Business Segmentation and Geographical Distribution

6 Months Ended

Jun. 30, 2012

Business Segmentation and Geographical Distribution [Abstract]

Business Segmentation and Geographical Distribution

(8) Business Segmentation and Geographical Distribution

Revenue from international sources approximated $185,000 and $279,000 for the three and six months ended June 30, 2012, compared to $277,000 and $354,000 for the same periods in 2011. As part of our revenue from international sources, we recognized approximately $115,000 and $192,000 in product revenue for the three and six months ended June 30, 2012 and June 30, 2011, respectively. Other revenue from a technology license fee from our Japanese licensee was $68,000 and $143,000 for the three and six months ended June 30, 2012, compared to $75,000 and $150,000 for the same periods in 2011. The Company entered into multiple agreements with this Japanese licensee during 2012. During January 2012, the Company and the Japanese licensee entered into a mutual cooperation agreement, which confirmed their intent to allow their existing agreements to terminate, in accordance with their terms, as of March 31, 2013. The parties also agreed that, as of April 1, 2013, the territorial restrictions and royalty payments set forth in the existing agreements would no longer be in effect. On March 31, 2012, the Company assigned the Japanese trademark for “NanoTek” to the Japanese licensee in exchange for $5,000. In addition, the Japanese licensee paid the Company $279,000 during April 2012 as prepayment for the final minimum royalty of $300,000, due under the existing terms in April 2013, which represents a 7% discount for early payment. The Company recorded the royalty prepayment as deferred other revenue as of March 31, 2012, and will recognize it ratably over the contract term.

The Company’s operations comprise a single business segment and all of the Company’s long-lived assets are located within the United States.