RE:RE:Allowance for bad debtThe reserve is still in place $8.6M because it needs to remain in place.
Over a year ago, they also said it would be paid during 2023, they even had a payment schedule.
MONTREAL, Feb. 21, 2023
Payment Schedule under DROSRITE™ Contract As previously announced by the Company on October 4, 2022, an additional payment of approximately $682,000 (US$0.5 million) was received under the Company’s DROSRITE™ contract. At December 31, 2022, a balance of approximately $12.8 million (US$9.4 million) was owed to the Company under the DROSRITE™ contract.
An initial off-site facility has been commissioned by the end user of the DROSRITE™ systems and is fully operational since April 2022. The construction of the on-site facility, using DROSRITE™ systems, has begun, and the Company has agreed, following discussions with its customer and its financing partners, to revise the payment schedule with its customer while it is completing its additional financing for the on-site facility. As a result of the strong relationship developed with the customer, the Company believes it was in its best interests to support its customer. The revised payment schedule provides for the payment of US$1.5 million in the coming weeks, followed by US$6.2 million to be paid on a monthly basis over a period of six months commencing in April 2023, with the balance to be paid at a later date to better reflect the timing of need and usage.
StairwayTo wrote: So why increase the reserve for bad debt to $8.6M if you expect to collect it?
Payments for Outstanding Major Receivables:
The Company has remained in continuous discussions with Radian Oil and Gas Services Company regarding the outstanding receivable of approximately US$8.0 million.
The Company now expects payment of this receivable to be received in full within Q2 2024.
StairwayTo wrote: Allowance for bad debt of $8.6M is the equivalent of 70% of the total sales for 2023 ,
Or 31% of the past 2 years of sales.