Note 4. Advances from Customers

9 Months Ended

Dec. 31, 2012

Deferred Revenue Disclosure [Text Block]

Note 4.  Advances from Customers

Under a three-year agreement with Stryker expiring in April 2014, 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 under an agreement expiring in December 2015. 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 indefinitely.

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 in September 2010 and March 2011 and from SpineView for the initial stocking order of 50 SpineView surgical endoscope systems in September 2010. All of the advances were fully utilized as of September 30, 2012. The following table summarizes the activity related to these and other customer advances related to service contracts for the three and nine months ended December 31, 2012 and 2011:

Three months ended December 31, 2011	Stryker			SpineView			Other		Total
Beginning balance at October 1	$	1,970		$	830		$	47	$	2,847
Additional advances received		-			-			65		65
Revenue recognized		(1,056	)		(186	)		-		(1,242	)
Adjustments		(12	)		1			-		(11	)
Ending balance at December 31	$	902		$	645		$	112	$	1,659

Nine months ended December 31, 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 December 31	$	-		$	-		$	-		$	-

Nine months ended December 31, 2011	Stryker			SpineView			Other			Total
Beginning balance at April 1	$	4,433		$	1,255		$	5		$	5,693
Additional advances received		-			-			109			109
Revenue recognized		(3,509	)		(612	)		(2	)		(4,123	)
Adjustments		(22	)		2			-			(20	)
Ending balance at December 31	$	902		$	645		$	112		$	1,659

(1) Amount reclassified to deferred revenue