Note 3 - Revenue Recognition

3 Months Ended

Mar. 31, 2023

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,
	2023		2022
	(in thousands)
U.S.
Systems	$	-	$	-
Instruments and accessories		60		64
Services		75		74
Leases		71		113
Total U.S. revenue		206		251
Outside of U.S. ("OUS")
Systems		-		-
Instruments and accessories		233		283
Services		120		234
Leases		417		298
Total OUS revenue		770		815
Total
Systems		-		-
Instruments and accessories		293		347
Services		195		308
Leases		488		411
Total revenue	$	976	$	1,066

Remaining Performance Obligations

The 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. The transaction price allocated to remaining performance obligations as of March 31, 2023 was $0.9 million, which is expected to be recognized over one to four years. 

Contract Assets and Liabilities

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, 2023 and 2022 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, 2023		December 31, 2022
	(in thousands)
Contract Assets	$	81	$	116
Deferred Revenue	$	456	$	465

Senhance System Leasing

The Company enters into 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 right to purchase the leased Senhance 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 Senhance System. For the three months ended March 31, 2023, and 2022, variable lease revenue related to usage-based arrangements was not material.  

Accounts Receivable

Accounts receivable are recorded at net realizable value, which includes an allowance for expected credit losses. The allowance for expected credit losses is based on the Company’s assessment of the 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 expected credit losses was $1.6 million and $1.6 million as of March 31, 2023 and December 31, 2022, respectively. The Company recorded immaterial amounts for expected credit losses during the three months ended March 31, 2023 and 2022, respectively.