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REVENUE
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 12—REVENUE

 

The following table disaggregates the Company’s revenue for the years ended December 31, 2022 and 2021 (in thousands):

 

   HW   Monitoring   Total 
Year ended December 31, 2022:               
PG Segment  $2,234   $3,660   $5,894 
CP Segment   854    252    1,106 
Total Revenue  $3,088   $3,912   $7,000 

 

    HW     Monitoring     Total  
Year ended December 31, 2021:                        
PG Segment   $ 2,018     $ 3,769     $ 5,787  
CP Segment     728       261       989  
Total Revenue   $ 2,746     $ 4,030     $ 6,776  

 

 

Deferred revenue activity for the year ended December 31, 2022 can be seen in the table below (in thousands):

 

    HW     Monitoring     Total  
Balance at December 31, 2021   $ 3,268     $ 2,125     $ 5,393  
Additions during the period     2,776       4,207       6,983  
Recognized as revenue     (2,293 )     (3,912 )     (6,205 )
Balance at December 31, 2022   $ 3,751     $ 2,420     $ 6,171  
                         
Amounts to be recognized as revenue in the year ending:                        
December 31, 2023   $ 1,963     $ 2,021     $ 3,984  
December 31, 2024     1,359       396       1,755  
December 31, 2025 and thereafter     429       3       432  
    $ 3,751     $ 2,420     $ 6,171  

 

Other revenue of $780,000 is related to custom design hardware, accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred.

 

Deferred revenue activity for the year ended December 31, 2021 can be seen in the table below (in thousands):

 

    HW     Monitoring     Total  
Balance at December 31, 2020   $ 2,576     $ 1,978     $ 4,554  
Additions during the period     2,548       4,177       6,725  
Recognized as revenue     (1,856 )     (4,030 )     (5,886 )
Balance at December 31, 2021   $ 3,268     $ 2,125     $ 5,393  
                         
Amounts to be recognized as revenue in the year ending:                        
December 31, 2022   $ 1,695     $ 1,846     $ 3,541  
December 31, 2023     1,116       275       1,391  
December 31, 2024 and thereafter     457       4       461  
    $ 3,268     $ 2,125     $ 5,393  

 

Other revenue of $890,000 is related to revenue from sales of custom design hardware, accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred.

 

Deferred charges relate only to the sale of equipment. Deferred charges activity for the year ended December 31, 2022 can be seen in the table below (in thousands):

 

         
Balance at December 31, 2021   $ 1,513  
Additions during the period     1,267  
Recognized as cost of sales     (1,086 )
Balance at December 31, 2022   $ 1,694  
         
Amounts to be recognized as cost of sales in the year ending:        
December 31, 2023   $ 887  
December 31, 2024     616  
December 31, 2025 and thereafter     191  
    $ 1,694  

 

 

Data costs paid to AT&T and the COGS related to sales of upgrade kits, accessories and repairs of $843,000 in the aggregate are expensed as incurred and are not deferred.

 

Deferred charges activity for the year ended December 31, 2021 can be seen in the table below (in thousands):

 

         
Balance at December 31, 2020   $ 1,306  
Additions during the period     1,155  
Recognized as cost of sales     (948 )
Balance at December 31, 2021   $ 1,513  
         
Amounts to be recognized as cost of sales in the year ending:        
December 31, 2022   $ 799  
December 31, 2023     507  
December 31, 2024 and thereafter     207  
    $ 1,513  

 

Data costs paid to AT&T and the COGS related to sales of custom design hardware, accessories and repairs of $929,000 in the aggregate are expensed as incurred and are not deferred.

 

The Company pays its employees sales commissions for sales of HW and for first sales of monitoring services (not for renewals). In accordance with Topic 606, Revenue from Contracts with Customers, of the FASB Accounting Standards Codification (“ASC 606”), the Company capitalizes as a contract asset the sales commissions on these sales. Contract assets associated with HW are amortized over the estimated life of the units which are currently estimated to be three years. Contract assets associated with monitoring services are amortized over the expected monitoring life including renewals.

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the year ended December 31, 2022 (in thousands):

 

    HW     Monitoring     Total  
Balance at December 31, 2021   $ 242     $ 53     $ 295  
Additions during the period     233       55       288  
Amortization of sales commissions     (156 )     (28 )     (184 )
Balance at December 31, 2022   $ 319     $ 80     $ 399  

 

The capitalized sales commissions are included in other current assets ($196,000) and other assets ($203,000) in the Company’s Consolidated Balance Sheets at December 31, 2022.

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the year ended December 31, 2021 (in thousands):

 

    HW     Monitoring     Total  
Balance at December 31, 2020   $ 136     $ 41     $ 177  
Additions during the period     212       34       246  
Amortization of sales commissions     (106 )     (22 )     (128 )
Balance at December 31, 2021   $ 242     $ 53     $ 295  

 

The capitalized sales commissions are included in other current assets ($138,000) and other assets ($157,000) in the Company’s Consolidated Balance Sheets at December 31, 2021.