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Sales, Contract Assets and Contract Liabilities
 9 Months Ended
Sep. 30, 2021
Sales, Contract Assets and Contract Liabilities  
Sales, Contract Assets and Contract Liabilities

Note 5 – Sales, Contract Assets and Contract Liabilities

The Company recognized $190,000 of revenue during the three months ended September 30, 2021 and $553,000 during the nine months ended September 30, 2021. Revenues were generated from the completion and delivery of a multi burner product and from two prior period projects for which performance obligations were completed and constraints relating to collectability were eliminated. There was no revenue during the three and nine months ended September 30, 2020.

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During the three and nine months ended September 30, 2021, the Company recognized cost of goods sold of $278,000 and $1,008,000 respectively. Cost of sales during the three months ended September 30, 2021 consisted of $182,000 in estimated losses on a contract that the Company anticipates will show a loss upon completion and $96,000 related to the delivery and sale of the multi burner product.

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Cost of sales during the nine months ended September 30, 2021 consisted of cost of goods sold of $390,000 recorded upon completion of the burner contracts and $712,000 in an estimated loss on a contract that the Company anticipates will result in a loss upon completion. These amounts were offset by adjustments totaling $86,000 related to the reversals of accruals for product warranties that expired and $8,000 of accrual adjustments.

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In September of 2021, the Company received verbal notification from ExxonMobil to put on hold the testing of its ClearSign CoreTM process burners to be installed at the Baytown, Texas refinery because there was insufficient time for ExxonMobil to engineer their inclusion during the targeted 2022 refinery turnaround.

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The Company recognized $180,000 in cost of sales during the three ended September 30, 2020 related to an accrual for an anticipated loss contract. Cost of sales for the nine months ended September 30, 2020 include this loss accrual, offset by an adjustment of $153,000 representing the reversal of accruals for product warranties which expired on six completed projects from years 2016 and 2017.

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The Company had contract assets of $0 and $92,000 and contract liabilities of $0 and $94,000 at September 30, 2021 and December 31, 2020, respectively.