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Note 8. Revenue and Major Customers
6 Months Ended
Jun. 30, 2016
Notes  
Note 8. Revenue and Major Customers

Note 8.                        Revenue and Major Customers

 

For the six months ended June 30, 2016 and 2015, the Company’s largest customer accounted for approximately 43% and 34% of our revenues, respectively, and approximately 24% for each of the three months ended June 30, 2016 and 2015.  For the six months ended June 30, 2016 and 2015, the top three customers accounted summarily for approximately 84% and 80%, respectively, and 55% and 65% for the three months ended June 30, 2016 and 2015, respectively, of the Company’s revenues.  The accounts receivable balance due (which are unsecured) for these three customers at June 30, 2016 was approximately $7,800, or 52% of the accounts receivable balance.  The Company’s sludge processing agreement with Altamonte Springs, which was its largest customer in 2014, it’s second largest in 2015 and its largest in both the first quarter and year to date 2016 revenue, was not renewed effective April 2016 and therefore did not contribute any revenue during the second quarter.  The Company’s failure to renew that agreement had a material adverse effect on its business, financial conditions and results of operations.  Beginning in March 2014, the Company’s operations in Florida were voluntarily delayed for a short time while the Company moved assets and personnel to a new site in Bradley, Florida.  While operations subsequently resumed, this reduction in revenue has materially reduced available cash to fund current or prior expenses incurred, remained at this lower level and then further decreased over subsequent periods to date.  Total revenue for the second quarter of 2016 was approximately $51,000, an 84% decrease from the same period in 2015 and a 74% decrease from the first quarter of 2016.

 

A substantial portion of the Company's revenue is derived from services provided under contracts and agreements with existing licensees.  Some of these contracts provide for termination of the contract by the customer after giving relatively short notice.  In addition, some of these contracts contain liquidated damages clauses, which may or may not be enforceable in the event of early termination of the contracts.  If one or more of these contracts are terminated prior to the expiration of its term, and the Company is not able to replace revenues from the terminated contract or receive liquidated damages pursuant to the terms of the contract, the lost revenue could have a material and adverse effect on its business and financial condition.