Revenues

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Note 2. Revenues

Our Company follows ASU 214-09, Revenue from Contracts with Customers (“Topic 606”), using the modified retrospective method. The adoption of the guidance affected our recognition of revenue from licenses and royalties. Since its adoption in 2018, we recognize revenue from licensees and royalties at a point in time when the term begins. During the third quarter of 2022, we negotiated an amendment to a license agreement with a licensee that provides for a five year extension to the license agreement that contains guaranteed royalties payable in installments over the term of the amendment to the license agreement. Since the performance obligation is to grant the license for the use of certain patented ink technology as it exists at the time that it is granted, the promise to grant the license is a performance obligation satisfied at a point in time in accordance with Topic 606. In accordance with Topic 606, we recorded $241,000 net of imputed interest of licenses, royalties and fees and $16,900 of selling expenses in the third quarter and first nine months of 2022 related to the amendment to the license agreement. The related receivable and payable are recorded as other assets and other liabilities on the balance sheet.