ClearPoint Neuro, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

Revenue Recognition

3 Months Ended

Mar. 31, 2019

3.	Revenue Recognition

Revenue by Service Line

	Three Months Ended March 31,
	2019		2018
Products:
Disposable products:
Functional neurosurgery	$	1,604,645	$	1,161,335
Biologics and drug delivery		284,910		198,465
Capital equipment		274,399		178,798
Total product revenue		2,163,953		1,538,598
Services:
Capital equipment and other		211,202		84,768
Biologics and drug delivery		97,362		-
Total service revenue		308,564		84,768
Total revenue	$	2,472,517	$	1,623,366

Contract Balances

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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.

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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 months ended March 31, 2019, the Company recognized capital equipment-related service revenue of $69,749 which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2018.

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 March 31, 2019, such billings amounted to $212,500, 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, 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 March 31, 2019 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 $253,881 at March 31, 2019. The Company expects to recognize this revenue within the next three years.