Quarterly report pursuant to Section 13 or 15(d)

REVENUE RECOGNITION

v3.20.2
REVENUE RECOGNITION
 9 Months Ended
Sep. 30, 2020
Revenue From Contract With Customer [Abstract]  
REVENUE RECOGNITION

NOTE 3. REVENUE RECOGNITION

 

Revenue recognition. We generate revenue primarily from the licensing of our intellectual property. We also, occasionally, receive a one-time sale of certain products and/or reimbursement of our equipment.

 

License fees. We derive product lease and royalty revenue from negotiated recurring fee license agreements and the performance of our products. We account for these agreements as month-to-month contracts and recognize revenue each month as we satisfy our performance obligations. In addition, revenue associated with performance-based agreements is recognized during the month that the usage of the product or intellectual property occurs.

 

Product sales. Occasionally, we sell certain incidental products or receive reimbursement of our equipment after the commencement of the new license agreement. Revenue from such sales is recognized as a separate performance obligation when we ship the items.

Disaggregation of revenue

 

The following table disaggregates our revenue by geographic location for the following periods:

 

 

 

Three Months

Ended September 30,

 

 

Nine Months

Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

North America and Caribbean

 

$

971,147

 

 

$

3,891,875

 

 

$

4,262,408

 

 

$

11,644,353

 

Europe, Middle East and Africa

 

 

826,686

 

 

 

1,479,771

 

 

 

2,693,714

 

 

 

4,473,230

 

Total revenue

 

$

1,797,833

 

 

$

5,371,646

 

 

$

6,956,122

 

 

$

16,117,583

 

 

Revenue contract liability  

 

For a portion of our business, we invoice our clients monthly in advance for unlimited use of our intellectual property licenses and recognize a revenue contract liability that represents such advanced billing to our clients for unsatisfied performance. We reduce the revenue contract liability and recognize revenue when we transfer those goods or services and, therefore, satisfy our performance obligation.

The table below summarizes changes in the revenue contract liability during the nine months ended September 30, 2020:

 

Beginning balance – January 1, 2020

 

$

1,294,265

 

Increase (advanced billings)

 

 

7,199,100

 

Decrease (revenue recognition)

 

 

(7,906,271

)

Ending balance – September 30, 2020

 

$

587,094

 

 

Revenue recognized during the three and nine months ended September 30, 2020 that was included in the beginning balance of revenue contract liability was $6,250 and $1,292,182, respectively.