Annual report pursuant to Section 13 and 15(d)

Revenue Recognition

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Revenue Recognition
 12 Months Ended
Dec. 31, 2021
Revenue Recognition [Abstract]  
Revenue from Contract with Customer .    Revenue Recognition
Revenue by Service Line
Years Ended December 31,
(in thousands) 2021 2020
Functional neurosurgery navigation and therapy
Disposable products
 $ 7,696  $ 6,211 
Services
 375  — 
Subtotal – Functional neurosurgery navigation and therapy
 8,071  6,211 
Biologics and drug delivery
Disposable products
 3,353  1,528 
Services
 3,442  3,672 
               Subtotal – Biologics and drug delivery revenue 6,795  5,200 
Capital equipment and software
Systems and software products
 864  1,093 
Services
 569  325 
                     Subtotal – Capital equipment and software revenue 1,433  1,418 
Total revenue
 $ 16,299  $ 12,829 
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 consolidated balance sheets.
•Contract liabilities – The Company generally bills and collects capital equipment and software-related service fees at the inception of the service agreements, which have terms ranging from one to three years. The Company may also enter into agreements with customers that bundle the capital equipment and software-related service fees with software and hardware upgrades that are made commercially available over the term of the contract. The unearned portion of such fees are classified as deferred revenue.
During the years ended December 31, 2021 and 2020, the Company recognized capital equipment and software-related service revenue of approximately $0.3 million and $0.5 million, respectively, which was previously included in deferred revenue in the accompanying consolidated balance sheets at December 31, 2020 and 2019.
The Company offers an upgraded version of its software at no additional charge to customers purchasing a three-year systems service agreement. The transaction prices of the software and the service agreement were determined through an allocation of the service agreement price based on the standalone prices of the software and the service agreements customarily charged by the Company. The transaction price of the software was recognized as revenue upon its installation and comprised approximately $0.04 million and $0.1 million of unbilled accounts receivable at December 31, 2021 and 2020, respectively.
Revenue with respect to remaining performance obligations related to capital equipment and software-related service agreements and the upfront payments discussed under the heading “Contract Balances” above amounted to approximately $0.8 million at December 31, 2021. The Company expects to recognize approximately 67% of this revenue over the next twelve months and the remainder thereafter.