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| REVENUE | NOTE 3 – REVENUE
The Company's first commercial agreement occurred in May 2023, in the form of a four-year material supply and license agreement (the “License Agreement”) that incorporates the Company's patented electro-optic polymer materials for use in manufacturing of photonic devices (the “Licensed Product”). The licensee shall pay the Company a running royalty with a minimum royalty paid on an annual basis over the term of the License Agreement and milestone license fees. The License Agreement is a non-exclusive material supply and license agreement. Additional future revenue will be generated from royalties from the licensee’s sale of Licensed Product that exceed the minimum royalty payments and milestone license fees.
During 2024, the Company performed device processing work for a customer.
Timing of Revenue Recognition and Contract Balances Revenues related to the initial license fee and a minimum annual royalty are recognized over time commencing with the License Agreement in May 2023. An up-front license fee in the amount of $50,000 was paid during the period ended December 31, 2023. $14,875 and $23,208 of this amount is recorded as a contract liability in current liabilities on the Company’s balance sheets as of June 30, 2025 and December 31, 2024, respectively. For the three months ended June 30, 2025 and 2024, the Company recognized $25,605 and $19,355 in revenue related to this agreement, respectively. For the six months ended June 30, 2025 and 2024, the Company recognized $48,522 and $36,022, in revenue related to this agreement, respectively. In March 2024, the Company completed device processing work on the devices supplied by a customer. Revenue for this contract was recognized at the time of shipment of the devices back to the customer and amounted to $0 and $13,750 for the three and six months ended June 30, 2024, respectively. Contract balances are as follows:
Significant changes in the contract balances for the six months ended June 30, 2025 are as follows:
Assets Recognized for the Costs to Obtain a Contract There are no assets recognized for the costs to obtain the License Agreement.
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