These paragraphs seem to paint a different picture. From last 10Q Submitted. Looking forward to seeing 10K filing for Annual Reports, may give a better picture of revenues. But in general things to totally out of control it looks like with customer contracts. I hope Parker Meeks can pull Hyzon out of this rut - from the looks of it, the previous Craig Knight had no clue how to run this operation.
Note 3. Revenue
The Company recognized negligible revenue and $2.9 million in sales of hydrogen fuel cell systems in the United States, sales of FCEVs in China, and retrofit services in Europe for the three and six months ended June 30, 2022, respectively.
The Company did not recognize any revenue for the three and six months ended June 30, 2021. In accordance with ASC 606, the Company is required to evaluate customers’ ability and intent to pay substantially all of the consideration to which the Company is entitled in exchange for the vehicles transferred to the customer, i.e., collectability of contracts with customers. The customer in China, to which the Company delivered 62 FCEVs in 2021, is a special purpose entity established in response to China’s national hydrogen fuel cell vehicle pilot program. While in the Company’s estimation the customer has strong business plans and management teams, in consideration of the customer’s limited operating history and extended payment terms in their contracts, the Company determined the collectability criterion is not met with respect to contract existence under ASC 606, and therefore, an alternative method of revenue recognition has been applied to the arrangement. The $2.5 million of revenue recognized under this arrangement in the six months ended June 30, 2022 is equal to the remaining consideration received after satisfying local government VAT obligations, as such amounts are non-refundable and the Company has transferred control of the 62 FCEVs to which the consideration relates and has stopped transferring goods or services to the customer. The Company will continue to monitor the customer and evaluate the collectability
criterion as of each reporting period. The total cost of FCEVs delivered to the customer in China was recorded within Cost of revenue in the Consolidated Statements of Operations and
Comprehensive Income (Loss) in 2021 since control of such FCEVs was transferred to the customer prior to December 31, 2021.
Contract Balances
Contract liabilities relate to the advance consideration invoiced or received from customers for products and services prior to satisfying a performance obligation or in excess of amounts allocated to a previously satisfied performance obligation. The current portion of contract liabilities is recorded within Contract liabilities in the Consolidated Balance Sheets and totaled $2.1 million and $10.9 million as of June 30, 2022 and December 31, 2021, respectively. The long-term portion of contract liabilities is recorded within Other liabilities in the Consolidated Balance Sheets and totaled $6.0 million and $1.0 million as of June 30, 2022 and December 31, 2021, respectively. As part of efforts to exit certain customer contracts, the Company refunded $1.3 million to customers in the third and fourth quarters of 2022.
Remaining Performance Obligations.
The transaction price associated with remaining performance obligations for commercial vehicles and other contracts with customers was $15.4 million as of June 30, 2022. The Company expects to recognize approximately 5% of its remaining performance obligations as revenue over the twelve months after June 30, 2022.
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