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3. ASC Topic 606, Revenue from Contracts with Customers | 12 Months Ended
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Dec. 31, 2019
Revenue from Contract with Customer [Abstract] |
ASC Topic 606, Revenue from Contracts with Customers | The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which was adopted on January 1, 2018 using the modified retrospective method. Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for transferring those goods or services. Revenue is recognized based on the following five step model:
1. Identification of the contract with a customer
2. Identification of the performance obligations in the contract
3. Determination of the transaction price
4. Allocation of the transaction price to the performance obligations in the contract
5. Recognition of revenue when, or as, the Company satisfies a performance obligation
Details of this five-step process are as follows: Identification of the contract with a customer Customer purchase orders are generally considered to be contracts under ASC 606. Purchase orders typically identify specific terms of products to be delivered, create the enforceable rights and obligations of both parties, and result in commercial substance. No other forms of contract revenue recognition, such as the completed contract or percentage of completion methods, were utilized by the Company in either 2018 or 2019. Performance obligations The Company’s performance obligation is generally limited to delivery of the requested items to its customers at the agreed upon quantities and prices. Determination and allocation of the transaction price The Company has established prices for its products. These prices are effectively agreed to when customers place purchase orders with the Company. Rebates and discounts, if any, are recognized in full at the time of sale as a reduction of net revenue. Allocation of transaction prices is not necessary where one performance obligation exists. Recognition of revenue as performance obligations are satisfied Product revenues are recognized when the products are delivered, and title passes to the customer. Disaggregation of Revenue Revenue streams from product sales and royalties are summarized below for the twelve months ended December 31, 2019 and 2018. All revenue was generated in the United States; therefore, no geographical disaggregation is necessary.
|  | Successor |  |  | Predecessor |
|  | Twelve Months Ended December 31, 2019 |  |  | August 28, 2018-December 31, 2018 |  |  | January 1, 2018-August 27, 2018 |
Product sales revenue |  | $ | 11,607,638 |  |  | $ | 3,006,320 |  |  | $ | 5,639,552 |
Royalty revenue |  |  | 159,125 |  |  |  | - |  |  |  | 134,000 |
Total Revenue |  | $ | 11,766,763 |  |  | $ | 3,006,320 |  |  | $ | 5,773,552 |
The Company recognizes royalty revenue from a licensing agreement between BioStructures, LLC and the Company. The Company records revenue each calendar quarter as earned per the terms of the agreement which stipulates the Company will receive quarterly royalty payments of at least $50,250. Under the terms of the development and license agreement the Company executed with BioStructures, LLC in 2011, royalties of 2.0% are recognized on sales of products containing the Company’s patented resorbable bone hemostasis. The minimum annual royalty due to the Company is $201,000 per year throughout the life of the patent which expires in 2023. These royalties are payable in quarterly installments of $50,250. To date, royalties related to this licensing agreement have not exceeded the annual minimum of $201,000 ($50,250 per quarter).

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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