NET SALES

6 Months Ended

Dec. 31, 2022

Equity [Abstract]

NET SALES

NOTE 3. NET SALES

The following table presents the disaggregation of net sales by revenue recognition model (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
Net Sales:
Over-time revenue recognition	$	483	$	115	$	1,391	$	311
Point-in-time revenue recognition		10,799		10,058		20,978		19,850
Total net sales	$	11,282	$	10,173	$	22,369	$	20,161

The timing of revenue recognition, billings, and cash collections results in billed accounts receivables, unbilled receivables (presented as deferred costs on our condensed consolidated balance sheets) and customer advances and deposits (presented as deferred revenue on our condensed consolidated balance sheets), where applicable. Amounts are generally billed as work progresses in accordance with agreed upon milestones. The over-time revenue recognition model consists of non-recurring engineering (“NRE”) and prototype services and typically relates to NRE services related to the evaluation, design or customization of a medical device and is typically recognized over time utilizing an input measure of progress based on costs incurred compared to the estimated total costs upon completion. During the three and six months ended December 31, 2022, we recorded $312,000 and $862,000, respectively, of revenue that had been included in deferred revenue in the prior year. During the three and six months ended December 31, 2021, we recorded $98,000 of revenue that had been included in deferred revenue in the prior year. The revenue recognized from the contract liabilities consisted of satisfying our performance obligations during the normal course of business. Our entire deferred revenue balance of $851,000 at December 31, 2022, is currently expected to be recognized in the next 12 months.

The following tables summarize our contract assets and liability balances (in thousands):

	As of and for the Three Months Ended December 31,						As of and for the Six Months Ended December 31,
	2022			2021			2022			2021
Contract assets beginning balance	$	591		$	185		$	714		$	212
Expenses incurred during the year		412		$	247		$	746		$	362
Amounts reclassified to cost of sales		(117	)		—			(566	)		(130	)
Amounts allocated to discounts for standalone selling price		(9	)		(8	)		(17	)		(20	)
Contract assets ending balance	$	877		$	424		$	877		$	424

	As of and for the Three Months Ended December 31,						As of and for the Six Months Ended December 31,
	2022			2021			2022			2021
Contract liabilities beginning balance	$	851		$	293		$	1,013		$	150
Payments received from customers		312		$	389		$	700		$	532
Amounts reclassified to revenue		(312	)		(98	)		(862	)		(98	)
Contract liabilities ending balance	$	851		$	584		$	851		$	584