Note 3—Accounts Receivable, Net:

Accounts receivable, net consisted of the following (in thousands):

Trade accounts receivable consist entirely of amounts owed from the Company’s customers related to product sales. Royalty revenue receivable represents amounts owed related to royalty revenue recognized based on the Company’s sub-licensees’ sales in their respective territories in the periods ended  June 30, 2026 and  December 31, 2025.

For all accounts receivable, the Company recognizes credit losses based on lifetime expected losses to selling, general and administrative expense in the condensed consolidated statements of operations. In determining estimated credit losses, the Company evaluates its historical loss rates, current economic conditions, and reasonable and supportable forecasts of future economic conditions. The Company recorded a recovery to the provision for credit loss of $0.0 million and $0.3 million for the three months ended June 30, 2026 and 2025, respectively. The Company recorded a recovery to the provision of credit loss of $0.0 million and $0.1 million for six months ended June 30, 2026 and 2025, respectively.