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Revenue Recognition and Contracts with Customers
 9 Months Ended
Sep. 30, 2025
Revenue Recognition and Contracts with Customers  
Revenue Recognition and Contracts with Customers

Note 2 – Revenue Recognition and Contracts with Customers

Disaggregated Revenue

The Company’s total revenue was comprised of two major product lines: Smart Glasses Sales and Engineering Services. The following table summarizes the revenue recognized by major product line:

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Three Months Ended

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Nine Months Ended

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September 30, 

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September 30, 

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2025

    

2024

    

2025

    

2024

Revenues

 

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Products Sales

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$

896,274

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$

988,328

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$

3,265,657

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$

3,418,665

Engineering Services

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264,673

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397,386

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771,941

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1,063,488

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Total Revenue

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$

1,160,947

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$

1,385,714

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$

4,037,598

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$

4,482,153

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Significant Judgments

Under Topic 606 “Revenue from Contracts with Customers”, we use judgments that could potentially impact both the timing of our satisfaction of performance obligations and our determination of transaction prices used in determining revenue recognized by major product line. Such judgments include considerations in determining our transaction prices and when our performance obligations are satisfied for our standard product sales. For our Engineering Services, performance obligations are recognized over time using the input method, and the estimated costs to complete each project are considered significant judgments.

Performance Obligations

Revenues from our performance obligations are typically satisfied at a point-in-time for Smart Glasses, Waveguides and Display Engines, and our OEM Products, which are recognized when the customer obtains control and ownership, which is generally upon shipment. The Company considers shipping and handling activities performed to be fulfillment activities and not a separate performance obligation. The Company also records revenue for performance obligations relating to our Engineering Services over time by using the input method measuring progress toward satisfying the performance obligations. Satisfaction of our performance obligations related to our Engineering Services is measured by the Company’s costs incurred as a percentage of total expected costs to project completion, as the inputs of actual costs incurred by the Company are directly correlated with progress toward completing the contract. As such, the Company believes that our methodologies for recognizing revenue over time for our Engineering Services correlate directly with the transfer of control of the underlying assets to our customers.

Our standard product sales include a twelve (12) month assurance-type product warranty. In the case of certain OEM products and waveguide sales, some include a standard product warranty of up to eighteen (18) months to allow distribution channels to offer the end customer a full twelve (12) months of coverage. We offer an extended warranty to customers that extends the standard product warranty on product sales for an additional twelve (12) month period. All revenue related to extended product warranty sales is deferred and recognized over the extended warranty period. Our Engineering Services contracts vary from contract to contract but typically include payment terms of Net 30 days from the date of billing, subject to an agreed upon customer acceptance period.

As of September 30, 2025 and December 31, 2024, there were $62,700 and $109,725, respectively, in outstanding performance obligations remaining for extended warranties.

The following table presents a summary of the Company’s sales by revenue recognition method as a percentage of total net sales for the three and nine months ended September 30, 2025 and 2024:

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Three Months Ended
September 30,

 

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Nine Months Ended
September 30,

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2025

 

2024

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2025

 

2024

 

Point-in-Time

 

77

%

71

%

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81

%

76

%

Over Time – Input Method

 

23

%

29

%

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19

%

24

%

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Total

 

100

%

100

%

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100

%

100

%

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Remaining Performance Obligations

As of September 30, 2025, the Company had $2,044,911 of remaining performance obligations under two current waveguide development projects, including initial product production, which represents the remainder of transaction prices totaling $3,750,000 under these development projects, less revenue recognized under percentage of completion to date. The Company expects to recognize the remaining revenue related to this project based upon expected due dates, in the amounts of 13% in 2025 and 87% across 2026 and 2027. Revenues earned less amounts invoiced at September 30, 2025 and December 31, 2024 totaled $430,089 and $673,498, respectively.

As of September 30, 2024, the Company had $2,161,768 of remaining performance obligations under a current waveguide development project, which represented the remainder of transaction prices totaling $3,500,000 under this development agreement, less revenue recognized under percentage of completion to date.

As of September 30, 2025, the Company had no material outstanding performance obligations related to product sales, other than its standard and extended product warranties.