Consolidated Statement Of Changes In Stockholders' Equity (Unaudited) - USD ($) |
Total |
Private Warrant |
Pre-Funded Warrants |
Common Stock |
Additional Paid-In Capital |
Additional Paid-In Capital
Private Warrant
|
Additional Paid-In Capital
Pre-Funded Warrants
|
Accumulated Deficit |
Series A Preferred
Preferred Stock
|
Series B Preferred
Preferred Stock
|
Series C Preferred
Preferred Stock
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| Beginning balance (in shares) at Dec. 31, 2023 | 47,672,427 | 5,875,000 | 0 | 770,000 | |||||||
| Beginning balance at Dec. 31, 2023 | $ 12,948,689 | $ 4,767 | $ 56,926,161 | $ (43,982,904) | $ 588 | $ 0 | $ 77 | ||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
| Stock-based compensation - options | 1,657,822 | 1,657,822 | |||||||||
| Stock issued during period, shares, new issues (in shares) | 5,357,487 | ||||||||||
| Shares issued to institutional investor | 755,767 | $ 536 | 755,231 | ||||||||
| Warrants issues (in shares) | $ 1,081,471 | $ 525,905 | $ 1,081,471 | $ 525,905 | |||||||
| Net loss for the period | (4,141,541) | (4,141,541) | |||||||||
| Ending balance (in shares) at Mar. 31, 2024 | 53,029,914 | 5,875,000 | 0 | 770,000 | |||||||
| Ending balance at Mar. 31, 2024 | 12,828,113 | $ 5,303 | 60,946,590 | (48,124,445) | $ 588 | $ 0 | $ 77 | ||||
| Beginning balance (in shares) at Dec. 31, 2023 | 47,672,427 | 5,875,000 | 0 | 770,000 | |||||||
| Beginning balance at Dec. 31, 2023 | 12,948,689 | $ 4,767 | 56,926,161 | (43,982,904) | $ 588 | $ 0 | $ 77 | ||||
| Ending balance (in shares) at Dec. 31, 2024 | 77,076,129 | 5,875,000 | 0 | 770,000 | |||||||
| Ending balance at Dec. 31, 2024 | 20,182,026 | $ 7,707 | 74,256,138 | (54,082,484) | $ 588 | $ 0 | $ 77 | ||||
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
| Stock-based compensation - options | $ 1,179,207 | 1,179,207 | |||||||||
| Stock issued during period, shares, new issues (in shares) | 8,960,745 | ||||||||||
| Shares issued in exercise of stock options (in shares) | 125,000 | 110,028 | |||||||||
| Stock options exercised | $ 0 | $ 11 | (11) | ||||||||
| Sale of common stock, net of filing fees (in shares) | 4,500,000 | ||||||||||
| Sale of common stock, net of filing fees | 3,995,928 | $ 450 | 3,995,478 | ||||||||
| Warrants exercised (in shares) | 4,225,717 | ||||||||||
| Warrants exercised | 1,936,601 | $ 423 | 1,936,178 | ||||||||
| Preferred stock conversion to common stock (in shares) | 125,000 | (200,000) | |||||||||
| Preferred stock conversion to common stock | 1 | $ 13 | 8 | $ (20) | |||||||
| Net loss for the period | (1,197,031) | (1,197,031) | |||||||||
| Ending balance (in shares) at Mar. 31, 2025 | 86,036,874 | 5,875,000 | 0 | 570,000 | |||||||
| Ending balance at Mar. 31, 2025 | $ 26,096,732 | $ 8,604 | $ 81,366,998 | $ (55,279,515) | $ 588 | $ 0 | $ 57 |
Nature of Operations |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations | Nature of Operations Castellum, Inc. (the “Company”) is focused on building a large, successful technology company in the areas of cybersecurity, information technology, electronic warfare, information warfare, and information operations with businesses in the defense, federal civilian, and commercial markets (the "Markets"). Services include intelligence analysis, software development, software engineering, program management, strategic and mission planning, information assurance, cybersecurity and policy support, data analytics, and model based systems engineering ("MBSE"). These services, which largely focus on securing data and establishing related policies, are applicable to customers in the United States ("U.S.") government, financial services, healthcare, and other users of large data applications. The services can be delivered to legacy, customer owned networks, or customers who rely upon cloud-based infrastructures. The Company works with multiple investment bankers and contacts within its business network to identify potential acquisitions. Since November 2019, the Company has made the following acquisitions that specialize in the areas noted above: •Corvus Consulting, LLC (“Corvus”), •Mainnerve Federal Services, Inc. dba MFSI Government Group (“MFSI"), •Merrison Technologies, LLC ("Merrison"), •Specialty Systems, Inc. (“SSI”), •the business assets of Pax River from The Albers Group (“Pax River”), •Lexington Solutions Group, LLC (“LSG”), and •Global Technology and Management Resources, Inc. ("GTMR"). With the exception of Pax River, all of these acquisitions were considered business combinations under Topic 805 Business Combinations of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). See Note 3, “Disposition” for detail on the disposition of MFSI in 2024.
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Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year then ended. We have continued to follow the accounting policies set forth in those financial statements. Business Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM, the Chief Executive Officer, reviews consolidated results of operations to make decisions. The Company maintains one operating and reportable segment, which is the delivery of products and services in the areas of information technology, electronic warfare, information warfare and cybersecurity in the governmental and commercial markets. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company accounts for a contract with a customer that is within the scope of this Topic only when the five steps of revenue recognition under ASC 606 are met. The five core principles will be evaluated for each service provided by the Company and is further supported by applicable guidance in ASC 606 to support the Company’s recognition of revenue. Revenue is derived primarily from services provided to the Federal government. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services and solutions are transferred to the customer. The Company also evaluates whether two or more agreements should be accounted for as one single contract. When determining the total transaction price, the Company identifies both fixed and variable consideration elements within the contract. The Company estimates variable consideration as the most likely amount to which the Company expects to be entitled, limited to the extent that it is probable that a significant reversal will not occur in a subsequent period. At contract inception, the Company determines whether the goods or services to be provided are to be accounted for as a single performance obligation or as multiple performance obligations. For most contracts, the customers require the Company to perform several tasks in providing an integrated output and, hence, each of these contracts are deemed as having only one performance obligation. When contracts are separated into multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. This evaluation requires professional judgment, and it may impact the timing and pattern of revenue recognition. If multiple performance obligations are identified, the Company generally uses the cost plus a margin approach to determine the relative standalone selling price of each performance obligation. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between when payment by the client and the transfer of promised services to the client occur will be less than one year. The Company currently generates its revenue from three different types of contractual arrangements: cost plus fixed fee (“CPFF”), firm-fixed-price (“FFP”), and time-and-materials (“T&M”) contracts. The Company generally recognizes revenue over time as control is transferred to the customer, based on the extent of progress towards satisfaction of the performance obligation. The selection of the method used to measure progress requires judgment and is dependent on the contract type and the nature of the goods or services to be provided. For CPFF contracts, the Company uses input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency (“DCAA”) approved provisional burdens plus a fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. FFP contracts require the use of an input method based on estimated costs to complete. For T&M contracts, the Company uses input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract. These arrangements generally qualify for the “right-to-invoice” practical expedient where revenue is recognized in proportion to billable consideration. FFP level-of-effort contracts are substantially similar to T&M contracts except that the Company is required to deliver a specified level-of-effort over a stated period. For these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required manpower. Revenue generated by contract support service contracts is recognized over time as services are provided, based on the transfer of control. Revenue generated by FFP contracts is recognized over time as performance obligations are satisfied. Most contracts do not contain variable consideration and contract modifications are generally minimal. For these reasons, there is not a significant impact of electing these transition practical expedients. Revenue generated from contracts with Federal, state, and local governments is recorded over time, rather than at a point in time. Under the contract support services contracts, the Company performs software design work as it is assigned by the customer, and bills the customer, generally semi-monthly, on either a CPFF or T&M basis, as labor hours are expended. Certain other government contracts for software development have specific deliverables and are structured as FFP contracts, which are generally billed as the performance obligations under the contract are met. Revenue recognition under FFP contracts requires judgment to allocate the transaction price to the performance obligations. Contracts may have terms of up to five years. Contract accounting requires judgment relative to assessing risks and estimating contract revenue, as well as costs and assumptions for schedule and technical issues. Due to the size and nature of contracts, estimates of revenue and costs are subject to a number of variables. For contract change orders, claims, or similar items, judgment is required for estimating the amounts, assessing the potential for realization and determining whether realization is probable. Estimates of total contract revenue and costs are continuously monitored during the term of the contract and are subject to revision as the contract progresses. From time to time, facts develop that require revisions of revenue recognized or cost estimates. To the extent that a revised estimate affects the current or an earlier period, the cumulative effect of the revision is recognized in the period in which the facts requiring the revision become known. The Company accounts for contract costs in accordance with ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers. The Company recognizes the cost of sales of a contract as an expense when incurred or at the time a performance obligation is satisfied. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future, and the costs are expected to be recovered. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained. The following table disaggregates the Company’s revenue by contract type for the three months ended March 31:
Accounting for Income Taxes Income taxes are accounted for under the asset and liability method. We estimate our income taxes in each of the jurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets. 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. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. We are subject to income taxes in the Federal and state tax jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10, Income Taxes - Overall, on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized up on ultimate settlement with the related tax authority. Management evaluates its tax positions on a quarterly basis. The Company files income tax returns in the U.S. Federal tax jurisdiction and various state tax jurisdictions. The Federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities, generally for three years after they were filed. Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). This update requires disaggregated information about a reporting entity’s effective tax rate reconciliations as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact that this update will have on its financial statement disclosures. On November 4, 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40) ("ASU 2024-03"). ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 will be effective for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2023-09; however, it does not expect the standard will have a material impact on the Company’s consolidated financial position, results of operations, and/or cash flows. Other accounting standards updates adopted and/or issued, but not effective until after March 31, 2025, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations, and/or cash flows.
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Disposition |
3 Months Ended |
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Mar. 31, 2025 | |
| Discontinued Operations and Disposal Groups [Abstract] | |
| Disposition | Disposition Since January 1, 2024, the Company has completed the following disposition to achieve its business purposes as discussed in Note 1. MFSI On September 11, 2024, the Company entered into a stock purchase agreement with Lead-Risk Millenia, LLC (the "Buyer") for the sale of one of its subsidiaries, MFSI (the "MFSI Divestiture"). The stock purchase agreement, approved by the Board of Directors on September 13, 2024, was for the purchase and sale of 100% of the issued and outstanding stock of MFSI, which became effective on September 16, 2024. The stock purchase agreement required an initial cash payment of $15,000. Additionally, the Company will receive future consideration equal to 6% of all revenue generated by MFSI until September 30, 2029, or until total payments reach $705,000, whichever comes first. As part of the MFSI Divestiture, the Company retained all of MFSI's cash deposits and accounts receivable in excess of $150,000. Management estimated the present value of future consideration to be received, recognizing short and long term components of a receivable, which we will accrete over time and reassess periodically. An 8.5% discount rate was applied to calculate the present value of the receivable, totaling $223,249 ("Anticipated Receivable"). The Anticipated Receivable is revalued each quarter. The Company recorded a gain of $39,234 from the MFSI Divestiture. The balance of the Anticipated Receivable, accounts receivable in excess of $150,000, and any payments made by the Company on behalf of the Buyer, are reflected in Due from Buyer on the Consolidated Balance Sheets. After considering qualitative and quantitative aspects of MFSI and its sale relative to the guidance of ASC 205-20, Presentation of Financial Statements - Discontinued Operations, Management concluded MFSI should not be reported or disclosed as a discontinued operation. Further, since MFSI represented less than 5% of the total revenue for the Company, it was deemed immaterial to the Company's financial statements, and as such, pro forma financial statements are not required.
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Fixed Assets |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Assets | Fixed Assets Fixed assets consisted of the following as of March 31, 2025 and December 31, 2024:
Depreciation expense for the three months ended March 31, 2025 and March 31, 2024, was $22,650 and $41,261, respectively.
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Intangible Assets and Goodwill |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets consisted of the following as of March 31, 2025 and December 31, 2024:
The intangible assets with the exception of the trademarks were recorded as part of the acquisitions of Corvus, MFSI, Merrison, SSI, LSG, and GTMR. Amortization expense for the three months ended March 31, 2025 and March 31, 2024 was $355,537 and $556,724, respectively. Upon the MFSI Divestiture as disclosed in Note 3, “Disposition”, the intangible assets of MFSI were removed. The intangible assets are being amortized based on the estimated future lives as noted above. Future amortization of the intangible assets for the next five years as of March 31 are as follows:
The activity of goodwill for the three months ended March 31, 2025, is as follows:
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Notes Payable |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable | Notes Payable Our notes payable consists of the following as of March 31, 2025 and December 31, 2024:
(a)On February 22, 2024, as a result of amending the previous notes, as detailed Part II, Item 8 “Financial Statements and Supplementary Data”, Note 7 "Notes Payable", of our Annual Report on Form 10-K for the year-ended December 31, 2024, the Company entered into a new note (the "2024 Eisiminger Note"), with a principal balance of $6,000,000, maturing on August 31, 2026, and bearing interest at 7.5% per annum until February 1, 2025, after which the interest rate will increase to 8% per annum. (b)On February 22, 2024, the Company and the Buckhout Charitable Remainder Trust entered into a new note payable in the principal amount of $2,400,000 (the "Buckhout February 2024 Note") which matures on August 31, 2026, and accrues interest at a per annum rate of 5% through January 1, 2025, 8% per annum through January 1, 2026, and 12% per annum thereafter. The principal amount will be amortized at the rate of $100,000 per month, commencing in September 2024 until the final payment is made in August 2026. The terms of the Buckhout February 2024 Note do not permit the principal amount to be converted into common stock. Interest expense for the three months ended March 31, 2025 and March 31, 2024 was $153,808 and $233,510, respectively. Accrued interest on the notes payable as of March 31, 2025 and March 31, 2024 was $0. Future principal payments are scheduled to be $900,000 in 2025, with the remainder being paid off in 2026. Refer to Note 14, "Subsequent Events" for additional information regarding changes to the 2024 Eisiminger Note and the pay off of the Buckhout February 2024 Note.
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Note Payable - Related Party |
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||
| NOTE PAYABLE RELATED PARTY [Abstract] | |||||||||||||||||||||||||||||||||||||
| Note Payable - Related Party | Note Payable – Related Party The Company entered into a note payable with a related party in August 2021 with balances as of March 31, 2025 and December 31, 2024, as follows:
On February 16, 2024, the Company entered into a letter agreement to (i) extend the maturity date from December 31, 2024 to August 1, 2025 and (ii) require subsequent monthly principal payments of $50,000 for eight months commencing on the maturity date, with the final payment by March 31, 2026. All other terms of the note payable remain unchanged. As a result, $400,000 is reflected in current liabilities. Interest expense for the three months ended March 31, 2025 and 2024, was $4,932 and $4,973, respectively.
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Revolving Credit Facility |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Revolving Credit Facility | Revolving Credit Facility On April 4, 2022, the Company secured a $950,000 revolving credit facility with Live Oak Banking Company ("Live Oak Bank" and the “Revolving Credit Facility”). The Revolving Credit Facility was to mature on March 28, 2029, and draws on it are charged interest at the rate of prime plus 2.75% per annum. Interest is payable monthly. As of December 31, 2023, the Company had $625,025 outstanding on the Revolving Credit Facility. On February 22, 2024 the Company entered into a $4,000,000 revolving credit facility with Live Oak Bank that bears interest at prime plus 2% interest and matures on February 22, 2025 (the “New Live Oak Revolver"). The New Live Oak Revolver replaced the Revolving Credit Facility. The Company rolled over the principal balance outstanding of approximately $625,000 on the Revolving Credit Facility and was advanced an additional amount of $904,793. As of December 31, 2024, the total amount outstanding on the New Live Oak Revolver was $1,999,944. Effective August 15, 2024, the Company modified the terms of the New Live Oak Revolver with Live Oak Bank. Under the terms of the modified agreement, the Company is required to (i) establish a collateral account with a balance of not less than $250,000 until such time as the senior debt service covenant is replaced by a total debt service covenant of 1.15:1.00 at which time funds shall be released at lender's sole discretion, (ii) modified the frequency of the reporting of the borrowing base certificate from once a month to twice a month, and (iii) reduced the borrowing capacity from $4,000,000 to $2,000,000. On February 13, 2025, the Company fully repaid the New Live Oak Revolver with Live Oak Bank in the amount of $1,989,986 Following this payment, the line of credit was closed and the restricted cash was released to the Company’s checking account. The Company has no remaining obligations under the New Live Oak Revolver. Interest expense for the three months ended March 31, 2025 and 2024, was $28,658 and $14,402, respectively.
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Due To Seller |
3 Months Ended |
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Mar. 31, 2025 | |
| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
| Due To Seller | Due to Seller As part of the acquisition of SSI (the "SSI Acquisition"), the Company was obligated to pay an earnout contingent on the results of operations of SSI through August 2023. On February 15, 2024, the Company entered into an agreement with the former shareholders of SSI concerning the amount and timing of the contingent earnout included in total consideration for the SSI Acquisition which closed in August 2021. The parties agreed to settle the amount for a total of $720,000, with an initial payment of $180,000 that was made by the Company at signing of the agreement, plus starting in March 2024, monthly payments of $20,000 plus interest payable at 5% per annum for 27 months. As a result, $240,000 is recorded as Due to Seller in current liabilities and $40,000 is reflected in non-current liabilities as of March 31, 2025. Prior to the February 15, 2024 agreement, this earnout was recorded as Contingent Earnout on the Consolidated Balance Sheets.
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Stockholders' Equity |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company has 50,000,000 shares of preferred stock authorized. The Company has designated a Series A Preferred Stock, Series B Preferred Stock, and a Series C Preferred Stock. Series A Preferred Stock The Company has designated 10,000,000 shares of Series A Preferred Stock, par value of $0.0001. As of March 31, 2025 and December 31, 2024, the Company has 5,875,000 shares of Series A Preferred Stock issued and outstanding, which is convertible into 587,500 shares of the Company's common stock. For the three months ended March 31, 2025 and 2024, the Company recognized $18,269 and 18,269, respectively, in Series A dividends, all of which have been paid as of March 31, 2025. Series B Preferred Stock The Company has designated 10,000,000 shares of Series B Preferred Stock, par value of $0.0001. As of March 31, 2025 and December 31, 2024, the Company has 0 shares of Series B Preferred Stock issued and outstanding. Series C Preferred Stock The Company has designated 10,000,000 shares of Series C Preferred Stock, par value of $0.0001. As of March 31, 2025, the Company has 570,000 shares of Series C Preferred Stock issued and outstanding, which is convertible into 356,250 shares of the Company's common stock. As of December 31, 2024, the Company had 770,000 shares of Series C Preferred Stock issued and outstanding. For the three months ended March 31, 2025, the Company recognized $8,715 in Series C dividends, all of which have been paid as of March 31, 2025. Common Stock The Company has 3,000,000,000 shares of common stock, par value $0.0001 authorized. The Company has 86,036,874 and 77,076,129 shares issued and outstanding as of March 31, 2025, and December 31, 2024, respectively. On January 25, 2024, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which the Company agreed to sell and issue, in a registered direct offering, an aggregate of (i) 5,243,967 shares of the Company’s common stock, at a purchase price of $0.32 per share and (ii) 3,193,534 pre-funded warrants (the “Pre-funded Warrant(s)”) to purchase up to an aggregate of 3,193,534 shares of common stock for aggregate gross proceeds to the Company of approximately $2.7 million, before deducting the placement agent fees and estimated offering expenses payable by the Company (the “Registered Offering”). The Pre-funded Warrants were sold at an offering price of $0.319 per Pre-funded Warrant and are exercisable at a price of $0.001 per share. In a concurrent private placement, the Company agreed to issue to the same institutional investor, for each ordinary share and Pre-funded Warrant purchased in the offering, an additional ordinary share purchase warrant (“Regular Warrants”). The Regular Warrants have an exercise price of $0.35 and were exercisable to purchase an aggregate of 8,437,501 shares of common stock. The Regular Warrants are exercisable for five years. All Pre-funded and Regular Warrants have been exercised as of March 31, 2025. On January 3, 2025, a member of the Company’s Board of Directors, exercised stock options at $0.212 per share for 110,028 shares of common stock. In January 2025, two holders of the Company’s Series C Preferred Stock, converted 200,000 shares of Series C Preferred Stock into 125,000 shares of common stock at a conversion rate of 0.625 shares of Common Stock per share of Series C Preferred Stock. On February 12, 2025, an investor exercised an aggregate of 1,080,717 warrants to purchase 1,080,717 shares of the Company’s common stock which resulted in proceeds to the Company of $1. Prior to this exercise, the treatment of these warrants was evaluated under ASC 260-10, Earnings Per Share — Overall. Under this guidance, shares issuable for little or no cash consideration are considered outstanding common shares and are included in the computation of basic earnings per share from the date they are granted. Accordingly, the exercise of these warrants does not impact the Company's earnings per share calculation. On January 10, 2025, the Company filed a universal shelf registration on Form S-3 (File No. 333-284205), which was declared effective by the SEC on January 24, 2025, pursuant to which the Company may offer and sell up to $100,000,000 of equity and debt securities. On March 19, 2025, the Company closed on the public offering (the "Public Offering") of 4,500,000 units ("Unit(s)") at a public offering price of $1.00 per Unit. Each Unit consisted of one share of common stock and one warrant to purchase one share of common stock (the "2025 Warrants"). The 2025 Warrants are immediately exercisable at $1.08 per share and will expire 60 days from the date of issuance. The shares of common stock and 2025 Warrants are immediately separable and were issued separately. Gross proceeds from the Public Offering were approximately $4.5 million before deducting placement agent fees and offering expenses. Castellum intends to use the net proceeds of the offering for working capital and general corporate purposes. As of March 31, 2025, 1,145,000 of the 2025 Warrants issued above were exercised at $1.08 per share, for gross proceeds of $1.2 million before deducing placement agent fees. During the three months ended March 31, 2025, the Company recorded an obligation to issue 515,464 restricted shares of common stock, that vest ratably over a period of one year, to its Board of Directors (the "Board") for their service on the Board from January 1, 2024, through June 30, 2024. The total expense booked to record this obligation was $146,768. The shares were not issued as of March 31, 2025. During the three months ended March 31, 2025, 8,960,745 shares of common stock were issued. Warrants The Pre-funded Warrants were immediately exercisable and did not have an expiration date. As noted above, the Company sold Pre-funded Warrants to purchase up to an aggregate of 3,193,534 shares of common stock at an offering price of $0.319 per Pre-funded Warrant, which are exercisable at a price of $0.001 per share. As previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, all Pre-funded Warrants have been exercised. The Regular Warrants became exercisable on March 20, 2024, upon effectiveness of shareholder approval which was obtained on February 12, 2024. The Regular Warrants would have expired on March 20, 2029, and had an exercise price of $0.35 per share. 6,437,501 of the Regular Warrants were exercised in 2024. The remaining 2,000,000 warrants were exercised in February of 2025 to purchase 2,000,000 shares of the Company’s common stock which resulted in aggregate proceeds to the Company of $700,000. All warrants held by this investor have now been fully exercised. On February 12, 2025, an investor exercised an aggregate of 1,080,717 warrants to purchase 1,080,717 shares of the Company’s common stock which resulted in proceeds to the Company of $1. The treatment of these warrants was accessed under ASC 260-10, Earnings Per Share—Overall, where shares issuable for little or no cash consideration shall be considered outstanding common shares and are included in the computation of basic earnings per share since they were originally granted. Of the 4,500,000 2025 Warrants issued during the public offering in March 2025, 1,145,000 warrants were exercised at $1.08 per share prior to March 31, 2025. The remaining 3,355,000 warrants will expire on May 19, 2025, if not exercised prior to that time. The following table represents a summary of warrants for the three months ended March 31, 2025 and the year ended December 31, 2024:
Options The Company on November 9, 2021, approved the 2021 Stock Incentive Plan (the "Plan"), that authorized the Company to issue up to 2,500,000 shares of the Company's common stock in the form of restricted stock, stock options, and other stock awards as set forth in the Plan. On November 9, 2023 the Board of Directors approved an amendment to the Plan to increase the aggregate number of shares available for issuance from 2,500,000 to 6,000,000 (the "Amended Plan"), which was approved by the Company's shareholders at its annual meeting on May 29, 2024. As of March, 31, 2025, 5,887,500 stock options have been granted under the Amended Plan. On March 11, 2025, the Board approved an amendment to the Amended Plan to further increase the aggregate number of shares available for issuance from 6,000,000 to 9,000,000 (the "Second Plan Amendment"). The Second Plan Amendment is subject to the approval of the Company's shareholders at the Company's 2025 annual meeting of shareholders to be held on May 28, 2025. The following represents a summary of options for the Amended Plan and additional options granted outside of the Amended Plan, for the three months ended March 31, 2025 and the year ended December 31, 2024:
During the three months ended March 31, 2025, the Company recognized $1,179,209 of noncash stock based compensation related to the vesting of service-based stock options. 125,000 options were exercised during the three months ended March 31, 2025. The fair value of each option is estimated using the Black-Scholes valuation model. Changes to these inputs could produce a significantly higher or lower fair value measurement. The following assumptions were used for the periods as follows:
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Fair Value |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. U.S. GAAP sets forth a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value. The three levels are as follows: Level 1 – defined as observable inputs, such as quoted market prices in active markets. Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable. Level 3 – defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. Our financial assets and liabilities subject to the three-level fair value hierarchy consist principally of cash and cash equivalents, accounts receivable, accounts payable, contingent consideration, and derivative liabilities. The estimated fair value of cash and cash equivalents, accounts receivable, and accounts payable approximates their carrying value. On April 4, 2022, the Company issued common stock, a convertible note, and warrants in a SPA with Crom (respectively, the "2022 Crom Note", the "2022 Crom Warrants, and the “2022 Crom SPA”). The Company had evaluated the conversion option liability in the 2022 Crom Note and the 2022 Crom Warrant to determine proper accounting treatment and determined them to be derivative liabilities ("Derivative Liabilities"). On February 13, 2023, the 2022 Crom SPA was terminated through an induced conversion thereby extinguishing the conversion option liability associated with the 2022 Crom Note; the 2022 Crom Warrants were not affected. Concurrent with the termination of the 2022 Crom SPA, the Company issued common stock, a note payable with Crom ("2023 Note Payable"), and 2023 Crom Warrants in the 2023 Crom SPA ("2023 Crom Warrants"). The Company evaluated the conversion option in the 2023 Note Payable and the 2022 Crom Warrants to determine proper accounting treatment and determined them to be derivative liabilities (also “Derivative Liabilities”). The Derivative Liabilities had and have been accounted for utilizing ASC 815, Derivatives and Hedging. In 2024, the 2023 Note Payable was paid in full, thereby extinguishing the conversion feature, and the 2023 Crom Warrants were exercised. The Derivative Liabilities in the tables below include only the 2022 Crom Warrants. Refer to Note 10, “Stockholders’ Equity”, for more detail. The Company recognized a liability for the estimated fair value of the 2022 Crom Warrants. The estimated fair value of the liability was calculated using a binomial pricing model with key input variables by an independent third party, as of the date of issuance, with changes in fair value recorded as gains or losses on revaluation in other income (expense). The Company determined that the significant inputs used to value the 2022 Crom Warrants fall within Level 3 of the fair value hierarchy. In connection with the MFSI Divestiture, as discussed in Note 3, "Disposition", Management estimated the present value of future consideration to be received, using a probability-weighted analysis to determine the amount of the receivable and applying a discount rate that captures the risks associated with the duration of the consideration. The Company determined that the significant inputs used to value the Anticipated Receivable fall within Level 3 of the fair value hierarchy. The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of the 2022 Crom Warrants is estimated using a binomial valuation model. The following assumptions were used for the period as follows:
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Concentrations |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Risks and Uncertainties [Abstract] | |
| Concentrations | Concentrations Concentration of Credit Risk. The Company’s customer base is concentrated with a relatively small number of customers. The Company does not generally require collateral or other security to support accounts receivable. To reduce credit risk, the Company performs ongoing credit evaluations on its customers’ financial condition. The Company establishes allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other information. For the three months ended March 31, 2025 and 2024, the Company had three customers representing 63% and 54% of revenue earned, respectively. Any customer that represents 10% or greater of total revenue represents a risk. The Company also has three customers that represent 63% and four customers that represent 65% of the total accounts receivable as of March 31, 2025, and December 31, 2024, respectively.
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Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's quarterly provision for income taxes is measured using an estimated annual effective tax rate adjusted for discrete items that occur within the quarter. The effective income tax rate was (6.80)% and (3.40)% for the three months ended March 31, 2025, and 2024, respectively. The decrease in the effective tax for the three months ended March 31, 2025, versus the effective tax rate for the three months ended March 31, 2024 was primarily due to the nondeductible compensation, state taxes and change in valuation allowance.
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Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent EventsOn April 17, 2025, the Company entered into an amendment to the letter agreement dated February 24, 2024 with Robert Eisiminger (the "Amended Letter Agreement") pursuant to which Mr. Eisiminger agreed to accept a $2 million principal payment (the "Principal Payment") from the Company on two notes payable. As a result of the Principal Payment, the principal balance on the note payable with a principal balance of $400,000 dated February 28, 2022 was reduced to zero, and the principal balance on the 2024 Eisiminger Note was reduced to $4.0 million. The parties also agreed to extend the maturity date from August 31, 2026 to December 15, 2027 on the 2024 Eisiminger Note, and increase the per annum interest rate from 8.0% to 10.0%. All other terms of the 2024 Eisiminger Note remain unchanged. |
Pay vs Performance Disclosure - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
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| Pay vs Performance Disclosure | ||
| Net loss | $ (1,170,047) | $ (4,111,722) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Trading Arrangements, by Individual | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Basis of Presentation for Interim Periods. | Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year then ended. We have continued to follow the accounting policies set forth in those financial statements.
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| Business Segments | Business Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM, the Chief Executive Officer, reviews consolidated results of operations to make decisions. The Company maintains one operating and reportable segment, which is the delivery of products and services in the areas of information technology, electronic warfare, information warfare and cybersecurity in the governmental and commercial markets.
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| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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| Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606"). The Company accounts for a contract with a customer that is within the scope of this Topic only when the five steps of revenue recognition under ASC 606 are met. The five core principles will be evaluated for each service provided by the Company and is further supported by applicable guidance in ASC 606 to support the Company’s recognition of revenue. Revenue is derived primarily from services provided to the Federal government. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services and solutions are transferred to the customer. The Company also evaluates whether two or more agreements should be accounted for as one single contract. When determining the total transaction price, the Company identifies both fixed and variable consideration elements within the contract. The Company estimates variable consideration as the most likely amount to which the Company expects to be entitled, limited to the extent that it is probable that a significant reversal will not occur in a subsequent period. At contract inception, the Company determines whether the goods or services to be provided are to be accounted for as a single performance obligation or as multiple performance obligations. For most contracts, the customers require the Company to perform several tasks in providing an integrated output and, hence, each of these contracts are deemed as having only one performance obligation. When contracts are separated into multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised services underlying each performance obligation. This evaluation requires professional judgment, and it may impact the timing and pattern of revenue recognition. If multiple performance obligations are identified, the Company generally uses the cost plus a margin approach to determine the relative standalone selling price of each performance obligation. The Company does not assess whether a contract contains a significant financing component if the Company expects, at contract inception, that the period between when payment by the client and the transfer of promised services to the client occur will be less than one year. The Company currently generates its revenue from three different types of contractual arrangements: cost plus fixed fee (“CPFF”), firm-fixed-price (“FFP”), and time-and-materials (“T&M”) contracts. The Company generally recognizes revenue over time as control is transferred to the customer, based on the extent of progress towards satisfaction of the performance obligation. The selection of the method used to measure progress requires judgment and is dependent on the contract type and the nature of the goods or services to be provided. For CPFF contracts, the Company uses input progress measures to derive revenue based on hours worked on contract performance as follows: direct costs plus Defense Contract Audit Agency (“DCAA”) approved provisional burdens plus a fee. The provisional indirect rates are adjusted and billed at actual at year end. Revenue from FFP contracts is generally recognized ratably over the contract term, using a time-based measure of progress, even if billing is based on other metrics or milestones, including specific deliverables. FFP contracts require the use of an input method based on estimated costs to complete. For T&M contracts, the Company uses input progress measures to estimate revenue earned based on hours worked on contract performance at negotiated billing rates, plus direct costs and indirect cost burdens associated with materials and the direct expenses incurred in performance of the contract. These arrangements generally qualify for the “right-to-invoice” practical expedient where revenue is recognized in proportion to billable consideration. FFP level-of-effort contracts are substantially similar to T&M contracts except that the Company is required to deliver a specified level-of-effort over a stated period. For these contracts, the Company estimates revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required manpower. Revenue generated by contract support service contracts is recognized over time as services are provided, based on the transfer of control. Revenue generated by FFP contracts is recognized over time as performance obligations are satisfied. Most contracts do not contain variable consideration and contract modifications are generally minimal. For these reasons, there is not a significant impact of electing these transition practical expedients. Revenue generated from contracts with Federal, state, and local governments is recorded over time, rather than at a point in time. Under the contract support services contracts, the Company performs software design work as it is assigned by the customer, and bills the customer, generally semi-monthly, on either a CPFF or T&M basis, as labor hours are expended. Certain other government contracts for software development have specific deliverables and are structured as FFP contracts, which are generally billed as the performance obligations under the contract are met. Revenue recognition under FFP contracts requires judgment to allocate the transaction price to the performance obligations. Contracts may have terms of up to five years. Contract accounting requires judgment relative to assessing risks and estimating contract revenue, as well as costs and assumptions for schedule and technical issues. Due to the size and nature of contracts, estimates of revenue and costs are subject to a number of variables. For contract change orders, claims, or similar items, judgment is required for estimating the amounts, assessing the potential for realization and determining whether realization is probable. Estimates of total contract revenue and costs are continuously monitored during the term of the contract and are subject to revision as the contract progresses. From time to time, facts develop that require revisions of revenue recognized or cost estimates. To the extent that a revised estimate affects the current or an earlier period, the cumulative effect of the revision is recognized in the period in which the facts requiring the revision become known. The Company accounts for contract costs in accordance with ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers. The Company recognizes the cost of sales of a contract as an expense when incurred or at the time a performance obligation is satisfied. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future, and the costs are expected to be recovered. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained. The following table disaggregates the Company’s revenue by contract type for the three months ended March 31:
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| Accounting for Income Taxes | Accounting for Income Taxes Income taxes are accounted for under the asset and liability method. We estimate our income taxes in each of the jurisdictions where the Company operates. This process involves estimating our current tax expense or benefit together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets. 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. When assessing the realizability of deferred tax assets, we consider if it is more likely than not that some or all of the deferred tax assets will not be realized. In making this assessment, we consider the availability of loss carryforwards, projected reversals of deferred tax liabilities, projected future taxable income, and ongoing prudent and feasible tax planning strategies. We are subject to income taxes in the Federal and state tax jurisdictions based upon our business operations in those jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10, Income Taxes - Overall, on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized up on ultimate settlement with the related tax authority. Management evaluates its tax positions on a quarterly basis. The Company files income tax returns in the U.S. Federal tax jurisdiction and various state tax jurisdictions. The Federal and state income tax returns of the Company are subject to examination by the Internal Revenue Service (“IRS”) and state taxing authorities, generally for three years after they were filed.
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). This update requires disaggregated information about a reporting entity’s effective tax rate reconciliations as well as information on income taxes paid. This update is effective for annual periods beginning in our fiscal year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact that this update will have on its financial statement disclosures. On November 4, 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40) ("ASU 2024-03"). ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 will be effective for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2023-09; however, it does not expect the standard will have a material impact on the Company’s consolidated financial position, results of operations, and/or cash flows. Other accounting standards updates adopted and/or issued, but not effective until after March 31, 2025, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations, and/or cash flows.
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Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Company's Revenue By Contract Type | The following table disaggregates the Company’s revenue by contract type for the three months ended March 31:
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Fixed Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Fixed Assets | Fixed assets consisted of the following as of March 31, 2025 and December 31, 2024:
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Intangible Assets and Goodwill (Tables) |
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Intangible Assets | Intangible assets consisted of the following as of March 31, 2025 and December 31, 2024:
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| Schedule of Future Amortization of Intangible Assets | Future amortization of the intangible assets for the next five years as of March 31 are as follows:
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| Schedule of Goodwill | The activity of goodwill for the three months ended March 31, 2025, is as follows:
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Notes Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of notes payable | Our notes payable consists of the following as of March 31, 2025 and December 31, 2024:
(a)On February 22, 2024, as a result of amending the previous notes, as detailed Part II, Item 8 “Financial Statements and Supplementary Data”, Note 7 "Notes Payable", of our Annual Report on Form 10-K for the year-ended December 31, 2024, the Company entered into a new note (the "2024 Eisiminger Note"), with a principal balance of $6,000,000, maturing on August 31, 2026, and bearing interest at 7.5% per annum until February 1, 2025, after which the interest rate will increase to 8% per annum. (b)On February 22, 2024, the Company and the Buckhout Charitable Remainder Trust entered into a new note payable in the principal amount of $2,400,000 (the "Buckhout February 2024 Note") which matures on August 31, 2026, and accrues interest at a per annum rate of 5% through January 1, 2025, 8% per annum through January 1, 2026, and 12% per annum thereafter. The principal amount will be amortized at the rate of $100,000 per month, commencing in September 2024 until the final payment is made in August 2026. The terms of the Buckhout February 2024 Note do not permit the principal amount to be converted into common stock.
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Note Payable - Related Party (Tables) |
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||
| NOTE PAYABLE RELATED PARTY [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of notes payable to related party | The Company entered into a note payable with a related party in August 2021 with balances as of March 31, 2025 and December 31, 2024, as follows:
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Stockholders' Equity (Tables) |
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Warrants | The following table represents a summary of warrants for the three months ended March 31, 2025 and the year ended December 31, 2024:
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| Schedule of Options | The following represents a summary of options for the Amended Plan and additional options granted outside of the Amended Plan, for the three months ended March 31, 2025 and the year ended December 31, 2024:
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| Schedule of Stock Options, Valuation Assumptions | The following assumptions were used for the periods as follows:
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of derivative liabilities and the contingent earnout fall | The following tables present the Company's financial instruments that are measured at fair value on a recurring basis:
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| Summary of fair value measurements | Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of the 2022 Crom Warrants is estimated using a binomial valuation model. The following assumptions were used for the period as follows:
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Summary of Significant Accounting Policies (Details) |
3 Months Ended |
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Mar. 31, 2025
contractualArrangementType
| |
| Accounting Policies [Line Items] | |
| Number of contractual arrangement types | 3 |
| Maximum | |
| Accounting Policies [Line Items] | |
| Contract term | 5 years |
Summary of Significant Accounting Policies - Schedule of Company's Revenue By Contract Type (Detail) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
|
| Accounting Policies [Line Items] | ||
| Revenue from contract with customer, excluding assessed tax | $ 11,664,365 | $ 11,335,053 |
| Time and material | ||
| Accounting Policies [Line Items] | ||
| Revenue from contract with customer, excluding assessed tax | 4,935,016 | 6,389,298 |
| Firm fixed price | ||
| Accounting Policies [Line Items] | ||
| Revenue from contract with customer, excluding assessed tax | 741,066 | 749,611 |
| Cost plus fixed fee | ||
| Accounting Policies [Line Items] | ||
| Revenue from contract with customer, excluding assessed tax | $ 5,988,283 | $ 4,196,144 |
Disposition - Additional Information (Detail) |
3 Months Ended | |
|---|---|---|
|
Sep. 11, 2024
USD ($)
|
Mar. 31, 2025
USD ($)
|
|
| Business Acquisition [Line Items] | ||
| Gain on sale of subsidiary | $ 39,234 | |
| Disposal Group, Disposed of by Sale, Not Discontinued Operations | MFSI Divesture | ||
| Business Acquisition [Line Items] | ||
| Percentage of stock sold | 1 | |
| Initial cash payment | $ 15,000 | |
| Percentage of future revenue | 0.06 | |
| Total payments | $ 705,000 | |
| Cash deposits and accounts receivable | $ 150,000 | |
| Discount rate | 0.085 | |
| Present value of future consideration receivable | $ 223,249 | |
| Percentage of revenue | 0.05 |
Fixed Assets - Summary of Fixed Assets (Detail) - USD ($) |
Mar. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Total fixed assets | $ 541,414 | $ 541,414 |
| Accumulated depreciation | (407,953) | (385,303) |
| Fixed assets, net | 133,461 | 156,111 |
| Equipment and software | ||
| Property, Plant and Equipment [Line Items] | ||
| Total fixed assets | 261,408 | 261,408 |
| Furniture | ||
| Property, Plant and Equipment [Line Items] | ||
| Total fixed assets | 43,119 | 43,119 |
| Automobiles | ||
| Property, Plant and Equipment [Line Items] | ||
| Total fixed assets | 43,928 | 43,928 |
| Leasehold improvements | ||
| Property, Plant and Equipment [Line Items] | ||
| Total fixed assets | $ 192,959 | $ 192,959 |
Fixed Assets - Additional Information (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 22,650 | $ 41,261 |
Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
|
| Goodwill and Intangible Assets Disclosure [Line Items] | ||
| Amortization of intangible assets | $ 355,537 | $ 556,724 |
| Goodwill removed through dispositions | $ 0 | |
Intangible Assets and Goodwill - Schedule of Future Amortization of Intangible Assets (Detail) - USD ($) |
Mar. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Remainder of the year ending December 31, 2025 | $ 1,066,612 | |
| Year ending 2026 | 1,218,182 | |
| Year ending 2027 | 1,014,558 | |
| Year ending 2028 | 528,784 | |
| Year ending 2029 | 441,568 | |
| Year ending 2030 and thereafter | 2,168,509 | |
| Intangible assets, net | $ 6,438,213 | $ 6,793,750 |
Intangible Assets and Goodwill - Schedule of Goodwill (Detail) |
Mar. 31, 2025
USD ($)
|
|---|---|
| Goodwill [Roll Forward] | |
| Balance – beginning of period | $ 10,676,834 |
| Balance – ending of period | 10,676,834 |
| Corvus | |
| Goodwill [Roll Forward] | |
| Balance – beginning of period | 1,958,741 |
| Balance – ending of period | 1,958,741 |
| SSI | |
| Goodwill [Roll Forward] | |
| Balance – beginning of period | 8,718,093 |
| Balance – ending of period | 8,718,093 |
| MFSI | |
| Goodwill [Roll Forward] | |
| Balance – beginning of period | 0 |
| Balance – ending of period | $ 0 |
Notes Payable - Schedule of Notes Payable (Detail) - USD ($) |
Mar. 31, 2025 |
Dec. 31, 2024 |
Feb. 22, 2024 |
|---|---|---|---|
| Schedule Of Notes Payable [Line Items] | |||
| Total Notes Payable | $ 7,700,000 | $ 8,000,000 | |
| Convertibles Maturing February 13, 2024 | Promissory Note | |||
| Schedule Of Notes Payable [Line Items] | |||
| Total Notes Payable | $ 1,700,000 | $ 2,000,000 | $ 2,400,000 |
Notes Payable - Schedule of Notes Payable - Additional Information (Detail) - USD ($) |
24 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Aug. 31, 2026 |
Jan. 02, 2026 |
Jan. 01, 2026 |
Mar. 31, 2025 |
Feb. 02, 2025 |
Dec. 31, 2024 |
Feb. 22, 2024 |
|
| Debt Instrument [Line Items] | |||||||
| Notes payable | $ 7,700,000 | $ 8,000,000 | |||||
| Notes Payable | Note Payable Maturing August 31, 2026 | |||||||
| Debt Instrument [Line Items] | |||||||
| Notes payable | 6,000,000 | 6,000,000 | |||||
| Interest rate | 8.00% | 7.50% | |||||
| Promissory Note | Convertibles Maturing February 13, 2024 | |||||||
| Debt Instrument [Line Items] | |||||||
| Notes payable | $ 1,700,000 | $ 2,000,000 | $ 2,400,000 | ||||
| Interest rate | 5.00% | ||||||
| Promissory Note | Convertibles Maturing February 13, 2024 | Forecast | |||||||
| Debt Instrument [Line Items] | |||||||
| Interest rate | 12.00% | 8.00% | |||||
| Debt instrument, periodic payment | $ 100,000 |
Notes Payable - Additional Information (Detail) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
Dec. 31, 2025 |
|
| Schedule Of Notes Payable [Line Items] | |||
| Interest expense, debt | $ 153,808 | $ 233,510 | |
| Accrued interest payable current | $ 0 | $ 0 | |
| Forecast | Convertible Notes Payable | |||
| Schedule Of Notes Payable [Line Items] | |||
| Promissory note, monthly principal | $ 900,000 | ||
Note Payable - Related Party - Schedule Of Notes Payable To Related Party (Details) - USD ($) |
Mar. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Schedule of notes payable to related party [Line Items] | ||
| Notes payable | $ 7,700,000 | $ 8,000,000 |
| SSI | Note payable | ||
| Schedule of notes payable to related party [Line Items] | ||
| Interest rate | 5.00% | 5.00% |
| SSI | Related party | ||
| Schedule of notes payable to related party [Line Items] | ||
| Notes payable | $ 400,000 | $ 400,000 |
Note Payable - Related Party - Additional Information (Details) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Feb. 16, 2024 |
Mar. 31, 2025 |
Mar. 31, 2024 |
Dec. 31, 2024 |
|
| Schedule of notes payable to related party [Line Items] | ||||
| Revolving credit facility | $ 0 | $ 1,999,944 | ||
| Interest expense | 28,658 | $ 14,402 | ||
| Note payable | ||||
| Schedule of notes payable to related party [Line Items] | ||||
| Debt instrument, periodic payment | $ 50,000 | |||
| Debt instrument, term | 8 months | |||
| Related party | ||||
| Schedule of notes payable to related party [Line Items] | ||||
| Interest expense | $ 4,932 | $ 4,973 | ||
Revolving Credit Facility - Additional Information (Detail) |
3 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
|
Feb. 13, 2025
USD ($)
|
Feb. 22, 2024
USD ($)
|
Apr. 04, 2022
USD ($)
|
Mar. 31, 2025
USD ($)
|
Mar. 31, 2024
USD ($)
|
Dec. 31, 2024
USD ($)
|
Aug. 15, 2024
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
| Line of Credit Facility [Line Items] | ||||||||
| Revolving credit facility | $ 0 | $ 1,999,944 | ||||||
| Total debt service covenant | 1.15 | |||||||
| Interest expense | $ 28,658 | $ 14,402 | ||||||
| Revolving Credit Facility | ||||||||
| Line of Credit Facility [Line Items] | ||||||||
| Basis spread on variable rate | 2.00% | |||||||
| Amount rolled over | $ 625,000 | $ 625,025 | ||||||
| Borrowing capacity | 4,000,000 | $ 2,000,000 | ||||||
| Collateral | $ 250,000 | |||||||
| Repaid amount | $ 1,989,986 | |||||||
| Revolving Credit Facility | Live Oak Bank | ||||||||
| Line of Credit Facility [Line Items] | ||||||||
| Long-term line of credit | $ 950,000 | |||||||
| Basis spread on variable rate | 2.75% | |||||||
| Proceeds from lines of credit | $ 904,793 | |||||||
Due To Seller - Additional Information (Detail) |
Feb. 15, 2024
USD ($)
|
Mar. 31, 2025
USD ($)
|
Dec. 31, 2024
USD ($)
|
|---|---|---|---|
| Business Acquisition [Line Items] | |||
| Settlement | $ 720,000 | ||
| Settlement, initial payment | 180,000 | ||
| Settlement, periodic payment amount | $ 20,000 | ||
| Settlement, interest percent | 0.05 | ||
| Settlement, term | 27 months | ||
| Due to seller | $ 240,000 | $ 240,000 | |
| Due to seller, net of current portion | 40,000 | $ 100,000 | |
| SSI | |||
| Business Acquisition [Line Items] | |||
| Due to seller | 240,000 | ||
| Due to seller, net of current portion | $ 40,000 |
Stockholders' Equity - Schedule of warrants (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|---|
Mar. 19, 2025 |
Feb. 28, 2025 |
Mar. 31, 2025 |
Sep. 30, 2024 |
Dec. 31, 2024 |
Dec. 31, 2024 |
|
| Number | ||||||
| Exercised (in shares) | (125,000) | |||||
| Weighted Average Remaining Contractual Life (Years) | 4 years 1 month 2 days | |||||
| Warrant | ||||||
| Number | ||||||
| Beginning balance (in shares) | 8,744,698 | 7,444,698 | ||||
| Granted (in shares) | 4,500,000 | 11,631,035 | ||||
| Exercised (in shares) | (1,145,000) | (2,000,000) | (4,225,717) | (6,437,501) | (10,331,035) | |
| Ending balance (in shares) | 9,008,981 | 8,744,698 | 8,744,698 | |||
| Warrants exercisable (in shares) | 9,008,981 | 8,744,698 | 8,744,698 | |||
| Intrinsic value of warrants | $ 21,317 | $ 6,661,661 | $ 6,661,661 | |||
| Weighted Average Remaining Contractual Life (Years) | 2 years 5 months 23 days | 3 years 10 months 9 days | ||||
| Weighted Average Exercise Price | ||||||
| Beginning balance (in usd per share) | $ 1.40 | $ 1.68 | ||||
| Granted (in usd per share) | 1.08 | 0.34 | ||||
| Exercised (in usd per share) | 0.46 | 0.41 | ||||
| Ending balance (in usd per share) | $ 1.69 | $ 1.40 | $ 1.40 | |||
Stockholders' Equity - Schedule of Stock Options, Valuation Assumptions (Detail) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2025 |
Dec. 31, 2024 |
|
| Equity [Abstract] | ||
| Expected term | 7 years | 7 years |
| Expected volatility minimum | 164.63% | 123.05% |
| Expected volatility maximum | 169.75% | 124.33% |
| Expected dividend yield | 0.00% | 0.00% |
| Risk-free interest rate minimum | 4.14% | 3.89% |
| Risk-free interest rate maximum | 4.51% | 4.45% |
Fair Value - Summary of Derivative Liabilities and the Contingent Earn out Fall (Detail) - USD ($) |
Mar. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Anticipated Receivable | $ 223,249 | $ 265,739 |
| 2022 Crom Warrants | $ 382,000 | $ 883,000 |
| Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative liability | Derivative liability |
| Level 1 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Anticipated Receivable | $ 0 | $ 0 |
| 2022 Crom Warrants | 0 | 0 |
| Level 2 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Anticipated Receivable | 0 | 0 |
| 2022 Crom Warrants | 0 | 0 |
| Level 3 | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Anticipated Receivable | 223,249 | 265,739 |
| 2022 Crom Warrants | $ 382,000 | $ 883,000 |
Concentrations - Additional Information (Details) - Three Customers |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
Dec. 31, 2024 |
|
| Revenue, Product and Service Benchmark | Revenue from Rights Concentration Risk | |||
| Concentration Risk [Line Items] | |||
| Concentration risk, percentage | 63.00% | 54.00% | |
| Accounts Receivable | Customer Concentration Risk | |||
| Concentration Risk [Line Items] | |||
| Concentration risk, percentage | 63.00% | 65.00% | |
Income Taxes - Additional Information (Detail) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2025 |
Mar. 31, 2024 |
|
| Income Tax Disclosure [Abstract] | ||
| Effective income tax rate, percent | (6.80%) | (3.40%) |