Trade Receivables

12 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Trade Receivables

TRADE RECEIVABLES

Trade receivables consist of amounts generated from product sales and government contracts. Accounts receivable totaled $0.55 million and $1.99 million as of December 31, 2016 and 2015, respectively. Product revenue for the year ended December 31, 2016 includes $0.87 million of sales to one major customer ("Customer A"), representing 51% of total product revenue. Product revenue for a different major customer ("Customer B") was $2.73 million, representing 44% of total product revenue, for the year ended December 31, 2015. Receivables from Customer A were negative at December 31, 2016 due to the customer's right of return provision outlined below. Receivables from Customer B were $1.13 million at December 31, 2015 representing 57% of total receivables. Customer A has a right of return provision in the purchase contract allowing return of up to 100% of the product within a 90 day period. There have been no returns for the year ended December 31, 2016.

Provisional Indirect Cost Rates - The Company bills the government under cost-based research and development contracts at provisional billing rates which permit the recovery of indirect costs. These rates are subject to audit on an annual basis by the government agencies’ cognizant audit agency. The cost audit may result in the negotiation and determination of the final indirect cost rates. In the opinion of management, re-determination of any cost-based contracts will not have a material effect on the Company’s financial position or results of operations.