v3.26.1
REVENUE, CONTRACT ASSETS AND CONTRACT LIABILITIES
 6 Months Ended
Jun. 30, 2026
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 and six months ended June 30, 2026 and 2025, the components of revenue from contracts with customers and the related timing of revenue recognition is set forth in the table below (in thousands):

 

   2026   2025   2026   2025 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2026   2025   2026   2025 
                 
Product revenue                    
Appliances  $640   $1,028   $1,063   $2,400 
Tooth Positioners   715    857    1,732    1,298 
Total product revenue   1,355(1)   1,885(1)   2,795(1)   3,698(1)
                     
Service revenue                    
Sleep testing services  $2,392(3)  $844(3)  $4,687(3)  $1,167(3)
Treatment centers   767(2)   -(2)   1,660(2)   -(2)
VIP   12(2)   130(2)   49(2)   352(2)
Billing intelligence services   129(3)   190(3)   275(3)   372(3)
Myofunctional therapy services   337(2)   163(2)   462(2)   311(2)
Sponsorship/seminar/other   161(3)   608(3)   366(3)   935(3)
Total service revenue   3,798    1,935    7,499    3,137 
                     
Total revenue  $5,153   $3,820   $10,294   $6,835 

 

(1)  Product revenue from the sale of appliances and preformed appliances 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.

 

(3)  Sleep testing, treatment center, and other revenue is recognized at a point in time.

 

 

Changes in Contract Liabilities

 

The key components of changes in contract liabilities related to our legacy model for the six months ended June 30, 2026 and 2025 are as follows (in thousands):

   2026   2025 
         
Beginning balance, January 1  $479   $993 
New contracts, net of cancellations   615    212 
Revenue recognized   (511)   (720)
Ending balance, June 30  $583   $485 

 

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 and $0.1 million for the three months ended June 30, 2026 and 2025, respectively, and approximately $0.0 and $0.1 million for the six months ended June 30, 2026 and 2025, respectively.

 

Changes in Accounts Receivable

 

Our customers are billed based on fees agreed upon in each customer contract. Receivables from customers, which are stated at the net amount expected to be collected, were $1.4 million at June 30, 2026 and $1.6 million at December 31, 2025. Adjustments to the allowance are recorded in bad debt expense under general and administrative expenses in the consolidated statement of operations. An allowance of $1.2 and $0.9 million existed as of June 30, 2026 and December 31, 2025, respectively.