Quarterly report pursuant to Section 13 or 15(d)

REVENUE

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REVENUE
 3 Months Ended
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE C – REVENUE

 

The following table presents the Company’s product and recurring revenues disaggregated by industry for the three months ended March 31, 2022. 

                                   
    Hospitality     Education     Multiple
Dwelling
Units		     Government     Healthcare     Total  
Product   $ 1,058,627     $ 551,381     $ 69,297     $ 275,125     $ 0     $ 1,954,430  
Recurring     164,434       31,841       0       0       0       196,275  
    $ 1,223,061     $ 583,222     $ 69,297     $ 275,125     $ 0     $ 2,150,705  
      57%       27%       3%       13%       0%       100%  

 

The following table presents the Company’s product and recurring revenues disaggregated by industry for the three months ended March 31, 2021.

 

    Hospitality     Education     Multiple
Dwelling
Units		     Government     Healthcare     Total  
Product   $ 712,907     $ 74,103     $ 172,735     $ 118,335     $ 29,784     $ 1,107,864  
Recurring     162,794       16,426       7,125       0       0       186,345  
    $ 875,701     $ 90,529     $ 179,860     $ 118,335     $ 29,784     $ 1,294,209  
      68%       7%       14%       9%       2%       100%  

 

Sales taxes and other usage-based taxes are excluded from revenues.

 

Remaining performance obligations

 

As of March 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $0.6 million. Except for support services, the Company expects to recognize 100% of the remaining performance obligations over the next six months.

 

Contract assets and liabilities 

           
    March 31,
2022		     December 31,
2021		  
Contract assets   $ 128,872     $ 266,014  
Contract liabilities     941,102       941,230  

 

Contracts are billed in accordance with the terms and conditions, either at periodic intervals or upon substantial completion. This can result in billings occurring subsequent to revenue recognition, resulting in contract assets. Contract assets are presented as current assets in the Condensed Consolidated Balance Sheet.

 

Often, the Company will require customers to pay a deposit upon contract signing that will be applied against work performed or products shipped. In addition, the Company will often invoice the full term of support at the start of the support period. Billings that occur prior to revenue recognition result in contract liabilities. The change in the contract liability balance during the three-month period ended March 31, 2022 is the result of cash payments received and billing in advance of satisfying performance obligations. 

 

Contract costs

 

Costs to complete a turnkey contract primarily relate to the materials cost and direct labor and are recognized proportionately as the performance obligation is satisfied. The Company will defer costs to complete a contract when materials have shipped (and control over the materials has transferred to the customer), but an insignificant amount of rooms have been installed. The Company will recognize any deferred costs in proportion to revenues recognized from the related turnkey contract. The Company does not expect deferred contract costs to be long-lived since a typical turnkey project takes approximately 60 days to complete. Deferred contract costs are generally presented as other current assets in the Condensed Consolidated Balance Sheet.

 

The Company incurs incremental costs to obtain a contract in the form of sales commissions. These costs, whether related to performance obligations that extend beyond 12 months or not, are immaterial and will continue to be recognized in the period incurred within selling, general and administrative expenses.