Revenue Recognition

6 Months Ended

Jun. 30, 2011

Deferred Revenue Disclosure [Abstract]

Deferred Revenue Disclosure [Text Block]

5. Revenue Recognition

The Company is in the business of performing drug testing services and reporting the results thereof. The Company’s drug testing services include training for collection of samples and storage of positive samples for its customers for an agreed-upon fee per unit tested of samples. The revenues are recognized when the predominant deliverable, drug testing, is provided and reported to the customer.

The Company recognizes revenue under the FASB codification topic ASC 605, “Revenue Recognition,” (ASC 605).  In accordance with ASC 605, the Company considers testing, training and storage elements as one unit of accounting for revenue recognition purposes, as the training and storage costs are de minimis and do not have stand-alone value to the customer. The Company recognizes revenue as the service is performed and reported to the customer, since the predominant deliverable in each arrangement is the testing element of the units.

The Company also provides expert testimony, when and if necessary, to support the results of the tests, which is generally billed separately and recognized as the services are provided.

Deferred revenue represents payments received in advance of the performance of drug testing procedures, in relation to the personal drug testing kits PDT-90.  Deferred revenue is recognized as revenue when the underlying test results are delivered.  With respect to a portion of these transactions, there may be instances where the customer ultimately does not require performance.  Revenue is then recognized when the Company can reasonably, reliably and objectively determine that it is remote that performance will be required for an estimable portion of transactions.  The Company recorded $3 thousand and $12 thousand of revenue in the results of operations for the three months ended June 30, 2011 and 2010, respectively, related to test kits that were sold for which the Company’s obligations to provide service were deemed remote. The Company recorded $6 thousand and $19 thousand of revenue in the results of operations for the six months ended June 30, 2011 and 2010, respectively, related to test kits that were sold for which the Company’s obligations to provide service were deemed remote.

At June 30, 2011 and December 31, 2010, the Company had deferred revenue of approximately $11 thousand and $17 thousand, respectively, reflecting sales of its personal drug testing service for which the performance of the related test had not yet occurred and future obligations were not deemed remote.