Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

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Revenue Recognition
 9 Months Ended
Sep. 30, 2018
Revenue Recognition [Abstract]  
Revenue Recognition
3.   Revenue Recognition

 

Revenue by Service Line

 

  Three Months Ended September 30,
  2018   2017
Products:          
Disposable products:          
Functional neurology $ 1,448,850   $ 1,284,029
Biologics and drug delivery   190,993     136,833
Capital equipment   99,961     207,573
Total product revenue   1,739,804     1,628,435
Services:          
Capital equipment and other   62,238     88,635
Biologics and drug delivery   5,000     -
Total service revenue   67,238     88,635
Total revenue $ 1,807,042   $ 1,717,070

 

  Nine Months Ended September 30,
  2018   2017
Products:          
Disposable products:          
Functional neurology $ 3,787,712   $ 4,229,192
Biologics and drug delivery   483,251     291,023
Capital equipment   420,039     923,072
Total product revenue   4,691,002     5,443,287
Services:          
Capital equipment and other   218,742     256,860
Biologics and drug delivery   167,000     -
Total service revenue   385,742     256,860
Total revenue $ 5,076,744   $ 5,700,147

 

Contract Balances

 

· Contract assets – Substantially all the Company’s contracts with customers are based on customer-issued purchase orders for distinct products or services. Customers are billed upon delivery of such products or services, and the related contract assets comprise the accounts receivable balances included in the accompanying condensed consolidated balance sheets.

 

· Contract liabilities – The Company generally bills and collects capital equipment-related service fees at the inception of the service agreements, which have terms ranging from one to three years. The unearned portion of such service fees are classified as deferred revenue.

 

During the three and nine months ended September 30, 2018, the Company recognized capital equipment-related service revenue of $41,391 and $128,725, respectively, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2017.

 

In connection with one customer contract, the Company bills the customer for certain product the customer ordered and is committed to purchase, but which is shipped at a future date. At September 30, 2018, such billings amounted to $129,000, which amount is included in each of accounts receivable and deferred revenue in the accompanying condensed consolidated balance sheet.

 

Remaining Performance Obligations

 

The Company’s contracts with customers are predominantly of terms less than one year. Accordingly, the transaction price of remaining performance obligations related to such contracts at September 30, 2018 are not material.

 

Revenue with respect to remaining performance obligations related to capital equipment-related service agreements with original terms in excess of one year amounted to $273,561 at September 30, 2018. The Company expects to recognize this revenue within the next three years.

 

One contract with a customer has a stated term of three years. However, the customer has the right to terminate the contract for convenience upon a 30-day notice, in which event the customer would be obligated to compensate the Company for up to three months of previously forecast purchases. Based on the foregoing, the Company uses the practical expedient available under Topic 606 pursuant to which such contracts are considered to have a term of less than one year and for which disclosure of the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue is not required. Accordingly, the Company has not included such disclosure for this contract.