Financial Performance - Revenue for the year ended December 31, 2025, was $1,142,000, representing an increase of $1,034,000 or 957% compared to $108,000 in 2024, primarily due to revenue from the acquisition of Evoke Neuroscience [424]. - Cost of goods sold for 2025 was $497,000, up from $0 in 2024, with manufacturing and inventory costs accounting for 43% of the increase and labor costs for 33% [425]. - Research and development expenses decreased by $472,000 or 24% to $1,482,000 in 2025, primarily due to equity vesting related to the merger in August 2024 [426]. - Selling and marketing expenses decreased by $401,000 or 33% to $800,000 in 2025, mainly due to reduced consultant use following a rebranding in 2024 [427]. - General and administration expenses increased by $835,000 or 13% to $6,968,000 in 2025, largely due to higher directors and officers insurance costs and accrued fees from the cancellation of the Equity Line of Credit [428]. - The company reported an operating loss of $8,856,000 for 2025, an improvement of $1,198,000 compared to a loss of $10,054,000 in 2024 [422]. - Net cash used in operating activities was $8,194,000 for 2025, an increase of $2,039,000 or 33% from $6,155,000 in 2024, driven by higher operating costs and research and development expenses [441]. - Net cash used in investing activities rose to $2,488,000 in 2025 from $477,000 in 2024, representing a 422% increase attributed to the acquisition of Evoke Neuroscience [442]. - As of December 31, 2025, the company had an accumulated deficit of $111,615,000 and negative cash flows from operating activities of $8,194,000, raising substantial doubt about its ability to continue as a going concern [431]. Acquisitions and Investments - The company acquired all outstanding stock of Evoke for approximately $6,000, consisting of $3,000 in cash and 857,142 shares of Common Stock valued at $3.50 per share [374]. - The acquisition of Evoke Neuroscience was completed for a total consideration of $6,221, including $3,000 in cash and 857,142 shares of common stock [401]. - The company raised $150,000 through warrant exercises and $2,250,000 through a private placement after December 31, 2025, with investors having the right to purchase up to an additional $18,000,000 of units [420]. Revenue Model and Business Strategy - The company has a subscription-based commercial model that creates a recurring revenue stream, scaling with clinical utilization [360]. - The company plans to generate revenue through healthcare professionals in the U.S. and collaborations with pharmaceutical companies for neuroscience drug development [392]. Clinical Operations - The Evoke System is actively used across more than 85 clinical sites in the United States as of December 31, 2025, enhancing clinical decision-making through EEG and ERP assessments [360]. - The Firefly Platform integrates hardware, software, and data infrastructure to enhance the quality of electrophysiological assessments in clinical settings [359]. Stock and Warrants - The company generated total proceeds of $8,825 from the exercise of warrants to purchase 1,623,530 shares of Common Stock at various exercise prices [362]. - On March 28, 2025, the company issued 547,737 units at a purchase price of $3.00 per unit, each consisting of one share of Common Stock or a prefunded warrant [363]. - The company issued 400,000 units at a total purchase price of $1,200 on June 16, 2025, with each unit priced at $3.00 [375]. - The company entered into a warrants cancellation and exchange agreement, resulting in the exchange of June 2025 Warrants for New 2025 Warrants to purchase 800,000 shares of Common Stock at an exercise price of $0.50 per share [382]. - The company entered into an At the Market Offering Agreement with Konik Capital Partners, allowing for the sale of up to $7,434,266 in Common Stock [383]. - The March 2026 Purchase Agreement involves the issuance of up to 13,500,000 units at a price of $1.50 per unit, with an initial investment of $2,250,000 from accredited investors [388]. - The company will pay Konik a commission of 2.0% on gross proceeds from ATM Shares sold, along with reimbursement for legal fees not exceeding $50,000 [387]. - The offering was structured to comply with Nasdaq Listing Rule 5635(d) without requiring stockholder approval [390]. - The company will file a registration statement on Form S-1 for the resale of shares and warrant shares by April 15, 2026 [390]. Impairments and Market Conditions - No goodwill impairment was recognized as the market capitalization exceeded net assets, with a share price recovery to $1.73 by March 11, 2026 [406]. - Total impairment recognized on pre-acquisition Firefly assets was $251, due to the discontinuation of the BNA software platform and Zeto headsets [409]. - No applicable market risk disclosures were provided in the document [448].
Firefly Neuroscience, Inc.(AIFF) - 2025 Q4 - Annual Report