NDIVISION INC. General Overview
As used in this current report and unless otherwise indicated, the terms "we",
"us" and "our" mean
In
Results of Operations
The following summary of the Company's operations should be read in conjunction
with its unaudited condensed consolidated financial statements for the three
months ended
Three Months Ended
March 31,
2021 2020 Change
Revenue $ 1,377,454 $ 1,666,890 $ (289,436 )
Cost of revenue 1,142,023 1,020,152 121,871
Operating expenses 1,370,594 735,953 634,641
Other (expenses) income 113,025 30,047 82,978
Net loss $ (1,248,188 ) $ (119,262 ) $ (1,128,926 ) Revenues decreased by
Cost of revenue includes system infrastructure, software licenses, wages and
related payroll taxes and employee benefits of the engineers providing direct
services to our customers. There is a component of these costs that are
recurring and fixed to provide our minimum service level as a managed service
provider. Cost of revenue increased by
Operating expenses increased by
The Company incurred a net loss of
Liquidity and Capital Resources
Working Capital
As at As at
March 31, 2021 December 31, 2020
Current assets $ 2,449,372 $ 2,459,189
Current liabilities $ 2,371,081 $ 2,160,942
Working capital $ 78,291 $ 298,247
20
Table of Contents
Cash Flows
Three Months Ended March 31,
2021 2020
Cash flows used in operating activities $ (824,039 ) $ (198,893 )
Cash flows used in investing activities (14,302 ) (15,154 )
Cash flows provided by (used in) financing
activities 753,104 (64,714 )
Net decrease in cash during period $ (85,237 ) $ (278,761 ) At
Net cash used in investing activities for the three months ended
Net cash flows provided by financing activities for the three months ended
Management intends to finance operating costs over the next twelve months from the date of the issuance of these unaudited condensed consolidated financial statements with existing cash on hand, projected operations and short-term debt from the factoring of receivables. Management believes the cash flow from operations and cash on hand will be sufficient to finance operations over the next twelve months.
In
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations
are based on our unaudited condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in
We have identified below the accounting policies, related to what we believe are most critical to our business operations and are discussed throughout Management's Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.
Revenue Recognition
For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
21
Table of Contents
The Company recognizes revenue upon completion of our performance obligations or expiration of the contractual time to use services such as professional service hours purchased in bulk for a given time period. Any early termination fees are recognized in the period the contract is terminated and the termination invoice is paid.
The Company has elected the following practical expedients in applying ASC 606:
Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.
Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration.
Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer.
Accounts Receivable
Accounts receivable are stated at the amounts management expects to collect. An
allowance for doubtful accounts is recorded, as a charge to bad debt expense,
where collection is considered to be doubtful due to credit issues. These
allowances together reflect the Company's estimate of potential losses inherent
in accounts receivable balances, based on historical loss and known factors
impacting its customers. The Company recorded an allowance for doubtful accounts
of
Intangible Assets
Customer contracts acquired were recorded at their estimated fair value at the date of acquisition and are being amortized over their estimated useful life of five years using the straight-line method.
Impairment of Long-lived Assets
The Company records an impairment of long-lived assets used in operations, other
than goodwill, when events or circumstances indicate that the asset might be
impaired and the estimated undiscounted cash flows to be generated by those
assets over their remaining lives are less than the carrying amount of those
items. The net carrying value of assets not recoverable is reduced to fair
value, which is typically calculated using the discounted cash flow method. The
Company did not record any impairment during the three months ended
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In
22
Table of Contents
New Accounting Pronouncements Not Yet Adopted
In
In
© Edgar Online, source
