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Revenues and Other Income
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenues and Other Income

 (3) Revenues and Other Income

 

Revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration we expect to receive in exchange for those goods. When our ingredients and finished products are shipped, with control being transferred at the shipping point, this is the point in time at which we recognize the related revenue.

 

 

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. Customers’ deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in our statements of operations. For select customers the Company may pay volume rebates which are variable in nature due to the amount the select customer will take. During the three and nine months ended September 30, 2025, customers earned a volume rebate of $18,000 and $65,000 respectively. For the year ended December 31, 2024, one customer earned a volume rebate of $35,000.

 

Contract balances at September 30, 2025, December 31, 2024, and December 31, 2023 are as follows:

 

   Accounts Receivable   Contract Liabilities 
Balance, December 31, 2023  $3,467   $2,353 
Balance, December 31, 2024   4,869    5,571 
Balance, September 30, 2025   9,709    1,197 

 

Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period was $33 and $1,279 for the three months ended September 30, 2025 and 2024, respectively, and $5,028 and $2,882 for the nine months ended September 30, 2025 and 2024, respectively.

 

As part of the sales process, it is common for the Company to receive customer deposits. These deposits are typically held for less than a year and do not result in a financing component to the sales. The customer deposits are recognized as revenue when the Company ships the finished goods to the customer. Revenue is recognized when the goods are shipped.

 

The Company will for some customers arrange for the shipping of the finished goods. Revenues and costs associated with the shipment of the finished goods are recorded separately within product revenue and cost of revenue, respectively, on the consolidated statement of operations. With regard to revenue recognition, shipping activities that occur prior to the customers’ obtaining control of the goods are not a promised service to the customer, but rather activities to fulfill the Company’s promise to transfer the goods. As such, these activities are not deemed a performance obligation requiring allocation of the transaction price. Similarly, shipping activities that occur after the customers’ obtaining control of the goods are, as a matter of policy, also not a promised service to the customer, but rather an activity to fulfill the Company’s promise to transfer the goods.

 

Other revenue typically includes fees that our customers pay for various required laboratory tests, and may also include revenue from technology license fees and paid development projects. Technology license fees and paid development projects are recognized over time when the obligations under the agreed upon contractual arrangements are performed on our part.  Other revenue recognized over time was $64 and $81, for the three months ended September 30, 2025 and 2024, respectively, and $212 and $301 for the nine months ended September 30, 2025 and 2024, respectively.

 

Trade accounts receivable are carried at original invoice amount less an estimate made for future credit losses based on a review of all outstanding amounts on a monthly basis, and written off when deemed uncollectible. We determine the allowance for credit losses by identifying troubled accounts and by using historical experience applied to an aging of accounts, as well as expected losses based on the current and anticipated macroeconomic environment. Recoveries of trade accounts receivable previously written off are recorded when received. Our typical credit terms are between thirty and sixty days from shipment and invoicing.

 

   September 30, 2025   December 31, 2024 
Balance, beginning  $786   $225 
Current period provisions   950    564 
Write offs   (7)   (3)
Balance, ending  $1,729   $786