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

6 Months Ended

Jun. 30, 2019

3.	Revenue Recognition

Revenue by Service Line

	Three Months Ended June 30,
	2019		2018
Products:
Disposable products:
Functional neurosurgery	$	1,690,122	$	1,159,527
Biologics and drug delivery		244,949		111,792
Therapy		17,830		-
Capital equipment		241,293		141,280
Total product revenue		2,194,194		1,412,599
Services:
Capital equipment and other		243,954		71,736
Biologics and drug delivery		168,250		162,000
Total service revenue		412,204		233,736
Total revenue	$	2,606,398	$	1,646,335

	Six Months Ended June 30,
	2019		2018
Products:
Disposable products:
Functional neurosurgery	$	3,294,767	$	2,338,862
Biologics and drug delivery		529,859		292,258
Therapy		17,830		-
Capital equipment		515,692		320,078
Total product revenue		4,358,148		2,951,198
Services:
Capital equipment and other		455,156		156,504
Biologics and drug delivery		265,611		162,000
Total service revenue		720,767		318,504
Total revenue	$	5,078,915	$	3,269,702

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 and six months ended June 30, 2019, the Company recognized capital equipment-related service revenue of $66,783 and $131,012, respectively, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2018.

Under the terms of one customer contract, the Company is entitled to bill the customer for: (a) certain products the customer ordered and is committed to purchase but which are shipped at a future date; and (b) the achievement of certain milestones set forth in the contract. At June 30, 2019, such billings amounted to $75,000, 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, 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 June 30, 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 $481,598 at June 30, 2019. The Company expects to recognize this revenue within the next three years.