Accounts Receivable and Income Tax Refunds Receivable
|9 Months Ended|
Sep. 30, 2021
|Accounts Receivable and Income Tax Refunds Receivable||
Note 4 – Accounts Receivable and Income Tax Refunds Receivable
Accounts receivable at September 30, 2021 (unaudited) and December 31, 2020 consisted of the following:
Schedule of Accounts Receivable
The allowances reflected in the table above decreased as a percentage of accounts receivable to 80.8% at September 30, 2021 compared to 86.9% at December 31, 2020.
Estimated implicit price concessions deducted from revenues for the three months ended September 30, 2021 and 2020 were $1.9 million and $2.2 million, respectively, and for the nine months ended September 30, 2021 and 2020 were $6.2 million and $6.2 million, respectively. The allowance for doubtful accounts deducted from accounts receivable was $1.0 million at September 30, 2021 compared to $1.5 million at December 31, 2020, a decrease of $0.5 million. The decrease was due to lower implicit price concessions in the three months ended September 30, 2021 and to write offs of past due accounts receivable. The Company’s policy is to write off accounts receivable balances against the allowance for implicit price concessions once an accounts receivable ages past a specified number of days.
Accounts Receivable Sales Agreements
During the year ended December 31, 2020, the Company entered into six accounts receivable sales agreements under which the Company sold an aggregate of $3.3 million of accounts receivable on a non-recourse basis for an aggregate purchase price paid to the Company of $2.2 million, less $0.1 million of origination fees. Accordingly, the Company recorded a loss on the sales of $1.2 million during the year ended December 31, 2020. As of December 31, 2020, $1.7 million was outstanding and owed to three funding parties under three accounts receivable sales agreements. On September 14, 2021, the Company entered into separate settlement agreements with the three funding parties under which the Company agreed to repay an aggregate of $0.9 million in full settlement of the sales agreements. Per the settlement agreements, the Company is required to make equal monthly payments totaling $52,941 through January 1, 2023. As a result of the settlements, the Company recorded a gain from legal settlements of $0.6 million in the three and nine months ended September 30, 2021.
Income Tax Refunds Receivable
As of September 30, 2021 and December 31, 2020, the Company had $1.1 million and $1.4 million, respectively, of income tax refunds receivable. During 2020, the U.S. Congress approved the CARES Act, which allowed a five-year carryback privilege for federal net operating tax losses that arose in a tax year beginning in 2018 and through 2020. As a result, during the year ended December 31, 2020, the Company recorded approximately $1.1 million in refunds from the carryback of certain of its federal net operating losses. In addition, during the year ended December 31, 2020, the Company recorded $0.3 million in refunds related to other net operating loss carryback adjustments. During the nine months ended September 30, 2021, the Company received income tax refunds of $0.3 million, which represented refunds associated with the CARES Act. No refunds were received during the nine months ended September 30, 2020. The Company used the $0.3 million of refunds that it received in the nine months ended September 30, 2021 to repay a portion of the amount that it owes for federal income tax liabilities that arose from an audit of the Company’s 2015 Federal tax return as more fully discussed in Note 13. The Company’s income taxes are more fully discussed in Note 15 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.
Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef