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Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of License, Royal and Other Revenue

License, royalty and other revenue recognized for the three and nine months ended September 30, 2018 and 2017 is comprised of:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Royalty revenue under the Sublicense Agreement with CamelBak ⁽¹⁾	$	-	$	-	$	100,000	$	25,000
Royalty revenue under the License Agreement with Bellco		21,000		57,000		79,000		115,000
License revenue under the License Agreement with Bellco		-		18,000		-		53,000
Other revenue		55,000		-		74,000		-
Total license, royalty and other revenue	$	76,000	$	75,000	$	253,000	$	193,000

⁽¹⁾

In May 2015, the Company entered into a Sublicense Agreement with CamelBak Products, LLC (“CamelBak”). Under the Sublicense Agreement, the Company granted CamelBak an exclusive, non-transferable, worldwide (with the exception of Italy) sublicense and license, in each case solely to market, sell, distribute, import and export the Company’s individual water treatment device. In exchange for the rights granted to CamelBak, CamelBak agreed, through December 31, 2022, to pay the Company a percentage of the gross profit on any sales made to a branch of the U.S. military, subject to certain exceptions, and to pay a fixed per-unit fee for any other sales made. CamelBak is also required to meet or exceed certain minimum annual fees payable to the Company, and if such fees are not met or exceeded, the Company may convert the exclusive sublicense to a non-exclusive sublicense with respect to non-U.S. military sales.

Schedule of Revenues, Net

The following tables present the Company’s revenue for the three and nine months ended September 30, 2018 under the ASC 606 model as compared to revenue under the previous accounting guidance:

	Three Months Ended September 30, 2018
	Revenue as reported		Revenue under previous accounting guidance		Difference
Product revenue	$	1,648,000	$	1,648,000	$	-
Royalty revenue under the License Agreement with Bellco		21,000		21,000		-
License revenue under the License Agreement with Bellco ⁽¹⁾		-		18,000		(18,000	)
Other revenue		55,000		55,000		-
Total net revenues	$	1,724,000	$	1,742,000	$	(18,000	)

	Nine Months Ended September 30, 2018
	Revenue as reported		Revenue under previous accounting guidance		Difference
Product revenue	$	3,822,000	$	3,822,000	$	-
Royalty revenue under the Sublicense Agreement with CamelBak		100,000		100,000		-
Royalty revenue under the License Agreement with Bellco		79,000		79,000		-
License revenue under the License Agreement with Bellco ⁽¹⁾		-		53,000		(53,000	)
Other revenue		74,000		74,000		-
Total net revenues	$	4,075,000	$	4,128,000	$	(53,000	)

⁽¹⁾

Under ASC 606, amounts received related to the license under the License Agreement with Bellco would have been recognized as revenue at the time that the license was transferred, which was at the time the payments were received by the Company. Under previous accounting guidance, amounts received under the License Agreement with Bellco were deferred and recognized as revenue over the term of the License Agreement.