Quarterly report pursuant to Section 13 or 15(d)

REVENUE

v3.19.1
REVENUE
3 Months Ended
Mar. 31, 2019
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 year ended December 31, 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 March 31, 2019  
    Industrial Cleaning     Environmental Solutions     Solid Waste     Total  
Sources of Revenue                        
Industrial cleaning services   $ 220,200     $     $     $ 220,200  
Product sales           889,400             889,400  
Media sales           200,700             200,700  
Licensing fees                 25,200       25,200  
Operating fees                 6,900       6,900  
Management fees                 50,000       50,000  
Total Revenue   $ 220,200     $ 1,090,100     $ 82,100     $ 1,392,400  

 

    Three months ended March 31, 2018  
    Industrial Cleaning     Environmental Solutions     Solid Waste     Total  
Sources of Revenue                        
Industrial cleaning services   $ 529,700     $     $     $ 529,700  
Mobile rail car cleaning services     393,500                   393,500  
Product sales           382,100             382,100  
Media sales           493 400             493,400  
Licensing fees                 33,700       33,700  
Operating fees                 13,700       13,700  
Management fees                 50,000       50,000  
Total Revenue   $ 923,200     $ 875,500     $ 97,400     $ 1,896,100  

 

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 March 31, 2019   $ 1,297,700     $ 61,300     $ 78,900     $ 55,000  
                                 
Balance as of December 31, 2018     1,063,500       314,300       191,500       63,200  
                                 
Increase (decrease)   $ 234,200     ($ 253,000 )   ($ 112,600 )   ($ 8,200 )

 

 

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 March 31, 2019, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $1,676,100, of which the Company expects to recognize revenue of approximately 99% over the next 24 months, including 97% 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.