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SUPPLEMENTAL BALANCE SHEET DISCLOSURES

6 Months Ended

Jun. 30, 2025

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

Accounts receivable from product sales are net of allowance for credit losses. The allowance for credit losses was $0 as of both June 30, 2025 and December 31, 2024.

Inventory, net (in thousands)


	June 30,		December 31,
	2025		2024
Raw materials	$	575	$	576
Work-in-process		379		402
Finished goods		279		145
Inventory, gross		1,233		1,123
Inventory reserve		(92)		(87)
Inventory, net	$	1,141	$	1,036

During the six months ended June 30, 2025, no inventory was written off to the inventory reserve.

Prepaid expenses and other current assets (in thousands)


	June 30,		December 31,
	2025		2024
Prepaid expenses	$	480	$	603
Inventory related		10		55
Deferred offering costs		—		7
Total prepaid expenses and other current assets	$	490	$	665

Accrued and other current liabilities (in thousands)


	June 30,		December 31,
	2025		2024
Insurance payable	$	91	$	356
Employees benefits		328		759
Professional services		18		24
Franchise tax		20		—
Other		15		100
Total accrued and other current liabilities	$	472	$	1,239

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 June 30, 2025 and December 31, 2024 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.

On July 13, 2025, the Company sent HTC a termination letter, terminating the Exclusivity Agreement effective immediately, due to material breach by HTC in fulfilling its obligations under the Exclusivity Agreement.