Accounting for revenue recognition is complex and affected by interpretations of guidance provided by several sources, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). This guidance is subject to change. We follow the guidance established by the SEC in Staff Accounting Bulletin No. 104, as well as generally accepted criteria for revenue recognition, which require that, before revenue is recorded, there is persuasive evidence of an arrangement, the fee is fixed or determinable, collection is reasonably assured, and delivery to our customer has occurred. Applying these criteria to certain of our revenue arrangements requires us to carefully analyze the terms and conditions of our license agreements. Revenue from our technology license agreements is recognized at the time we enter into a contract, determine the license model (paid-in-advance or on-going royalty), and provide our customer with the licensed technology, if applicable. These criteria are generally met during the fiscal quarter of license announcement for paid-in-advance licenses, or the subsequent quarter immediately following. We believe that this is the point at which we have performed all of our obligations under the agreement; however, this remains a highly interpretive area of accounting and future license agreements may result in a different method of revenue recognition. To date all of our technology licenses have been paid-in-advance, however, on-going royalty license terms may be opted for by future licensees of our technology. Fees for maintenance or support of our licenses are recorded on a straight-line basis over the underlying period of performance.

This is from page 16 - Revenue Recognition. The NICE thing about this foot note IMO is that this is the FIRST time, I beleive, that we see IN WRITING, IN AN SEC FILING, the mention of on-going royalty licenses. While this presumably applies to MMP licensing, it might also apply to the NuPower stuff, as well as Crossflo, but regardless, I think it's a very positive development that we see this being specifically mentioned, and hopefully soon accounted for as it will certainly aid in PTSC providing predictable revenues for the market if agreements are structured as such.