NOTE 3 – REVENUE

Revenue comprises the following categories (in thousands):

SCHEDULE OF REVENUE 

Product revenue, net

The Company generates product revenue from sales of ZEVASKYN^® in the United States. The Company ships and sells ZEVASKYN^® directly to qualified treatment centers based on approved agreements. For these sales, the Company recognizes ZEVASKYN^® revenue equal to the allocated transaction consideration at the point in time that the completion of a final quality inspection of the product is completed at the qualified treatment centers.

Revenue from product sales is reduced at the time of recognition for payor rebates, co-payment assistance and prompt pay discounts, which are attributed to various commercial arrangements and government programs. Product revenue was reduced by $0.7 million of government rebates based on contracted rebate rates for the year ended December 31, 2025. There were no co-payment assistance or prompt pay discounts for the year ended December 31, 2025.

The Company’s contracts can include the right to receive an outcomes-based rebate and a subsequent treatment discount of ZEVASKYN^® under certain conditions. The Company has determined that the rebate and discount create a material right and allocates transaction consideration to ZEVASKYN^® and the material right on a relative standalone selling price basis. The standalone selling price for ZEVASKYN^® is the wholesale acquisition cost. The standalone selling price for the material right is determined by quantifying the discount a customer would receive upon exercise of the option adjusting for the likelihood the option will be exercised. Transaction consideration allocated to the material right is deferred and recognized when either (a) the subsequent purchase of ZEVASKYN^® occurs, or (b) the time period during which a subsequent purchase of ZEVASKYN^® could be made, expires. There was no deferral of revenue or contract assets and liabilities for the years ended December 31, 2025 or 2024.

License and other revenues

The Company enters into license agreements that are within the scope of ASC 606, under which it may exclusively license rights to research, develop, manufacture and commercialize its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. See Note 13 – License/Supplier Agreements for detailed information on the Company’s licenses agreements and revenues from these agreements.

Concentration of credit risk

Potential credit risk exposure for both ZEVASKYN^® and licensed revenue has been evaluated for the Company’s accounts receivable in accordance with ASC 326, Financial Instruments – Credit Losses. The loss percentage is calculated through the use of current and historical economic and financial information. As of December 31, 2025, there were no estimated losses applied to the accounts receivables balance.

The Company’s total percentage of revenue and accounts receivable balances were comprised of the following concentrations from its largest customers, based on whose revenue or accounts receivable concentration is greater than 10% of total revenue or total accounts receivable in the periods disclosed below.

SCHEDULE OF CONCENTRATION OF CREDIT RISK 

There was no revenue or accounts receivable as of December 31, 2024.