Significant Customers and Contingencies

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

Significant Customers and Contingencies

(9) Significant Customers and Contingencies

The portion of total revenue from our significant customers are as follows for the periods ending March 31, 2024, and 2023:

		For the three months ended March 31,
Customer #	Product Category	2024			2023
1	Solésence®		35	%		5	%
2	Personal Care Ingredients		14	%		37	%
3	Solésence®		12	%		9	%
4	Solésence®		4	%		11	%
	Total		65	%		62	%

Accounts receivable balances for these four customers were approximately:

		For the three months ended March 31,
Customer #	Product Category	2024		2023
1	Solésence®	$	3,018	$	424
2	Personal Care Ingredients		692		1,197
3	Solésence®		600		485
4	Solésence®		10		548
	Total	$	4,320	$	2,654

We currently have exclusive supply agreements with BASF Corporation (“BASF”), that have contingencies outlined which could potentially result in the sale of production equipment from the Company to the customer intended to provide capacity sufficient to meet the customer’s production needs. This outcome may occur if we fail to meet certain performance requirements. In the event of an equipment sale, upon incurring a triggering event, the equipment would be sold to the customer at either 115% of the equipment’s net book value or the greater of 30% of the original book value of such equipment, and any associated upgrades to it, or 115% of the equipment’s net book value, depending on the equipment and related products.

If a triggering event were to occur and BASF elected to proceed with the equipment sale mentioned above, we would lose significant revenue. Replacement of necessary equipment that could be purchased and removed by the customer pursuant to this triggering event could take in excess of twelve months. Any additional capital outlays required to rebuild capacity would probably be greater than the proceeds from the purchase of the assets as dictated by our agreement with the customer. Similar consequences would occur if we were determined to have materially breached certain other provisions of the supply agreement with BASF.