Revenue, Contract Assets and Contract Liabilities

12 Months Ended

Dec. 31, 2021

Revenue, Contract Assets and Contract Liabilities

Revenue, Contract Assets and Contract Liabilities

Note 5 – Revenue, Contract Assets and Contract Liabilities

The Company recognized $607 thousand of revenue during the year ended December 31, 2021 and no revenues during the year ended December 31, 2020. Revenues were generated in the current year from the completion and delivery of multi burner products and from prior year projects for which performance obligations were completed and constraints relating to collectability were eliminated.

During the years ended December 31, 2021 and 2020, the Company recognized cost of goods sold of $1,059 thousand and $279 thousand, respectively.

Cost of sales during the year ended December 31, 2021 consisted of $433 thousand upon completion of the burner contracts and $712 thousand in loss related to the ExxonMobil project. These amounts were offset by adjustments totaling $86 thousand related to the reversals of accruals for product warranties that had expired.

During the year ended December 31, 2020, the Company recognized cost of goods sold of $450 thousand from the ExxonMobil project, which was anticipated to show a loss on the project when completed, and a second project that was completed but deemed as potentially uncollectable. These amounts were offset by $171 thousand for the reversal of accruals for product warranties that expired on seven completed projects from the years 2016 and 2017.

In September of 2021, the Company received verbal notification from ExxonMobil to put on hold the testing of its ClearSign Core^TM process burners to be installed at the Baytown, Texas refinery because there was insufficient time for ExxonMobil to engineer their inclusion during the targeted 2022 refinery turnaround.

The Company had contract assets of $39 thousand and $92 thousand and contract liabilities of $84 thousand and $94 thousand at December 31, 2021 and 2020, respectively.