Quarterly report pursuant to Section 13 or 15(d)

Revenue Recognition

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Revenue Recognition
 3 Months Ended
Mar. 31, 2022
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
3.   Revenue Recognition
Revenue by Service Line
Three Months Ended March 31,
(in thousands) 2022 2021
Functional neurosurgery navigation and therapy
Disposable products $ 1,863  $ 1,917 
Services 375  — 
Subtotal – Functional neurosurgery navigation and therapy
 2,238  1,917 
Biologics and drug delivery
Disposable products 850  914 
Services 1,304  746 
Subtotal – Biologics and drug delivery revenue 2,154  1,660 
Capital equipment and software
Systems and software products 450  331 
Services 189  122 
Subtotal – Capital equipment and software revenue 639  453 
Total revenue $ 5,031  $ 4,030 
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 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 is classified as deferred revenue.
During the three months ended March 31, 2022, the Company recognized capital equipment and software-related service revenue of approximately $0.1 million, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2021.
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 are 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 is recognized as revenue upon its installation and comprised less than $0.1 million of unbilled accounts receivable at March 31, 2022 and December 31, 2021.
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 $0.9 million at March 31, 2022. The Company expects to recognize approximately 54% of this revenue over the next twelve months and the remainder thereafter.