WaveDancer, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Significant Accounting Policies (Policies)

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2020
Accounting Policies [Abstract]
Organization and Business [Policy Text Block]	Operations Information Analysis Incorporated (“the Company”) was incorporated under the corporate laws of the Commonwealth of Virginia in 1979 to develop and market computer applications software systems, programming services, and related software products and automation systems. The Company provides services to customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area.
Use of Estimates, Policy [Policy Text Block]	Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates.
Revenue from Contract with Customer [Policy Text Block]	Revenue Recognition See Note 2 for a detailed description of revenue recognition under ASC 606 Accounting Standards Update No. 2014 - 09, Revenue from Contracts with Customers (Topic 606 ) (“ASU 2014 - 09” ). The Company adopted ASU 2014 - 09 and its related amendments (collectively known as “ASC 606” ).
Segment Reporting, Policy [Policy Text Block]	Segment Reporting The Company has concluded that it operates in one business segment, providing products and services to modernize client information systems.
Cash and Cash Equivalents, Policy [Policy Text Block]	Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of ninety days or less at the time of purchase to be cash equivalents. Deposits are maintained with a federally insured bank. Balances at times exceed federally insured limits, but management does not consider this to be a significant concentration of credit risk.
Accounts Receivable [Policy Text Block]	Accounts Receivable Accounts receivable consist of trade accounts receivable and do not bear interest. The Company typically does not require collateral from its customers. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable. The Company reviews its allowance for doubtful accounts monthly. Accounts with receivable balances past due over 90 days are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. No allowance for doubtful accounts has been recorded at December 31, 2020 and 2019.
Property, Plant and Equipment, Policy [Policy Text Block]	Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. Furniture and fixtures are depreciated over the lesser of the useful life or five years, off-the-shelf software is depreciated over the lesser of three years or the term of the license, custom software is depreciated over the least of five years, the useful life, or the term of the license, and computer equipment is depreciated over three years. Leasehold improvements are amortized over the estimated term of the lease or the estimated life of the improvement, whichever is shorter. Maintenance and minor repairs are charged to operations as incurred. Gains and losses on dispositions are recorded in operations.
Share-based Payment Arrangement [Policy Text Block]	Stock-Based Compensation At December 31, 2020, the Company had the stock-based compensation plans described in Note 11 below. Total compensation expense related to these plans was $27,628 and $6,031 for the years ended December 31, 2020 and 2019, respectively. The Company estimates the fair value of options granted using a Black-Scholes valuation model to establish the expense. When stock-based compensation is awarded to employees, the expense is recognized ratably over the vesting period. When stock-based compensation is awarded to non-employees, the expense is recognized over the period of performance.
Income Tax, Policy [Policy Text Block]	Income Taxes Deferred tax assets and liabilities are computed based on the difference between the financial statement and tax basis of assets and liabilities and are measured by applying enacted tax rates and laws for the taxable years in which those differences are expected to reverse. In addition, a valuation allowance is required to be recognized if it is believed more likely than not that a deferred tax asset will not be fully realized. Authoritative guidance prescribes a recognition threshold of more likely than not, and a measurement attribute for all tax positions taken or expected to be taken on a tax return, in order for those positions to be recognized in the financial statements. The Company continually reviews tax laws, regulations and related guidance in order to properly record any uncertain tax liabilities.
Earnings Per Share, Policy [Policy Text Block]	Income (Loss) Per Share The Company's income (loss) per share calculations are based upon the weighted average number of shares of common stock outstanding. The dilutive effect of stock options, warrants and other equity instruments are included for purposes of calculating diluted income per share, except for periods when the Company reports a net loss, in which case the inclusion of such equity instruments would be antidilutive. See Note 12 for more details.
Concentration Risk, Credit Risk, Policy [Policy Text Block]	Concentration of Credit Risk During the year ended December 31, 2020, the Company's prime contracts with U.S. government agencies represented 58.3% of revenue, subcontracts under federal procurements represented 40.6% of revenue, and 1.1% of revenue came from commercial contracts. The terms of these contracts and subcontracts vary from single transactions to five years. Within this group of prime contracts with U.S. government agencies, one individual contract represented 13.9% of revenue. Three subcontracts under federal procurements represented 17.9%, 10.3% and 8.7% of revenue, respectively. One prime contractor under which the Company has multiple subcontracts represented 28.7% of revenue in aggregate. During the year ended December 31, 2019, the Company's prime contracts with U.S. government agencies represented 76.8% of revenue, subcontracts under federal procurements represented 23.0% of revenue, and 0.2% of revenue came from commercial contracts. The terms of these contracts and subcontracts vary from single transactions to five years. Within this group of prime contracts with U.S. government agencies, one individual contract represented 19.0% of revenue. One subcontract under a federal procurement represented 17.2% of revenue. The Company sold third -party software and maintenance contracts under agreements with one major supplier in 2020 and 2019, accounting for 58.4% and 67.1% of total revenue, respectively. At December 31, 2020, the Company's accounts receivable included receivables from prime contracts with one U.S. government agency that represented 16.4% of the Company's outstanding accounts receivable, and receivables from two subcontracts under federal procurements that represented 56.8% and 14.4% of the Company's outstanding accounts receivable, respectively. Receivables from one prime contractor under which the Company has multiple subcontracts represented 71.2% of the Company's outstanding accounts receivable in aggregate. At December 31, 2019, the Company's accounts receivable included receivables from prime contracts with two U.S. government agencies that represented 13.0% and 10.7% of the Company's outstanding accounts receivable, respectively, and receivables from one subcontract under a federal procurement that represented 43.2% of the Company's outstanding accounts receivable.
Related Party Transactions, Policy [Policy Text Block]	Related Party Transactions The Company's Director of Human Resources is the spouse of Stan Reese, who served as the Senior Vice President and Chief Operating Officer of the Company through December 31, 2020, and now serves as Chief Executive Officer and President. During the years ended December 31, 2020 and 2019, the Director of Human Resources received wages and paid leave distributions totaling $140,400 and $131,552, respectively, as an employee of the Company.
COVID-19 [Policy Text Block]	COVID- 19 The COVID- 19 (coronavirus) outbreak has had a notable impact on general economic conditions, including, but not limited to, the temporary closures of many businesses, “shelter in place” and other governmental regulations, and “work from home” directives. There are many unknowns, and many regional inconsistencies. Notable potential effects on the Company include U.S. government procurements may be delayed or cancelled, work on new or existing contracts that require personal interactions may be suspended, payment processing for customer invoices may be delayed, employees and customers or their families may become infected, and personal business development meetings may not be able to take place. The Company continues to monitor the impact of the COVID- 19 outbreak closely. To date, the COVID- 19 impact on the Company's existing business has been minimal. The Company had previously implemented the necessary infrastructure for its employees to work remotely, so it did not experience material issues supporting its customers. The Company rapidly adapted to the challenges presented to its administration, including challenges to management, accounting, and information technology infrastructure. The extent to which business development efforts have been hampered by the inability to meet with potential customers in person is indeterminable. The full extent to which the COVID- 19 outbreak will impact the Company's business, results of operations, financial condition, and cash flows over time is uncertain.