REVENUE RECOGNITION The Company recognizes revenues in accordance with the provisions of FASB Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , which provides guidance on the recognition, presentation, and disclosure of revenue in financial statements filed with the Securities and Exchange Commission. ASC 606 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. The Company recognizes revenue upon transfer of control of promised products to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. The Company at times may enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. In such cases, revenue would be recognized at the time of delivery for each identified product or performance of service. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Distribution Rights The Company at times may derive part of its revenue from the sale of distribution rights within a designated territory for a period of time. Licenses for an exclusive territory provides a single distributor with the right to use and sell the distribution rights within the specified designated territory for a specified period. The determination of when the Company recognizes revenue is based on whether the distribution rights transfers to the distributor at (i) a point in time or (ii) over time. Furthermore, the Company needs to determine in accordance with ASC 606 if the distribution rights is (i) functional intellectual property that has significant standalone functionality or is (ii) symbolic intellectual property that requires ongoing activities from the Company. In June 2018, the Company received payment in the amount of $100,000 from the sale of distribution rights within a designated territory for a period of time of thirty years to a distributor. In August 2018, the Company received an additional payment in the amount of $90,000 for the sale of distribution rights within a separate designated territory for a period of thirty years to a distributor. The Company determined that the associated revenue would be recognized over the period of thirty years as the agreements for the sale of the distribution rights also called for the Company to continue to produce the product for the distributor over the term of the agreements. Therefore, the distribution rights were deemed to be symbolic intellectual property in accordance with ASC 606 as it requires ongoing activities from the Company. From time to time, and where strategic determinations or economic considerations dictate, the Company also derives revenue from the sale of its intellectual properties (proprietary formulations) into select vertical markets. The Company continues to enhance and improve upon certain of its intellectual properties currently used in non-core vertical markets as well as develop new variations on its existing portfolio of intellectual properties. The determination of when the Company recognizes revenue is based on whether the following two criteria are met (i) the customer can benefit from the intellectual property either on its own or together with other resources that are readily available to the customer, and (ii) the Companys promise to transfer the intellectual property is distinct within the context of the contract. In August 2019, the Company entered into an intellectual property sale and assignment agreement with a now exclusive worldwide HVAC distributor in exchange for a one-time cash payment of $200,000. The agreement includes a provision establishing a transitional manufacturing period of no less than six months during which the Company will continue to manufacture the product for the HVAC marketer and distributor at a predetermined, fixed-price per gallon. This agreement supersedes all prior agreements with the counter-party (specifically, the June 2018 and August 2018 agreements referenced in the immediately preceding paragraph), and, as such, triggers immediate recognition of the remaining contract liabilities under the previous distribution agreements. For the nine months ended September 30, 2019 and 2018, the Company recognized a contract liability in the amount of $0 and $188,639, respectively and revenue in the amount of $387,056 and $1,361, respectively from such sales of intellectual property and distribution rights. In addition, for the nine months ended September 30, 2019, the Company recognized additional contract liability in the amount of $9,200 as a result of advanced payments received from customers for performance obligations yet to be performed by the Company.