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SUPPLEMENTAL BALANCE SHEET DISCLOSURES

9 Months Ended

Sep. 30, 2024

SUPPLEMENTAL BALANCE SHEET DISCLOSURES

3. SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Components of selected captions in the unaudited condensed consolidated balance sheets consisted of the following:

Accounts receivable, net

Accounts receivable from product sales are net of allowance for credit losses. The allowance for credit losses was $0 as of both September 30, 2024 and December 31, 2023.

Inventory, net (in thousands)


	September 30,		December 31,
	2024		2023
Raw materials	$	349	$	351
Work-in-process		375		67
Finished goods		137		96
Inventory, gross		861		514
Inventory reserve		(87)		(57)
Inventory, net	$	774	$	457

During the nine months ended September 30, 2024, $2 thousand of inventory was written off to the inventory reserve.

Prepaid expenses and other current assets (in thousands)


	September 30,		December 31,
	2024		2023
Prepaid expenses	$	299	$	689
Inventory related		334		333
Deferred offering costs		7		140
Total prepaid expenses and other current assets	$	640	$	1,162

Accrued and other current liabilities (in thousands)


	September 30,		December 31,
	2024		2023
Insurance payable	$	—	$	446
Employees benefits		586		509
Professional services		36		52
Franchise tax		30		168
Other		36		85
Total accrued and other current liabilities	$	688	$	1,260

Deferred revenue

Exclusive Distribution Agreement

Pursuant to an Exclusive Distribution Agreement with Health Tech Connex Inc. (“HTC”) (“Exclusivity Agreement”) entered into on March 3, 2023, subject to certain terms and conditions, the Company granted to HTC the exclusive right

to provide PoNS Therapy in the Fraser Valley and Vancouver metro regions of British Columbia. HTC will purchase the PoNS devices for use in these regions exclusively from the Company and on terms no less favorable than the then-current standard terms and conditions. This Exclusivity Agreement replaced the previous Clinical Research and Co-Promotion Agreement (“Co-Promotion Agreement”) between the parties entered into in October 2019 that included a similar exclusive right provision. The exclusive right under the Exclusivity Agreement was granted for a value of CAD$273 thousand, which is represented by the unamortized up-front payment under the former Co-Promotion Agreement. The initial term of the Exclusivity Agreement expires on December 31, 2027, and is renewable by HTC for one additional five-year term upon sixty days’ written notice to the Company.

Deferred revenue as of both September 30, 2024 and December 31, 2023 is comprised of the remaining unamortized amount under the Exclusivity Agreement. Revenue recognized is included in Other revenue in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.