Note 3. Accounts Receivable – Project Revenue and Project Costs

              The total accounts receivable from the ENEC and FANR contracts were approximately $0.6 million at June 30, 2011, and approximately $0.8 million at December 31, 2010. These amounts represent approximately 46 percent and 83 percent of the total accounts receivable reported of approximately $1.3 million and $1.0 million at June 30, 2011 and December 31, 2010, respectively.

              Total unbilled accounts receivable reported on the accompanying consolidated balance sheets in accounts receivable of approximately $0.3 million and $0.5 million at June 30, 2011 and December 31, 2010 respectively, is for work that was billed to our clients in July 2011 and January 2011, respectively. Foreign currency transaction exchange losses were approximately $2,000 and $1,000 for the three months ended June 30, 2011 and 2010, respectively, which is reported in the caption other income and expense on the accompanying consolidated statement of operations. Foreign currency transaction exchange losses were approximately $1,000 for the six months ended June 30, 2011 and 2010, which is reported in the caption other income and expense on the accompanying consolidated statement of operations.

              Travel costs and other reimbursable costs under these contracts are reported in the accompanying statement of operations as both revenue and cost of consulting services provided, and totaled approximately $0.2 million and $0.3 million for the three months ended June 30, 2011 and 2010, respectively and $0.4 million and $0.6 million for the six months ended June 30, 2011 and 2010, respectively. The total travel and other reimbursable expenses that have not been reimbursed and are included in total accounts receivable reported above from our contracts were in the amount of approximately $59,000 and $67,000 at June 30, 2011 and December 31, 2010, respectively.

  We expect to continue to provide strategic advisory services to Abu Dhabi during the five-year term of these consulting agreements and also expect the variation of revenue from these contracts to continue. Under these agreements, revenue will be recognized on a time and expense basis. We periodically discuss our consulting work with ENEC and FANR, who will review the work we perform, and our reimbursable travel expenses, and accept our monthly invoicing for services and reimbursable expenses.

              The provisions in the GCC and Kuwait contracts obligate them to pay the Company milestone payments contingent on the achievement of certain substantive deliverables under the contract. The final work product to be delivered under the contract with the GCC is to issue a feasibility report on regional cooperation in the development of civilian nuclear power for electricity and water desalination. These milestone events include completion of meetings with all GCC members; delivery of assumptions and methodology; submittal of a discussion paper; delivery of a preliminary report and delivery of a final feasibility report to the GCC members. The Company recognizes milestone payments from the GCC as revenue when the Company achieves the underlying contractual milestone, as milestone payments are not dependent on any other future activities or achievement of any other future milestones and the achievement of each of the contractual milestones were substantively at risk and contingent at the effective date of the contract. Substantial effort is involved in achieving each of the milestones. These milestones represent the culmination of discrete earnings processes, and the amount of each milestone payment is reasonable in relation with the level of effort associated with the achievement of the milestone. Each milestone payment is nonrefundable and non-creditable when made. Furthermore, these milestones are considered substantive because the consideration earned from the achievement of each milestone (a) is commensurate with the Company’s performance to achieve the milestone, (b) relates solely to past performance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. Total revenue recognized from this GCC contract for the three months and six months ended June 30, 2010 was approximately $1.1 million and deferred revenue of approximately $0.4 million was recorded at June 30, 2011. As of June 30, 2011 no revenue was recognized from the work contracted with Kuwait, for which milestone payments are also to be made under this contract, and deferred revenue of $0.2 million was recorded at June 30, 2011.