NET SALES

3 Months Ended

Sep. 30, 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 September 30,
	2022		2021
Net Sales:
Over-time revenue recognition	$	907	$	196
Point-in-time revenue recognition		10,180		9,792
Total net sales	$	11,087	$	9,988

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 months ended September 30, 2022 and 2021, we recorded $551,000 and $0, respectively, 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 September 30, 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 September 30,
	2022			2021
Contract assets beginning balance	$	710		$	212
Expenses incurred during the year		333			96
Amounts reclassified to cost of sales		(448	)		(111	)
Amounts allocated to discounts for standalone selling price		(8	)		(12	)
Contract assets ending balance	$	587		$	185

	As of and for the Three Months Ended September 30,
	2022			2021
Contract liabilities beginning balance	$	1,013		$	150
Payments received from customers		389			143
Amounts reclassified to revenue		(551	)		—
Contract liabilities ending balance	$	851		$	293