Contracts with Desmet Ballestra Group

3 Months Ended

Sep. 30, 2023

Contracts With Desmet Ballestra Group

Contracts with Desmet Ballestra Group

Note 2 - Contracts with Desmet Ballestra Group

October 2021, the Company executed a three-year agreement with Desmet Ballestra (Desmet), a company located in Europe. This agreement is a continuation of the October 2018 agreement that expired also in October 2021. In accordance with ASC 606, the Company recognizes revenue from the sale of reactors at the time of shipment of the Nano reactor hardware as shipment is deemed to be the Company’s only performance obligation and the Company had no more continuing obligation other than the reactor’s two-year standard warranty. Desmet pays for such reactors on credit terms and the amount of a sale is recorded as a receivable upon acceptance by Desmet.

During the three months ended September 30, 2022, the Company recorded sales of $244,000 from Nano Reactor® sales from Desmet.

During the three months ended September 30, 2023 there were no sales from Nano Reactor to Desmet.

As part of the October 2021 agreement with Desmet, the Company also receives cash advances of $40,000 per month, subject to certain limitations, as advance payment for the sale of reactors. The Company initially records the advances received as “advances from distributor” a liability account, until such time revenue recognition is met. As of June 30, 2023, outstanding balance of customer advances amounted to $391,000.

During the three months ended September 30, 2023, advances received from Desmet amounted to $304,000.

As of September 30, 2023, outstanding advances from Desmet amounted to $695,000.