SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Revenue Recognition

Revenue Recognition:

Product revenue. The Company recognizes revenue for the sale of PV modules and other equipment sales at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For module and other equipment sales contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognizes the related revenue as control of each individual product is transferred to the customer.

During the three months ended June 30, 2022 and 2021, the Company recognized product revenue of $627,571 and $380,488, respectively. During the six months ended June 30, 2022 and 2021, the Company recognized product revenue of $681,781 and $545,646, respectively. During the three and six months ended June 30, 2022, one customer comprised 91% and 84%, respectively, of the total product revenue. During the three and six months ended June 30, 2021, the same customer comprised 96% and 80%, respectively, of the total product revenue.  

Milestone and engineering revenue. Each milestone and engineering arrangement is a separate performance obligation. The transaction price is estimated using the most likely amount method and revenue is recognized as the performance obligation is satisfied through achieving manufacturing, cost, or engineering targets. During the three and six months ended June 30, 2022, the Company recognized total Milestone and engineering revenue of $10,000 and $522,000, respectively, of which, $0 and $512,000, for the three and six months ended June 30, 2022, respectively, was earned from TubeSolar AG (“TubeSolar”), a significant existing stakeholder in the Company and a related party. The Company did not have Milestone and engineering revenue during the three and six months ended June 30, 2021.

Government contracts revenue. Revenue from government research and development contracts is generated under terms that are cost plus fee or firm fixed price. The Company generally recognizes this revenue over time using cost-based input methods, which recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated costs of the contract. In applying cost-based input methods of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

Cost based input methods of revenue recognition are considered a faithful depiction of the Company’s efforts to satisfy long-term government research and development contracts and therefore reflect the performance obligations under such contracts. Costs incurred that do not contribute to satisfying the Company’s performance obligations are excluded from the input methods of revenue recognition as the amounts are not reflective of transferring control under the contract. Costs incurred towards contract completion may include direct costs plus allowable indirect costs and an allocable portion of the fixed fee. If actual and estimated costs to complete a contract indicate a loss, provision is made currently for the loss anticipated on the contract.

No government contract revenue was recognized during the three and six months ended June 30, 2022 and 2021.

Accounts Receivable. As of June 30, 2022 and December 31, 2021, the Company had an accounts receivable, net balance of $836,074 and $49,250, respectively. As of June 30, 2022, one customer comprised 49% and a second customer comprised 48% of the total net accounts receivable balance. As of June 30, 2022 and December 31, 2021, the Company had an allowance for doubtful accounts of $26,000 and $26,000, respectively.

Deferred revenue for the six months ended June 30, 2022 was as follows:    

Balance as of January 1, 2022	$	22,500
Additions		206,279
Recognized as revenue		(228,669	)
Balance as of June 30, 2022	$	110

Earnings Per Share

Earnings per Share: Earnings per share (“EPS”) are the amount of earnings attributable to each share of common stock. Basic EPS has been computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Income available to common stockholders has been computed by deducting dividends accumulated for the period on cumulative preferred stock (whether or not earned) from net income. Diluted earnings per share has been computed by dividing net income adjusted on an if-converted basis for the period by the weighted average number of common shares and potentially dilutive common share outstanding (which consist of options and convertible securities using the treasury stock method or the if-converted method, as applicable, to the extent they are dilutive). Approximately 2.4 million shares of dilutive shares were excluded from the three and six months period ended June 30, 2022 EPS calculation as their impact is antidilutive. Approximately 29.1 million shares were excluded from the three month period ended June 30, 2021 EPS calculation as their impact is antidilutive. There were approximately 29.0 million shares of dilutive shares for the six months period ended June 30, 2021.

Recently Adopted or to be Adopted Accounting Policies

Recently Adopted or to be Adopted Accounting Policies

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current U.S. GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for smaller reporting public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years and can be adopted using either a modified retrospective or a fully retrospective method of transition. Management has not yet evaluated the impact that the adoption of ASU 2020-06 will have on the Company’s condensed consolidated financial statement presentation or disclosures.

Other new pronouncements issued but not effective as of June 30, 2022 are not expected to have a material impact on the Company’s condensed consolidated financial statements.