Question-and-Answer Session
Operator
(Operator Instructions). And our first question comes from the line of Steve Levenson of Stifel Nicolaus. Please proceed.
Steve Levenson - Stifel Nicolaus
Thank you. Good afternoon Anthony and Ken.
Ken Galaznik
Good afternoon.
Steve Levenson - Stifel Nicolaus
In respect to the revenue you mentioned that it was not recognized and the $6 million on that international order is that the same thing and have you shipped that merchandise now or you would be seeing that revenue in the third quarter?
Ken Galaznik
It’s not the same thing and it was actually in transit at on September 30th. So it, good load willing everything it should be in Q3.
Steve Levenson - Stifel Nicolaus
Okay. And the other $6 million will also be Q3 or that something that comes later?
Ken Galaznik
As Anthony mentioned earlier with the lumpiness what we’re we seeing on these orders, it would be very difficult to say when.
Steve Levenson - Stifel Nicolaus
Okay, thanks. You didn’t mention CAARS at all could you give us an update on what’s going on the CAARS program?
Anthony Fabiano
Right now, we are meeting our requirements under the contract. There hasn’t been any big news. So, it’s pretty much been a non-event this quarter.
Steve Levenson - Stifel Nicolaus
And when does the next chunk of funding come core for the product develop?
Anthony Fabiano
Steve, as you know the DNDO is very, very strict about his disclosing any future information about CAARS.
Steve Levenson - Stifel Nicolaus
Pretty good. I’ve take a shot at it, no problem.
Anthony Fabiano
Good shot.
Steve Levenson - Stifel Nicolaus
In relation to the increase spending on R&D what sort of payback, do you think you will get and how long do you think you have to wait for it?
Anthony Fabiano
Well, it’s an interesting question, a lot of what we are spending on R&D is our research, a lot of it is advanced development, where we are developing concepts that are breakthrough for potential products and a very significant amount is the development of products that we bring into market.
So payback is a kind of tricky question, so you really break it down. But normally, we have a process, Steve, that we will not fund the development. That is the kickoff of a product to go through our stage gate process, which means we intend to make a product unless we have a very high confidence factor in our payback, which means relatively short.
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