Note 4. Advances from Customers

6 Months Ended

Sep. 30, 2012

Deferred Revenue Disclosure [Text Block]

Note 4.   Advances from Customers

We currently have a three-year agreement with Stryker under which we are the exclusive supplier of Stryker-branded flexible video and fiber cystoscopes. These cystoscopes employ our patented EndoSheath technology, which are co-branded Stryker and Vision-Sciences. We also supply Stryker with flexible ureteroscopes. Stryker has the exclusive rights to distribute products we manufacture, including cystoscopes, urology EndoSheath technology, and ureteroscopes, in North America, South America, Latin America, China, and Japan. Although Stryker was to receive the exclusive rights for the rest of the world in April 2012, we reached an agreement with Stryker to delay this launch until at least December 2012. The agreement expires in April 2014 unless otherwise renewed.

We also have a development and supply agreement with SpineView, Inc. (“SpineView”) under which we developed and supply a charge-coupled device (CCD) based video surgical endoscope for use with SpineView’s products.

We received advances from Stryker for future orders of our scopes and EndoSheath technology and from SpineView for the initial stocking order of 50 SpineView surgical endoscope systems. The following table summarizes the activity related to these and other customer advances related to service contracts for the three and six months ended September 30, 2012 and 2011:

Three months ended September 30, 2012	Stryker		SpineView			Other		Total
Beginning balance at July 1	$	-	$	161		$	-	$	161
Additional advances received		-		-			-		-
Revenue recognized		-		(161	)		-		(161	)
Ending balance at September 30	$	-	$	-		$	-	$	-

Three months ended September 30, 2011	Stryker			SpineView			Other			Total
Beginning balance at July 1	$	2,840		$	1,179		$	13		$	4,032
Additional advances received		-			-			35			35
Revenue recognized		(864	)		(348	)		(1	)		(1,213	)
Adjustments		(6	)		(1	)		-			(7	)
Ending balance at September 30	$	1,970		$	830		$	47		$	2,847

Six months ended September 30, 2012	Stryker			SpineView			Other			Total
Beginning balance at April 1	$	117		$	420		$	135		$	672
Additional advances received		-			-			8			8
Revenue recognized		(117	)		(420	)		-			(537	)
Adjustments (1)		-			-			(143	)		(143	)
Ending balance at September 30	$	-		$	-		$	-		$	-

Six months ended September 30, 2011	Stryker			SpineView			Other			Total
Beginning balance at April 1	$	4,433		$	1,255		$	5		$	5,693
Additional advances received		-			-			44			44
Revenue recognized		(2,453	)		(426	)		(2	)		(2,881	)
Adjustments		(10	)		1			-			(9	)
Ending balance at September 30	$	1,970		$	830		$	47		$	2,847

(1) Amount reclassified to deferred revenue