REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES

3 Months Ended

Mar. 31, 2025

Revenue from Contract with Customer [Abstract]

REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES

NOTE 3 - REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES

Net Revenue

For the three months ended March 31, 2025 and 2024, the components of revenue from contracts with customers and the related timing of revenue recognition is set forth in the table below (in thousands):

	Three Months Ended March 31,
	2025			2024
Product revenue
Appliances		1,273			1,145
Guides		540			529
Total product revenue		1,813	(1)		1,674	(1)
Service revenue
VIP		223	(2)		907	(2)
Billing intelligence services		181			225
Sleep testing services		323			307
Myofunctional therapy services		148			184
Sponsorship/seminar/other		328			122
Total service revenue		1,203			1,745
Total revenue	$	3,016		$	3,419

(1)	Product revenue from the sale of appliances and guides is typically fixed at the inception of the contract and is recognized at the point in time when shipment of the related products occurs.
(2)	Service revenue from the sale of VIP enrollments, billing services and therapy is typically fixed at the inception of the contract and is recognized ratably over time as the services are performed and the performance obligations completed.

Changes in Contract Liabilities

The key components of changes in contract liabilities for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

	2025			2024
Beginning balance, January 1	$	993		$	2,427
New contracts, net of cancellations		23			1,466
Revenue recognized		(422	)		(962	)
Ending balance, March 31	$	594		$	2,931

The current portion of deferred revenue is approximately $0.6 million, which is expected to be recognized over the next 12 months from the date of the period presented. Additionally, revenue from breakage on contract liabilities was approximately $0.1 and $0.4 million for the three months ended March 31, 2025 and 2024 respectively.

Changes in Accounts Receivable

Our customers are billed based on fees agreed upon in each customer contract. Receivables from customers were $0.4 million at December 31, 2024 and $0.7 million at March 31, 2025. An allowance is maintained for accounts receivable which is generally based on a combination of factors, including the aging of the receivables, historical collection trends, and charge-offs. Adjustments to the allowance are recorded in bad debt expense under general and administrative expenses in the consolidated statement of operations. An allowance of $0.4 million existed as of March 31, 2025 and December 31, 2024.