Company: KWIK
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001683168-25-003684
Chunk: 22

Company: KwikClick, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 22
---

sellers a software platform to sell their products. For some contracts, the Company provides payment processing and order
fulfillment facilitation. The Company is not the seller of record in these transactions and does not carry any of the seller’s
inventory. The Company’s revenue is based on a percentage of the transaction value between the third-party seller and buyer
and can be subject to minimum monthly fees.

     8 

The Company generally determines stand-alone revenue
based on a percentage of the prices charged by the seller to deliver products sold. The commissions and any related fulfillment, shipping,
and transaction processing fees the Company earns from these arrangements are recognized when the services are rendered, which is generally
when the transaction is processed on the Company’s software platform as that is the point-in-time the promise to facilitate the
transaction has been completed. It is the responsibility of the third-party seller to ship products to the buyer.

Custom Design Services

The Company provides custom-brand programming
services in which it builds features for the third-party sellers. Such services often include building a shopping cart integration, revised
or updated affiliate commission tracking system, and reporting functionality. These custom programming features, when built by the Company,
are designed to integrate into the Company’s software platform. The Company has determined custom design services are distinct in
the context of the contract as the customer can benefit from the custom design services on its own as the features do not require the
Company’s software platform for the customer to derive value, and they are separately identifiable promises in the contract. These
custom design services are performed over a specified term for a fixed monthly fee. Revenue under these arrangements is recognized ratably
over the custom design period, which generally is the contract term. Additionally, the customer simultaneously receives and consumes the
benefit provided by the Company as the performance of the custom design services enhances and/or creates assets that the customer controls,
while the assets are being enhanced or created – i.e. the features enhanced or created by the 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

The Company records any 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 consolidated