Company: KWIK
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001683168-25-008410
Chunk: 3

Company: KwikClick, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 8
Chunk 3
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 Company (e.g. shopping cart integration, revised or updated affiliate commission
tracking system, and reporting functionality) are built into the customer’s existing IT infrastructure for ongoing use without the
Company’s required ongoing involvement or its software platform.

Contract Assets and Contract Liabilities

The Company records any amounts due or payments
received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue. The timing of revenue recognition,
billings and cash collections results in billed accounts receivable (contract assets) and deferred revenue (contract liabilities) on the
condensed consolidated balance sheets. Deferred revenue is for sales where the right to payment exists or payment has been received, but
control has not been transferred.

The beginning and ending contract balances were
as follows:

    Schedule of contract assets and liabilities

    September 30, 
2025

    December 31, 
2024

    December 31, 
2023

    Accounts receivable
     
    $
    38,231

    $
    32,278

    $
    16,503

    Deferred revenue
     
    $
    27,500

    $
    –

    $
    –

Cost to Obtain Revenue Contracts

Applicable sales commissions paid in connection
with contracts exceeding one year are capitalized and amortized over the period of benefit, which has been determined to be the contract
term. During the three and nine months ended September 30, 2025, the Company capitalized the fair value of a warrant issued in connection
with securing a new customer contract of $43,355. During the three and nine months ended September 30, 2024, no material sales commissions
or other forms of compensation were paid in connection with the acquisition of customer contracts.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements
are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”)
or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below.

New Accounting Pronouncements, Adopted

In August 2023, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, “Business Combinations—Joint
Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply
a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net