DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

NOTE 8. DEFERRED REVENUE AND REMAINING PERFORMANCE OBLIGATIONS

Deferred revenue consists of amounts received for products or services not yet delivered or earned. Deferred income consists of amounts received for commitments not yet fulfilled. When products or services are delivered to customers and as service commitments are fulfilled, these contract liabilities are recognized as earned. Deferred revenue or income that the Company does not expect will be earned within the following twelve months is reported in the consolidated balance sheets as deferred income, non-current.

Contract liabilities consisted of the following as of December 31 (in thousands):

	2023		2022
Products and services not yet delivered	$	540	$	547
BD deferred exclusivity fee	1,005
Deferred revenue and income, current	$	1,545	$	547
Australia R&D tax incentive	$	1,122	$	—
Deferred income, non-current	$	1,122	$	—

The Company recognized $0.5 million, $0.4 million, and $0.3 million of revenue that was included in the beginning contract liabilities for the years ended December 31, 2023, 2022, and 2021 respectively. No material amount of revenue recognized during the period was from performance obligations satisfied in prior periods.

Transaction Price Allocated to Remaining Performance Obligations

As of December 31, 2023, $5.2 million of revenue is expected to be recognized from remaining performance obligations. This balance primarily relates to product shipments for reagents sold to customers under sales-type lease agreements. These agreements have between one and six year terms and revenue is recognized as reagents are shipped, typically on a straight-line basis. The remaining balance relates to executed service contracts that begin as warranty periods expire. These service contracts typically provide a one to five year term and revenue is recognized on a straight-line basis.

The Company elects not to disclose the value of unsatisfied performance obligations for (i) contracts with an expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Commercial Agent Relationship with Becton, Dickinson and Company (“BD”)

The Company has entered into an exclusive commercial agreement with BD to act as the Company’s agent and representative. The purpose of this agreement is to establish an on-going commercialization of the Company’s products. The Company is classified as the principal and BD as the agent. In accordance with the terms of this agreement, BD will pay the Company an exclusivity fee in multiple installments for exclusive rights, while the Company will pay BD an agent fee based on the Company’s revenue.

The Company accounts for agent fees consistent with how it accounts for sales commissions as described above in Note 2, Summary of Significant Accounting Policies. As such, agent fees paid to BD correspond with periodic sales and are expensed to sales, general and administrative expense.

The Company accounts for the exclusivity fee from BD as a deferred income when the cash is received. The Company uses forecasted revenue to estimate the amount of deferred income to amortize within the period as an offset to sales, general and administrative expense.

The following table presents the activity related to the BD commercial agreement for the year ended December 31, 2023 (in thousands).

	2023
Exclusivity fees received	$	2,000
Amortized exclusivity fees	$	(995)
Agent fees incurred	998
Net expense	$	3

Australia R&D Tax Incentive

As discussed further in Note 14, Income Taxes, in 2023, the Company received a research and development tax incentive from Australia (“Australia R&D Tax Incentive”) totaling $1.1 million from the Australian government which is fully reserved as the sustainability of the amount upon potential examination by the Australian tax authority is uncertain. This amount is recorded as deferred income, non-current in the consolidated balance sheets as of December 31, 2023.