```markdown [PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [ITEM 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents VivoSim Labs, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, business operations, equity changes, and commitments for the period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------- | :------------ | :------------- | | Cash and cash equivalents | $9,055 | $11,312 | | Total current assets | $9,679 | $12,131 | | Total assets | $11,978 | $14,650 | | Total current liabilities | $2,142 | $3,737 | | Total liabilities | $2,440 | $4,158 | | Total stockholders' equity | $9,538 | $10,492 | [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Royalty revenue | $37 | $25 | | Product revenue | $0 | $14 | | Total Revenues | $37 | $39 | | Cost of revenues | $0 | $2 | | Research and development expenses | $1,001 | $1,402 | | Selling, general and administrative expenses | $1,951 | $2,021 | | Total costs and expenses | $2,952 | $3,425 | | Loss from Operations | $(2,915) | $(3,386) | | Net Loss | $(2,843) | $(3,344) | | Net loss per common share—basic and diluted | $(1.14) | $(2.74) | | Weighted average shares used in computing net loss per common share—basic and diluted | 2,503,697 | 1,221,974 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - For the three months ended June 30, 2025, the company issued **702 thousand** shares of common stock from a public offering, resulting in **$1.811 million** in net proceeds[16](index=16&type=chunk) - Stock-based compensation expense was **$78 thousand** for the three months ended June 30, 2025, compared to **$156 thousand** for the same period in 2024[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(3,940) | $(2,983) | | Net cash provided by investing activities | $0 | $20 | | Net cash provided by financing activities | $1,683 | $6,249 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(2,257) | $3,286 | | Cash, cash equivalents, and restricted cash at end of period | $9,198 | $6,330 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements, covering the company's business, accounting policies, equity, agreements, commitments, and related party transactions [Note 1. Description of Business](index=7&type=section&id=Note%201.%20Description%20of%20Business) VivoSim Labs, Inc. (formerly Organovo Holdings, Inc.) is a pharmaceutical and biotechnology services company focused on providing drug testing in 3D human tissue models of liver and intestine, leveraging new approach methodologies (NAM) models. The company sold its FXR program in March 2025 for $10.0 million and is advancing its Preclinical IBD Program with an IND application goal by December 2026 - VivoSim Labs, Inc. (formerly Organovo Holdings, Inc.) changed its name on April 24, 2025, to reflect its new business model focusing on 3D human tissue models for drug testing[25](index=25&type=chunk) - The company sold its FXR program in March 2025 for **$10.0 million**, with potential future milestones up to **$50.0 million**[24](index=24&type=chunk) - The company's liver toxicology platform demonstrated a best-in-class predictive power of **87.5% sensitivity** and **100% specificity** for challenging liver toxicity cases[27](index=27&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=9&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, prepared in accordance with GAAP for interim information. It also addresses the company's liquidity and going concern status, use of estimates, fair value measurement, insurance premium financing liability, net loss per share calculation, and revenue recognition policies [Basis of Presentation and Principles of Consolidation](index=9&type=section&id=Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) - Financial statements are prepared in accordance with U.S. GAAP for interim financial information and include VivoSim and its wholly-owned subsidiaries[31](index=31&type=chunk)[32](index=32&type=chunk) [Liquidity and Going Concern](index=9&type=section&id=Liquidity%20and%20Going%20Concern) Key Financial Metrics | Metric (in millions) | June 30, 2025 | | :------------------- | :------------ | | Cash and cash equivalents | $9.1 | | Restricted cash | $0.1 | | Accumulated deficit | $(345.0) | | Negative cash flows from operations (3 months) | $(3.9) | | Working capital | $7.6 | - The company needs substantial additional funding to support future operating activities and has concluded that there is substantial doubt about its ability to continue as a going concern for at least one year[36](index=36&type=chunk) [Use of Estimates](index=11&type=section&id=Use%20of%20Estimates) - Financial statements rely on management estimates and assumptions, which are subject to ongoing review and may differ from actual results[37](index=37&type=chunk) [Fair value measurement](index=11&type=section&id=Fair%20value%20measurement) - Fair value measurements use a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[38](index=38&type=chunk)[44](index=44&type=chunk) [Insurance Premium Financing Liability](index=11&type=section&id=Insurance%20Premium%20Financing%20Liability) | Metric (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------- | :------------ | :------------- | | Insurance premium financing liability | $0 | $128 | [Net Loss Per Share](index=11&type=section&id=Net%20Loss%20Per%20Share) - Approximately **0.7 million** and **0.9 million** common stock equivalents were excluded from diluted net loss per share calculations for the three months ended June 30, 2025 and 2024, respectively, due to their anti-dilutive effect[41](index=41&type=chunk) [Revenue recognition](index=11&type=section&id=Revenue%20recognition) - Royalty revenue for the three months ended June 30, 2025, and 2024, was **$37,000** and **$25,000**, respectively, derived from sales-based royalties from a license agreement with BICO Group AB[42](index=42&type=chunk)[43](index=43&type=chunk)[76](index=76&type=chunk) [Product revenue, net](index=13&type=section&id=Product%20revenue%2C%20net) - The company's former Mosaic division, which generated product revenue, ceased commercial operations during the third quarter of fiscal 2025[45](index=45&type=chunk) [Recent Accounting Pronouncements](index=13&type=section&id=Recent%20Accounting%20Pronouncements) - The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) on its financial statements[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 3. Accrued Expenses](index=13&type=section&id=Note%203.%20Accrued%20Expenses) Accrued expenses decreased from $1.226 million at March 31, 2025, to $0.727 million at June 30, 2025, primarily due to a reduction in accrued payroll and other employee benefits | Accrued Expenses (in thousands) | June 30, 2025 | March 31, 2025 | | :------------------------------ | :------------ | :------------- | | Accrued payroll and other employee benefits | $152 | $652 | | Accrued legal and professional fees | $565 | $515 | | Other accrued expenses | $10 | $59 | | **Total** | **$727** | **$1,226** | [Note 4. Stockholders' Equity](index=13&type=section&id=Note%204.%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including common stock issuances from ATM offerings and a public offering, stock-based compensation, and RSU/stock option activity. It also outlines shares reserved for future issuance under various equity plans and warrants [Preferred Stock](index=13&type=section&id=Preferred%20Stock) - **25,000,000** shares of preferred stock are authorized, but none are currently outstanding[50](index=50&type=chunk) [Common Stock](index=13&type=section&id=Common%20Stock) - During Q2 2025, **701,729** common shares were issued via ATM offerings, generating **$1.8 million** in net proceeds[56](index=56&type=chunk) - As of June 30, 2025, **$3.1 million** is available for future ATM offerings under the 2024 ATM Prospectus[56](index=56&type=chunk) [May 2024 Best Efforts Public Offering](index=15&type=section&id=May%202024%20Best%20Efforts%20Public%20Offering) - The May 2024 public offering generated approximately **$4.5 million** in net proceeds[60](index=60&type=chunk) - All **416,666** Pre-Funded Warrants issued in the May 2024 offering were exercised by March 31, 2025[58](index=58&type=chunk) [Restricted Stock Units](index=17&type=section&id=Restricted%20Stock%20Units) | RSU Activity | Number of Shares | Weighted Average Price | | :----------- | :--------------- | :--------------------- | | Unvested at March 31, 2025 | 8,165 | $6.57 | | Unvested at June 30, 2025 | 8,165 | $6.57 | [Stock Options](index=17&type=section&id=Stock%20Options) | Stock Option Activity | Options Outstanding | Weighted Average Exercise Price | | :-------------------- | :------------------ | :------------------------------ | | Outstanding at March 31, 2025 | 141,397 | $22.66 | | Options granted | 7,974 | $1.93 | | Options cancelled / forfeited | (1,923) | $15.76 | | Options expired | (3,904) | $38.68 | | Outstanding at June 30, 2025 | 143,544 | $21.16 | | Vested and Exercisable at June 30, 2025 | 38,227 | $58.02 | [Warrants](index=17&type=section&id=Warrants) | Common Warrant Activity | Number of Warrants | Exercise Price | | :---------------------- | :----------------- | :------------- | | Outstanding at March 31, 2025 | 539,060 | $9.60 | | Outstanding at June 30, 2025 | 539,060 | $9.60 | [Employee Stock Purchase Plan](index=19&type=section&id=Employee%20Stock%20Purchase%20Plan) - No shares were issued under the ESPP during the three months ended June 30, 2025[68](index=68&type=chunk) - As of June 30, 2025, **3,708** shares remain available for purchase under the ESPP[68](index=68&type=chunk) [Common Stock Reserved for Future Issuance](index=19&type=section&id=Common%20Stock%20Reserved%20for%20Future%20Issuance) | Category | Shares Reserved at June 30, 2025 | | :---------------------------------------------------------------- | :------------------------------- | | Common stock issuable pursuant to options outstanding and reserved under the 2012 Plan | 27,804 | | Common stock issuable pursuant to options outstanding and reserved under the A&R 2022 Plan | 111,574 | | Common stock reserved under the A&R 2022 Plan | 196,627 | | Common stock reserved under the ESPP | 3,708 | | Common stock reserved under the 2021 Inducement Equity Plan | 83 | | Common stock issuable pursuant to restricted stock units outstanding under the A&R 2022 Plan | 8,165 | | Common stock issuable pursuant to options outstanding and reserved under the Inducement Plan | 4,166 | | Common stock issuable pursuant to outstanding common warrants | 539,060 | | **Total at June 30, 2025** | **891,187** | [Stock-based Compensation Expense and Valuation Information](index=19&type=section&id=Stock-based%20Compensation%20Expense%20and%20Valuation%20Information) Key Financial Metrics | Stock-based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $13 | $26 | | General and administrative | $65 | $130 | | **Total** | **$78** | **$156** | - The total unrecognized compensation cost for unvested stock options was approximately **$0.5 million**, expected to vest over **2.41 years**[71](index=71&type=chunk) - The weighted average grant date fair value for stock options decreased from **$9.64** in Q2 2024 to **$1.68** in Q2 2025[73](index=73&type=chunk) [Note 5. Collaborative Research, Development, and License Agreements](index=21&type=section&id=Note%205.%20Collaborative%20Research%2C%20Development%2C%20and%20License%20Agreements) This note details the company's license agreements, including one with BICO Group AB for bioprinting patents, generating royalty revenue, and an amended agreement with the University of Missouri for in-licensed technology [BICO Group AB](index=21&type=section&id=BICO%20Group%20AB) - Royalty revenue from BICO Group AB increased by **48%** to **$37,000** for the three months ended June 30, 2025, from **$25,000** in the prior year[76](index=76&type=chunk) [University of Missouri](index=23&type=section&id=University%20of%20Missouri) - The license agreement with the University of Missouri was amended in December 2022, making the intellectual property fully paid up for a single **$50,000** payment, removing future royalty obligations[79](index=79&type=chunk) [Note 6. Commitments and Contingencies](index=23&type=section&id=Note%206.%20Commitments%20and%20Contingencies) The company is subject to various claims and legal actions, including a complaint filed by H.C. Wainwright & Co., LLC alleging breach of a tail financing provision. An accrual of $0.6 million has been recognized for loss contingencies related to this matter [Legal Matters](index=23&type=section&id=Legal%20Matters) - H.C. Wainwright & Co., LLC filed a complaint against the company in August 2024 for alleged breach of a tail financing provision[81](index=81&type=chunk) - The company recognized a **$0.6 million** accrual for loss contingencies related to the H.C. Wainwright complaint, comprising **$0.4 million** in accrued expenses and **$0.2 million** as a liability to be settled in equity[83](index=83&type=chunk) [Note 7. Leases](index=24&type=section&id=Note%207.%20Leases) The company has an operating lease for lab and office space in San Diego, which commenced in December 2021. As of June 30, 2025, operating lease right-of-use assets were $755,000 and total lease liabilities were $822,000 [Operating Leases](index=24&type=section&id=Operating%20Leases) Key Financial Metrics | Lease Metric (in thousands) | June 30, 2025 | | :-------------------------- | :------------ | | Operating lease right-of-use assets | $755 | | Total lease liabilities | $822 | | Weighted average remaining lease term | 1.58 years | | Weighted average discount rate | 6% | - Cash outflows for operating leases were **$134,000** for the three months ended June 30, 2025, compared to **$130,000** for the same period in 2024[88](index=88&type=chunk) [Note 8. Concentrations](index=26&type=section&id=Note%208.%20Concentrations) The company's financial instruments, primarily cash equivalents and short-term investments, are subject to credit risk, though no material losses have been experienced. Receivables are concentrated among a small number of customers, but management does not believe significant credit risk exists [Credit risk and significant customers](index=26&type=section&id=Credit%20risk%20and%20significant%20customers) - The company's credit risk is concentrated in cash equivalents and short-term investments, but no material losses have occurred[90](index=90&type=chunk) - Receivables are from a small number of customers, but management believes no significant credit risk exists as of June 30, 2025[91](index=91&type=chunk) [Note 9. Related Parties](index=26&type=section&id=Note%209.%20Related%20Parties) The company has ongoing agreements with Viscient Biosciences, an entity where VivoSim's Executive Chairman, Keith Murphy, serves as CEO and President. These agreements involve service provision and equipment sharing, with R&D consulting expenses incurred from Viscient [Viscient Biosciences](index=26&type=section&id=Viscient%20Biosciences) - VivoSim's Executive Chairman, Keith Murphy, also serves as CEO and President of Viscient Biosciences[93](index=93&type=chunk) - VivoSim incurred **$72,000** in R&D consulting expenses from Viscient for the three months ended June 30, 2025, with no such expenses in the prior year[94](index=94&type=chunk) [Note 10. Business Segment Information](index=26&type=section&id=Note%2010.%20Business%20Segment%20Information) In fiscal 2026, the company identified one operating segment: Research & Development (R&D). This segment focuses on providing drug testing services using 3D human tissue models of liver and intestine, aiming to reduce drug development risks and costs [Research & Development](index=26&type=section&id=Research%20%26%20Development) - The company operates a single R&D segment focused on 3D human tissue models for liver and intestinal toxicology insights[96](index=96&type=chunk) Key Financial Metrics | Disaggregated Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Royalty revenue | $37 | $25 | | Product revenue | $0 | $14 | | Research and development expenses (a)(b) | $932 | $1,318 | | Selling, general, and administrative expenses (a)(b) | $1,881 | $1,879 | | Non-cash stock-based compensation | $78 | $156 | | Depreciation and amortization | $61 | $70 | | Consolidated operating loss | $(2,915) | $(3,386) | [Note 11. Subsequent Events](index=28&type=section&id=Note%2011.%20Subsequent%20Events) Subsequent events include a letter agreement with Aegis Capital Corp. for financial advisory services and an additional Statement of Work with Viscient Biosciences for R&D services [Letter Agreement with Aegis](index=28&type=section&id=Letter%20Agreement%20with%20Aegis) - On July 25, 2025, the company engaged Aegis Capital Corp. as a non-exclusive financial advisor for **12 months**[99](index=99&type=chunk) - Adam Stern, a member of the company's board of directors, is the Head of Private Equity Banking at Aegis[100](index=100&type=chunk) [Statement of Work to Intercompany Agreement with Viscient](index=28&type=section&id=Statement%20of%20Work%20to%20Intercompany%20Agreement%20with%20Viscient) - Effective July 4, 2025, Viscient Biosciences agreed to provide additional R&D services to the company under an amended Intercompany Agreement[101](index=101&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for the three months ended June 30, 2025, compared to 2024, highlighting the business model transition, financial performance, liquidity challenges, and future funding requirements [Basis of Presentation](index=29&type=section&id=Basis%20of%20Presentation) - The financial statements are unaudited and prepared according to SEC instructions for Form 10-Q, with interim results not necessarily indicative of full-year performance[104](index=104&type=chunk) [Overview](index=29&type=section&id=Overview) - The company's core business is providing drug testing services using 3D human tissue models for liver and intestinal toxicology insights[105](index=105&type=chunk) - The FXR program was sold in March 2025 for **$10.0 million**, with potential milestones up to **$50.0 million**[107](index=107&type=chunk) - The Preclinical IBD Program is advancing, with a goal for an IND Application with the FDA by December 2026[109](index=109&type=chunk) [Critical Accounting Policies, Estimates, and Judgments](index=31&type=section&id=Critical%20Accounting%20Policies%2C%20Estimates%2C%20and%20Judgments) - No significant changes to critical accounting policies have occurred since March 31, 2025[114](index=114&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three months ended June 30, 2025, and 2024, across various revenue and expense categories [Revenues](index=32&type=section&id=Revenues) | Revenue (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Royalty revenue | $37 | $25 | $12 | 48% | | Product revenue | $0 | $14 | $(14) | (100%) | | **Total Revenues** | **$37** | **$39** | **$(2)** | **(5%)** | [Cost of Revenues](index=32&type=section&id=Cost%20of%20Revenues) | Cost of Revenues (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------ | :------------------------------- | :------------------------------- | :--------- | :--------- | | Cost of revenues | $0 | $2 | $(2) | (100%) | [Research and Development Expenses](index=32&type=section&id=Research%20and%20Development%20Expenses) Key Financial Metrics | R&D Expenses (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $932 | $1,318 | $(386) | (29%) | | Non-cash stock-based compensation | $13 | $26 | $(13) | (50%) | | Depreciation and amortization | $56 | $58 | $(2) | (3%) | | **Total research and development expenses** | **$1,001** | **$1,402** | **$(401)** | **(29%)** | - Average full-time R&D staff decreased from **fifteen** to **ten** employees year-over-year[119](index=119&type=chunk) [Selling, General and Administrative Expenses](index=32&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Key Financial Metrics | SG&A Expenses (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Selling, general and administrative | $1,881 | $1,879 | $2 | 0% | | Non-cash stock-based compensation | $65 | $130 | $(65) | (50%) | | Depreciation and amortization | $5 | $12 | $(7) | (58%) | | **Total selling, general and administrative expenses** | **$1,951** | **$2,021** | **$(70)** | **(3%)** | - Average full-time SG&A staff decreased from **five** to **three** employees year-over-year[121](index=121&type=chunk) [Other Income](index=33&type=section&id=Other%20Income) | Other Income (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Other income | $72 | $44 | [Financial Condition, Liquidity and Capital Resources](index=33&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's financial condition as of June 30, 2025, shows $9.1 million in cash and cash equivalents, an accumulated deficit of $345.0 million, and negative operating cash flow of $3.9 million for the quarter. These factors raise substantial doubt about its ability to continue as a going concern, necessitating additional funding Key Financial Metrics | Metric (in millions) | June 30, 2025 | March 31, 2025 | | :------------------- | :------------ | :------------- | | Cash and cash equivalents | $9.1 | $11.3 | | Restricted cash | $0.1 | $0.1 | | Accumulated deficit | $(345.0) | $(342.2) | | Working capital | $7.6 | $8.4 | - The company had negative cash flow from operations of approximately **$3.9 million** for the three months ended June 30, 2025[124](index=124&type=chunk) - Management has concluded that substantial doubt exists about the company's ability to continue as a going concern for at least one year, requiring additional funding[131](index=131&type=chunk) [Operating activities](index=33&type=section&id=Operating%20activities) | Cash Flow (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(3,940) | $(2,983) | [Investing activities](index=33&type=section&id=Investing%20activities) | Cash Flow (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | | Net cash provided by investing activities | $0 | $20 | [Financing activities](index=33&type=section&id=Financing%20activities) | Cash Flow (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | | Net cash provided by financing activities | $1,683 | $6,249 | - Financing activities in Q2 2025 included **$1.8 million** from ATM share offerings and **$0.1 million** repayment of insurance premium financing liability[129](index=129&type=chunk) [Operations funding requirements](index=35&type=section&id=Operations%20funding%20requirements) - Expected total operating expenses for fiscal year 2026 are between **$10 million** and **$11 million**[131](index=131&type=chunk) - The company's public float is less than **$75.0 million**, limiting primary public offerings to one-third of its public float[136](index=136&type=chunk) - Failure to obtain adequate financing will have a material adverse effect on the company's business, operating results, and financial condition[137](index=137&type=chunk) [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company has no off-balance sheet arrangements that are expected to have a material effect on its financial condition[138](index=138&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, VivoSim Labs, Inc. is not required to provide quantitative and qualitative disclosures about market risk under Item 305(e) of Regulation S-K - The company is a smaller reporting company and is not required to provide market risk disclosures[139](index=139&type=chunk) [ITEM 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of its principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were designed and operating effectively. No material changes in internal control over financial reporting occurred during the quarter [Disclosure Controls and Procedures](index=37&type=section&id=Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were evaluated and concluded to be designed and operating effectively as of June 30, 2025[141](index=141&type=chunk) [Changes in Internal Control over Financial Reporting](index=37&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[142](index=142&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=37&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) - Control systems have inherent limitations, including resource constraints, human error, and potential for circumvention, providing only reasonable assurance[143](index=143&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 6, "Commitments and Contingencies," for a discussion of its legal proceedings and contingencies, including a complaint filed by H.C. Wainwright & Co., LLC - Legal proceedings and contingencies are discussed in Note 6 of the financial statements[145](index=145&type=chunk) [ITEM 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section outlines substantial risks associated with investing in the company's common stock, including significant operating losses, unproven business strategy, funding requirements, intense competition, and regulatory challenges [Risk Factor Summary](index=38&type=section&id=Risk%20Factor%20Summary) - Key risks include substantial operating losses, unproven platform technology, need for reliable human cell supply, and significant additional funding requirements[148](index=148&type=chunk)[149](index=149&type=chunk) - The company's ability to continue as a going concern is in substantial doubt, which may hinder future financing[149](index=149&type=chunk) [Risks Related to our Business](index=39&type=section&id=Risks%20Related%20to%20our%20Business) - The company's business strategy using 3D human tissue models for drug testing is new and unproven, with no guarantee of profitability[150](index=150&type=chunk) - The company will incur substantial additional operating losses as services and R&D activities proceed, with profitability being uncertain[151](index=151&type=chunk) - The company requires a constant, steady, reliable supply of human cells for its services and R&D, and failure to secure this could harm operations[160](index=160&type=chunk) [Risks Related to Government Regulation](index=48&type=section&id=Risks%20Related%20to%20Government%20Regulation) - The company's past use of hazardous chemicals and biological materials poses risks of claims and substantial costs for improper handling or disposal[184](index=184&type=chunk)[185](index=185&type=chunk) - Failure to obtain and sustain adequate reimbursement for potential products from third-party payors would materially adversely affect future sales and profitability[186](index=186&type=chunk)[191](index=191&type=chunk) - Current and future legislation, such as the PPACA and Inflation Reduction Act of 2022, may increase commercialization costs, affect drug prices, and reduce demand for drug candidates[192](index=192&type=chunk)[194](index=194&type=chunk)[197](index=197&type=chunk) - Changes in government funding for agencies like the FDA and SEC could hinder their ability to review and approve products, causing delays and negatively impacting the business[198](index=198&type=chunk)[199](index=199&type=chunk)[202](index=202&type=chunk) [Risks Related to Our Capital Requirements, Finances and Operations](index=54&type=section&id=Risks%20Related%20to%20Our%20Capital%20Requirements%2C%20Finances%20and%20Operations) - Management and auditors have expressed substantial doubt about the company's ability to continue as a going concern without additional capital[205](index=205&type=chunk)[206](index=206&type=chunk) - The company has a history of operating losses, with an accumulated deficit of **$345.0 million** as of June 30, 2025, and expects to incur significant additional losses[209](index=209&type=chunk) - Inability to raise sufficient additional capital on acceptable terms could force the company to delay, limit, or eliminate business opportunities and adversely affect its financial condition[208](index=208&type=chunk) [Risks Related to Our Intellectual Property](index=68&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - The company's success depends on obtaining and maintaining adequate patent protection for its technologies, intellectual property, and service offerings, which is uncertain[251](index=251&type=chunk)[252](index=252&type=chunk) - Patents covering the company's products could be found invalid or unenforceable if challenged in court or before administrative bodies, potentially reducing scope or invalidating rights[259](index=259&type=chunk) - The company depends on license agreements with the University of Missouri, and failure to comply with or maintain these obligations could materially harm its business[274](index=274&type=chunk) - Changes in U.S. patent law (e.g., Leahy-Smith Act, Supreme Court rulings) or international patent law (e.g., European unitary patent system) could diminish the value of patents and impair protection[270](index=270&type=chunk)[272](index=272&type=chunk) [Risks Related to Litigation](index=76&type=section&id=Risks%20Related%20to%20Litigation) - The company is involved in various claims and litigation, including a complaint from H.C. Wainwright & Co., LLC, which can be costly and divert management attention[282](index=282&type=chunk)[283](index=283&type=chunk) - Litigation outcomes are unpredictable, and unfavorable resolutions could result in losses exceeding recorded amounts, materially affecting financial statements[284](index=284&type=chunk) [General Risk Factors](index=76&type=section&id=General%20Risk%20Factors) - Compliance with federal securities laws and Sarbanes-Oxley Act reporting requirements is expensive[285](index=285&type=chunk) - Failure to comply with Section 404 of the Sarbanes-Oxley Act or discovery of material weaknesses could lead to sanctions, declining stock price, and increased costs[286](index=286&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds occurred during the period[287](index=287&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=76&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities occurred during the period[288](index=288&type=chunk) [ITEM 4. Mine Safety Disclosure](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - Mine Safety Disclosure is not applicable to the company[289](index=289&type=chunk) [ITEM 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[290](index=290&type=chunk) [ITEM 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including various agreements, certificates of incorporation, common warrants, and certifications required by the Sarbanes-Oxley Act - The exhibits include the Asset Purchase Agreement, Certificate of Incorporation amendments, Common Warrant form, and Section 302 and 906 certifications[292](index=292&type=chunk) [SIGNATURES](index=80&type=section&id=SIGNATURES) The report is duly signed on behalf of VivoSim Labs, Inc. by Keith Murphy, Executive Chairman (Principal Executive Officer), and Norman Staskey, Chief Financial Officer (Principal Financial Officer), on August 12, 2025 - The report was signed by Keith Murphy, Executive Chairman, and Norman Staskey, Chief Financial Officer, on August 12, 2025[297](index=297&type=chunk) ```

Core Insights - NIO Inc.'s sub-brand ONVO is launching the L90 flagship electric SUV, with test drives starting in China and deliveries expected to begin on August 1, 2025 [1][2][10] Product Launch and Features - The L90 will officially launch on July 31, 2025, with pre-sales starting on July 10, 2025 [2] - The starting price for the L90 is RMB 279,900 with an 85-kWh battery, which can be reduced to RMB 193,900 under the Battery-as-a-Service rental option [3] - The L90 includes high-end features such as 900V fast charging, an AR head-up display, adjustable air suspension, a built-in smart refrigerator, and Level 2+ driver assistance systems powered by Nvidia's Orin-X chip [4][10] Competitive Landscape - Li Auto Inc. is set to unveil its electric SUV, the Li i8, on July 29, 2025, with pre-sales starting on July 17, 2025, and a price range of RMB 350,000 to RMB 400,000 [6] - XPeng Inc. launched the G7 at a starting price of RMB 195,800, which is lower than its initial pre-sale price of RMB 235,800 [7] Financial Performance - NIO has outperformed the Zacks Automotive-Domestic industry year-to-date, with shares gaining 14.9% compared to the industry's decline of 7.2% [8] - NIO's price/sales ratio indicates it is trading at a forward sales multiple of 0.66, which is higher than the industry's 0.45, suggesting potential overvaluation [11] Earnings Estimates - The Zacks Consensus Estimate for 2025 EPS has increased by 16 cents in the past 60 days, while the estimate for 2026 EPS has decreased by one cent in the past 30 days [12]

[Important Information Regarding Forward-Looking Statements](index=3&type=section&id=Important%20Information%20Regarding%20Forward-Looking%20Statements) This section highlights that the Annual Report contains forward-looking statements subject to risks and uncertainties detailed in Item 1A - The Annual Report contains forward-looking statements, identified by terms like "believe," "expect," and "anticipate," which are subject to risks and uncertainties detailed in Item 1A. "Risk Factors."[8](index=8&type=chunk) - All information in the report reflects the **1-for-12 reverse stock split** of common stock, effective March 21, 2025.[9](index=9&type=chunk) [PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) VivoSim Labs, Inc. transitioned from a clinical-stage biotechnology company to a pharmaceutical and biotechnology services company, specializing in drug testing using proprietary 3D human tissue models - VivoSim Labs, Inc. (formerly Organovo Holdings, Inc.) transitioned its business model in March 2025 from developing FXR314 for IBD to providing testing services using **3D human tissue models**.[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk) - The company now focuses on liver and intestinal toxicology insights using New Approach Methodologies (NAM) models, anticipating accelerated adoption due to FDA's refined animal testing requirements.[12](index=12&type=chunk)[16](index=16&type=chunk) - The FXR program was sold in March 2025 for **$10.0 million upfront** ($9.0 million at closing, $1.0 million in escrow), with potential future milestones up to **$50.0 million**.[14](index=14&type=chunk) - VivoSim's liver toxicology platform demonstrated best-in-class predictive power with **87.5% sensitivity** for known liver-toxic drugs and **100% specificity** for non-toxic compounds.[16](index=16&type=chunk) [Overview](index=4&type=section&id=Overview) This section provides a general description of the company's business and strategic direction [Our Platform Technology](index=4&type=section&id=Our%20Platform%20Technology) This section describes the company's proprietary bioprinting technology and 3D human tissue models used for drug testing services [Intellectual Property](index=5&type=section&id=Intellectual%20Property) This section details the company's intellectual property portfolio, including in-licensed and company-owned patents covering bioprinting technology and engineered tissue products [In-Licensed Intellectual Property](index=5&type=section&id=In-Licensed%20Intellectual%20Property) This section describes the exclusive licenses obtained from universities for foundational 3D bioprinting technology and cellular aggregates - The company obtained worldwide exclusive licenses from the University of Missouri-Columbia (MU) and the Medical University of South Carolina in 2009 and 2010, covering foundational **3D bioprinting technology** and cellular aggregates.[24](index=24&type=chunk) - These licenses provide intellectual property rights for creating engineered tissues and utilizing the NovoGen Bioprinter®, with ongoing royalty payments based on net sales.[24](index=24&type=chunk)[25](index=25&type=chunk) [Company Owned Intellectual Property](index=6&type=section&id=Company%20Owned%20Intellectual%20Property) This section outlines VivoSim's owned and exclusively licensed patents protecting its bioprinting platform and engineered tissue products - VivoSim owns or exclusively licenses **34 issued U.S. patents** and over **50 international patents**, plus 9 pending U.S. and over 5 pending international applications, covering bioprinting technology and engineered tissue products.[23](index=23&type=chunk) - The company's bioprinting platform is protected by **11 issued U.S. patents** and **15 issued foreign patents**, with remaining terms ranging from over 6 to over 9 years.[27](index=27&type=chunk) - NAMkind™ Human Liver Tissue is protected by **4 U.S. patents** and several international patents, with remaining terms from over 8 to over 10 years.[28](index=28&type=chunk) - Past patent disputes with Cellink AB (BICO Group AB) regarding bioprinter technology were settled in February 2022, resulting in a non-exclusive license agreement.[30](index=30&type=chunk) [Employees and Human Capital](index=6&type=section&id=Employees%20and%20Human%20Capital) This section details the company's employee count and objectives for human capital management, including recruitment and retention strategies - As of June 1, 2025, VivoSim Labs had **13 employees**, 5 of whom are full-time, and also retains former employees and expert consultants.[32](index=32&type=chunk) - Human capital objectives include identifying, recruiting, retaining, incentivizing, and integrating employees, with equity incentive plans used for motivation.[33](index=33&type=chunk) [Corporate Information](index=7&type=section&id=Corporate%20Information) This section provides details on the company's name change, stock trading symbol, and principal executive offices - The company changed its name to VivoSim Labs, Inc. on April 24, 2025, and its common stock trades on Nasdaq Capital Market under the symbol "VIVS."[34](index=34&type=chunk) - Principal executive offices are located at 11555 Sorrento Valley Rd, Suite 100, San Diego CA 92121.[34](index=34&type=chunk) [Available Information](index=7&type=section&id=Available%20Information) This section informs about the company's investor relations website where SEC filings will be provided free of charge - The company's investor relations website (https://www.vivosim.ai) is under development and will provide SEC filings free of charge.[35](index=35&type=chunk) [Item 1A. Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) This section details significant investment risks, including substantial operating losses, an unproven business strategy, funding requirements, and regulatory challenges - The company expects substantial additional operating losses and its business strategy of using **3D human tissue models** for drug discovery is new and unproven.[38](index=38&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) - VivoSim will require substantial additional funding, which could dilute existing stockholders or restrict operations, and its independent auditor has expressed substantial doubt about its ability to continue as a going concern.[38](index=38&type=chunk)[50](index=50&type=chunk)[95](index=95&type=chunk) - The company faces intense competition, relies on a constant supply of human cells, and depends on third-party contractors for critical development aspects.[43](index=43&type=chunk)[48](index=48&type=chunk)[61](index=61&type=chunk) - Regulatory challenges, including potential changes in healthcare legislation and government funding for agencies like the FDA, could increase commercialization costs and affect drug pricing.[81](index=81&type=chunk)[87](index=87&type=chunk) - The company's common stock may continue to be volatile, and there is a risk of failing to maintain Nasdaq listing requirements, which could harm liquidity and capital raising ability.[38](index=38&type=chunk)[124](index=124&type=chunk)[131](index=131&type=chunk) - Intellectual property protection is critical, but patents could be found invalid or unenforceable, and enforcing patent rights can be expensive and time-consuming.[142](index=142&type=chunk)[150](index=150&type=chunk)[154](index=154&type=chunk) [Risk Factor Summary](index=8&type=section&id=Risk%20Factor%20Summary) This section provides a high-level overview of the most significant risks that could materially affect the company's business, financial condition, and results of operations [Risks Related to our Business](index=9&type=section&id=Risks%20Related%20to%20our%20Business) This section outlines risks specific to the company's business model, including its unproven strategy, competition, and reliance on key resources and third parties [Risks Related to Government Regulation](index=19&type=section&id=Risks%20Related%20to%20Government%20Regulation) This section addresses potential impacts of government regulations, healthcare legislation, and funding changes on the company's operations and commercialization efforts [Risks Related to Our Capital Requirements, Finances and Operations](index=24&type=section&id=Risks%20Related%20to%20Our%20Capital%20Requirements%2C%20Finances%20and%20Operations) This section details financial risks, including the need for additional funding, potential dilution, and the auditor's going concern doubt [Risks Related to Our Common Stock and Liquidity Risks](index=33&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock%20and%20Liquidity%20Risks) This section covers risks associated with the company's common stock, including price volatility, potential delisting from Nasdaq, and limitations on capital raising [Risks Related to Our Intellectual Property](index=39&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section discusses the challenges and uncertainties involved in protecting the company's intellectual property, including patent validity and enforcement costs [Risks Related to Litigation](index=45&type=section&id=Risks%20Related%20to%20Litigation) This section addresses the potential impact of legal proceedings and claims on the company's financial condition and operations [General Risk Factors](index=47&type=section&id=General%20Risk%20Factors) This section covers broader risks that could affect the company, its industry, or the economy as a whole [Item 1B. Unresolved Staff Comments](index=48&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments.[175](index=175&type=chunk) [Item 1C. Cybersecurity](index=48&type=section&id=Item%201C.%20Cybersecurity) VivoSim Labs considers cybersecurity critical and has implemented a governance structure, processes, and third-party evaluations to assess and manage cybersecurity risks - Cybersecurity is critical for VivoSim Labs, which faces threats common in most industries, including ransomware and denial-of-service attacks.[176](index=176&type=chunk) - The company has a governance structure and processes to assess, identify, manage, and report cybersecurity risks, with oversight from the Audit Committee.[177](index=177&type=chunk) - VivoSim relies on third-party services for security control evaluations and requires subcontractors to report cybersecurity incidents.[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 2. Properties](index=48&type=section&id=Item%202.%20Properties) VivoSim Labs leases approximately 10,943 square feet of lab and office space in San Diego, CA, under a lease agreement that commenced in December 2021 - VivoSim Labs leases **10,943 square feet** of lab and office space at 11555 Sorrento Valley Road, San Diego, CA 92121.[181](index=181&type=chunk) - The permanent lease commenced in December 2021 for approximately sixty-two months.[181](index=181&type=chunk) [Item 3. Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various claims and legal actions, including a complaint filed by H.C. Wainwright & Co., LLC alleging breach of a tail financing provision - H.C. Wainwright & Co., LLC filed a complaint against the company on August 27, 2024, alleging breach of a tail financing provision and seeking compensatory and consequential damages and attorneys' fees.[169](index=169&type=chunk)[370](index=370&type=chunk) - The company recorded an accrual of **$0.6 million** for loss contingencies related to the H.C. Wainwright complaint, with **$0.4 million** in accrued expenses and **$0.2 million** as a liability to be settled in equity.[372](index=372&type=chunk) - Litigation outcomes are inherently unpredictable, and assessing contingencies requires significant judgment about future events.[183](index=183&type=chunk)[371](index=371&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to VivoSim Labs, Inc - This item is not applicable.[186](index=186&type=chunk) [PART II](index=51&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) VivoSim Labs' common stock trades on the Nasdaq Capital Market under "VIVS," with 2,599,797 outstanding shares and no anticipated cash dividends - Common stock trades on the Nasdaq Capital Market under the symbol "VIVS."[188](index=188&type=chunk) Common Stock Information (as of May 20, 2025) | Metric | Value | | :----- | :---- | | Outstanding Shares | 2,599,797 | | Holders of Record | ~64 | - The company has never declared or paid cash dividends and does not anticipate doing so, intending to retain earnings for future expansion.[189](index=189&type=chunk)[136](index=136&type=chunk) [Item 6. [Reserved]](index=51&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - This item is reserved.[192](index=192&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses VivoSim Labs' financial condition, operational results, business model transition, critical accounting policies, and going concern uncertainty - VivoSim Labs transitioned its business model to providing testing services using **3D human tissue models** for liver and intestinal toxicology, following the sale of its FXR program in March 2025.[194](index=194&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - The company has incurred recurring operating losses and negative cash flows, with an accumulated deficit of **$342.2 million** as of March 31, 2025, leading to substantial doubt about its ability to continue as a going concern.[96](index=96&type=chunk)[221](index=221&type=chunk)[227](index=227&type=chunk)[250](index=250&type=chunk)[279](index=279&type=chunk)[282](index=282&type=chunk) - Critical accounting policies include stock-based compensation and revenue recognition, which involve significant estimates and judgments.[201](index=201&type=chunk)[202](index=202&type=chunk) [Overview](index=52&type=section&id=Overview) This section provides a summary of the company's business model transition, financial performance, and strategic focus on 3D human tissue models [Critical Accounting Policies, Estimates, and Judgments](index=53&type=section&id=Critical%20Accounting%20Policies%2C%20Estimates%2C%20and%20Judgments) This section outlines the key accounting policies that require significant management judgment and estimates, such as stock-based compensation and revenue recognition [Stock-based compensation](index=53&type=section&id=Stock-based%20compensation) This section details the methodology for estimating the fair value of stock-based compensation, including the use of Black-Scholes and Monte Carlo simulations - Stock-based compensation fair value is estimated using a Black-Scholes option-pricing model, with assumptions for expected volatility, life, risk-free interest rate, and dividends.[203](index=203&type=chunk) - For options with market conditions, Monte Carlo simulations are used; for performance criteria, expense is adjusted based on achievement probability.[203](index=203&type=chunk) [Revenue](index=53&type=section&id=Revenue) This section describes the company's revenue recognition policies for royalty revenue from license agreements and product revenue from its former Mosaic Cell Sciences division - Royalty revenue from license agreements is recognized based on sales-based royalties, with variable consideration evaluated for constraint.[206](index=206&type=chunk)[208](index=208&type=chunk) - Product revenue from the former Mosaic Cell Sciences division was recognized upon customer control of products, typically at delivery, but commercial operations ceased in Q3 fiscal 2025.[209](index=209&type=chunk)[214](index=214&type=chunk) [Sale of FXR Program](index=55&type=section&id=Sale%20of%20FXR%20Program) This section details the sale of the FXR program to Eli Lilly and Company, including the upfront payment and potential future milestone payments - The FXR program was sold to Eli Lilly and Company on March 25, 2025, for **$10.0 million upfront** ($9.0 million at closing, $1.0 million in escrow) and potential milestone payments up to **$50.0 million**.[210](index=210&type=chunk) - The transaction was recorded as other income under ASC Topic 610, with future milestone payments constrained due to uncertainty.[211](index=211&type=chunk) [Results of Operations](index=55&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the years ended March 31, 2025 and 2024, across various income statement line items [Comparison of the Years Ended March 31, 2025 and 2024](index=55&type=section&id=Comparison%20of%20the%20Years%20Ended%20March%2031%2C%202025%20and%202024) This section presents a detailed comparison of the company's financial results for the fiscal years 2025 and 2024 Results of Operations (in thousands, except percentages) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | Increase (decrease) $ | Increase (decrease) % | | :-------------------------------- | :------------------------ | :------------------------ | :-------------------- | :-------------------- | | Royalty revenue | $119 | $109 | $10 | 9% | | Product revenue | $25 | $— | $25 | 100% | | Cost of revenues | $5 | $— | $5 | 100% | | Research and development | $5,025 | $5,498 | $(473) | (9%) | | Selling, general and administrative | $7,730 | $9,697 | $(1,967) | (20%) | | Other income | $10,130 | $417 | $9,713 | 2,329% | [Revenues](index=55&type=section&id=Revenues) This section analyzes the company's total revenue, primarily from royalty income, and notes the cessation of product revenue from the Mosaic division - Total revenue was **$0.1 million** for both years ended March 31, 2025 and 2024, primarily from royalty revenue.[213](index=213&type=chunk) - Product revenue of **$25,000** in 2025 was from the former Mosaic division, which ceased commercial operations in Q3 fiscal 2025.[213](index=213&type=chunk)[214](index=214&type=chunk) [Cost of Revenues](index=57&type=section&id=Cost%20of%20Revenues) This section discusses the cost of revenues, which was minimal in 2025 and related to the sales of finished goods inventory from the Mosaic division - Total cost of revenues was less than **$0.1 million** in 2025, related to Mosaic's finished goods inventory sales, compared to zero in 2024.[215](index=215&type=chunk) [Research and Development Expenses](index=57&type=section&id=Research%20and%20Development%20Expenses) This section details the changes in research and development expenses, highlighting decreases due to reduced personnel and facilities costs Research and Development Expenses (in thousands, except percentages) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | Increase (decrease) $ | Increase (decrease) % | | :------------------------------ | :------------------------ | :------------------------ | :-------------------- | :-------------------- | | Research and development | $4,712 | $5,133 | $(421) | (8%) | | Non-cash stock-based compensation | $86 | $138 | $(52) | (38%) | | Depreciation and amortization | $227 | $227 | $— | 0% | | **Total R&D expenses** | **$5,025** | **$5,498** | **$(473)** | **(9%)** | - Total R&D expenses decreased by **$0.5 million (9%)** to **$5.0 million** in 2025, driven by a **$0.3 million** decrease in personnel costs due to reduced headcount and a **$0.1 million** decrease in facilities/materials costs.[216](index=216&type=chunk) [Selling, General and Administrative Expenses](index=57&type=section&id=Selling%20General%20and%20Administrative%20Expenses) This section analyzes the decrease in selling, general, and administrative expenses, primarily attributed to lower personnel-related and investor relations costs Selling, General and Administrative Expenses (in thousands, except percentages) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | Increase (decrease) $ | Increase (decrease) % | | :-------------------------------- | :------------------------ | :------------------------ | :-------------------- | :-------------------- | | Selling, general and administrative | $7,245 | $8,274 | $(1,029) | (12%) | | Non-cash stock-based compensation | $446 | $1,370 | $(924) | (67%) | | Depreciation and amortization | $39 | $53 | $(14) | (26%) | | **Total SG&A expenses** | **$7,730** | **$9,697** | **$(1,967)** | **(20%)** | - Total SG&A expenses decreased by **$2.0 million (20%)** to **$7.7 million** in 2025, primarily due to a **$1.3 million** decrease in personnel-related costs (including **$0.9 million** from reduced stock-based compensation and **$0.4 million** from prior year severance) and a **$0.6 million** decrease in investor relations expenses.[217](index=217&type=chunk) [Other Income (Expense)](index=57&type=section&id=Other%20Income%20%28Expense%29) This section explains the significant increase in other income, mainly driven by the gain from the sale of the FXR program - Other income significantly increased to **$10.1 million** in 2025 from **$0.4 million** in 2024, primarily due to the **$10.0 million** gain from the sale of the FXR program, partially offset by a **$0.3 million** decrease in net interest income.[218](index=218&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=57&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash flows from operating, investing, and financing activities, its funding requirements, and going concern status [Operating activities](index=59&type=section&id=Operating%20activities) This section details the changes in net cash used in operating activities, primarily influenced by a cash payment for R&D and working capital adjustments - Net cash used in operating activities decreased by **$5.2 million**, from **$14.7 million** in 2024 to **$9.5 million** in 2025, primarily due to a **$2.0 million** cash payment for acquired in-process R&D in 2024 and increased working capital.[223](index=223&type=chunk) [Investing activities](index=59&type=section&id=Investing%20activities) This section highlights the significant increase in net cash provided by investing activities, mainly due to proceeds from the sale of the FXR program - Net cash provided by investing activities significantly increased to **$9.0 million** in 2025 from **$0.8 million** in 2024, primarily from the **$9.0 million** proceeds from the sale of the FXR program.[224](index=224&type=chunk) [Financing activities](index=59&type=section&id=Financing%20activities) This section describes the increase in net cash provided by financing activities, driven by ATM share offerings and a public offering of common stock and warrants - Net cash provided by financing activities increased to **$8.8 million** in 2025 from **$1.4 million** in 2024, driven by ATM share offerings and a public offering of common stock and warrants.[225](index=225&type=chunk) [Operations funding requirements](index=59&type=section&id=Operations%20funding%20requirements) This section discusses the company's ongoing need for substantial additional funding and the auditor's substantial doubt about its ability to continue as a going concern - The company has financed operations through equity sales, licensing revenue, grants, and the FXR program sale, but requires substantial additional funding for future activities.[226](index=226&type=chunk)[227](index=227&type=chunk) - Management concluded that substantial doubt exists about the company's ability to continue as a going concern for at least one year.[227](index=227&type=chunk)[228](index=228&type=chunk) - As of March 31, 2025, approximately **$142.7 million** was available under the 2024 Shelf registration statement, and **$2.3 million** for ATM offerings, with limitations if public float is below **$75.0 million**.[232](index=232&type=chunk)[233](index=233&type=chunk) - A public offering in May 2024 generated net proceeds of approximately **$4.5 million** from the sale of common stock and warrants.[234](index=234&type=chunk)[348](index=348&type=chunk) [Nasdaq Deficiency Notices & Reverse Stock Split](index=61&type=section&id=Nasdaq%20Deficiency%20Notices%20%26%20Reverse%20Stock%20Split) This section details the Nasdaq deficiency notices received by the company, the subsequent reverse stock split, and the regained compliance status - The company received Nasdaq deficiency notices in July 2024 for failing to maintain a minimum bid price of **$1.00** and in February 2025 for not meeting the minimum stockholders' equity requirement.[236](index=236&type=chunk)[239](index=239&type=chunk)[283](index=283&type=chunk)[285](index=285&type=chunk) - A **1-for-12 reverse stock split** was effected on March 21, 2025, and Nasdaq granted an exception until April 15, 2025, to regain compliance, which was achieved by April 30, 2025.[240](index=240&type=chunk)[286](index=286&type=chunk) - The company is subject to a Mandatory Panel Monitor for one year, with stricter delisting rules if non-compliance recurs.[240](index=240&type=chunk)[287](index=287&type=chunk) [Contractual Obligations and Commitments](index=63&type=section&id=Contractual%20Obligations%20and%20Commitments) This section outlines the company's contractual obligations, including cancellable supplier contracts and operating lease payment commitments - The company has cancellable contracts with suppliers and service providers, generally with less than six months' notice.[241](index=241&type=chunk) - As of March 31, 2025, total undiscounted operating lease payment obligations were **$0.5 million** payable within 12 months and **$0.5 million** thereafter.[242](index=242&type=chunk)[368](index=368&type=chunk) [Effect of Inflation and Changes in Prices](index=63&type=section&id=Effect%20of%20Inflation%20and%20Changes%20in%20Prices) Management does not believe that inflation and changes in price will have a material effect on operations - Management does not believe that inflation and changes in price will have a material effect on operations.[243](index=243&type=chunk) [Recent Accounting Pronouncements](index=63&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 13 of the Consolidated Financial Statements for details on recently adopted and issued accounting pronouncements - Information regarding recently adopted and issued accounting pronouncements is detailed in Note 13 to the Consolidated Financial Statements.[244](index=244&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) VivoSim Labs' primary market risk is interest income sensitivity due to changes in U.S. interest rates, with limited foreign currency risk - The company's primary market risk is interest income sensitivity, influenced by changes in U.S. interest rates, as investments are in cash, cash equivalents, and short-term interest-bearing securities.[245](index=245&type=chunk) - VivoSim Labs does not hedge interest rate exposure and has limited foreign currency risk.[245](index=245&type=chunk) - As of March 31, 2025, all investments, consisting of U.S. Treasury bills, had matured.[245](index=245&type=chunk)[321](index=321&type=chunk) [Item 8. Consolidated Financial Statements](index=64&type=section&id=Item%208.%20Consolidated%20Financial%20Statements) This section presents audited consolidated financial statements for 2025 and 2024, including auditor's report, balance sheets, and cash flows, noting going concern uncertainty - The independent registered public accounting firm expressed substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows.[250](index=250&type=chunk) Consolidated Financial Highlights (Years Ended March 31, 2025 and 2024, in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :---------------------------------- | :----- | :----- | :--------- | :--------- | | Total Revenues | $144 | $109 | $35 | 32% | | Loss from Operations | $(12,616) | $(15,086) | $2,470 | (16%) | | Net Loss | $(2,488) | $(14,671) | $12,183 | (83%) | | Cash and Cash Equivalents | $11,312 | $2,901 | $8,411 | 290% | | Total Current Assets | $12,131 | $3,936 | $8,195 | 208% | | Total Current Liabilities | $3,737 | $1,860 | $1,877 | 101% | | Working Capital | $8,400 | $2,076 | $6,324 | 305% | | Accumulated Deficit | $(342,157) | $(339,669) | $(2,488) | 1% | - Net cash used in operating activities decreased by **$5.2 million**, from **$14.7 million** in 2024 to **$9.5 million** in 2025, primarily due to a **$2.0 million** cash payment for acquired in-process R&D in 2024 and increased working capital.[223](index=223&type=chunk) - Net cash provided by investing activities significantly increased to **$9.0 million** in 2025, primarily from the **$9.0 million** proceeds from the sale of the FXR program.[224](index=224&type=chunk) - Net cash provided by financing activities increased to **$8.8 million** in 2025, driven by ATM share offerings and a public offering of common stock and warrants.[225](index=225&type=chunk) [Report of Independent Registered Public Accounting Firm](index=65&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) This section contains the independent auditor's report on the consolidated financial statements, including an emphasis paragraph on the company's going concern uncertainty [Consolidated Balance Sheets](index=68&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2025 and 2024 [Consolidated Statements of Operations and Other Comprehensive Loss](index=69&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) This section provides a detailed breakdown of the company's revenues, expenses, and net loss for the fiscal years ended March 31, 2025 and 2024 [Consolidated Statements of Stockholders' Equity](index=70&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents the changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the fiscal years ended March 31, 2025 and 2024 [Consolidated Statements of Cash Flows](index=71&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities for the fiscal years ended March 31, 2025 and 2024 [Notes to Consolidated Financial Statements](index=72&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides additional information and explanations for the amounts presented in the consolidated financial statements [Note 1. Description of Business and Summary of Significant Accounting Policies](index=72&type=section&id=Note%201.%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes VivoSim Labs' business model transition, significant accounting policies, and the going concern uncertainty - VivoSim Labs transitioned its business model to providing testing services using **3D human tissue models** for liver and intestinal toxicology, following the sale of its FXR program in March 2025.[271](index=271&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The company has incurred recurring operating losses and negative cash flows, with an accumulated deficit of **$342.2 million** as of March 31, 2025, leading to substantial doubt about its ability to continue as a going concern.[279](index=279&type=chunk)[282](index=282&type=chunk) - The company regained Nasdaq compliance for minimum bid price and stockholders' equity after a **1-for-12 reverse stock split** on March 31, 2025, but remains under a one-year Mandatory Panel Monitor.[286](index=286&type=chunk)[287](index=287&type=chunk) [Note 2. Investments and fair value measurement](index=83&type=section&id=Note%202.%20Investments%20and%20fair%20value%20measurement) This note details the company's investments in debt securities and their fair value measurement, noting the maturity of all investments by March 31, 2025 - As of March 31, 2025, all investments in U.S. Treasury bills had matured, resulting in approximately **$0.1 million** of interest income for the year.[321](index=321&type=chunk) Investments in Debt Securities (as of March 31, 2024, in thousands) | Metric | Amortized costs basis | Gross unrealized gains | Gross unrealized losses | Fair value | | :----------------------- | :-------------------- | :--------------------- | :-------------------- | :--------- | | Investments in debt securities | $996 | $2 | $— | $998 | [Note 3. Prepaid Expenses and Other Current Assets](index=83&type=section&id=Note%203.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) This note provides a breakdown of prepaid expenses and other current assets as of March 31, 2025 and 2024 Prepaid Expenses and Other Current Assets (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :------------------------------ | :------------- | :------------- | | Prepaid insurance | $417 | $445 | | Prepaid expenses | $360 | $256 | | Other current assets | $12 | $4 | | **Total** | **$789** | **$705** | [Note 4. Fixed Assets](index=83&type=section&id=Note%204.%20Fixed%20Assets) This note details the company's fixed assets, including laboratory equipment, furniture, and computer equipment, along with accumulated depreciation Fixed Assets (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :------------------------ | :------------- | :------------- | | Laboratory equipment | $1,630 | $1,617 | | Furniture and fixtures | $66 | $66 | | Computer software and equipment | $244 | $244 | | **Fixed Assets, gross** | **$1,940** | **$1,927** | | Less accumulated depreciation | $(1,521) | $(1,258) | | **Fixed Assets, net** | **$419** | **$669** | - Depreciation expense for both years ended March 31, 2025 and 2024 was approximately **$0.3 million**.[324](index=324&type=chunk) [Note 5. Accrued Expenses](index=83&type=section&id=Note%205.%20Accrued%20Expenses) This note provides a breakdown of accrued expenses, including payroll, legal, and other general accrued liabilities, as of March 31, 2025 and 2024 Accrued Expenses (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :------------------------------ | :------------- | :------------- | | Accrued payroll and other employee benefits | $652 | $536 | | Accrued legal and professional fees | $515 | $93 | | Other accrued expenses | $59 | $98 | | **Total accrued expenses** | **$1,226** | **$727** | [Note 6. Collaborative Research, Development, and License Agreements](index=85&type=section&id=Note%206.%20Collaborative%20Research%2C%20Development%2C%20and%20License%20Agreements) This note details the company's various license agreements, including royalty revenues, payments, and terminations - The company recorded **$119,000** and **$109,000** in royalty revenue for the years ended March 31, 2025 and 2024, respectively, from a non-exclusive license agreement with BICO Group AB.[326](index=326&type=chunk) - An amended license agreement with the University of Missouri in December 2022 made the licensed intellectual property fully paid up for a **$50,000 upfront payment**, eliminating future royalty obligations.[329](index=329&type=chunk) - The license agreement with Clemson University Research Foundation terminated in May 2024 upon patent expiration; no royalty expense was recorded for 2025 due to legal expense offsets.[330](index=330&type=chunk)[331](index=331&type=chunk) - Following the sale of the FXR program, the company paid **$100,000** to the Salk Institute for Biological Studies as a royalty expense.[333](index=333&type=chunk) [Note 7. Stockholders' Equity](index=86&type=section&id=Note%207.%20Stockholders%27%20Equity) This note provides information on the company's authorized and outstanding shares, equity offerings, and stock-based compensation expenses - The company is authorized to issue **200,000,000 shares** of common stock and **25,000,000 shares** of preferred stock; as of March 31, 2025, **1,898,068 common shares** were outstanding and no preferred shares.[259](index=259&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk) - During fiscal year 2025, **493,372 shares** of common stock were sold through ATM offerings for net proceeds of approximately **$4.9 million**.[232](index=232&type=chunk)[342](index=342&type=chunk) - A May 2024 public offering included **130,202 common shares** and **416,666 pre-funded warrants**, generating approximately **$4.5 million** in net proceeds.[234](index=234&type=chunk)[344](index=344&type=chunk)[348](index=348&type=chunk) - Total stock-based compensation expense was **$532,000** in 2025, down from **$1,508,000** in 2024, with unrecognized compensation cost for unvested stock options at **$0.6 million**.[359](index=359&type=chunk) [Note 8. Leases](index=94&type=section&id=Note%208.%20Leases) This note describes the company's operating lease for office and lab space, including lease terms, liabilities, and cash outflows - The company's operating lease for **10,943 square feet** of office and lab space in San Diego commenced in December 2021 for approximately 62 months, with monthly payments of about **$40,800** and annual escalators.[364](index=364&type=chunk) Lease Liabilities and Right-of-Use Assets (as of March 31, 2025, in thousands) | Category | Amount | | :------------------------------ | :----- | | Operating lease right-of-use assets | $867 | | Operating lease liability, current | $521 | | Operating lease liability, noncurrent | $421 | | **Total lease liabilities** | **$942** | | Weighted average remaining lease term | 1.83 years | | Weighted average discount rate | 6% | - Cash outflows for operating leases were **$524,000** in 2025 and **$509,000** in 2024.[367](index=367&type=chunk) [Note 9. Commitments and Contingencies](index=96&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note outlines the company's legal commitments and contingencies, including a complaint filed by H.C. Wainwright & Co., LLC and related accruals - The company is defending a complaint filed by H.C. Wainwright & Co., LLC on August 27, 2024, alleging breach of a tail financing provision.[370](index=370&type=chunk) - An accrual of **$0.6 million** was recorded for loss contingencies related to the H.C. Wainwright complaint, with **$0.4 million** in accrued expenses and **$0.2 million** as a liability to be settled in equity.[372](index=372&type=chunk) [Note 10. Income Taxes](index=96&type=section&id=Note%2010.%20Income%20Taxes) This note provides details on the company's income tax provision, deferred tax assets, valuation allowance, and net operating loss carryforwards Provision (benefit) for income taxes (in thousands, except percentages) | Category | March 31, 2025 | % | March 31, 2024 | % | | :------------------------------------------ | :------------- | :-- | :------------- | :-- | | Tax computed at federal statutory rate | $(522) | 21.0% | $(3,081) | 21.0% | | State income tax, net of federal benefit | $(35) | 1.4% | $(110) | 0.7% | | Stock-based compensation | $75 | -3.0% | $721 | -4.9% | | Removal of net operating losses and research development credits | $615 | -24.7% | $1,910 | -13.0% | | Valuation allowance | $(177) | 7.1% | $527 | -3.6% | | **Provision (benefit) for income taxes** | **$2** | **-0.1%** | **$2** | **0.0%** | - A full valuation allowance has been established against deferred tax assets due to uncertainty of realization, which decreased by **$177,000** in 2025.[374](index=374&type=chunk) - As of March 31, 2025, the company had federal net operating loss carryforwards of **$222.2 million** (some indefinite, some expiring from 2028) and state NOLs of **$44.3 million** (expiring from 2028).[375](index=375&type=chunk) - Federal and state research tax credit carryforwards were **$5.3 million** and **$4.8 million**, respectively, as of March 31, 2025, with federal credits expiring from 2028 and state credits not expiring.[376](index=376&type=chunk) [Note 11. Related Parties](index=99&type=section&id=Note%2011.%20Related%20Parties) This note discloses transactions and agreements with related parties, specifically with Viscient Biosciences, an entity sharing an executive chairman - The company has an intercompany agreement with Viscient Biosciences, an entity where VivoSim's Executive Chairman also serves as CEO and President.[381](index=381&type=chunk)[382](index=382&type=chunk) - Under this agreement, VivoSim incurred **$118,000** in R&D consulting expenses from Viscient in fiscal 2025 and provided **$3,000** in histology services to Viscient.[382](index=382&type=chunk) [Note 12. Defined Contribution Plan](index=99&type=section&id=Note%2012.%20Defined%20Contribution%20Plan) This note describes the company's 401(k) plan, including employer matching provisions and the amounts expensed for contributions - The company's 401(k) plan includes an employer matching provision for up to **6%** of employee contributions.[383](index=383&type=chunk) - Amounts expensed under the 401(k) plan were approximately **$66,000** in 2025 and **$61,000** in 2024.[383](index=383&type=chunk) [Note 13. Recent Accounting Pronouncements](index=99&type=section&id=Note%2013.%20Recent%20Accounting%20Pronouncements) This note outlines recently adopted and issued accounting pronouncements and their potential impact on the company's financial statements [Recently Adopted Accounting Pronouncements](index=99&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) This section details accounting pronouncements that the company has recently adopted and their impact on its financial statements - The company adopted ASU 2023-07, Segment Reporting, in November 2023, which did not materially impact its consolidated financial statements.[385](index=385&type=chunk) [Recently Issued Accounting Pronouncements](index=99&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section describes recently issued accounting pronouncements that are not yet effective and their potential future impact on the company - ASU 2023-09 (Income Taxes) requires enhanced annual disclosures for tabular rate reconciliation and disaggregated income taxes paid, effective for annual periods after December 15, 2024.[386](index=386&type=chunk) - ASU 2024-03 (Income Statement - Expense Disaggregation) aims to improve expense disclosures, effective for annual periods after December 15, 2026.[387](index=387&type=chunk)[388](index=388&type=chunk) [Note 14. Restructuring](index=101&type=section&id=Note%2014.%20Restructuring) This note details the company's restructuring efforts, including workforce reductions and associated costs and savings - In August 2023, the company reduced its workforce by approximately **24% (six employees)** to focus on the FXR314 clinical program and extend cash runway.[389](index=389&type=chunk) - Restructuring costs of approximately **$0.4 million** for severance were incurred and paid in fiscal 2024, resulting in annual cost savings of about **$1.4 million** for fiscal 2025.[389](index=389&type=chunk) [Note 15. Business Segment Information](index=101&type=section&id=Note%2015.%20Business%20Segment%20Information) This note explains the company's transition from two operating segments to a single segment following the cessation of Mosaic Cell Sciences operations - The company transitioned from two operating segments (Research & Development and Mosaic Cell Sciences) to a single operating segment in Q4 fiscal 2025 after Mosaic ceased commercial operations.[390](index=390&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk) - The R&D segment now focuses on providing drug testing services using **3D human tissue models** after the sale of the FXR program.[391](index=391&type=chunk) - The closing of the Mosaic segment was not reported as a discontinued operation as it did not represent a strategic shift with a major effect on operations.[394](index=394&type=chunk)[395](index=395&type=chunk) [Note 16. Subsequent Events](index=103&type=section&id=Note%2016.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - Between April 1, 2025, and the filing date, the company issued **701,729 shares** of common stock in ATM offerings for net proceeds of approximately **$1.8 million**.[398](index=398&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=104&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants on accounting and financial disclosure matters - There were no changes in or disagreements with accountants on accounting and financial disclosure.[400](index=400&type=chunk) [Item 9A. Controls and Procedures](index=104&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that VivoSim Labs' disclosure controls and internal control over financial reporting were effective as of March 31, 2025, with no material changes - Management concluded that disclosure controls and procedures were designed and operating effectively as of March 31, 2025.[402](index=402&type=chunk) - Internal control over financial reporting was assessed as effective as of March 31, 2025, based on the COSO framework.[404](index=404&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth quarter of fiscal year 2025.[405](index=405&type=chunk) [Item 9B. Other Information](index=104&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the fiscal quarter ended March 31, 2025.[407](index=407&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=104&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to VivoSim Labs, Inc - This item is not applicable.[408](index=408&type=chunk) [PART III](index=106&type=section&id=PART%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=106&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the proxy statement for the 2025 annual meeting of stockholders - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement.[411](index=411&type=chunk) [Item 11. Executive Compensation](index=106&type=section&id=Item%2011.%20Executive%20Compensation) Information relating to executive compensation is incorporated by reference from the proxy statement for the 2025 annual meeting of stockholders - Executive compensation information is incorporated by reference from the 2025 proxy statement.[412](index=412&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides a summary of the company's equity compensation plans as of March 31, 2025, including outstanding securities and those available for future issuance Equity Compensation Plan Summary (as of March 31, 2025) | Plan Category | Number of securities to be issued upon exercise/vesting of outstanding options, warrants, units and rights (A) | Weighted-average exercise price of outstanding options, warrants, units and rights (B) | Number of securities available for future issuance under Equity Compensation Plans (C) | | :------------------------------------------------- | :--------------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | Equity compensation plans approved by security holders | 145,396 | $22.34 | 202,482 | | Equity compensation plans not approved by security holders | 4,166 | $33.00 | 83 | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=106&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the proxy statement for the 2025 annual meeting of stockholders - Information on related party transactions and director independence is incorporated by reference from the 2025 proxy statement.[415](index=415&type=chunk) [Item 14. Principal Accountant Fees and Services](index=106&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information relating to principal accountant fees and services is incorporated by reference from the proxy statement for the 2025 annual meeting of stockholders - Information on principal accountant fees and services is incorporated by reference from the 2025 proxy statement.[416](index=416&type=chunk) [PART IV](index=107&type=section&id=PART%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=107&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This item lists the exhibits and financial statement schedules filed as part of the Annual Report, with schedules omitted as not applicable - The item includes a list of exhibits and financial statement schedules filed with the Annual Report.[421](index=421&type=chunk)[423](index=423&type=chunk) - Financial statement schedules are omitted as not applicable for the years ended March 31, 2025 and 2024.[421](index=421&type=chunk)

Core Insights - VivoSim Labs, Inc. has emerged from stealth mode to significantly impact drug discovery and development [1] - The FDA's initiative to phase out animal testing in favor of non-animal methodologies is expected to accelerate VivoSim's market adoption, targeting a market worth over $10 billion [2][7] Company Overview - VivoSim will provide liver and intestinal toxicology insights using its new approach methodologies (NAM) models, which are designed to be more predictive and ethically sound compared to traditional animal testing [2][3] - The company aims to reduce clinical trial failures and development costs by 50% across the industry through its innovative models [4] Technological Advancements - VivoSim's NAMkind liver model has shown an industry-best correlation rate with known clinical failures, potentially reducing the incidence of unforeseen liver toxicity events by 50% or more [5] - The NAMkind intestine models will offer insights currently unavailable to industry scientists, addressing issues that can affect cancer patients undergoing treatment [6] Industry Impact - The FDA's goals to phase out animal testing create a significant opportunity for VivoSim to fill the gap in commercially available solutions, aligning with the vision of providing better outcomes for pharmaceutical customers and patients [7]

Core Viewpoint - Organovo Holdings, Inc. will rebrand as VivoSim Labs, Inc. and will begin trading under the new ticker symbol "VIVS" on April 24, 2025 [1]. Group 1 - The name change to VivoSim Labs, Inc. will be effective on April 24, 2025 [1]. - The company's common stock will continue to be listed on the Nasdaq Capital Market [2]. - Existing stockholders do not need to take any action regarding the name and ticker symbol change [2].

Financial Performance and Compliance - Organovo Holdings reported preliminary unaudited cash for the fiscal year ending March 31, 2025, and expects to meet all requirements for continued listing on the Nasdaq Capital Market[6]. - The company had stockholders' equity of $364,000 as of December 31, 2024, which did not meet Nasdaq's minimum requirement of $2,500,000[10]. - Following the asset sale and other financial activities, the company believes it has a minimum of $2,500,000 in stockholders' equity as of April 2, 2025[12]. - The company received a notice from Nasdaq indicating it did not meet the minimum bid price requirement of $1.00 per share[10]. - The company presented its compliance plan to the Nasdaq Hearings Panel on February 27, 2025, and was granted an exception until April 15, 2025, to demonstrate compliance[10]. - Forward-looking statements indicate potential risks and uncertainties regarding compliance with Nasdaq listing requirements[13]. Asset Sale - On March 25, 2025, Organovo completed the sale of its FXR program to Eli Lilly for an upfront cash payment of $10.0 million, with potential milestone payments of up to $50.0 million[11]. Financial Strategy - The company has engaged in warrant exercises and sales of common stock to improve its financial position[12]. - Organovo's financial information is subject to adjustments based on the completion of customary annual audit procedures[6]. Company Classification - The company is classified as an emerging growth company under the Securities Act[5].

Core Viewpoint - Organovo Holdings, Inc. reported preliminary unaudited cash and net cash utilization results for the fiscal year ending March 31, 2025, indicating a cash balance of approximately $11.3 million and net cash utilization of $2.0 - $2.2 million for the fourth quarter [1][2]. Financial Summary - The preliminary cash and cash equivalents balance as of March 31, 2025, was approximately $11.3 million [2]. - The net cash utilization during the fourth quarter from January 1, 2025, to March 31, 2025, was approximately $2.0 - $2.2 million [2]. Nasdaq Compliance Update - The company expects to meet all requirements for continued listing on the Nasdaq Capital Market, having closed above the $1.00 minimum bid price since March 21, 2025 [3]. - Nasdaq requires a minimum of 10 consecutive trading days where the stock closes at a minimum bid price of $1.00, which the company has achieved [3]. Future Milestone Payments - The company anticipates receiving a $5 million milestone payment within the next 12 months related to the start of a Phase 2 clinical trial for the FXR agonist recently sold [4]. - Future milestone payments associated with the FXR agonist could total up to $50 million, including the $5 million payment upon the commencement of the Phase 2 clinical trial [4]. Company Overview - Organovo is a clinical stage biotechnology company focused on developing drugs effective in three-dimensional (3D) human tissues for drug development [5]. - The company utilizes proprietary technology to create 3D human tissues that replicate key aspects of native human tissue composition, architecture, function, and disease [5].

Core Insights - Organovo Holdings, Inc. is a clinical stage biotechnology company focused on developing novel treatment approaches for inflammatory bowel disease (IBD) [1] Group 1: Business Update - The company has completed the sale of its FXR Program to Lilly, receiving upfront payments and anticipating future milestone payments [2] - Organovo expects a decrease in expenditures in the coming year due to the elimination of costs associated with the FXR314 program, allowing for a more efficient use of existing capital [2] - The company plans to report its full year financials for the fiscal year ended March 31, 2025, around June 6-10, 2025 [2] Group 2: Research and Development - Organovo utilizes 3D human cellular models of Crohn's disease and ulcerative colitis to evaluate therapeutic opportunities, believing these models increase the likelihood of success in clinical trials [3] - In 2024, FXR314 showed strong performance in improving epithelial barrier function and fibrotic activity in ulcerative colitis models, as presented at the Crohn's and Colitis Congress [3] - FXR314 demonstrated synergistic benefits when paired with an approved Janus kinase (JAK) inhibitor, indicating potential for combination therapies [3] Group 3: Company Overview - Organovo is developing drugs that are effective in 3D human tissues, utilizing proprietary technology to create tissues that mimic native human tissue characteristics [4]

Core Insights - Organovo Holdings, Inc. has successfully closed the sale of its FXR program, including the lead asset FXR314, to Eli Lilly and Company on March 25, 2025 [1][2] Group 1: Transaction Details - Organovo will receive an upfront payment and future milestone payments as FXR314 achieves key regulatory and commercial milestones [2] - Eli Lilly is acquiring all commercial and intellectual property rights to Organovo's FXR program for worldwide development and will handle all future clinical development [2] Group 2: Company Overview - Organovo is a clinical stage biotechnology company focused on developing drugs that are effective in three-dimensional (3D) human tissues [3] - The company utilizes proprietary technology to create 3D human tissues that replicate essential aspects of native human tissue composition, architecture, function, and disease [3]

Core Insights - Organovo Holdings, Inc. has successfully closed the sale of its FXR program, including the lead asset FXR314, to Eli Lilly and Company on March 25, 2025 [1][2] Company Overview - Organovo is a clinical stage biotechnology company focused on developing drugs that are effective in three-dimensional (3D) human tissues, utilizing proprietary technology to create 3D human tissues that replicate key aspects of native human tissue [3]