10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2018
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:   000-54918

MCORPCX, INC.

(Exact name of registrant as specified in its charter)

California

(State or other jurisdiction of incorporation or organization)

26-0030631

(I.R.S. Employer Identification No.)

201 Spear Street, Suite 1100

San Francisco, CA   94105

(Address of principal executive offices, including zip code)

(415) 526-2655

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.   YES ☑     NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   YES ☑     NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer (Do not check if a smaller reporting company)	☐	Smaller Reporting Company Emerging growth company	☑ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   YES ☐     NO ☑

Indicated the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 20,426,158 as of August 9, 2018.  

MCORPCX, Inc.

Form 10-Q Quarterly Report

TABLE OF CONTENTS

		Page No.
	Part I. - Financial Information	3
Item 1.	Financial Statements.	3
	Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017.	3
	Statements of Operations for the Three and Six Months ended June 30, 2018 and 2017 (unaudited).	4
	Statements of Cash Flows for the Three and Six Months ended June 30, 2018 and 2017 (unaudited).	5
	Notes to Financial Statements (unaudited).	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	11
Item 3.	Quantitative and Qualitative Disclosure about Market Risk.	17
Item 4.	Controls and Procedures.	17
	Part II. - Other Information	18
Item 1.	Legal Proceedings.	18
Item 1A.	Risk Factors.	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	18
Item 3.	Defaults Upon Senior Securities.	18
Item 4.	Mine Safety Disclosures.	18
Item 5.	Other Information.	18
Item 6.	Exhibits.	19
Signatures		20

PART I. FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

McorpCX, Inc.

Balance Sheets

	June 30,			December 31,
	2018			2017
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,338,291		$	1,616,076
Accounts receivable		666,731			274,785
Total current assets		2,005,022			1,890,861
Long term assets:
Property and equipment, net		90,171			86,551
Capitalized software development costs, net		204,657			301,574
Intangible assets, net		-			6,250
Other assets		28,474			27,137
Total assets	$	2,328,324		$	2,312,373
Liabilities and Shareholders' Equity
Liabilities:
Accounts payable	$	343,698		$	218,107
Deferred revenue		27,504			80,057
Notes payable		-			8,169
Total current liabilities		371,202			306,333
Total liabilities		371,202			306,333
Shareholders' equity:
Common stock, no par value, 500,000,000 shares authorized, 20,426,158 shares issued and outstanding at June 30, 2018 and December 31, 2017		-			-
Additional paid-in capital		6,434,865			6,428,997
Accumulated deficit		(4,477,743	)		(4,422,957	)
Total shareholders' equity		1,957,122			2,006,040
Total liabilities and shareholders' equity	$	2,328,324		$	2,312,373

The accompanying notes are an integral part of these unaudited financial statements.

3

McorpCX, Inc.

Statements of Operations

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Revenue, net
Consulting services	$	1,238,836		$	506,304		$	1,795,072		$	764,979
Products and other		165,818			96,309			223,436			134,925
Total revenue, net		1,404,654			602,613			2,018,508			899,904
Cost of goods sold
Labor		511,642			119,482			713,081			179,452
Products and other		229,147			120,719			325,123			200,522
Total cost of goods sold		740,789			240,201			1,038,204			379,974
Gross profit		663,865			362,412			980,304			519,930
Expenses
Salaries and wages		213,959			253,081			432,918			498,440
Contract services		40,186			20,962			114,251			30,710
Other general and administrative		264,543			167,019			486,761			319,218
Total expenses		518,688			441,062			1,033,930			848,368
Net operating income (loss)		145,177			(78,650	)		(53,626	)		(328,438	)
Interest expense		(293	)		(2,874	)		(403	)		(5,742	)
Other income (expense)		3,046			5,468			(757	)		2,994
Income (loss) before income taxes		147,930			(76,056	)		(54,786	)		(331,186	)
Income tax provision		-			-			-			-
Net income (loss)	$	147,930		$	(76,056	)	$	(54,786	)	$	(331,186	)
Net income (loss) per share-basic and diluted	$	0.01		$	(0.00	)	$	(0.00	)	$	(0.02	)
Weighted average common shares outstanding-basic and diluted		20,426,158			20,426,158			20,426,158			20,426,158

The accompanying notes are an integral part of these unaudited financial statements.

4

McorpCX, Inc.

Statements of Cash Flows

(unaudited)

	Six Months Ended June 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(54,786	)	$	(331,186	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		104,021			115,450
Stock compensation expense		5,868			78,229
Loss on disposal of assets		-			298
Unrealized loss (gain) on foreign currency transactions		-			(5,274	)
Changes in operating assets and liabilities:
Accounts receivable		(391,946	)		(82,548	)
Other assets		(1,337	)		606
Accounts payable		125,591			83,401
Other current liabilities		-			1,435
Deferred revenue		(52,553	)		83,822
Net cash used in operating activities		(265,142	)		(55,767	)
INVESTING ACTIVITIES
Equipment purchases		(4,474	)		(2,353	)
Proceeds from sale of equipment		-			2,000
Capitalized software development costs		-			(93,803	)
Net cash used in investing activities		(4,474	)		(94,156	)
FINANCING ACTIVITIES
Repayment of notes payable		(8,169	)		-
Net cash used in financing activities		(8,169	)		-
Decrease in cash and cash equivalents		(277,785	)		(149,923	)
Cash and cash equivalents, beginning of period		1,616,076			1,925,744
Cash and cash equivalents, end of period	$	1,338,291		$	1,775,821
Supplemental disclosure of cash flow information:
Interest paid	$	403		$	4,265

The accompanying notes are an integral part of these unaudited financial statements.

5

MCORPCX, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2018

(unaudited)

Note 1: Organization and Basis of Presentation

McorpCX, Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the State of California on December 14, 2001. We are a customer experience (CX) management solutions company dedicated to helping organizations improve customer experiences, increase customer loyalty, reduce costs and increase revenue.

We are a customer experience services company, delivering consulting and technology solutions to customer-centric organizations. We are engaged in the business of delivering technology-enabled consulting and professional services that are designed to help corporations improve their customer listening and customer experience management capabilities. To augment our consultative solutions, we have developed technology products that include on-demand “cloud based” customer experience management software. Our professional and related services include a range of customer experience management services such as research, training, strategy consulting and process optimization.

The financial statements and related disclosures as of and for the three and six months ended June 30, 2018 and 2017, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). The balance sheet as of December 31, 2017 was derived from the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our Annual Report for the year ended December 31, 2017, filed on Form 10-K with the SEC on March 29, 2018.  The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, all references to "McorpCX," "we," "us," "our" or the "Company" are to McorpCX, Inc.

Note 2: Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU No. 2014- 09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In addition, ASU No. 2017-03 conforms certain paragraphs within the SEC Staff Guidance to the guidance issued in Accounting Standards Update No. 2014-01, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. The Company is currently evaluating the impact of these amendments on its financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718. The amendments are effective for fiscal years beginning after December 15, 2017 and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU 2017-09 with no material impact to the financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (Topic 606) "Revenue from Contracts with Customers." Topic 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (Topic 605) and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic 606 as of January 1, 2018 using the modified retrospective transition method. See Note 3 for further details.

In November 2017, the FASB issued ASU No. 2017-14, Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606) (SEC Update). The ASU amends SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic 606, Revenue from Contracts with Customers. The amendments were effective upon issuance. The Company has evaluated the impact on revenue recognition and does not expect these amendments to have a material effect on its financial statements.

6

In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which retained the current framework for accounting for financial instruments in generally accepted accounting principles (GAAP) but made targeted improvements to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this Update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The Company adopted ASU 2018-03 with no material impact to the financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding standard tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU No. 2018-02 on its consolidated financial statements.

Note 3. Revenues

Adoption of ASC Topic 606, "Revenue from Contracts with Customers"

On January 1, 2018 we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

We did not have a cumulative impact as of January 1, 2018 due to the adoption of Topic 606 and there was not an impact to our statements of operations for the three and six months ended June 30, 2018 as a result of applying Topic 606.

Revenue Recognition

The Company’s revenue consists primarily of professional and consulting services, as well as software-enabled product sales and other revenues. Consulting services include customer experience management consulting in the areas of strategy development, planning, education, training and program design, and includes the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. Product revenue is from productized and software-enabled service sales not elsewhere classified, while other revenue includes reimbursement of related travel costs and out-of-pocket expenses.

The consulting services are contracted under master terms and conditions with statements of work (“SOW”) defined for each project. A typical consulting SOW will span a period of 60-180 days and will usually be billed to the client based on certain milestones being achieved throughout the SOW. The Company recognizes revenue based upon a percentage of completion of each SOW during each project, which are typically 60-180 days in duration. In addition, we typically incur travel other miscellaneous expenses during work on each SOW which we bill to our clients for reimbursement. The travel and miscellaneous expenses are recognized in revenue on a percentage of work complete basis.

Contract costs, such as commissions, are typically incurred contemporaneously with the pattern of revenue recognition and, as such, are expensed as incurred.

Consulting Service Revenues

The Company’s consulting services are project based and include the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. The performance obligation in these projects is the delivery of specific findings reports as it pertains to the customer experience being analyzed. These projects include milestone payments for completion of different phases of the project and are included in the transaction price. These milestone payments are deemed to be fixed because the milestones are within the control of the Company. The projects also include reimbursable expenses, which are part of the transaction price and deemed variable consideration. These reimbursable expenses are estimated at contract inception. Given the confidentiality provisions in the agreement and the nature of the services being performed, the Company has no alternative use for the specific findings report. Therefore, the Company recognizes the transaction price over time, based on percentage of completion of the milestones in the contract.

7

Product and other revenue

Product and other revenue primarily originates from the utilization of the Company’s web-hosted Touchpoint Mapping On-Demand application (“Touchpoint Mapping”), which is designed to gather customer satisfaction data, track brand perceptions, and analyze results. Touchpoint Mapping is a SaaS (Software as a Service) subscription-based technology application, which derives revenue from the following sources: nonrefundable setup fees, subscription fees, professional service fees, and consulting fees related to implementation, customization, configuration, training, and other value-added services.  Customer licenses for Touchpoint Mapping are not subject to the licensing guidance in Topic 606 because the customer can’t take possession of the software at any time and the customer would not be able to operate the software on its own or with another third party. Fees charged to customers of Touchpoint Mapping may include implementation, setup, training and license fees for the application. Revenue generated from Touchpoint Mapping (either directly through licensing fees or fees received through support functions) is recognized on a straight-line basis because the Company’s obligations under its contracts concerning Touchpoint Mapping are deemed to be stand-ready obligations due to the fact that the Company is contractually required to provide access to Touchpoint Mapping and customer support on a daily basis. Consequently, usage of Touchpoint Mapping by customers does not affect the ability of customers to access the application or our customer support functions. For these reasons, revenue is recognized on a straight-line basis over the contract period. If billings are front loaded, this will result in a deferral of revenue during the contract period. For recognition purposes, we do not unbundle such services into separate performance obligations as their pattern of transfer does not differ.

The aggregate amount of the fees received from customers that are allocated to product and other revenue performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2018 is $27,504 and included in deferred revenue on the accompanying balance sheets. The Company expects to recognize revenue of $27,504 in the next 12 months related to these unsatisfied (or partially unsatisfied) performance obligations. Revenue related to these performance obligations are not expected to be recognized beyond fiscal year 2018. 

Arrangements with Multiple Performance Obligations

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers. If the pattern of transfer of control for each obligation does not differ, the Company does not allocate revenue to specific performance obligations.

Deferred Revenues (Contract Liabilities)

The Company records deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable.

Payment terms vary by customer and the products or services offered. The term between invoicing and when payment is due is not significant. For certain products or services and customer types, full or a partial payment of the entire contract is required before the products or services are delivered to the customer.

During the three and six months ended June 30, 2018, we recognized revenue of $6,291 and $80,057, respectively, related to our contract liabilities included in deferred revenue at December 31, 2017. During the three and six months ended June 30, 2017 we recognized revenue of $60,589 and $111,618, respectively, related to our contract liabilities included in deferred revenue at December 31, 2016.

Contract Assets

Given the nature of the Company’s services and contracts, it has no contract assets.

Practical Expedients and Exemptions

Contract costs consist primarily of sales commissions, The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less and they are only due and payable upon receipt of payment from the client. These costs are recorded within sales and marketing expenses.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

8

Note 4: Capitalized Software Development Costs 

Costs incurred to develop Software as a Service (SaaS) technology consist of external direct costs of materials and services and payroll and payroll-related costs for employees who directly devote time to the project. Research and development costs incurred during the preliminary project stage are expensed as incurred. Capitalization begins when technological feasibility is established. Costs incurred during the operating stage of the software application relating to upgrades and enhancements are capitalized to the extent that they result in the extended life of the product. All other costs are expensed as incurred. Expenses relating to upgrades and enhancements were capitalized during the six months ended June 30, 2017 in the amount of $93,803. There were no expenses capitalized during the six months ended June 30, 2018.

Amortization of software development costs commenced when the product was available for general release to customers. The capitalized costs are amortized on a straight-line basis over the three-year expected useful life of the software. Capitalized software development costs, net of amortization, were $204,657 and $301,574 as of June 30, 2018 and December 31, 2017, respectively. Amortization expense incurred during the six months ended June 30, 2018 and 2017 was $96,917 and $93,819, respectively and is included in cost of goods sold in the statements of operations.

Note 5: Intangible Assets

Intangibles consist of the following as of June 30, 2018.

	2018
			Accumulated
	Gross		Amortization			Net Book Value
Website development costs	$	70,188	$	(70,188	)	$	-
Media distribution rights		25,000		(25,000	)		-
Intellectual property		5,000		(5,000	)		-
LinkedIn Group		2,500		(2,500	)		-
Organization costs		1,377		(1,377	)		-
Total intangibles	$	104,065	$	(104,065	)	$	-

Our intangible assets are reviewed for impairment when facts or circumstances suggest that the carrying value of the asset may not be recoverable.  There were no impairment charges during the six months ended June 30, 2018 and 2017.

Total amortization of intangible assets was $6,250 and $19,156 for the six months ended June 30, 2018 and 2017, respectively.

Note 6: Stock-Based Compensation

Our stock-based compensation plan was originally established in 2008. The shares of our common stock issuable pursuant to the terms of such plan (the “Plan Shares”) could not exceed 30% of any outstanding issue or 2,500,000 shares, whichever was the lower amount.

In December 2015, we adopted a revised share option plan in which Plan Shares cannot exceed 10% of the total issued and outstanding shares at any given time. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of the grant and all option grants have a 10-year term. This share option plan was approved by the Company’s shareholders at the annual meeting of shareholders on August 10, 2016.

To calculate the fair value of stock options at the date of grant, we use the Black-Scholes option pricing model. The volatility used is based on a blended historical volatility of our own stock and similar sized companies due to the limited historical data available for our own stock price.  The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110.  The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

At June 30, 2018, 1,350,000 stock options were exercisable and $5,868 of total compensation cost related to vested share-based compensation grants had been recognized for the six months ended June 30, 2018. There was no unrecognized compensation expense from stock options at June 30, 2018.

9

The following table summarizes our stock option activity for the three months ended June 30, 2018:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (in years)		Value
Outstanding at December 31, 2017		1,350,000	$	0.60		6.07	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2018		1,350,000	$	0.60		5.58		-
Exercisable at June 30, 2018		1,350,000	$	0.60		5.58	$	-

There were no options granted during the six months ended June 30, 2018.

Note 7: Concentrations

We sell products and services under various terms to a broad range of companies across multiple industries ranging from start-ups to Fortune 500 companies, with sales historically concentrated among a few large clients. We continue to make efforts to mitigate risk from loss of a single client and shift sales concentration to a more even distribution among our clients. For the six months ended June 30, 2018 and 2017, the percentage of sales and the concentrations are:

	2018			2017
Largest client		41	%		33	%
Second largest client		20	%		19	%
Third largest client		16	%		17	%
Next three largest clients		18	%		27	%
All other clients		5	%		4	%
		100	%		100	%

Sales are made without collateral and the credit-related losses have been insignificant or non-existent. Accordingly, there is no provision made to include an allowance for doubtful accounts.

Note 8: Debt

On September 16, 2011, a $100,000 CAD note was executed with an individual, a 1.86% shareholder. The note is structured to incur a balloon payment of the principal and 4% APR non-compounding accrued interest on its amended maturity date of October 31, 2017. Effective October 31, 2016 the note's previous maturity date of September 16, 2016 was amended to extend the maturity date to October 31, 2017. In October 2017, $66,217 was paid to the note holder and the remaining balance of $8,169 was paid in February 2018 fully satisfying the debt. The balance of $8,169 is presented under notes payable on the balance sheet as of December 31, 2017 and there were no fees or penalties incurred by the Company. There was no notes payable balance as of June 30, 2018. We have recorded foreign currency gains of $413 and $4,472 during the six months ended June 30, 2018 and 2017, respectively, related to the revaluation of this note's principal from CAD to USD.

Interest expense was $403 and $5,742 for the six months ended June 30, 2018 and 2017, respectively and consists of interest on our short-term promissory notes, and credit card balances.

Note 9: Going Concern

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

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We have had material operating losses and have not yet created positive cash flows. These factors raise substantial doubt as to our ability to continue as a going concern. However, we continue to improve our core consulting services revenue and contain costs in order to reduce our net operating losses. We believe that our increased revenues and improved net losses in the year ended December 31, 2017 and the first half of 2018 compared to our financial results in the year ended December 31, 2016 and the first half of 2017 coupled with our cash balance of $1,338,291 at June 30, 2018 and our belief that sufficient funding may be available from private placements of equity securities or additional borrowings if needed will enable us to meet our liquidity needs over the next 12 months. Notwithstanding the foregoing, our longer-term ability to continue as a going concern is entirely dependent upon our ability to achieve a level of profitability, and/or to raise additional capital through debt financing and/or through sales of common stock. We cannot provide any assurance that profits from operations, if any, will generate sufficient cash flow to meet our working capital needs and service our existing debt, nor that sufficient capital can be raised through debt or equity financing. The financial statements do not include adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern. 

Note 10: Basic and Diluted Net Income / (Loss) per Share

The Company follows FASB ASC 260, “Earnings Per Share”, when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Net income (loss) per share was computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. For the three and six months ended June 30, 2018 and 2017, the assumed exercise of share options is anti-dilutive and are excluded from the determination of net income (loss) per share – basic and diluted. The share options were anti-dilutive due to the Company’s net loss or the Company’s common stock average market price was less than the share options exercise price. Accordingly, net income (loss) per share basic and diluted are equal in all periods presented. Securities that were not included in the diluted per share calculations because they would be anti-dilutive were options to purchase common stock of 1,350,000 and 1,475,000 as of June 30, 2018 and 2017, respectively.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018			2017
Net income (loss)	$	147,930	$	(76,056	)	$	(54,786	)	$	(331,186	)
Basic and diluted weighted average common shares outstanding		20,426,158		20,426,158			20,426,158			20,426,158
Net income (loss) per share, basic and diluted	$	0.01	$	(0.00	)	$	(0.00	)	$	(0.02	)

Note 11: Related-Party Transactions

During the three months ended June 30, 2018, a company controlled by the Company’s Chief Executive Officer purchased from the Company an internet domain name that was obsolete and not being used in the business nor needed for the go-forward business for $2,000 that is included in other income (expense) on the statements of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement

This Management’s Discussion and Analysis includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: “believe,” “expect,” “plan”, “estimate,” “anticipate,” “intend,” “project,” “will,” “predicts,” “seeks,” “may,” “would,” “could,” “potential,” “continue,” “ongoing,” “should” and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from our predictions. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Unless the context otherwise requires, all references to "McorpCX," "we," "us," "our" or the "Company" are to McorpCX, Inc. and our subsidiaries.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, income taxes, stock-based compensation, research and development costs and impairment of long-lived assets have the greatest potential impact on our financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

A description of the Company’s critical accounting policies and related judgments and estimates that affect the preparation of the Company’s financial statements is set forth in under the heading “Critical Accounting Policies and Estimates” in Item 7, Management’s Discussion and Analysis of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. With the exception of the adoption of Topic 606 discussed in Note 3, such policies were unchanged during the six months ended June 30, 2018.

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Overview

We are a customer experience (CX) management solutions company dedicated to helping organizations improve customer experiences, increase customer loyalty, reduce costs and increase revenue. We believe that delivering better customer experiences is a powerful, sustainable way for any organization to differentiate themselves from their competition. As such, we are engaged in the business of developing and delivering technology-enabled products and professional services that are designed to help corporations improve their customer listening and customer experience management capabilities with the goal of helping them design and deliver better experiences for their customers.

Our primary source of revenue is derived from our consulting services which are intended to help primarily large and medium sized organizations plan, design and deliver better customer experiences in order to maximize their return on investment, improve efficiency, and increase the adoption of our products and services. Our services offered include a range of customer experience management consulting services in the areas of research, strategy development, planning, education, training and best practices, as well as providing customer-centric strategies and implementation roadmaps in support of these strategies.

Our products include on-demand “cloud based” customer experience management software such as Touchpoint Mapping® On-Demand (also marketed as McorpCX | Insights), referred to as “Touchpoint Mapping”, and McorpCX | Persona.

Touchpoint Mapping is a research-based online Software-as-a-Service (“SaaS”) solution designed to provide insights to organizations that can help them improve customer and employee experience, brand, and loyalty. It is designed to be a solution for customer-centric organizations to measure and gather customer data across all their touchpoints, channels and interactions with their customers.

McorpCX | Persona, another online SaaS solution, is designed for developing and managing customer persona, as well as automating the currently manual process of developing, managing and sharing persona across corporations. It is designed to help customer-centric businesses and the agencies and consultancies that serve them to better understand, connect with and serve their customers.

There are many potential unforeseen and significant market and competitive risks associated our current products and services. Though we released the first version of Touchpoint Mapping in 2013, and we released the first version of McorpCX | Persona in 2016, neither product has generated significant sales revenue to date, and we cannot predict the timing or probability of generating material sales revenue from either of them.

As of the date of this report, we have yet to engage the necessary sales and marketing staff or the capabilities required to identify, develop, and close material product sales opportunities, and currently lack sufficient resources to market and sell our products in the manner which we believe is required to achieve our product sales and revenue growth objectives. It is our expectation that numerous unforeseen challenges will be encountered as we continue to develop, market, distribute and sell our products and services.

Although management still believes that our ability to achieve long-term profitability will stem in large part from our ability to successfully commercialize our software products, we feel that in the short-term, expanding our consulting business will lead to greater revenues for the Company, which could be utilized for future product development. We intend to continue to evaluate our software products to determine the next phase of new product development and potential enhancements to our existing product suite.

The Company is in the process of determining the optimal path forward for our software products based on current market dynamics, the competitive environment and customer feedback. We continue to evaluate various potential strategies with the goal of improving our ability to achieve additional revenue and profit growth for both our software products as well as our consultant services. These possible strategies, which are generally focused on ways to create a more complete slate of customer experience solutions for our clients, include further software or technology development expenditures, pursuit of merger, acquisitions or joint ventures with companies that provide complimentary products and services, software licensing arrangements, and investment in additional infrastructure within our Company. Each of these possible strategies will be thoroughly vetted by our board of directors to assess the expected level of enterprise value creation for each strategy compared to the various risks associated with each possible scenario.  In addition, we may require financing to pursue these strategies that is beyond our current financial resources.  Accordingly, there is no assurance that we will be able to pursue any strategies that are identified by our board of directors.

We cannot assure you that we will be able to compete successfully against current or potential competitors, or that competition will not have a material adverse effect on our business, financial condition and operations.

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Summary of Financial Results

Select financial highlights for the three and six months ended June 30, 2018:

● Revenue increased by 133% from $602,613 during the second quarter of 2017 to $1,404,654 during the second quarter of 2018 and by 124% from $899,904 in the first half of 2017 to $2,018,508 in the first half of 2018.

● Gross profit increased by 83% from $362,412 in the second quarter of 2017 to $663,865, in the second quarter of 2018 and 89% from $519,930 in the first half of 2017 to $980,304 in the first half of 2018.

● We recorded net operating income of $145,177 in the second quarter of 2018 compared to a net operating loss of $78,650 during the same quarter of 2017. Net operating loss was $53,626 in the first half of 2018 compared to a net operating loss of $328,438 for the first half of 2017.

● The Company reported EBITDA⁽¹⁾ of $199,539 and $49,638 in the second quarter and first half of 2018, respectively, compared to ($16,241) and ($209,994) in the second quarter and first half of 2017

● The Company had a cash balance of $1,338,291 at June 30, 2018 compared to a cash balance of $1,616,076 at December 31, 2017.

⁽¹⁾ We define EBITDA as the net loss plus interest, tax, depreciation and amortization expenses. We consider EBITDA to be a meaningful supplement to net income (loss) as a performance measure primarily because depreciation and amortization expenses are not actual cash costs, and interest and tax expenses are not related to our direct operating activities. See below for a reconciliation of net income (loss) to EBITDA.

Sources of Revenue

Our revenue consists primarily of professional and consulting services, as well as software-enabled product sales and other revenues. Consulting services include customer experience management consulting in the areas of strategy development, planning, education, training and program design, and includes the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. Product revenue is from productized and software-enabled service sales not elsewhere classified, while other revenue includes reimbursement of related travel costs and out-of-pocket expenses.

While our plan of operations is based on enhancing our service revenue by cross-selling our products to clients in complement to our consulting services to establish more recurring SaaS subscription fees, we anticipate that fees for professional and consulting services will remain our most significant revenue source in the foreseeable future. We have not obtained material stand-alone sales commitments for Touchpoint Mapping or McorpCX | Persona, and do not anticipate being able to do so until we engage the necessary sales and marketing staff to develop and execute product sales opportunities. During the second half of 2017, we stopped further development of our software in order to re-assess the product roadmap to better define the future direction of our software platform.

Cost of Goods Sold and General and Administrative Expenses

Cost of Goods Sold

Cost of goods sold has historically consisted primarily of expenses directly related to providing professional and consulting services. Those expenses include contract labor, third-party services, and materials and travel expenses related to providing professional services to our clients. Costs of goods also includes product-related hosting and monitoring costs, licenses for products embedded in the application, amortization of capitalized software development costs, related sales commissions, service support, account and subscription management, as applicable.

General and Administrative Expenses

General and administrative expenses consist primarily of salary and related expenses for management, client delivery, finance and accounting, and sales and marketing. These expenses also include contract services, as well as marketing and promotion costs, professional fees, software license fee expenses, administrative costs, insurance, rent and a portion of travel expenses and other overhead, which are categorized as “other general and administrative expenses” in our financial statements. In addition, the other general and administrative expenses include the professional fees, filing, and registration costs necessary to meet the requirements associated with having to file reports with the United States Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as well as having our stock listed on the TSX Venture Exchange (the “TSX-V”) in Canada and quoted on the OTCQB venture marketplace in the United States.

Sales and marketing expenses are currently reflected in salaries and wages, commissions, contract labor, sales, marketing and promotion, and other related overhead expense categories. Since we currently recognize revenue over the term of the subscriptions or professional services engagements, we expect to experience a delay between increases in selling and marketing expenses and the recognition of revenue. We expect to continue to incur significant sales and marketing expenses in both absolute dollars and as a percentage of expenses as we seek to increase the level of our sales and marketing activities. We expect that total general and administrative expenses will increase as we continue to add resources in connection with the growth of our business.

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Results of Operations

					Change from		Percent Change
Revenue	2018		2017		Prior Year		from Prior Year
Three Months Ended June 30,	$	1,404,654	$	602,613	$	802,041		133	%
Six Months Ended June 30,	$	2,018,508	$	899,904	$	1,118,604		124	%

Overall the 133% increase in revenues for three months ended June 30, 2018 compared to the same period in 2017 was attributed to a 145% increase in consulting services revenue and a 72% increase in products and other revenue for the three months ended June 30, 2018 compared to same period in the prior year. The increase in consulting services revenue from $506,304 for the three months ended June 30, 2017 to $1,238,836 for the same period in 2018 was primarily the result of increased revenues from both new clients as well as from existing clients in 2018 compared to 2017, which we believe were mostly the result of our continued marketing efforts related to attracting new clients and from cross-selling different services to our existing clients. The increase in product and other revenue from $96,309 for the three months ended June 30, 2017 to $165,818 for the same period in 2018 was largely attributed to increased recognized revenue for reimbursable travel and miscellaneous expenses plus ancillary services we provided in connection with our consulting services.

Overall the 124% increase in revenue for six months ended June 30, 2018 compared to the same period in 2017 was attributed to a 135% increase in consulting services revenue and a 66% increase in products and other revenue for the six months ended June 30, 2018 compared to same period in the prior year. The increase in consulting services revenue from $764,979 for the six months ended June 30, 2017 to $1,795,072 for the same period in 2018 was primarily the result of increased revenues from both new clients as well as from existing clients in 2018 compared to 2017, which we believe were mostly the result of our continued marketing efforts related to attracting new clients and from cross-selling different services to our existing clients. The increase in product and other revenue from $134,925 for the six months ended June 30, 2017 to $223,436 for the same period in 2018 was largely attributed to increased recognized revenue for reimbursable travel and miscellaneous expenses plus ancillary services we provided in connection with our consulting services.

					Change from		Percent Change
Cost of Goods Sold	2018		2017		Prior Year		from Prior Year
Three Months Ended June 30,	$	740,789	$	240,201	$	500,588		208	%
Six Months Ended June 30,	$	1,038,204	$	379,974	$	658,230		173	%

Cost of goods sold increased by $500,588 and $658,230 for the three and six months ended June 30, 2018, respectively, compared to the same periods in 2017 due primarily to increased resources required to support the increase in consulting services revenue provided during the current period. In the six months ended June 30, 2018, our labor costs increased by $533,629 compared to the same period in the prior year mainly as a result of the Company’s need to contract outside services to assist with delivery of our consulting services in 2018. There was also an increase in reimbursable expenses of $110,947 for the six months ended June 30, 2018 compared to the same period in the prior year, which was related to an increase in travel and miscellaneous expenses associated with the delivery of the increased consulting services in 2018.

							Change from		Percent Change
Net Operating Income (Loss)	2018			2017			Prior Year		from Prior Year
Three Months Ended June 30,	$	145,177		$	(78,650	)	$	223,827		(285%	)
Six Months Ended June 30,	$	(53,626	)	$	(328,438	)	$	274,812		(84%	)

For the three months ended June 30, 2018 we had a net operating income of $145,177 compared to a net operating loss of $78,650 for the three months June 30, 2017. During 2018, we focused on growing our consulting services operations through increased business development activities which we believe was the primary driver in an 83% increase in gross profit of $301,453 to $663,865 for the three months ended 2018 compared to $362,412 for the same period in the previous year. Similarly, EBITDA improved by $215,780 to a gain of $199,539 for the three months ended June 30, 2018 compared to a loss of $16,241 for the three months ended June 30, 2017.

For the six months ended June 30, 2018 we had a net operating loss of $53,626 compared to a net operating loss of $328,438 for the six months June 30, 2017. During 2018, we focused on growing our consulting services operations through increased business development activities which resulted in an 89% increase in gross profit of $460,374 to $980,304 for the six months ended 2018 compared to $519,930 for the same period in the previous year. Similarly, EBITDA improved by $259,632 to a gain of $49,638 for the six months ended June 30, 2018 compared to a loss of $209,994 for the six months ended June 30, 2017.

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We consider EBITDA to be a meaningful supplement to net income (loss) as a performance measure primarily because depreciation and amortization expenses are not an actual cash costs, and interest and tax expenses are not related to our direct operating activities. In addition, we believe EBITDA is commonly used by investors and other interested parties to evaluate our financial performance. EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs. EBITDA should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, or as an alternative to net cash from operating activities as a measure of liquidity. EBITDA is an internal measure and therefore may not be comparable to other companies. EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that EBITDA does not reflect: (i) our cash expenditures, or future requirements, for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, working capital needs; and (iii) the interest expense, or the cash requirements necessary to service interest or principal payments, on our outstanding debt (if any). Because of these limitations, EBITDA should only be considered as a supplemental performance measure and should not be considered as a measure of liquidity or cash available to us to invest in the growth of our business. Because all companies do not calculate EBITDA in the same manner, EBITDA as calculated by us may differ from EBITDA as calculated by other companies. We compensate for these limitations by using EBITDA as a supplemental measure of our performance and by relying primarily on our GAAP financial statements.

The following table provides a reconciliation of net income (loss) to EBITDA for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2018			2017			2018			2017
Net Income (Loss)	$	147,930		$	(76,056	)	$	(54,786	)	$	(331,186	)
Depreciation and Amortization		(51,316	)		(56,941	)		(104,021	)		(115,450	)
Interest expense		(293	)		(2,874	)		(403	)		(5,742	)
EBITDA	$	199,539		$	(16,241	)	$	49,638		$	(209,994	)

					Change from			Percent Change
Salaries and Wages	2018		2017		Prior Year			from Prior Year
Three Months Ended June 30,	$	213,959	$	253,081	$	(39,122	)		(15%	)
Six Months Ended June 30,	$	432,918	$	498,440	$	(65,522	)		(13%	)

Salaries and wages decreased by $39,122 during the three months ended June 30, 2018 compared to the same period in 2017 mostly as a result of a decrease in stock-based compensation expense of approximately $27,100, which was primarily driven by the Company not granting any options to employees in 2018, combined with a $10,500 reduction in officer salaries and a $1,500 reduction in payroll taxes. From the total officer’s salary costs incurred during the three months ended June 30, 2017, $2,000 was capitalized.

We did not incur any software development costs for the three months ended June 30, 2018 primarily due to the decision to curtail additional software development halfway through 2017.

Salaries and wages decreased by $65,522 during the six months ended June 30, 2018 compared to the same period in 2017 mostly as a result of a decrease in stock-based compensation expense of approximately $72,300, which was primarily driven by the Company not granting any options to employees in 2018, combined with a $20,500 reduction in staff salaries and a $3,900 reduction in payroll taxes, being partially offset by an increase in officers’ salaries of approximately $31,200 during the first half of 2018 compared to the same period in 2017. From the total officer’s salary costs incurred during the six months ended June 30, 2017, $21,000 was capitalized.

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We did not incur any software development costs for either the three or six months ended June 30, 2018 primarily due to the decision to curtail additional software development halfway through 2017.

					Change from		Percent Change
Contract Services	2018		2017		Prior Year		from Prior Year
Three Months Ended June 30,	$	40,186	$	20,962	$	19,224		92	%
Six Months Ended June 30,	$	114,251	$	30,710	$	83,541		272	%

Contract services expenses increased during the three and six months ended June 30, 2018 compared to the same period in 2017 primarily due to increases in accounting and administrative costs and related to the expenses associated with the additional personnel required to support a higher level of consulting projects during the current quarter and first half of 2018.

					Change from		Percent Change
Other General and Administrative	2018		2017		Prior Year		from Prior Year
Three Months Ended June 30,	$	264,543	$	167,019	$	97,524		58	%
Six Months Ended June 30,	$	486,761	$	319,218	$	167,543		52	%

Other general and administrative costs increased for the three months ended June 30, 2018 compared to the same period in 2017 primarily due to an increase in sales and marketing expenses of $42,300 as well as an increase in professional and legal fees of $52,000 mostly due to increased accounting fees associated with additional work related to the adoption of new accounting standard ASC 606 in January 2018 and an increase in legal fees and other professional fees related to business development and corporate governance activities during the current quarter compared to the same period in 2017.

Other general and administrative costs increased for the six months ended June 30, 2018 compared to the same period in 2017 primarily due to an increase in sales and marketing expenses of $84,000 as well as an increase in professional fees and legal fees of $102,000 mostly due to increased accounting fees associated with additional work related to the adoption of new accounting standard ASC 606 in January 2018 and the timing of incurring accounting fees, an increase in legal fees and other professional fees related to business development and corporate governance activities during the current period compared to the same period in 2017. These increases were partially offset by an $18,500 decrease in expenses related to administration and rent in the first half of 2018 compared to the same period in 2017.

						Change from			Percent Change
Other Income/Expense	2018			2017		Prior Year			from Prior Year
Three Months Ended June 30,	$	3,046		$	5,468	$	(2,422	)		(44%	)
Six Months Ended June 30,	$	(757	)	$	2,994	$	(3,751	)		(125%	)

Other income/(expense) decreased for the three and six months ended June 30, 2018 when compared to the corresponding periods in 2017 primarily due to an increase in state use tax expenses.

Liquidity and Capital Resources

We measure our liquidity in a variety of ways, including the following:

	June 30,		December 31,
	2018		2017
Cash and cash equivalents	$	1,338,291	$	1,616,076
Working capital	$	1,633,820	$	1,584,528

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Anticipated Uses of Cash

For the six months ended June 30, 2018 and the year ended December 31, 2017, we were able to finance our operations, including capital expenditures for product development and marketing activities with cash generated through operating activities, and cash on hand. The accompanying financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

In 2017 and the first half of 2018, our primary area of investment was professional staff to support our consulting services and manage our SaaS product business, including client relationship management, product development, staff sales and marketing activities.

We currently anticipate that our uses of cash for the remainder of 2018 will mirror the primary uses of cash during the first half of 2018, which included cash paid to professional staff to support our consulting services, professional services and SaaS product delivery business along with our general and administrative support and new business development activities.

We currently plan to fund our expenditures with cash flows generated from ongoing operations and/or if needed, the possibility may exist to raise additional capital through debt financing and/or through sales of common stock. We do not intend to pay dividends in the foreseeable future. Based upon the current level of our pipeline of signed contracts and pipeline of potential new projects plus our current expectations for future periods in light of the current economic environment, we believe that cash flow from operations and available cash will be adequate to finance the capital requirements for our business during the next 12 months.

We continue to seek ways to expand upon our business and as such, in the future we may make acquisitions of businesses or assets or commitments to additional capital projects. To achieve the long-term goals of expanding our assets and earnings, including through acquisitions, capital resources will be required. Depending on the size of a transaction, the capital resources that will be required can be substantial. The necessary resources may be generated from cash flow from operations, cash on hand, borrowing against our assets or the issuance of securities, and there is no assurance these capital resources will be available to us when required.

Cash Flow – Six Months Ended June 30, 2018 and 2017

Operating Activities. Net cash used in operating activities increased to $265,142 for the six months ended June 30, 2018 compared to $55,767 for the six months ended June 30, 2017, mostly as a result of increased cash from a reduction in net operating loss of $276,400 combined with a $42,190 increase in accounts payable during the current period compared to the same period of 2017, being more than offset by a $309,398 increase in accounts receivable, a reduction of the non-cash stock compensation expenses, and  cash used in connection with decreased deferred revenue in the first half of 2018 compared to the first half of 2017.

Days Sales Outstanding (“DSO”), which the Company defines as the average number of days it takes to collect revenue once a sale has been made, increased in 2018 compared to the same period of the prior year. During the six months ended June 30, 2018, DSO was approximately 60 days, up from approximately 23 days during the six months ended June 30, 2017. The increase in DSO was caused by the increase in accounts receivable balance at June 30, 2018 compared to June 30, 2017, which was driven by the 133% and 124% increase in revenue during the three and six months ended June 30, 2018, respectively. DSO can fluctuate due to the timing and nature of contracts that lead to up-front billings related to deferred revenue on services not yet performed.

Investing Activities. There was $4,474 net cash used in investing activities for the six months ended June 30, 2018 compared to $94,156 in net cash used in investing activities for the same period in 2017. Net cash used in investing activities in 2017 primarily consisted of cash used for capitalized software development costs of $93,803 partially offset by proceeds from the sale of equipment.

Financing Activities. Net cash used in financing activities for the six months ended June 30, 2018 amounted to $8,169 which related to the repayment of a $100,000 CAD note during the period. There was no cash provided by, or used in, financing activities for the six months ended June 30, 2017.  

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of June 30, 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and as such, are not required to provide the associated information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedure

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were not effective, as a result of the material weaknesses identified in connection with our financial statements as of December 31, 2017, as disclosed on our Form 10-K annual report for the year ended December 31, 2017.

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Changes in Internal Controls

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, in order to address the deficiencies in the Company’s internal control over financial reporting, the Company engaged an external firm in the first quarter of 2018 to provide outsourced controller services. This external firm is currently in the process of documenting our internal control process and is expected to provide guidance to assist the Company in developing sufficient segregation of duties within our accounting functions in order to remediate the identified deficiencies.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not involved in any legal actions or claims and to our knowledge no such actions or claims are pending.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “2017 Annual Report”), which could materially affect our business, results of operations or financial condition.

The risk factors affecting the Company have not materially changed as of June 30, 2018 from those disclosed in the 2017 Annual Report. However, it is important to note that the risks described in our 2017 Annual Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may eventually prove to materially adversely affect our business, results of operations or financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Recent Sales of Unregistered Securities

There were no unregistered sales of our equity securities during the six-month period ended on June 30, 2018.

Purchases of Equity Securities

During the six months ended June 30, 2018, there were no purchases of our common stock made by, or on behalf of, the Company or any "affiliated purchaser," as defined by Rule 10b-18 of the Exchange Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION.

(a) Not applicable.

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ITEM 6. EXHIBITS.

3.1	Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.2	Amended Articles of Incorporation (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.3	Amended Articles of Incorporation (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.4	Amended Articles of Incorporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 13, 2015).
3.5	Amended Articles of Incorporation (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 14, 2016).

3.6	Amended and Restated Bylaws (Incorporated by reference to Exhibit 3. 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 24, 2015).
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1*	Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension – Schema
101.CAL	XBRL Taxonomy Extension – Calculations
101.DEF	XBRL Taxonomy Extension – Definitions
101.LAB	XBRL Taxonomy Extension – Labels
101.PRE	XBRL Taxonomy Extension – Presentation

*Furnished, not filed

Notes to Exhibits List:

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheet, (ii) Statements of Operations, (iii) Statements of Cash Flows, and (iv)Notes to the Financial Statements. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report has been signed on its behalf by the undersigned, thereunto duly authorized on this 10th day of August 2018.

MCORPCX, INC.
BY:	/s/Michael Hinshaw
	Michael Hinshaw
	Chief Executive Officer, Treasurer, Principal Accounting Officer, Secretary and Director
BY:	/s/Gregg Budoi
	Gregg Budoi
	Chief Financial Officer

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EXHIBIT INDEX

3.1	Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.2	Amended Articles of Incorporation (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.3	Amended Articles of Incorporation (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 25, 2012).
3.4	Amended Articles of Incorporation (Incorporated by reference to the Company’s Form 8-K filed with the Securities and Exchange Commission on July 13, 2015).
3.5	Amended Articles of Incorporation (Incorporated by reference to the Company’s Form 10-Q filed with the Securities and Exchange Commission on November 14, 2016).
3.6	Amended and Restated Bylaws (Incorporated by reference to Exhibit 3. 2.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on November 24, 2015).
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
32.1*	Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension - Schema
101.CAL	XBRL Taxonomy Extension - Calculations
101.DEF	XBRL Taxonomy Extension - Definitions
101.LAB	XBRL Taxonomy Extension - Labels
101.PRE	XBRL Taxonomy Extension - Presentation

*Furnished, not filed

Notes to Exhibits List:

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Balance Sheet, (ii) Statements of Operations, (iii) Statements of Cash Flows, and (iv)Notes to the Financial Statements. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

21

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Hinshaw, certify that:

1.	I have reviewed this Form 10-Q for the period ended June 30, 2018 of MCorpCX, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 10, 2018	/s/Michael Hinshaw
		Michael Hinshaw
		Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregg Budoi, certify that:

1.	I have reviewed this Form 10-Q for the period ended June 30, 2018 of McorpCX, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 10, 2018	/s/Gregg Budoi
		Gregg Budoi
		Principal Financial Officer

EX-32.1

Exhibit 32.1 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of McorpCX, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Hinshaw, Chief Executive Officer of the Company and Gregg Budoi, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 10^th day of August 2018.

/s/Michael Hinshaw

Michael Hinshaw

Chief Executive Officer

/s/Gregg Budoi

Gregg Budoi

Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 09, 2018
Document Information [Line Items]
Entity Registrant Name	McorpCX, Inc.
Entity Central Index Key	0001535079
Trading Symbol	mccx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		20,426,158
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,338,291	$ 1,616,076
Accounts receivable	666,731	274,785
Total current assets	2,005,022	1,890,861
Long term assets:
Property and equipment, net	90,171	86,551
Capitalized software development costs, net	204,657	301,574
Intangible assets, net		6,250
Other assets	28,474	27,137
Total assets	2,328,324	2,312,373
Liabilities:
Accounts payable	343,698	218,107
Deferred revenue	27,504	80,057
Notes payable		8,169
Total current liabilities	371,202	306,333
Total liabilities	371,202	306,333
Shareholders' equity:
Common stock, no par value, 500,000,000 shares authorized, 20,426,158 shares issued and outstanding at June 30, 2018 and December 31, 2017
Additional paid-in capital	6,434,865	6,428,997
Accumulated deficit	(4,477,743)	(4,422,957)
Total shareholders' equity	1,957,122	2,006,040
Total liabilities and shareholders' equity	$ 2,328,324	$ 2,312,373

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares $ / shares in Thousands	Jun. 30, 2018	Dec. 31, 2017
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	20,426,158	20,426,158
Common stock, shares outstanding (in shares)	20,426,158	20,426,158

XML

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue, net
Revenue, net	$ 1,404,654	$ 602,613	$ 2,018,508	$ 899,904
Cost of goods sold
Cost of goods sold	740,789	240,201	1,038,204	379,974
Gross profit	663,865	362,412	980,304	519,930
Expenses
Salaries and wages	213,959	253,081	432,918	498,440
Contract services	40,186	20,962	114,251	30,710
Other general and administrative	264,543	167,019	486,761	319,218
Total expenses	518,688	441,062	1,033,930	848,368
Net operating income (loss)	145,177	(78,650)	(53,626)	(328,438)
Interest expense	(293)	(2,874)	(403)	(5,742)
Other income (expense)	3,046	5,468	(757)	2,994
Income (loss) before income taxes	147,930	(76,056)	(54,786)	(331,186)
Income tax provision
Net income (loss)	$ 147,930	$ (76,056)	$ (54,786)	$ (331,186)
Net income (loss) per share-basic and diluted (in dollars per share)	$ 0.01	$ 0	$ 0	$ (0.02)
Weighted average common shares outstanding-basic and diluted (in shares)	20,426,158	20,426,158	20,426,158	20,426,158
Service [Member]
Revenue, net
Revenue, net	$ 1,238,836	$ 506,304	$ 1,795,072	$ 764,979
Product and Service, Other [Member]
Revenue, net
Revenue, net	165,818	96,309	223,436	134,925
Cost of goods sold
Cost of goods sold	229,147	120,719	325,123	200,522
Product [Member]
Cost of goods sold
Labor	$ 511,642	$ 119,482	$ 713,081	$ 179,452

XML

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (54,786)	$ (331,186)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization	104,021	115,450
Stock compensation expense	5,868	78,229
Loss on disposal of assets		298
Unrealized loss (gain) on foreign currency transactions		(5,274)
Changes in operating assets and liabilities:
Accounts receivable	(391,946)	(82,548)
Other assets	(1,337)	606
Accounts payable	125,591	83,401
Other current liabilities		1,435
Deferred revenue	(52,553)	83,822
Net cash used in operating activities	(265,142)	(55,767)
INVESTING ACTIVITIES
Equipment purchases	(4,474)	(2,353)
Proceeds from sale of equipment		2,000
Capitalized software development costs		(93,803)
Net cash used in investing activities	(4,474)	(94,156)
FINANCING ACTIVITIES
Repayment of notes payable	(8,169)
Net cash used in financing activities	(8,169)
Decrease in cash and cash equivalents	(277,785)	(149,923)
Cash and cash equivalents, beginning of period	1,616,076	1,925,744
Cash and cash equivalents, end of period	1,338,291	1,775,821
Supplemental disclosure of cash flow information:
Interest paid	$ 403	$ 4,265

XML

Note 1 - Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note

1:

Organization and Basis of Presentation

McorpCX, Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the State of California on

December 14, 2001.

We are a customer experience (CX) management solutions company dedicated to helping organizations improve customer experiences, increase customer loyalty, reduce costs and increase revenue.

We are a customer experience services company, delivering consulting and technology solutions to customer-centric organizations. We are engaged in the business of delivering technology-enabled consulting and professional services that are designed to help corporations improve their customer listening and customer experience management capabilities. To augment our consultative solutions, we have developed technology products that include on-demand “cloud based” customer experience management software. Our professional and related services include a range of customer experience management services such as research, training, strategy consulting and process optimization.

The financial statements and related disclosures as of and for the

three

and

six

months ended

June 30, 2018

and

2017,

are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). The balance sheet as of

December 31, 2017

was derived from the audited financial statements included in our Annual Report on Form

10

-K for the year ended

December 31, 2017.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our Annual Report for the year ended

December 31, 2017,

filed on Form

10

-K with the SEC on

March 29, 2018. 

The results of operations for the

three

and

six

months ended

June 30, 2018,

are

not

necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, all references to "McorpCX," "we," "us," "our" or the "Company" are to McorpCX, Inc.

XML

Note 2 - Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note

2:

Recent Accounting Pronouncements

In

January 2017,

the FASB issued ASU

No.

2017

-

03,

Accounting Changes and Error Corrections (Topic

250

) and Investments—Equity Method and Joint Ventures (Topic

323

). The ASU adds SEC disclosure requirements for both the quantitative and qualitative impacts that certain recently issued accounting standards will have on the financial statements of a registrant when such standards are adopted in a future period. Specially, these disclosure requirements apply to the adoption of ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

); ASU

No.

2016

-

02,

Leases (Topic

842

); and ASU

No.

2016

-

13,

Financial Instruments—Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments. In addition, ASU

No.

2017

-

03

conforms certain paragraphs within the SEC Staff Guidance to the guidance issued in Accounting Standards Update

No.

2014

-

01,

Investments—Equity Method and Joint Ventures (Topic

323

): Accounting for Investments in Qualified Affordable Housing Projects. The Company is currently evaluating the impact of these amendments on its financial statements.

In

May 2017,

the FASB issued ASU

No.

2017

-

09,

Compensation—Stock Compensation (Topic

718

): Scope of Modification Accounting, to provide clarity and reduce both (

1

) diversity in practice and (

2

) cost and complexity when applying the guidance in Topic

718,

Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC

718.

The amendments are effective for fiscal years beginning after

December 15, 2017

and should be applied prospectively to an award modified on or after the adoption date. Early adoption is permitted, including adoption in an interim period. The Company adopted ASU

2017

-

09

with

no

material impact to the financial statements.

In

May 2014,

the FASB issued Accounting Standards Update

No.

2014

-

09

(Topic

606

) "Revenue from Contracts with Customers." Topic

606

supersedes the revenue recognition requirements in Topic

605

“Revenue Recognition” (Topic

605

) and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. We adopted Topic

606

as of

January 1, 2018

using the modified retrospective transition method. See Note

3

 for further details.

In

November 2017,

the FASB issued ASU

No.

2017

-

14,

Income Statement—Reporting Comprehensive Income (Topic

220

), Revenue Recognition (Topic

605

), and Revenue from Contracts with Customers (Topic

606

) (SEC Update). The ASU amends SEC paragraphs pursuant to the SEC Staff Accounting Bulletin

No.

116

and SEC Release

No.

33

-

10403,

which bring existing guidance into conformity with Topic

606,

Revenue from Contracts with Customers. The amendments were effective upon issuance. The Company has evaluated the impact on revenue recognition and does

not

expect these amendments to have a material effect on its financial statements.

In

February 2018,

the FASB issued ASU

No.

2018

-

03,

Technical Corrections and Improvements to Financial Instruments — Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities, which retained the current framework for accounting for financial instruments in generally accepted accounting principles (GAAP) but made targeted improvements to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments in this Update are effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years beginning after

June 15, 2018.

The Company adopted ASU

2018

-

03

with

no

material impact to the financial statements.

In

February 2018,

the FASB issued ASU

No.

2018

-

02,

Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. The ASU amends ASC

220,

Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding standard tax effects. The ASU is effective for all entities for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU

No.

2018

-

02

on its consolidated financial statements.

XML

Note 3 - Revenues

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note

3.

 Revenues

Adoption of ASC Topic

606,

"Revenue from Contracts with Customers"

On 

January 

1,

2018

we adopted Topic

606

using the modified retrospective method applied to those contracts which were

not

completed as of 

January 

1,

2018.

Results for reporting periods beginning after 

January 

1,

2018

 are presented under Topic

606,

while prior period amounts are

not

adjusted and continue to be reported in accordance with our historic accounting under Topic

605.

We did

not

have a cumulative impact as of 

January 

1,

2018

 due to the adoption of Topic

606

and there was

not

an impact to our statements of operations for the

three

and

six

months ended 

June 30, 2018 

as a result of applying Topic

606.

Revenue Recognition

The Company’s revenue consists primarily of professional and consulting services, as well as software-enabled product sales and other revenues. Consulting services include customer experience management consulting in the areas of strategy development, planning, education, training and program design, and includes the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. Product revenue is from productized and software-enabled service sales

not

elsewhere classified, while other revenue includes reimbursement of related travel costs and out-of-pocket expenses.

The consulting services are contracted under master terms and conditions with statements of work (“SOW”) defined for each project. A typical consulting SOW will span a period of

60

-

180

days and will usually be billed to the client based on certain milestones being achieved throughout the SOW. The Company recognizes revenue based upon a percentage of completion of each SOW during each project, which are typically

60

-

180

days in duration. In addition, we typically incur travel other miscellaneous expenses during work on each SOW which we bill to our clients for reimbursement. The travel and miscellaneous expenses are recognized in revenue on a percentage of work complete basis.

Contract costs, such as commissions, are typically incurred contemporaneously with the pattern of revenue recognition and, as such, are expensed as incurred.

Consulting Service Revenues

The Company’s consulting services are project based and include the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. The performance obligation in these projects is the delivery of specific findings reports as it pertains to the customer experience being analyzed. These projects include milestone payments for completion of different phases of the project and are included in the transaction price. These milestone payments are deemed to be fixed because the milestones are within the control of the Company. The projects also include reimbursable expenses, which are part of the transaction price and deemed variable consideration. These reimbursable expenses are estimated at contract inception. Given the confidentiality provisions in the agreement and the nature of the services being performed, the Company has

no

alternative use for the specific findings report. Therefore, the Company recognizes the transaction price over time, based on percentage of completion of the milestones in the contract.

Product and other revenue

Product and other revenue primarily originates from the utilization of the Company’s web-hosted Touchpoint Mapping On-Demand application (“Touchpoint Mapping”), which is designed to gather customer satisfaction data, track brand perceptions, and analyze results. Touchpoint Mapping is a SaaS (Software as a Service) subscription-based technology application, which derives revenue from the following sources: nonrefundable setup fees, subscription fees, professional service fees, and consulting fees related to implementation, customization, configuration, training, and other value-added services.  Customer licenses for Touchpoint Mapping are

not

subject to the licensing guidance in Topic

606

because the customer can’t take possession of the software at any time and the customer would

not

be able to operate the software on its own or with another

third

party. Fees charged to customers of Touchpoint Mapping

may

include implementation, setup, training and license fees for the application. Revenue generated from Touchpoint Mapping (either directly through licensing fees or fees received through support functions) is recognized on a straight-line basis because the Company’s obligations under its contracts concerning Touchpoint Mapping are deemed to be stand-ready obligations due to the fact that the Company is contractually required to provide access to Touchpoint Mapping and customer support on a daily basis. Consequently, usage of Touchpoint Mapping by customers does

not

affect the ability of customers to access the application or our customer support functions. For these reasons, revenue is recognized on a straight-line basis over the contract period. If billings are front loaded, this will result in a deferral of revenue during the contract period. For recognition purposes, we do

not

unbundle such services into separate performance obligations as their pattern of transfer does

not

differ.

The aggregate amount of the fees received from customers that are allocated to product and other revenue performance obligations that are unsatisfied (or partially unsatisfied) as of

June 30, 2018

is

$27,504

and included in deferred revenue on the accompanying balance sheets. The Company expects to recognize revenue of

$27,504

in the next

12

months related to these unsatisfied (or partially unsatisfied) performance obligations. Revenue related to these performance obligations are

not

expected to be recognized beyond fiscal year

2018.

 

Arrangements with Multiple Performance Obligations

The Company’s contracts with customers

may

include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers. If the pattern of transfer of control for each obligation does

not

differ, the Company does

not

allocate revenue to specific performance obligations.

Deferred Revenues (Contract Liabilities)

The Company records deferred revenues when cash payments are received or due in advance of our performance, including amounts which are refundable.

Payment terms vary by customer and the products or services offered. The term between invoicing and when payment is due is

not

significant. For certain products or services and customer types, full or a partial payment of the entire contract is required before the products or services are delivered to the customer.

During the

three

and

six

months ended

June 30, 2018,

we recognized revenue of

$6,291

and

$80,057,

respectively, related to our contract liabilities included in deferred revenue at

December 31, 2017.

During the

three

and

six

months ended

June 30, 2017

we recognized revenue of

$60,589

and

$111,618,

respectively, related to our contract liabilities included in deferred revenue at

December 31, 2016.

Contract Assets

Given the nature of the Company’s services and contracts, it has

no

contract assets.

Practical Expedients and Exemptions

Contract costs consist primarily of sales commissions, The Company generally expenses sales commissions when incurred because the amortization period would have been

one

year or less and they are only due and payable upon receipt of payment from the client. These costs are recorded within sales and marketing expenses.

The Company does

not

disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of

one

year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

XML

Note 4 - Capitalized Software Development Costs

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Research, Development, and Computer Software Disclosure [Text Block]

Note

4:

Capitalized Software Development Costs

 

Costs incurred to develop Software as a Service (SaaS) technology consist of external direct costs of materials and services and payroll and payroll-related costs for employees who directly devote time to the project. Research and development costs incurred during the preliminary project stage are expensed as incurred. Capitalization begins when technological feasibility is established. Costs incurred during the operating stage of the software application relating to upgrades and enhancements are capitalized to the extent that they result in the extended life of the product. All other costs are expensed as incurred. Expenses relating to upgrades and enhancements were capitalized during the

six

months ended

June 30, 2017

in the amount of

$93,803.

There were

no

expenses capitalized during the

six

months ended

June 30, 2018.

Amortization of software development costs commenced when the product was available for general release to customers. The capitalized costs are amortized on a straight-line basis over the

three

-year expected useful life of the software. Capitalized software development costs, net of amortization, were

$204,657

and

$301,574

as of

June 30, 2018

and

December 31, 2017,

respectively. Amortization expense incurred during the

six

months ended

June 30, 2018

and

2017

was

$96,917

and

$93,819,

respectively and is included in cost of goods sold in the statements of operations.

XML

Note 5 - Intangible Assets

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

5:

Intangible Assets

Intangibles consist of the following as of

June 30, 2018.

	2018
			Accumulated
	Gross		Amortization			Net Book Value
Website development costs	$	70,188	$	(70,188	)	$	-
Media distribution rights		25,000		(25,000	)		-
Intellectual property		5,000		(5,000	)		-
LinkedIn Group		2,500		(2,500	)		-
Organization costs		1,377		(1,377	)		-
Total intangibles	$	104,065	$	(104,065	)	$	-

Our intangible assets are reviewed for impairment when facts or circumstances suggest that the carrying value of the asset

may

not

be recoverable.  There were

no

impairment charges during the

six

months ended

June 30, 2018

and

2017.

Total amortization of intangible assets was

$6,250

and

$19,156

for the

six

months ended

June 30, 2018

and

2017,

respectively.

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Note 6 - Stock-based Compensation

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note

6:

Stock-Based Compensation

Our stock-based compensation plan was originally established in

2008.

The shares of our common stock issuable pursuant to the terms of such plan (the “Plan Shares”) could

not

exceed

30%

of any outstanding issue or

2,500,000

shares, whichever was the lower amount.

In

December 2015,

we adopted a revised share option plan in which Plan Shares cannot exceed

10%

of the total issued and outstanding shares at any given time. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of the grant and all option grants have a

10

-year term. This share option plan was approved by the Company’s shareholders at the annual meeting of shareholders on

August 10, 2016.

To calculate the fair value of stock options at the date of grant, we use the Black-Scholes option pricing model. The volatility used is based on a blended historical volatility of our own stock and similar sized companies due to the limited historical data available for our own stock price.  The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin

No.

110.

  The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

At

June 30, 2018,

1,350,000

stock options were exercisable and

$5,868

of total compensation cost related to vested share-based compensation grants had been recognized for the

six

months ended

June 30, 2018.

There was

no

unrecognized compensation expense from stock options at

June 30, 2018.

The following table summarizes our stock option activity for the

three

months ended

June 30, 2018:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (in years)		Value
Outstanding at December 31, 2017		1,350,000	$	0.60		6.07	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2018		1,350,000	$	0.60		5.58		-
Exercisable at June 30, 2018		1,350,000	$	0.60		5.58	$	-

There were

no

options granted during the

six

months ended

June 30, 2018.

XML

Note 7 - Concentrations

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

7:

Concentrations

We sell products and services under various terms to a broad range of companies across multiple industries ranging from start-ups to Fortune

500

companies, with sales historically concentrated among a few large clients. We continue to make efforts to mitigate risk from loss of a single client and shift sales concentration to a more even distribution among our clients. For the

six

months ended

June 30, 2018

and

2017,

the percentage of sales and the concentrations are:

	2018			2017
Largest client		41	%		33	%
Second largest client		20	%		19	%
Third largest client		16	%		17	%
Next three largest clients		18	%		27	%
All other clients		5	%		4	%
		100	%		100	%

Sales are made without collateral and the credit-related losses have been insignificant or non-existent. Accordingly, there is

no

provision made to include an allowance for doubtful accounts.

XML

Note 8 - Debt

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

8:

Debt

On

September 16, 2011,

a

$100,000

CAD note was executed with an individual, a

1.86%

shareholder. The note is structured to incur a balloon payment of the principal and

4%

APR

non-compounding accrued interest on its amended maturity date of

October 31, 2017.

Effective

October 31, 2016

the note's previous maturity date of

September 16, 2016

was amended to extend the maturity date to

October 31, 2017.

In

October 2017,

$66,217

was paid to the note holder and the remaining balance of

$8,169

was paid in

February 2018

fully satisfying the debt. The balance of

$8,169

is presented under notes payable on the balance sheet as of

December 31, 2017

and there were 

no

fees or penalties incurred by the Company. There was

no

notes payable balance as of

June 30, 2018.

We have recorded foreign currency gains of

$413

and

$4,472

during the

six

months ended

June 30, 2018

and

2017,

respectively, related to the revaluation of this note's principal from CAD to USD.

Interest expense was

$403

and

$5,742

for the

six

months ended

June 30, 2018

and

2017,

respectively and consists of interest on our short-term promissory notes, and credit card balances.

XML

Note 9 - Going Concern

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Substantial Doubt about Going Concern [Text Block]

Note

9:

Going Concern

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

We have had material operating losses and have

not

yet created positive cash flows. These factors raise substantial doubt as to our ability to continue as a going concern. However, we continue to improve our core consulting services revenue and contain costs in order to reduce our net operating losses. We believe that our increased revenues and improved net losses in the year ended

December 31, 2017

and the

first

half of

2018

compared to our financial results in the year ended

December 31, 2016

and the

first

half of

2017

coupled with our cash balance of

$1,338,291

at

June 30, 2018

and our belief that sufficient funding

may

be available from private placements of equity securities or additional borrowings if needed will enable us to meet our liquidity needs over the next

12

months. Notwithstanding the foregoing, our longer-term ability to continue as a going concern is entirely dependent upon our ability to achieve a level of profitability, and/or to raise additional capital through debt financing and/or through sales of common stock. We cannot provide any assurance that profits from operations, if any, will generate sufficient cash flow to meet our working capital needs and service our existing debt, nor that sufficient capital can be raised through debt or equity financing. The financial statements do

not

include adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern. 

XML

Note 10 - Basic and Diluted Net Income / (Loss) Per Share

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

10:

Basic and Diluted Net Income / (Loss) per Share

The Company follows FASB ASC

260,

“Earnings Per Share”, when reporting Earnings Per Share resulting in the presentation of basic and diluted earnings per share. Net income (loss) per share was computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. For the

three

and

six

months ended

June 30, 2018

and

2017,

the assumed exercise of share options is anti-dilutive and are excluded from the determination of net income (loss) per share – basic and diluted. The share options were anti-dilutive due to the Company’s net loss or the Company’s common stock average market price was less than the share options exercise price. Accordingly, net income (loss) per share basic and diluted are equal in all periods presented. Securities that were

not

included in the diluted per share calculations because they would be anti-dilutive were options to purchase common stock of

1,350,000

and

1,475,000

as of

June 30, 2018

and

2017,

respectively.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018			2017
Net income (loss)	$	147,930	$	(76,056	)	$	(54,786	)	$	(331,186	)
Basic and diluted weighted average common shares outstanding		20,426,158		20,426,158			20,426,158			20,426,158
Net income (loss) per share, basic and diluted	$	0.01	$	(0.00	)	$	(0.00	)	$	(0.02	)

XML

Note 11 - Related-Party Transactions

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

11:

Related-Party Transactions

During the

three

months ended

June 30, 2018,

a company controlled by the Company’s Chief Executive Officer purchased from the Company an internet domain name that was obsolete and

not

being used in the business nor needed for the go-forward business for

$2,000

that is included in other income (expense) on the statements of operations.

XML

Note 5 - Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	2018
			Accumulated
	Gross		Amortization			Net Book Value
Website development costs	$	70,188	$	(70,188	)	$	-
Media distribution rights		25,000		(25,000	)		-
Intellectual property		5,000		(5,000	)		-
LinkedIn Group		2,500		(2,500	)		-
Organization costs		1,377		(1,377	)		-
Total intangibles	$	104,065	$	(104,065	)	$	-

XML

Note 6 - Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Share-based Compensation, Activity [Table Text Block]

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term (in years)		Value
Outstanding at December 31, 2017		1,350,000	$	0.60		6.07	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2018		1,350,000	$	0.60		5.58		-
Exercisable at June 30, 2018		1,350,000	$	0.60		5.58	$	-

XML

Note 7 - Concentrations (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

	2018			2017
Largest client		41	%		33	%
Second largest client		20	%		19	%
Third largest client		16	%		17	%
Next three largest clients		18	%		27	%
All other clients		5	%		4	%
		100	%		100	%

XML

Note 10 - Basic and Diluted Net Income / (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018		2017			2018			2017
Net income (loss)	$	147,930	$	(76,056	)	$	(54,786	)	$	(331,186	)
Basic and diluted weighted average common shares outstanding		20,426,158		20,426,158			20,426,158			20,426,158
Net income (loss) per share, basic and diluted	$	0.01	$	(0.00	)	$	(0.00	)	$	(0.02	)

XML

Note 3 - Revenues 1 (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Contract with Customer, Liability, Revenue Recognized	$ 6,291	$ 60,589	$ 80,057	$ 111,618
Contract with Customer, Asset, Net, Total	$ 0		$ 0
Minimum [Member]
Statements of Work, Term			60 days
Maximum [Member]
Statements of Work, Term			180 days

XML

Note 3 - Revenues 2 (Details Textual)	Jun. 30, 2018 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01
Revenue, Remaining Performance Obligation, Amount	$ 27,504
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue, Remaining Performance Obligation, Amount	$ 27,504

XML

Note 4 - Capitalized Software Development Costs (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Capitalized Computer Software, Additions	$ 0	$ 93,803
Capitalized Computer Software, Useful Life	3 years
Capitalized Computer Software, Net, Ending Balance	$ 204,657		$ 301,574
Cost of Goods Sold [Member]
Capitalized Computer Software, Amortization	$ 96,917	$ 93,819

XML

Note 5 - Intangible Assets (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Impairment of Intangible Assets, Finite-lived	$ 0	$ 0
Amortization of Intangible Assets, Total	$ 6,250	$ 19,156

XML

Note 5 - Intangible Assets - Summary of Intangible Assets (Details)	Jun. 30, 2018 USD ($)
Intangible assets, gross	$ 104,065
Intangible assets, accumulated amortization	(104,065)
Intangible assets, net
Developed Technology Rights [Member]
Intangible assets, gross	70,188
Intangible assets, accumulated amortization	(70,188)
Intangible assets, net
Distribution Rights [Member]
Intangible assets, gross	25,000
Intangible assets, accumulated amortization	(25,000)
Intangible assets, net
Intellectual Property [Member]
Intangible assets, gross	5,000
Intangible assets, accumulated amortization	(5,000)
Intangible assets, net
LinkedIn Group [Member]
Intangible assets, gross	2,500
Intangible assets, accumulated amortization	(2,500)
Intangible assets, net
Organization Costs [Member]
Intangible assets, gross	1,377
Intangible assets, accumulated amortization	(1,377)
Intangible assets, net

XML

Note 6 - Stock-based Compensation (Details Textual) - USD ($)		6 Months Ended	12 Months Ended
	Aug. 10, 2016	Jun. 30, 2018	Dec. 31, 2015	Dec. 31, 2008
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Outstanding Stock Maximum			10.00%	30.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				2,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number		1,350,000
Allocated Share-based Compensation Expense, Total		$ 5,868
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options		$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		0
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years

XML

Note 6 - Stock-based Compensation - Stock Option Activity (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Options outstanding, balance (in shares)	1,350,000
Weighted average exercise price, outstanding balance (in dollars per share)	$ 0.60
Weighted average remaining contractual term, outstanding balance (Year)	5 years 211 days	6 years 25 days
Aggregate intrinsic value, outstanding balance
Options granted (in shares)	0
Weighted average exercise price, options granted (in dollars per share)
Options exercised (in shares)
Weighted average exercise price, options exercised (in dollars per share)
Options forfeited or expired (in shares)
Weighted average exercise price, options forfeited or expired (in dollars per share)
Options outstanding, balance (in shares)	1,350,000	1,350,000
Weighted average exercise price, outstanding balance (in dollars per share)	$ 0.60	$ 0.60
Options exercisable (in shares)	1,350,000
Weighted average exercise price, options exercisable (in dollars per share)	$ 0.60
Weighted average remaining contractual term, options exercisable (Year)	5 years 211 days
Aggregate intrinsic value, options exercisable

XML

Note 7 - Concentrations (Details Textual) $ in Thousands	Jun. 30, 2018 USD ($)
Allowance for Doubtful Accounts Receivable, Ending Balance	$ 0

XML

Note 7 - Concentrations - Percentage of Sales and the Concentrations (Details) - Customer Concentration Risk [Member] - Sales Revenue, Net [Member]	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Concentrations	100.00%	100.00%
Largest Client [Member]
Concentrations	41.00%	33.00%
Second Largest Client [Member]
Concentrations	20.00%	19.00%
Third Largest Client [member]
Concentrations	16.00%	17.00%
Next Three Largest Clients [Member]
Concentrations	18.00%	27.00%
All Other Clients [Member]
Concentrations	5.00%	4.00%

XML

Note 8 - Debt (Details Textual)	1 Months Ended		3 Months Ended		6 Months Ended
	Feb. 28, 2018 USD ($)	Oct. 31, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Sep. 16, 2011 CAD ($)
Repayments of Notes Payable					$ 8,169
Foreign Currency Transaction Loss, before Tax					413	4,472
Interest Income (Expense), Net, Total			$ (293)	$ (2,874)	(403)	$ (5,742)
A 1.86% Shareholder [Member]
Debt Instrument, Face Amount								$ 100,000
Percentage of Ownership								1.86%
Debt Instrument, Interest Rate, Effective Percentage								4.00%
Repayments of Notes Payable	$ 8,169	$ 66,217
Debt Instrument, Fee Amount							$ 0
Notes Payable, Total			$ 0		$ 0

XML

Note 9 - Going Concern (Details Textual) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Cash and Cash Equivalents, at Carrying Value, Ending Balance	$ 1,338,291	$ 1,616,076	$ 1,775,821	$ 1,925,744

XML

Note 10 - Basic and Diluted Net Income / (Loss) Per Share (Details Textual) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,350,000	1,475,000

XML

Note 10 - Basic and Diluted Net Income / (Loss) Per Share - Computations for Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net income (loss)	$ 147,930	$ (76,056)	$ (54,786)	$ (331,186)
Basic and diluted weighted average common shares outstanding (in shares)	20,426,158	20,426,158	20,426,158	20,426,158
Net income (loss) per share, basic and diluted (in dollars per share)	$ 0.01	$ 0	$ 0	$ (0.02)

XML

Note 11 - Related-Party Transactions (Details Textual)	3 Months Ended
	Jun. 30, 2018 USD ($)
Chief Executive Officer [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 2,000