|STEREOTAXIS, INC. filed this Form 10-Q on 08/08/2018|
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from sales of disposable products is recognized when control is transferred to the customers, which generally occurs at the time
of shipment, but can also occur at the time of delivery depending on the customer arrangement. Disposable products are covered
by an assurance type warranty that provides for the return of defective products. Warranty costs were not material for the periods
presented. Disposable revenue represented 34% and 33% of revenue for the six months ended June 30, 2018 and 2017, respectively.
Company is entitled to royalty payments from Biosense Webster, payable quarterly based on net revenues from sales of the co-developed
catheters. Royalty revenue from the co-developed catheters remained relatively unchanged
at 10% of revenue for the six months ended June 30, 2018 and 2017.
recurring revenue includes revenue from software licenses, product maintenance plans, and other post warranty maintenance. Revenue
from services and license fees is deferred and amortized over the service or license fee period, which is typically one year.
Revenue related to services performed on a time-and-materials
basis is recognized when performed. Other recurring revenue represented 54% and 44% of revenue
for the six months ended June 30, 2018 and 2017, respectively.
months ended June 30,|| ||
months ended June 30,|| |
|Disposables, service and accessories||
|| ||7,240,650|| ||
|| ||6,638,587|| ||
|| ||14,195,008|| ||
|| ||13,397,364|| |
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 the Company’s systems contracts and obligations
that will be recognized as revenue in future periods. These obligations are generally satisfied within two years after contract
inception but may occasionally extend longer. Transaction price representing revenue to be earned on remaining performance obligations
on system contracts was approximately $1.3 million as of June 30, 2018. Performance obligations arising from contracts for disposables,
royalty and service are generally expected to be satisfied within one year after entering into the contract.
following information summarizes the Company’s contract assets and liabilities:
30, 2018|| ||
31, 2017|| |
|Contract Assets - Unbilled
|| || || ||
|| || || |
|Product shipped, revenue deferred||
|| ||934,136|| ||
|| ||941,724|| |
|Deferred service and license fees||
|| ||6,499,720|| ||
|| ||5,372,908|| |
|Total deferred revenue||
|| ||7,433,856|| ||
|| ||6,314,632|| |
|Less: Long-term deferred revenue||
|Total current deferred revenue||
Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the
difference between the revenue that was earned but not billed on service contracts and revenue from system contracts that was
recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the
arrangements. Deferred revenue is primarily related to service contracts, for which the service fees are billed up-front, generally
quarterly or annually, and for amounts billed in advance for system contracts for which some performance obligations remain outstanding.
For service contracts, the associated deferred revenue is generally recognized ratably over the service period. For system contracts,
the associated deferred revenue is recognized when the remaining performance obligations are satisfied. The Company did not have
any impairment losses on its contract assets for the periods presented.
recognized for the six months ended June 30, 2018 and 2017, that was included in the deferred revenue balance at the beginning
of each reporting period was $4,152,694 and $5,504,863, respectively.
Recognized from the Costs to Obtain a Contract with a Customer
Company has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized
as the Company expects to generate future economic benefits from the related revenue generating contracts after the initial capital
sales transaction. The costs capitalized as contract acquisition costs included in prepaid expenses and other assets, in the Company’s
balance sheet was $0.4 million as of June 30, 2018. The Company did not incur any impairment losses during any of the periods
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