3. Revenue

As described in Note 1, Organization and Description of Business, above, the Company's primary operations are inclusive of the research and development of several product candidates. The Company's ability to generate revenue will depend substantially on the successful development and eventual commercialization of product candidates. For the years ended December 31, 2025 and 2024, the Company has not recognized revenue from its primary operations and does not expect to do so for at least the next several years. The Company does generate revenue from license agreements and research and development agreements through certain subsidiaries, which is further explained below:

License Revenue

Otsuka License and Collaboration Agreement

In March 2021, Perception Neuroscience Holdings, Inc. (“Perception”), a controlled VIE of the Company, entered into a license and collaboration agreement (the “Otsuka Agreement”) with Otsuka under which Perception granted exclusive rights to Otsuka to develop and commercialize products containing arketamine, known as PCN-101 in Japan for the treatment of any depression, including treatment-resistant depression, or major depressive disorder or any of their related symptoms or conditions at its own cost and expense. Perception retained all rights to PCN-101 outside of Japan.

In January 2025, Otsuka provided a notice of termination pursuant to the Otsuka Agreement, effective as of April 2025. As of the termination date, the Company is no longer eligible to receive any milestone payments or royalties pursuant to the Otsuka Agreement. For the years ended December 31, 2025 and 2024 there were no milestones achieved under the Otsuka Agreement. For the year ended December 31, 2025 and 2024, the Company did not recognize any license revenue and recognized $0.3 million or license revenue, respectively, pursuant to the Otsuka Agreement.

Rizafilm LLC License and Supply Agreement

In January 2025, the Company, through its wholly owned subsidiary Nualtis, entered into an Amended & Restated Asset Purchase Agreement ("APA") and an Amended & Restated Supply Agreement ("Supply Agreement") with Rizafilm LLC ("Rizafilm"). Under the APA, Nualtis sold licensing and intellectual property rights of Nualtis's oral thin film technology in exchange for an upfront payment of $0.2 million and an additional $0.5 million upon completion of certain manufacturing milestones. Under the Supply Agreement, subject to approval by the FDA, Nualtis will serve as the sole manufacturer of Rizafilm's products over a five year term with an automatic renewal option for an additional five years unless either party provides sufficient written notice. Additionally, the Supply Agreement requires Rizafilm to adhere to certain firm commitments.

During the year ended December 31, 2025, the Company recognized $0.2 million of license revenue pursuant to the Rizafilm APA.

Research and Development Services Revenue

In addition to the Company's license revenue, the Company recognizes revenue through various research and development agreements through Nualtis. In these agreements, Nualtis is responsible for performing research and development services for customers interested in leveraging Nualtis's novel oral thin film technology for drug delivery. Many of these agreements provide Nualtis either the option or the right to serve as the sole manufacturer of these drugs upon regulatory approval. For the year ended December 31, 2025 the Company has recognized $4.0 million in revenue from research and development services. For the year ended December 31, 2024, the Company did not recognize revenue from research and development services.

For the years ended December 31, 2025 and 2024, the Company had contract liabilities of $1.5 million and $0.7 million, respectively, which is recorded within Deferred revenue on the Company's consolidated balance sheets, and consists of the upfront payments received as part of the various research and development agreements discussed above. As of December 31, 2025, approximately $1.5 million of the contract liability balance is expected to be recognized as revenue from the remaining performance obligations over the next 12 months as performance obligations are satisfied. The Company will re-evaluate the transaction price in each reporting period and as certain events are resolved or other changes in circumstances occur.

For the year ended December 31, 2025, the Company's license revenue and research and development revenue has been recognized entirely in Canada. Nualtis recognized a significant amount of research and development service revenue from three customers that individually represent more than 10% of total research and development service revenue. Total research and development service revenue from the three vendors are $1.6 million, $1.5 million, and $0.7 million, respectively.