Note

Restatement of Previously Issued Financial Statements

The Company has restated the accompanying financial statements for the year ended

December 31, 2019

and the unaudited financial statements for the

three

months ended and year-to-date periods ended

March 31, 2020,

June 30, 2020

and

September 30, 2020.

The restatement reflects adjustments to correct misstatements related to the accounting treatment of the following items:

●

The costs of delivered systems related to customer contracts whereby it was determined

not

probable that we would collect substantially all of the consideration to which we were entitled to from the contract were previously deferred and amortized over the contract life. The Company determined these costs are

not

eligible for deferral and accordingly, these costs are now reflected as an expense when the customer obtains control of the related deliverables.

●

Certain customer contracts with extended payment terms were previously determined to

not

qualify as a contract for accounting purposes based on an assessment of collectability performed at contract inception. The Company determined it was improperly performing the assessment of collectability of customer contracts in accordance with the revenue recognition accounting guidance under Topic

606.

In addition, the Company determined that it had improperly recorded accounts receivable and deferred revenue related to these contracts. Management's reassessment of collectability at both contract inception and on an ongoing basis resulted in the determination that more contracts met the criteria for collectability at contract inception an on an ongoing basis than previously determined, resulting in adjustments to revenue, accounts receivable and deferred revenue to correct these misstatements.

The impact of this correction to the applicable reporting periods for the financial statement line items impacted is as follows:

	December 31, 2019				March 31, 2020 (unaudited)				June 30, 2020 (unaudited)				September 30, 2020 (unaudited)
	As Reported		As Restated		As Reported		As Restated		As Reported		As Restated		As Reported		As Restated
Balance Sheets
Accounts Receivable (including long term)	$	4,791,559	$	2,342,489	$	3,882,850	$	1,615,474	$	3,757,362	$	1,989,344	$	3,420,732	$	1,669,570
Contract assets	$	1,037,364	$	0	$	862,624	$	0	$	776,373	$	0	$	740,774	$	0
Contract liabilities	$	3,148,410	$	0	$	2,628,972	$	0	$	2,281,383	$	0	$	2,164,580	$	0
Deferred tax liability	$	543,000	$	465,000	$	438,000	$	357,000	$	433,000	$	373,000	$	387,000	$	312,000
Stockholders' Equity	$	4,617,246	$	4,357,224	$	4,623,402	$	4,354,374	$	4,664,320	$	4,461,312	$	4,750,525	$	4,498,169

	Year ended				Three Months Ended						Three Months Ended
	December 31, 2019				March 31, 2020 (unaudited)						June 30, 2020 (unaudited)
Statements of Operations	As Reported		As Restated		As Reported			As Restated			As Reported			As Restated
Revenues	$	7,505,371	$	7,908,461	$	1,307,376		$	1,125,630		$	1,212,551		$	1,133,071
Cost of sales	$	1,715,054	$	2,457,077	$	401,888		$	227,148		$	183,536		$	97,285
Gross profit	$	5,790,317	$	5,451,384	$	905,488		$	898,482		$	1,029,015		$	1,035,786
Selling, general and administrative expenses	$	4,853,767	$	4,528,567	$	932,790		$	937,790		$	1,037,504		$	975,254
Income (loss) from operations	$	936,550	$	922,817	$	(27,302	)	$	(39,308	)	$	(8,489	)	$	60,532
Net income (loss)	$	815,998	$	805,265	$	(1,188	)	$	(10,194	)	$	33,574		$	81,595
Earnings (loss) per Share:
Basic	$	0.18	$	0.18	$	(0.00	)	$	(0.00	)	$	0.01		$	0.02
Diluted	$	0.18	$	0.18	$	(0.00	)	$	(0.00	)	$	0.01		$	0.02

	Six Months Ended					Three Months Ended				Nine Months Ended
	June 30, 2020 (unaudited)					September 30, 2020 (unaudited)				September 30, 2020 (unaudited)
Statements of Operations	As Reported			As Restated		As Reported		As Restated		As Reported		As Restated
Revenues	$	2,519,927		$	2,258,701	$	1,288,559	$	1,188,612	$	3,808,486	$	3,447,313
Cost of sales	$	585,424		$	324,433	$	349,998	$	314,399	$	935,422	$	638,832
Gross profit	$	1,934,503		$	1,934,268	$	938,561	$	874,213	$	2,873,064	$	2,808,481
Selling, general and administrative expenses	$	1,970,294		$	1,913,044	$	843,781	$	843,781	$	2,814,075	$	2,756,825
Income (loss) from operations	$	(35,791	)	$	21,224	$	94,780	$	30,432	$	58,989	$	51,656
Net income (loss)	$	32,386		$	71,401	$	78,861	$	29,513	$	111,247	$	100,914
Earnings (loss) per Share:
Basic	$	0.01		$	0.02	$	0.02	$	0.01	$	0.02	$	0.02
Diluted	$	0.01		$	0.02	$	0.02	$	0.01	$	0.02	$	0.02

There was

impact on cash as a result of these misstatements, and as such, the statement of cash flows for the corresponding adjustments reflects an adjustment to net income and to the balance sheet items, resulting in

change to cash flows from operations for all periods impacted.

We have also corrected

2018

for these misstatements, which resulted in an approximate decrease of

$249,000

to stockholders' equity as of

December 31, 2018.