Note 12 – Deferred Revenues

Arrangements with customers include multiple deliverables, consisting of an initial delivery of seeds and a contingent portion of the sale that is dependent on the customers future harvest of the seeds. Deferred revenues associated with these multiple-element arrangements were $11,808 and $30,164 at December 31, 2022 and 2021, respectively. Related deferred cost of goods sold were $6,655 and $19,470 at December 31, 2022 and 2021, respectively, resulting in deferred gross margins of $5,153 and $10,964 at December 31, 2022 and 2021, respectively, that is expected to be recognized upon the customers’ completion of their harvests in future periods.

ONE WORLD PRODUCTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS