Biocentric Energy Holdings, Inc. (BEHL)

[BigBake1]

The issue with deposits is that many believe that at any time the customer can back out of the deal and demand their deposit back. In some cases this is true, but not in this case, this company does not keep on hand stock of components for multiple customers. They depend upon money coming in to order the necessary components. Maybe in a couple of years they may operate with enough cash flow to retain an inventory but not right now as they are a start up.

It will also depend upon how the company does its accounting, there is accrual accounting and cash accounting. In accrual accounting you can recognize cash on the books before even getting cash in hand or deferred until cash is in hand. Cash accounting is strictly cash in hand, so either method results in REVENUES on the income sheet. So arguing whether there will be revenues based upon deposits and whether those deposits can be refunded are moot. This is all by GAAP guidelines. The deferred can actually be booked as payments received now in this quarter with the final payment booked at completion of the services rendered in another quarter.

The unknowns are the actual cost they are selling these to these first time owners, I have a feeling these are not going to be much above break even point. It is a typical strategy just to get your foot into the door and if things proceed successfully the price will change accordingly for the company to make their ideal profits.