Revenues from Contracts with Customers; Other Revenues

The Company’s current and historical revenues have consisted of the following: (a) ethanol sales and related products revenue, net; (b) hydrocarbon revenue; and (c) grant and other revenue, which primarily has historically consisted of revenues from governmental and cooperative research grants.

Ethanol sales and related products revenues.

Ethanol sales and related products revenues are sold to customers on a “free-on-board, shipping point” basis. Each transaction occurs independent of any other sale, and once sold, there are

future obligations on the part of the Company to provide post-sale support or promises to deliver future goods or services.

Hydrocarbon revenue.

Hydrocarbon revenues include sales of ATJ, isooctene and isooctane and is sold mostly on a “free-on-board, shipping point” basis. Each transaction occurs independent of any other sale, and once sold, there are

future obligations on the part of the Company to provide post-sale support or promises to deliver future goods or services.

Grant and other revenues.

Grant and other revenues primarily have historically consisted of governmental and cooperative research grants, of which the

Northwest Advanced Renewables Alliance

grant, funded by the United States Department of Agriculture, comprised the majority of those revenues since

2014.

This grant consists of a non-reciprocal arrangement, and therefore, does

not

qualify as a contract pursuant to ASC

606,

Revenues from Contracts with Customers

. Other revenues have included historically occasional short-term (less than

one

-year) consulting services and leases of certain storage facilities located at the Company's Luverne Facility.

The following table sets forth the components of the Company’s revenues between those generated from contracts with customers and those generated from arrangements that do

not

constitute a contract with a customer (in thousands).

	Three Months Ended June 30 , 2019
Major Goods/Service Line	Revenues from Contracts with Customers		Other Revenues		Total
Ethanol sales and related products, net	$	4,966	$	—	$	4,966
Hydrocarbon revenue		92		—		92
Grant and other revenue		—		28		28
	$	5,058	$	28	$	5,086
Timing of Revenue Recognition
Goods transferred at a point in time	$	5,058	$	—	$	5,058
Services transferred over time		—		28		28
	$	5,058	$	28	$	5,086

	Three Months Ended June 30 , 2018
Major Goods/Service Line	Revenues from Contracts with Customers		Other Revenues		Total
Ethanol sales and related products, net	$	8,813	$	—	$	8,813
Hydrocarbon revenue		607		—		607
Grant and other revenue		—		—		—
	$	9,420	$	—	$	9,420
Timing of Revenue Recognition
Goods transferred at a point in time	$	9,420	$	—	$	9,420
Services transferred over time		—		—		—
	$	9,420	$	—	$	9,420

	Six Months Ended June 30, 2019
Major Goods/Service Line	Revenues from Contracts with Customers		Other Revenues		Total
Ethanol sales and related products, net	$	10,630	$	—	$	10,630
Hydrocarbon revenue		831		—		831
Grant and other revenue		—		28		28
	$	11,461	$	28	$	11,489
Timing of Revenue Recognition
Goods transferred at a point in time	$	11,461	$	—	$	11,461
Services transferred over time		—		28		28
	$	11,461	$	28	$	11,489

	Six Months Ended June 30, 2018
Major Goods/Service Line	Revenues from Contracts with Customers		Other Revenues		Total
Ethanol sales and related products, net	$	17,031		—	$	17,031
Hydrocarbon revenue		607		—		607
Grant and other revenue		25		—		25
	$	17,663	$	—	$	17,663
Timing of Revenue Recognition
Goods transferred at a point in time	$	17,638	$	—	$	17,638
Services transferred over time		25		—		25
	$	17,663	$	—	$	17,663

Goods transferred at a point-in-time.

For the

three

and

six

months ended

June 30, 2019

and

2018,

there were

contracts with customers for which consideration was variable or for which there were multiple performance obligations for any given contract. Accordingly, the entire transaction price is allocated to the goods transferred. As of

June 30, 2019

and

December 31, 2018,

there were

remaining unfulfilled or partially fulfilled performance obligations.

All goods transferred are tested to ensure product sold satisfies contractual product specifications prior to transfer. The customer obtains control of the goods when title and risk of loss for the goods has transferred, which in most cases is “

free-on-board, shipping point".

All material contracts have payment terms of between

one

three

months and there are

return or refund rights.

Services transferred over time.

For the

three

and

six

months ended

June 30, 2019

and

2018,

there were

contracts for which consideration was variable or for which there were multiple performance obligations for any given contract. Accordingly, the entire transaction price is allocated to the individual service performance obligation. As of

June 30, 2019

and

December 31, 2018,

there were

material unfulfilled or partially fulfilled performance obligations.

For the

three

and

six

months ended

June 30, 2019

and

2018,

revenues were recognized ratably over time, as the performance obligation was satisfied and benefit to the customer was transferred on a ratable basis over time.

Contract Assets and Trade Receivables.

As of

June 30, 2019

and

December 31, 2018,

there were

contract assets or liabilities as all customer amounts owed to the Company are unconditional and the Company does

not

receive payment in advance for its products. Accordingly, amounts owed by customers are classified as account receivables on the Company’s consolidated balance sheets. In addition, due to the nature of the Company’s contracts, there are

costs incurred or to be paid in the future that qualify for asset recognition as a cost to fulfill or obtain a contract. The Company did

not

incur any impairment losses on any receivables as all amounts owed were paid or current as of

June 30, 2019

and

December 31, 2018.