Quarterly report pursuant to Section 13 or 15(d)

REVENUE

v3.10.0.1
REVENUE
6 Months Ended
Jun. 30, 2018
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 3 – REVENUE

 

The Company adopted the provisions of the guidance in the new revenue standard under ASC 606 effective January 1, 2018 applying the modified retrospective method to all contracts. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue recognition guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under previous revenue recognition guidance. The adoption of this guidance did not have any material impact on the Company’s consolidated condensed financial statements. There was no impact to net revenue for the quarter ended June 30, 2018 as a result of applying the new revenue recognition guidance.

 

Products Revenue

 

Product revenue generated from contracts with customers, for the manufacture of products for the removal and treatment of hazardous vapor and gasses. Total estimated revenue includes all of the following: (1) the basic contract price, (2) contract options, and (3) change orders. Once contract performance is underway, we may experience changes in conditions, client requirements, specifications, designs, materials and expectations regarding the period of performance. Such changes are “change orders” and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without obtaining client agreement. Revenue related to change orders is recognized as costs are incurred if it is probable that costs will be recovered by changing the contract price. The Company does not incur pre-contract costs. Under the new revenue recognition guidance, we found no change in the manner we recognize product revenue. Provisions for estimated losses on uncompleted contracts are recorded in the period in which the losses are identified and included as additional loss. Provisions for estimated losses on contracts are shown separately as liabilities on the balance sheet, if significant, except in circumstances in which related costs are accumulated on the balance sheet, in which case the provisions are deducted from the accumulated costs. A provision as a liability is reported as a current liability.

 

We include in current assets and current liabilities amounts related to contracts realizable and payable. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract costs and profits recognized to date over billings to date and are recognized as a current asset. Revenue contract liabilities represent the excess of billings to date over the amount of contract costs and profits recognized to date and are recognized as a current liability.

 

Products revenue also includes media sales which are recognized as the product is shipped to the customer for use.

 

Services Revenue 

Our services revenue is primarily comprised of services related to industrial cleaning and mobile railcar cleaning, which we recognize as services are rendered.

 

Solid Waste Revenue

The Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the license. Revenue from joint venture operations of the Company’s CoronaLux™ units is recognized as the revenue is earned by the joint venture. Revenue from management services is recognized as services are performed.

 

Disaggregation of Revenue

 

    Three months ended June 30, 2018  
    Industrial Cleaning     Environmental
Solutions
   

Solid Waste

 

    Total  
Sources of Revenue                        
Industrial cleaning services   $ 219,500     $     $     $ 219,500  
Mobile rail car cleaning services     577,300                   577,300  
Product sales           716,200             716,200  
Media sales           827,500             827,500  
Licensing fees                 33,700       33,700  
Operating fees                 4,300       4,300  
Management fees                 50,000       50,000  
Total Revenue   $ 796,800     $ 1,543,700     $ 88,000     $ 2,428,500  

 

    Three months ended June 30, 2017  
    Industrial Cleaning     Environmental
Solutions
   

Solid Waste

 

    Total  
Sources of Revenue                        
Industrial cleaning services   $ 555,500     $     $     $ 555,500  
Product sales           1,510,900             1,510,900  
Media sales           351,600             351,600  
Licensing fees                 47,100       47,100  
Operating fees                 27,400       27,400  
Total Revenue   $ 555,500     $ 1,862,500     $ 74,500     $ 2,492,500  

 

    Six months ended June 30, 2018  
    Industrial Cleaning     Environmental Solutions     Solid Waste     Total  
Sources of Revenue                        
Industrial cleaning services   $ 749,200     $     $     $ 749,200  
Mobile rail car cleaning services     970,800                   970,800  
Product sales           1,098,300             1,098,300  
Media sales           1,320,900             1,320,900  
Licensing fees                 67,400       67,400  
Operating fees                 18,000       18,000  
Management fees                 100,000       100,000  
Total Revenue   $ 1,720,000     $ 2,419,200     $ 185,400     $ 4,324,600  

 

    Six months ended June 30, 2017  
    Industrial Cleaning     Environmental Solutions     Solid Waste     Total  
Sources of Revenue                        
Industrial cleaning services   $ 1,390,000     $     $     $ 1,390,000  
Product sales           2,888,100             2,888,100  
Media sales           663,400             663,400  
Licensing fees                 94,300       94,300  
Operating fees                 49,600       49,600  
Total Revenue   $ 1,390,000     $ 3,551,500     $ 143,900     $ 5,085,400  

 

Contract Balances

 

Where a performance obligation has been satisfied but not yet invoiced at the reporting date, a contract asset is recognized on the balance sheet. Where a performance obligation has not yet been satisfied but an invoice has been raised at the reporting date, a contract liability is recognized on the balance sheet.

 

The opening and closing balances of the Company’s accounts receivables and contract liabilities (current and non-current) are as follows:

 

            Contract Liabilities  
    Accounts Receivable, net     Revenue Contract Liabilities    

Deferred Revenue

(current)

   

Deferred Revenue

(non-current)

 
                                 
Balance as of June 30, 2018   $ 1,262,600     $ 550,100     $ 128,000     $ 76,900  
                                 
Balance as of December 31, 2017     692,400       227,300       304,200       113,100  
                                 
Increase (decrease)   $ 570,200     $ 322,800     ($ 176,200 )   ($ 36,200 )

 

The majority of the Company’s revenue is generally invoiced on a weekly or monthly basis, and the payments are generally received within approximately 30-60 days. Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance, including amounts that are refundable.

 

Remaining Performance Obligations

 

 As of June 30, 2018, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $731,000, of which the Company expects to recognize revenue of approximately 94% over the next 24 months, including 89% over the next 12 months.

 

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected term of one year or less and (ii) contracts for which the Company recognizes revenue at the amounts to which it has the right to invoice for services performed.