaction
costs related to business combinations are recorded withing general and administrative expenses. The Company reviews goodwill for impairment on
an annual basis or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company performs
an annual impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized
for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed
the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill carrying
amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The Company has determined
that it has a single reporting unit for purposes of performing its goodwill impairment test. As the Company uses the market approach to
assess impairment, its common stock price is an important component of the fair value calculation. If the Company’s stock price
continues to experience significant price and volume fluctuations, this will impact the fair value of the reporting unit and can lead
to potential impairment in future periods. The Company performs its annual impairment test during the fourth quarter of each fiscal year.
As of March 31, 2024 and 2023, we had not identified any factors that indicated there was an impairment of our goodwill and determined
that no additional impairment analysis was then required. Property and Equipment Property and equipment are stated at cost or contributed
value. Depreciation of furniture, software and equipment is calculated using the straight-line method over their estimated useful lives,
and leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the lease term.
The cost and related accumulated depreciation of equipment retired or sold are removed from the accounts and any differences between the
undepreciated amount and the proceeds from the sale are recorded as a gain or loss on sale of equipment. Maintenance and repairs are charged
against expense as incurred. Impairment of Long-Lived Assets The Company has long-lived assets such as tangible property and equipment,
identified intangible assets consisting of acquired patents and core technology. When events or changes in circumstances occur that could
indicate the carrying value of long-lived assets may not be recoverable, the Company assesses recoverability by determining whether the
undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. If the undiscounted
cash flow is less, an impairment charge is recognized for the excess of the carrying amounts of these assets over the fair values. Fair
values are determined by discounted future cash flows, appraisals or other methods. During the three months ended March 31, 2024 and 2023, the Company
did not record any impairment from long-lived assets. Fair Value of Financial Instruments The carrying amount of certain financial instruments held by the Company,
such as cash equivalents, accounts receivable, contract assets and liabilities, accounts payable, and accrued and other current liabilities,
approximate fair value due to their short maturities. The carrying amount of the liabilities for the convertible preferred stock warrants
represent their fair value. The carrying amounts of the Company’s borrowings and lease liabilities approximate fair value due to
the market interest rates that these obligations bear and interest rates currently available to the Company. Fair value is defined as the exchange price that would be received
for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in
an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize
the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy
for disclosure of fair value measurements as follows:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 Inputs other than quoted prices included within Level 1 that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and
Level 3 Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within
the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. As of March 31, 2024
and December 31, 2023, the Company had $4.3 million and $793 thousand, respectively, in Level 1 assets, comprised of U.S. Government mutual
funds, and no carrying value for Level 3 liabilities, comprised of warrant liabilities. See Note 11, Capital Stock – Warrants Research and Development Cost s Research and development costs include costs directly
attributable to the conduct of research and development programs, including the cost of services provided by outside contractors, acquiring
work-in-progress intellectual property, development, and mandatory compliance fees and contractual obligations. All costs associated with
research and development are expensed as incurred. Software Development Cost s Software development costs incurred subsequent
to the establishment of technological feasibility for software intended to be sold, licensed or otherwise marketed to customers will be
capitalized, but development costs not meeting the criteria for capitalization are expensed as incurred. With respect to internal use
software, the Company will capitalize such development costs incurred during the application development stage, but development costs
incurred prior to that stage will be expensed as incurred. No amortization expense will be recorded until the software is ready for its
intended use. To date the Company has not incurred any material capitalizable software development costs. Stock-based Compensation Stock-based compensation expense for expected-to-vest awards is valued
under the single-option approach and amortized on a straight-line basis, accounting for actual pre-vesting forfeitures as they occur.
We utilize the Black-Scholes pricing model in order to determine the fair value of stock-based option awards. The Black-Scholes pricing
model requires various highly subjective assumptions including volatility, expected option life, and risk-free interest rate. The assumptions
used in calculating the fair value of share-based payment awards represent management’s best estimates. These estimates involve
inherent uncertainties and the application of management judgment. If factors change and different assumptions are used, our stock-based
compensation expense could be materially different in the future. Income Taxes The Company uses the asset and liability method
of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable
to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities.
Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, management
concludes that it is more-likely-than-not that the deferred tax assets will not be realized. Realization of deferred tax assets is also
dependent upon future earnings, if any, the timing and amount of which are uncertain. The Company records a liability for the uncertain
tax positions taken or expected to be taken on the Company’s tax return when it is more-likely-than-not that the tax position might
be challenged despite the Company’s belief that the tax return positions are fully supportable, and additional taxes will be due
as a result. To the extent that the assessment of such tax positions changes, for example, based on the outcome of a tax audit, the change
in estimate is recorded in the period in which the determination is made. The provision for income taxes includes the impact of provisions
for uncertain tax positions. Loss Per Share Basic net loss per common share is computed by
dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is
computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the
number of additional common shares that would have been outstanding if the common share equivalents had been issued (computed using the
“If-Converted” method), unless the effect of such issuances would have been anti-dilutive. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements
are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise
discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial
position or results of operations upon adoption. The Company has evaluated the recently implemented accounting standards and concluded
that none currently apply to the Company. |
