| Financial Statement Impact of Transition to ASC 606 |
As noted above, we transitioned to ASC 606 using the modified retrospective method on January 1, 2018. The cumulative effect of this transition to applicable contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to stockholders’ equity as of that date. As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018:
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December 31,
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Adjusted
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2017
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Adjustments
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January 1,
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As Reported
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due to ASC 606
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2018
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ASSETS
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Current assets
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Cash
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$
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460,059
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$
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-
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$
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460,059
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Accounts receivable, net of allowance for doubtful accounts of $2,280 and $2,280, respectively
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885,743
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544,599
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1,430,342
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Other current assets
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209,536
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-
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209,536
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Total current assets
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1,555,338
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544,599
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2,099,937
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Goodwill
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803,118
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-
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803,118
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Intangible assets, net
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676,436
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-
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676,436
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Accounts receivable, long term
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-
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424,023
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424,023
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Other assets
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88,916
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-
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88,916
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TOTAL ASSETS
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$
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3,123,808
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$
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968,622
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$
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4,092,430
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$
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1,096,003
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$
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-
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$
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1,096,003
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Accrued interest
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1,168
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-
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1,168
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Accrued and deferred personnel compensation
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590,500
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-
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590,500
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Deferred revenue and customer deposits
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1,429,266
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-
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1,429,266
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Notes payable, net - current maturities
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2,236,224
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-
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2,236,224
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Other current liabilities
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226,355
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191,121
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417,476
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Total current liabilities
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5,579,516
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191,121
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5,770,637
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Non-current liabilities
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Notes payable, net - long term
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180,810
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-
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180,810
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Other long term liabilities
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-
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150,477
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150,477
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Total non-current liabilities
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180,810
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150,477
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331,287
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Total liabilities
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5,760,326
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341,598
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6,101,924
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Commitments and Contingencies (See Note 9)
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Stockholders' equity
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Common stock, $0.001 par value; 100,000,000 shares authorized; 37,025,140 and 37,025,140, shares issued and outstanding
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37,025
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-
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37,025
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Equity payable
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100,862
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-
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100,862
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Additional paid-in capital
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77,910,842
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-
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77,910,842
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Accumulated other comprehensive loss
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(65,764)
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-
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(65,764)
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Accumulated deficit
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(80,619,483)
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627,024
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(79,992,459)
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Total stockholders' equity
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(2,636,518)
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627,024
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(2,009,494)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$
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3,123,808
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$
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968,622
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$
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4,092,430
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The following tables reflect the impact of adoption of ASC 606 on our condensed consolidated statements of operations for the three months ended March 31, 2018 and our condensed consolidated balance sheet as of March 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”):
Condensed Consolidated Statement of Operations
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Three Months Ended March 31, 2018
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As reported
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Total Adjustments Under ASC 606
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Amounts Under Previous Standards
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Revenues
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Revenues
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$
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3,693,328
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$
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1,648,731
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$
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2,044,597
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Cost of revenues
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793,389
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-
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793,389
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Gross profit
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2,899,939
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1,648,731
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1,251,208
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Operating expenses
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General and administrative
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1,248,343
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93,516
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1,154,827
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Sales and marketing
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1,461,580
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-
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1,461,580
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Engineering, research, and development
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1,531,598
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841,647
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689,951
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Depreciation and amortization
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96,970
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-
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96,970
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Total operating expenses
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4,338,491
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935,163
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3,403,328
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Gain (loss) from operations
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(1,438,552)
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713,568
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(2,152,120)
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Other income/(expense)
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Interest income
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456
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-
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456
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Interest expense
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(57,489)
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-
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(57,489)
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Gain on sale of fixed assets
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(8,722)
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-
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(8,722)
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Foreign currency (loss) gain
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330
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-
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330
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Total other income/(expense)
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(65,425)
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-
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(65,425)
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Loss before income taxes
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(1,503,977)
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713,568
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(2,217,545)
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Income tax expense
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Net loss
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(1,503,977)
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713,568
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(2,217,545)
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Other comprehensive loss, net of income tax
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Foreign currency translation adjustments
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(12,615)
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-
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(12,615)
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Comprehensive loss
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$
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(1,516,592)
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$
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713,568
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$
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(2,230,160)
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Net loss per share - basic and diluted
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$
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(0.04)
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$
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0.02
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$
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(0.06)
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Weighted average number of shares
during the period - basic and diluted
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38,018,733
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38,018,733
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38,018,733
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Condensed Consolidated Balance Sheet
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March 31, 2018 As Reported
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Total Adjustments Under ASC 606
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Amounts Under Previous Standards
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ASSETS
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Current assets
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Cash
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$
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419,373
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$
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-
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$
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419,373
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Accounts receivable, net of allowance for doubtful accounts of $1,189 and $1,189, respectively
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1,457,634
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(824,459)
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633,175
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Other current assets
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202,412
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-
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202,412
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Total current assets
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2,079,419
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(824,459)
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1,254,960
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Goodwill
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803,118
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-
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803,118
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Intangible assets, net
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600,296
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-
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600,296
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Accounts receivable, long term
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824,272
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(824,272)
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-
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Other assets
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91,124
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-
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91,124
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TOTAL ASSETS
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$
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4,398,229
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$
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(1,648,731)
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$
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2,749,498
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$
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1,148,953
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$
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-
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$
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1,148,953
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Accrued interest
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15,083
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-
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15,083
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Accrued and deferred personnel compensation
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761,805
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-
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761,805
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Deferred revenue and customer deposits
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1,602,711
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-
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1,602,711
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Notes payable, net - current maturities
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170,592
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-
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170,592
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Other current liabilities
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429,789
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(411,011)
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18,778
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Total current liabilities
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4,128,933
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(411,011)
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3,717,922
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Non-current liabilities
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Notes payable, net - long term
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1,423,495
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-
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1,423,495
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Other long term liabilities
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582,626
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(524,152)
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58,474
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Total non-current liabilities
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2,006,121
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(524,152)
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1,481,969
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Total liabilities
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6,135,054
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(935,163)
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5,199,891
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Commitments and Contingencies (See Note 9)
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Stockholders' equity
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Common stock, $0.001 par value; 100,000,000 shares authorized; 39,057,573 and 39,057,573, shares issued and outstanding
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39,058
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-
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39,058
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Equity payable
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100,862
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-
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100,862
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Additional paid-in capital
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80,325,094
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-
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80,325,094
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Accumulated other comprehensive loss
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(78,379)
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-
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(78,379)
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Accumulated deficit
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(82,123,460)
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(713,568)
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(82,837,028)
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Total stockholders' equity
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(1,736,825)
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(713,568)
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(2,450,393)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$
|
4,398,229
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$
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(1,648,731)
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$
|
2,749,498
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