Revenue and related accounts

3 Months Ended

Mar. 31, 2025

Revenue and related accounts

Revenue and related accounts

2. Revenue and related accounts

Accounts Receivable, net. Accounts receivable are presented in the condensed consolidated balance sheets at their outstanding balances net of the allowance for credit losses. These receivables are generally trade receivables due in one year or less or expected to be billed and collected within one year. The Company estimates credit losses on accounts receivable in accordance with ASC 326 Financial Instruments - Credit Losses. The Company measures the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. The estimate for allowance for credit losses is based on a historical loss rate for each pool. Management considers qualitative factors such as changes in economic factors, regulatory matters, and industry trends to determine if an allowance should be further adjusted. The provision for credit losses is included in selling, general, and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss).

Balance as of December 31, 2024	$	137,000
Provision for credit loss		16,000
Write-offs		(39,000)
Other adjustments		(25,000)
Balance as of March 31, 2025	$	89,000

Prepaid Expenses. The Company records a prepaid expense when it has paid for a good or service that it has not yet incurred. As of March 31, 2025 and December 31, 2024, the Company had paid $1,412,000 and $1,012,000, respectively, for bulbs to be received in calendar year 2025.

Revenue. The following table presents revenue disaggregated by customer, as determined by the operational nature of their industry:

	Three Months Ended		Three Months Ended
	March 31, 2025		March 31, 2024
Supermarket	$	10,701,000	$	7,472,000
Wholesaler		1,663,000		388,000
Other		79,000		173,000
	$	12,443,000	$	8,033,000

During the three months ended March 31, 2025 and 2024, the Company had four and three customers that accounted for 10% or more of the total revenues, respectively. During the three months ended March 31, 2025, these four customers accounted for approximately 17%, 17%, 13%, and 11% of revenues, respectively. During the three months ended March 31, 2024, these three customers accounted for approximately 47%, 13%, and 11% of revenues, respectively. As of March 31, 2025, three of these customers also accounted for approximately 18%, 17%, and 15% of accounts receivable, net, while one different customer accounted for approximately 12% of accounts receivable, net, as of March 31, 2025. As of December 31, 2024, three customers accounted for approximately 22%, 18%, and 13% of accounts receivable, net. The loss of a major customer could adversely affect the Company’s operating results and financial condition.

Cost of Sales. Cost of sales consists primarily of costs to procure, sort, pick, cool, and transport bulbs. Additionally, cost of sales includes labor and facility costs related to production operations. Inventories are stated at the lower of cost, as determined on the first-in, first-out method, or net realizable value.