BNB PLUS CORP. Revenue Disclosure

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”). ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and/or service has been performed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered or services provided and the collectability of those amounts. Provisions for allowances and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered, service has not been provided, or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered, the service has been provided, or no refund will be required. At September 30, 2018 and 2017, the Company recorded total deferred revenue of $1,856,693 and $351,735, respectively.

Revenue arrangements with multiple components are divided into separate units of accounting if certain criteria are met, including whether the delivered component has stand-alone value to the customer. Consideration received is allocated among the separate units of accounting based on their respective selling prices. The selling price for each unit is based on vendor-specific objective evidence, or VSOE, if available, third party evidence if VSOE is not available, or estimated selling price if neither VSOE nor third party evidence is available. The applicable revenue recognition criteria are then applied to each of the units.

Revenue for government contract awards, which supports the Company’s development efforts on specific projects, is recognized as firm fixed price government contract awards and are recognized over the period of the contract. The Company recognized revenue from a government contract of $748,040 and $249,348 for the fiscal years ended September 30, 2018 and 2017, respectively.

The Company has a licensing agreement with a company that operates in the cotton industry. The shipment to this customer during fiscal 2018 included extended payment terms, as compared to those defined in the contract and therefore is included in deferred revenue as of September 30, 2018. The extended payment terms for this shipment are three equal installments due 90, 180 and 270 days from shipment. The deferred revenue will be recognized to revenue as the payments become due assuming all other conditions for revenue recognition have been satisfied. At September 30, 2018, the amount included in deferred revenue related to the shipment with extended payment terms was $766,192. The cotton ginning season in the United States takes place between September and March each year; therefore, revenues from our cotton customer contracts may be seasonal and recognized primarily during our first and fourth fiscal quarters.