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REVENUE
 6 Months Ended
Jun. 30, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 3 – REVENUE

 

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (Topic 606). The standard establishes the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows from a contract with a customer.

 

The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement. Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement.

 

During 2024, the Company performed device processing work for a customer.

 

Timing of Revenue Recognition and Contract Balances

Revenues related to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An up-front license fee in the amount of $50,000 was paid during the period ending December 31, 2023. $31,541 of this amount is recorded in current liabilities on the Company’s balance sheet as of June 30, 2024. For the three and six months ended June 30, 2024, the Company recognized $19,355 and $36,022, respectively, in revenue related to this agreement.

In March 2024, the Company completed device processing work on the devices supplied by a customer. Revenue for this contract was recognized at the time of shipment of the devices back to the customer and amounted to $0 and $13,750 for the three and six months ended June 30, 2024, respectively.

 

Contract balances are as follows:

         
   June 30, 2024   December 31, 2023 
         
Accounts receivable, net  $8,065   $30,376 
Short-term contract assets  $—   $— 
Long-term contract assets  $—   $— 
Short-term liability deferred revenue  $31,541   $39,875 

 

Significant changes in the contract balances for the period ended June 30, 2024 are as follows:

         
   Six Months Ended June 30, 2024 
   Assets   Liabilities 
Balance at December 31, 2023  $30,376   $(39,875)
Revenue recognized that was previously included in deferred revenue   —    8,334 
Decreases/increases due to cash received   (63,884)   — 
Billed receivables recorded   33,508    — 
Transferred to receivables from unbilled receivables   (19,624)   — 
Unbilled receivables recorded   27,689    — 
Balance at June 30, 2024  $8,065   $(31,541)

 

A rollforward of contract balances is not disclosed for the period ended June 30, 2024 since there were no contracts as of December 31, 2022.

 

Assets Recognized for the Costs to Obtain a Contract

 

There are no assets recognized for the costs to obtain the License Agreement.