Note 3 - Revenue Recognition

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3. Revenue Recognition

The following table presents revenue disaggregated by type and geography:

	Three Months Ended March 31,
	2022		2021
	(in thousands)
U.S.
Systems	$	-	$	3
Instruments and accessories		64		62
Services		74		98
Leases		113		90
Total U.S. revenue		251		253
Outside of U.S. ("OUS")
Systems		-		921
Instruments and accessories		283		377
Services		234		281
Leases		298		251
Total OUS revenue		815		1,830
Total
Systems		-		924
Instruments and accessories		347		439
Services		308		379
Leases		411		341
Total revenue	$	1,066	$	2,083

Remaining Performance Obligations

Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations as of March 31, 2022 was $2.6 million, which is expected to be recognized over one to four years. 

Contract Assets and Liabilities

The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the three months ended March 31, 2022 and 2021 that was included in the deferred revenue balance at the beginning of each reporting period was $0.2 million and $0.2 million, respectively

The following information summarizes the Company’s contract assets and liabilities:

	As of
	March 31, 2022		December 31, 2021
	(in thousands)
Contract Assets	$	68	$	91
Deferred Revenue	$	533	$	543

Senhance System Leasing

The Company enters into operating lease arrangements with certain qualified customers. Revenue related to arrangements including lease elements are allocated to lease and non-lease elements based on their relative standalone selling prices. Lease elements generally include a Senhance System, while non-lease elements generally include instruments, accessories, and services. For some lease arrangements, the customers are provided with the option to purchase the leased System at some point during and/or at the end of the lease term. In some arrangements lease payments are based on the usage of the System. For the three months ended March 31, 2022, and 2021, variable lease revenue related to usage-based arrangements was not material.  

Trade Accounts Receivable

The allowance for doubtful accounts is based on the Company’s assessment of collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The allowance for doubtful accounts was $1.8 million and $1.7 million as of March 31, 2022, and December 31, 2021, respectively. For the three months ended March 31, 2022, and 2021, bad debt expense was not material.