Annual report pursuant to Section 13 and 15(d)

Revenue Recognition

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Revenue Recognition
12 Months Ended
Dec. 31, 2018
Revenue Recognition [Abstract]  
Revenue Recognition
3. Revenue Recognition

 

Revenue by Service Line

 

    Years Ended December 31,
    2018   2017
Products:                
Disposable products:                
Functional neurosurgery   $ 5,313,041     $ 5,233,092  
Biologics and drug delivery     951,940       675,809  
Capital equipment     420,039       1,115,109  
Total product revenue     6,685,020       7,024,010  
Services:                
Functional neurosurgery     100,000        
Biologics and drug delivery     175,223        
Capital equipment and other     393,023       355,515  
Total service revenue     668,246       355,515  
Total revenue   $ 7,353,266     $ 7,379,525  

 

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 year ended December 31, 2018, the Company recognized capital equipment-related service revenue of $142,605 which was previously included in deferred revenue in the accompanying consolidated balance sheet at December 31, 2017.

 

In connection with one customer contracts, 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 December 31, 2018, such billings amounted to $8,000, which amount is included in each of accounts receivable and deferred revenue in the accompanying condensed consolidated balance sheet. There were no such billings at December 31, 2017. 

 

Remaining Performance Obligations

 

The Company’s contracts with customers, other than capital equipment-related service agreements discussed below, are predominantly of terms less than one year. Accordingly, the transaction price of remaining performance obligations related to such contracts at December 31, 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 $303,912 at December 31, 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.