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Revenue Recognition
12 Months Ended
Dec. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Revenue Recognition

Our operations are divided into two operating segments—“Products and Licensing” and “Technology Development”.
The Products and Licensing segment derives its revenues from product sales, funded product development and technology licenses.
The Technology Development segment provides applied research to customers in our areas of focus. Our engineers and scientists collaborate with our network of government, academic and industry experts to identify technologies and ideas with promising market potential. We then compete to win fee-for-service contracts from government agencies and industrial customers who seek innovative solutions to practical problems that require new technology. The Technology Development segment derives its revenues primarily from services.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic locations, customer-type, contract type, timing of recognition, and major categories for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.

The details are listed in the table below for the years ended December 31, 2019 and 2018:




 
 
Years ended December 31,
 
 
2019
 
2018
 
 
Products and Licensing
Technology Development
Total
 
Products and Licensing
Technology Development
Total
Total Revenue by Geographic Location
 
 
 
 
 
 
United States
$
21,782,692

$
26,024,674

$
47,807,366

 
$
11,585,296

$
20,967,556

$
32,552,852

 
Asia
13,669,304


13,669,304

 
5,977,563


5,977,563

 
Europe
7,277,234


7,277,234

 
3,873,161


3,873,161

 
Canada, Central and South America
1,432,082


1,432,082

 
382,797


382,797

 
All Others
329,729


329,729

 
130,872


130,872

 
Total
$
44,491,041

$
26,024,674

$
70,515,715

 
$
21,949,689

$
20,967,556

$
42,917,245

 
 
 
 

 
 
 
 
 
 
 
 

 
 
 
 
Total Revenue by Major Customer Type

 
 
 
 
 
Sales to the U.S. government
$
2,601,069

$
25,377,961

$
27,979,030

 
$
1,834,289

$
20,703,338

$
22,537,627

 
U.S. direct commercial sales and other
19,181,625

646,713

19,828,338

 
9,737,720

264,218

10,001,938

 
Foreign commercial sales & other
22,708,347


22,708,347

 
10,377,680


10,377,680

 
Total
$
44,491,041

$
26,024,674

$
70,515,715

 
$
21,949,689

$
20,967,556

$
42,917,245

 
 
 
 

 
 
 
 
 
 
 
 

 
 
 
 
Total Revenue by Contract Type

 
 
 
 
 
Fixed-price contracts
$
44,491,041

$
14,111,092

$
58,602,133

 
$
21,949,689

$
9,388,770

$
31,338,459

 
Cost-type contracts

11,913,582

11,913,582

 

11,578,786

11,578,786

 
  Total
$
44,491,041

$
26,024,674

$
70,515,715

 
$
21,949,689

$
20,967,556

$
42,917,245

 
 
 
 

 
 
 
 
 
 
 
 

 
 
 
 
Total Revenue by Timing of Recognition

 
 
 
 
 
Goods transferred at a point in time
$
43,129,361

$

$
43,129,361

 
$
21,330,000

$

$
21,330,000

 
Goods/services transferred over time
1,361,680

26,024,674

27,386,354

 
619,689

20,967,556

21,587,245

 
Total
$
44,491,041

$
26,024,674

$
70,515,715

 
$
21,949,689

$
20,967,556

$
42,917,245

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Revenue by Major Products/Services
 
 
 
 
 
 
Technology development
$

$
26,024,674

$
26,024,674

 
$

$
20,967,556

$
20,967,556

 
Test, measurement and sensing systems
41,787,613


41,787,613

 
19,641,434


19,641,434

 
Other
2,703,428


2,703,428

 
2,308,255


2,308,255

 
Total
$
44,491,041

$
26,024,674

$
70,515,715

 
$
21,949,689

$
20,967,556

$
42,917,245












Contract Balances

Our contract assets consist of unbilled amounts for technology development contracts as well as custom product contracts. Also included in contract assets are royalty revenue and carrying amounts of right of returned inventory. Long-term contract assets include the fee withholding on cost reimbursable contracts that will not be billed within a year. Contract liabilities include excess billings, subcontractor accruals, warranty expense, extended warranty revenue, right of return refund, and customer deposits. The net contract (liabilities)/assets changed by $1.0 million, due primarily to increased contract liabilities in addition to a slight increase in contract assets. The increase in contract liabilities is a result of the increased number of government research programs in addition to an increase in the number of our fixed-price contracts that have reached milestones as designated in their respective contracts, but revenue has not yet been recognized. The increase in contract assets is primarily driven by the unbilled fee required by our cost-reimbursable government contracts, which cannot be fully billed until after the specific contract is complete.

The following table shows the components of our contract balances as of December 31, 2019 and 2018:

 
December 31,
 
2019
 
2018
Contract assets
$
3,208,206

 
$
2,759,315

Contract liabilities
(3,887,685
)
 
(2,486,111
)
   Net contract assets
$
(679,479
)
 
$
273,204


  

Performance Obligations

Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and for which a purchase order has been received by a commercial customer, and unfunded obligations represent firm orders for which funding has not yet been appropriated. The approximate value of our Products and Licensing segment's unfulfilled performance obligations was $16.1 million at December 31, 2019. We expect to satisfy 63% of the performance obligations in 2020, 13% in 2021 and the remainder by 2024. The approximate value of our Technology Development segment's unfulfilled performance obligations was $31.3 million at December 31, 2019. We expect to satisfy 70% of the performance obligations in 2020, 24% in 2021 and the remainder by 2022.