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Revenue Recognition
6 Months Ended
Jun. 30, 2017
Revenue Recognition [Abstract]  
Revenue Recognition

Note 4 - Revenue Recognition

 

Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured.

 

The Company recognizes revenue related to product sales when product is shipped via external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. Shipments for all products are currently received directly by the Company’s customers.

 

License Agreement Revenue

 

Deferred revenue was approximately $313,000 and $348,000 on the accompanying consolidated balance sheets as of June 30, 2017 and December 31, 2016, respectively, and is related to the Company’s License Agreement with Bellco (see Note 13, below), which is being deferred over the remainder of the expected obligation period. The Company has recognized approximately $2,763,000 of revenue related to the Bellco License Agreement to date and approximately $18,000 and $35,000, respectively, for the three and six months ended June 30, 2017. The Company recognized approximately $17,000 and $34,000, respectively, of revenue related to this License Agreement for the three and six months ended June 30, 2016. Approximately $34,000 of revenue will be recognized in the remaining six months of fiscal year 2017 and approximately $69,000 of revenue will be recognized in each of the years ended December 31, 2018 through 2021.

  

For the three months ended June 30, 2017 and 2016, the Company recognized royalty revenue from Bellco of approximately $31,000 and $29,000, respectively. For the six months ended June 30, 2017 and 2016, the Company recognized royalty revenue of approximately $58,000 and $57,000, respectively.

 

See Note 13, Commitments and Contingencies, for further discussion of the Bellco License Agreement.