Quarterly report pursuant to Section 13 or 15(d)

C. REVENUE

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C. REVENUE
 6 Months Ended
Jun. 30, 2020
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 June 30, 2020.

 

      Hospitality     Education     Multiple Dwelling Units     Government     Total  
Product     $ 979,720     $ 72,733     $ 37,198     $ 13,720     $ 1,103,371  
Recurring       142,351       20,099       15,861       –       178,311  
        $ 1,122,071     $ 92,832     $ 53,059     $ 13,720     $ 1,281,682  
                                             

 

 

The following table presents the Company’s product and recurring revenues disaggregated by industry for the six months ended June 30, 2020.

 

      Hospitality     Education     Multiple Dwelling Units     Government     Total  
Product     $ 2,182,060     $ 322,166     $ 130,270     $ 78,137     $ 2,712,633  
Recurring       315,923       40,362       16,188       –       372,473  
        $ 2,497,983     $ 362,528     $ 146,458     $ 78,137     $ 3,085,106  
                                             

 

The following table presents the Company’s product and recurring revenues disaggregated by industry for the three months ended June 30, 2019.

 

      Hospitality     Education     Multiple Dwelling Units     Government     Total  
Product     $ 2,326,641     $ 452,417     $ 111,624     $ 490,210     $ 3,380,892  
Recurring       149,224       21,604       18,315       –       189,143  
        $ 2,475,865     $ 474,021     $ 129,939     $ 490,210     $ 3,570,035  
                                             

 

The following table presents the Company’s product and recurring revenues disaggregated by industry for the six months ended June 30, 2019.

 

      Hospitality     Education     Multiple Dwelling Units     Government     Total  
Product     $ 4,021,290     $ 708,153     $ 312,050     $ 926,068     $ 5,967,561  
Recurring       305,496       41,049       19,131       –       365,676  
        $ 4,326,786     $ 749,202     $ 331,181     $ 926,068     $ 6,333,237  
                                             

 

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

 

Remaining performance obligations

 

As of June 30, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $0.84 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

 

    June 30,
2020		     December 31,
2019		  
Contract assets   $ 43,866     $ 188,120  
Contract liabilities     654,754       764,184  
Net contract liabilities   $ 610,888     $ 576,064  

 

 

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 six-month period ended June 30, 2020 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 sixty days to complete. Deferred contract costs are generally presented as other current assets in the condensed consolidated balance sheets.

 

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 twelve months or not, are immaterial and will continue to be recognized in the period incurred within selling, general and administrative expenses.