REVENUE

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 3. REVENUE

We sell AI-based products that include our Remark AI Thermal Kits, rPads and Thermal Helmets in the U.S., as well as the various customized products we sell in China based upon facial recognition, gesture recognition and other technologies.

We do not include disclosures related to remaining performance obligations because substantially all our contracts with customers have an original expected duration of one year or less or, with regard to our stand-ready obligations, the amounts involved are not material.

Disaggregation of Revenue

The following table presents a disaggregation of our revenue by major category (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
AI-based products	$	2,496	$	549	$	4,873	$	3,439
Other	150		137		503		1,321
Revenue	$	2,646	$	686	$	5,376	$	4,760

The following table presents a disaggregation of our revenue by country (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
China	$	2,051	$	552	$	3,383	$	4,319
United States	590		134		1,852		441
Other countries	5		—		141		—
Revenue	$	2,646	$	686	$	5,376	$	4,760

Significant Judgments

When accounting for revenue we make certain judgments, such as whether we act as a principal or as an agent in transactions or whether our contracts with customers fall within the scope of current GAAP regarding revenue, that affect the determination of the amount and timing of our revenue from contracts with customers. Based on the current facts and circumstances related to our contracts with customers, none of the judgments we make involve an elevated degree of qualitative significance or complexity such that further disclosure is warranted in terms of their potential impact on the amount and timing of our revenue.

Contract Assets and Contract Liabilities

We do not currently generate material contract assets. During the nine months ended September 30, 2020, our contract liability changed only as a result of routine business activity.

During the nine months ended September 30, 2020, we recognized approximately $0.2 million of revenue which was included in the beginning balance of Contract liability at January 1, 2020, while during the comparable period of 2019, we did not recognize a material amount of revenue which was included in the beginning balance of Contract liability at January 1, 2019.

During the nine months ended September 30, 2020 and 2019, we did not recognize revenue from performance obligations within the scope of ASC 606 that were satisfied in previous periods.

Certain Agreements Related to AI-Based Product Sales

In December 2018, we completed two fully-integrated AI solutions for which we fully performed under the agreement and title to the product passed to our customer, so we recognized cost of revenue of $4.0 million; however, we did not recognize the $4.6 million of revenue from such projects due to uncertainty regarding the timing of collection of amounts payable to us under the agreement. The uncertainty regarding the timing of collection prevented us from determining that collectibility of all amounts payable to us under the agreements was probable, resulting in a timing difference between recognition of cost and recognition of revenue. Though we cannot recognize the revenue until collectibility is deemed probable, we expect to fully collect the amounts payable to us under our legally-enforceable agreements and, therefore, we recorded a receivable of $4.6 million in Prepaid expense and other current assets, and a liability in Accrued expense and other current liabilities on our 2018 Consolidated Balance Sheet.

During the year ended December 31, 2019, we recorded approximately $1.1 million of revenue on the projects described above or which we did not recognize revenue in 2018 due to uncertainty regarding the timing of collection of the amounts due, and as of December 31, 2019, the total balances of Prepaid expense and other current assets and of Accrued expense and other current liabilities contained $3.4 million related to such projects. During the nine months ended September 30, 2020, we recognized approximately $0.2 million of revenue on the projects described above. As a result, the total balances of Prepaid expense and other current assets and of Accrued expense and other current liabilities contained $3.2 million as of September 30, 2020.