XML 20 R9.htm IDEA: XBRL DOCUMENT
v3.20.2

Note 3 - Revenue From Contracts With Customers | 9 Months Ended
--- | ---
Sep. 30, 2020
Notes to Financial Statements |
Revenue from Contract with Customer [Text Block] |
3. | REVENUE FROM CONTRACTS WITH CUSTOMERS
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:
| ● | Identify the contract with a customer
| ● | Identify the performance obligations in the contract
| ● | Determine the transaction price
| ● | Allocate the transaction price to performance obligations in the contract
| ● | Recognize revenue when or as the Company satisfies a performance obligation
Disaggregation of Revenue The following table summarizes revenue from contracts with customers for the three month periods ended:
|  | North America |  |  | South America |  |  | EMEA* |  |  | Asia |  |  | September 30, 2020 |
License fees |  | $ | 339,747 |  |  | $ | - |  |  | $ | 6,732 |  |  | $ | - |  |  | $ | 346,479 |
Hardware |  |  | 103,511 |  |  |  | - |  |  |  | 1,800 |  |  |  | - |  |  |  | 105,311 |
Services |  |  | 450,994 |  |  |  | 13,800 |  |  |  | 22,893 |  |  |  | 3,848 |  |  |  | 491,535 |
Total Revenues |  | $ | 894,252 |  |  | $ | 13,800 |  |  | $ | 31,425 |  |  | $ | 3,848 |  |  | $ | 943,325 |
|  | North America |  |  | South America |  |  | EMEA* |  |  | Asia |  |  | September 30, 201 9 |
License fees |  | $ | 50,400 |  |  | $ | 43,000 |  |  | $ | 4,168 |  |  | $ | 704 |  |  | $ | 98,272 |
Hardware |  |  | 98,995 |  |  |  | - |  |  |  | 14,759 |  |  |  | 3,316 |  |  |  | 117,070 |
Services |  |  | 206,094 |  |  |  | 845 |  |  |  | 23,433 |  |  |  | 7,000 |  |  |  | 237,372 |
Total Revenues |  | $ | 355,489 |  |  | $ | 43,845 |  |  | $ | 42,360 |  |  | $ | 11,020 |  |  | $ | 452,714 |
The following table summarizes revenue from contracts with customers for the nine month periods ended:
|  | North America |  |  | South America |  |  | EMEA* |  |  | Asia |  |  | September 30, 2020 |
License fees |  | $ | 528,524 |  |  | $ | - |  |  | $ | 6,732 |  |  | $ | 70,110 |  |  | $ | 605,366 |
Hardware |  |  | 208,192 |  |  |  | - |  |  |  | 1,800 |  |  |  | 29,033 |  |  |  | 239,025 |
Services |  |  | 857,156 |  |  |  | 14,550 |  |  |  | 37,594 |  |  |  | 19,261 |  |  |  | 928,561 |
Total Revenues |  | $ | 1,593,872 |  |  | $ | 14,550 |  |  | $ | 46,126 |  |  | $ | 118,404 |  |  | $ | 1,772,952 |
|  | North America |  |  | South America |  |  | EMEA* |  |  | Asia |  |  | September 30, 201 9 |
License fees |  | $ | 97,408 |  |  | $ | 43,000 |  |  | $ | 31,668 |  |  | $ | 69,704 |  |  | $ | 241,780 |
Hardware |  |  | 269,393 |  |  |  | 12,636 |  |  |  | 342,304 |  |  |  | 155,632 |  |  |  | 779,965 |
Services |  |  | 602,782 |  |  |  | 8,252 |  |  |  | 82,440 |  |  |  | 17,501 |  |  |  | 710,975 |
Total Revenues |  | $ | 969,583 |  |  | $ | 63,888 |  |  | $ | 456,412 |  |  | $ | 242,837 |  |  | $ | 1,732,720 |
*EMEA – Europe, Middle East, Africa All of the Company's performance obligations, and associated revenue, are generally transferred to customers at a point in time, with the exception of support and maintenance, and professional services, which are generally transferred to the customer over time. Software licenses Software license revenue consist of fees for perpetual and subscription licenses for one or more of the Company's biometric fingerprint solutions. Revenue is recognized at a point in time once the software is available to the customer for download. Software license contracts are generally invoiced in full on execution of the arrangement. Hardware Hardware revenue consists of fees for associated equipment sold with or without a software license arrangement, such as servers, locks and fingerprint readers. Customers are not obligated to buy third party hardware from the Company, and may procure these items from a number of suppliers. Revenue is recognized at a point in time once the hardware is shipped to the customer. Hardware items are generally invoiced in full on execution of the arrangement. Support and Maintenance Support and Maintenance revenue consists of fees for unspecified upgrades, telephone assistance and bug fixes. The Company satisfies its Support and Maintenance performance obligation by providing “stand-ready” assistance as required over the contract period. The Company records deferred revenue (contract liability) at time of invoice until the contracts term occurs. Revenue is recognized over time on a ratable basis over the contract term. Support and Maintenance contracts are one to five years in length and are generally invoiced in advance at the beginning of the term. Support and Maintenance revenue for subscription licenses is carved out of the total license cost at 18% and recognized on a ratable basis over the license term. Professional Services Professional services revenues consist primarily of fees for deployment and optimization services, as well as training. The majority of the Company's consulting contracts are billed on a time and materials basis, and revenue is recognized based on the amount billable to the customer in accordance with practical expedient ASC 606 - 10 - 55 - 18. For other professional services contracts, the Company utilizes an input method and recognizes revenue based on labor hours expended to date relative to the total labor hours expected to be required to satisfy its performance obligation. Contracts with Multiple Performance Obligations Some contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The standalone selling prices are determined based on overall pricing objectives, taking into consideration market conditions and other factors, including the value of the contracts, the cloud applications sold, customer demographics, geographic locations, and the number and types of users within the contracts. The Company considered several factors in determining that control transfers to the customer upon shipment of hardware and availability of download of software. These factors include that legal title transfers to the customer, the Company has a present right to payment, and the customer has assumed the risks and rewards of ownership. Accounts receivable from customers are typically due within 30 days of invoicing. The Company does not record a reserve for product returns or warranties as amounts are deemed immaterial based on historical experience. Costs to Obtain and Fulfill a Contract Costs to obtain and fulfill a contract are predominantly sales commissions earned by the sales force and are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over a period of benefit determined to be four years. These costs are included as capitalized contract costs on the balance sheet. The period of benefit was determined by taking into consideration customer contracts, technology, and other factors based on historical evidence. Amortization expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Transaction Price Allocated to the Remaining Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied at September 30, 2020. The guidance provides certain practical expedients that limit this requirement, which the Company's contracts meet as follows:
| ● | The performance obligation is part of a contract that has an original expected duration of one year or less, in accordance with ASC 606 - 10 - 50 - 14.
At September 30, 2020, deferred revenue represents the remaining performance obligations related to support and maintenance, of which is expected to be recognized from one year to five years. Revenue recognized during the three and nine months ended September 30, 2020 from amounts included in deferred revenue at the beginning of the period was approximately $94,000 and $202,000, respectively. Revenue recognized during the three and nine months ended September 30, 2019 from the amounts included in the deferred revenue at the beginning of the period was approximately $89,000 and $200,000, respectively. The Company did not recognize any revenue from performance obligations satisfied in prior periods. Total deferred revenue (contract liability) was $813,505 and $359,212 at September 30, 2020 and December 31, 2019, respectively.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration