Company Overview - The company develops AI-powered laboratory-based blood tests for early detection and prevention of cancers and chronic diseases [280]. - The OneTest brand includes two test families: OneTest for Cancer (MCED) and OneTest for Longevity, launched in February 2026 [281]. Financing Activities - On February 9, 2026, the company completed a second closing of bridge financing, issuing a secured convertible promissory note of $275,000 and a warrant for 62,500 shares [283]. - The company raised additional funding of $5 million through a private placement and $275,000 in convertible debt and bridge financing after December 31, 2025 [308]. - The company entered into a Note Purchase Agreement on November 17, 2025, for a secured convertible promissory note of $295,000 and a warrant for 62,500 shares of common stock, totaling a purchase price of $250,000 [313]. - The company also entered a Preferred Purchase Agreement on November 17, 2025, to sell up to $40,000,000 in series E convertible preferred stock at $1,000 per share [322]. - The company issued convertible promissory notes totaling $712,256 in May and November 2025, with net proceeds of approximately $668,472 [331]. - The company has a most favored nation provision in both agreements, ensuring that any more favorable terms offered to other investors will also be extended to the current investors [320][330]. Stock and Equity - The series E convertible preferred stock has a stated value of $1,098.90 per share, with a preferred return of 9% per annum, increasing to 15% upon an event of default [285]. - On February 19, 2026, the company issued 5,000 shares of series E convertible preferred stock for $5,000,000, net of fees [287]. - A total of 846,368 shares of series A preferred stock were converted into common stock on February 19, 2026 [288]. - The Preferred Warrant can be exercised until November 30, 2026, at an exercise price of $11.42 [326]. Financial Performance - The company’s financial performance is influenced by factors such as capital access, technology acquisition costs, and marketing expenses [291]. - Total revenues increased by $292,790, or 16.71%, to $2,045,133 for the year ended December 31, 2025, compared to $1,752,343 for the year ended December 31, 2024 [296]. - Revenues from OneTest increased by $312,826, or 20.98%, to $1,803,707 for the year ended December 31, 2025, driven by a 35% increase in Premium Tests sold [296]. - Gross profit increased by $244,230, or 67.78%, to $604,541 for the year ended December 31, 2025, with a gross margin of 29.56% compared to 20.56% in 2024 [301]. - Sales, general and administrative expenses decreased by $1,416,744, or 29.77%, to $3,342,843 for the year ended December 31, 2025, resulting in a significant improvement in efficiency [302]. - Research and development expenses decreased by $669,212, or 53.04%, to $592,569 for the year ended December 31, 2025, as a result of reduced spending on major studies conducted in 2024 [303]. - Net loss decreased by $1,812,846, or 32.65%, to $3,738,821 for the year ended December 31, 2025, compared to a net loss of $5,551,667 in 2024 [306]. Cash Flow - Cash and cash equivalents at the end of the year were $1,025,987, down from $1,784,009 at the beginning of the year [310]. - Net cash used in operating activities was $1,919,720 for the year ended December 31, 2025, an improvement from $2,598,785 in 2024 [310]. - Net cash provided by financing activities was $1,161,698 for the year ended December 31, 2025, compared to $293,333 in 2024, reflecting successful capital-raising efforts [312]. Regulatory and Compliance - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to rely on certain disclosure exemptions [292]. - The company will remain an emerging growth company until it meets specific revenue or market capitalization thresholds [293]. - The company is required to file a registration statement with the SEC within 15 days of the first closing, registering at least 5,050,000 shares of common stock [327]. - The company has no off-balance sheet arrangements that could impact its financial condition or results of operations [339]. Revenue Recognition - Revenue recognition follows ASC Topic 606, with revenue recognized when customers obtain control of goods or services, reflecting expected consideration [340]. - Revenue from OneTest is recognized upon analysis of returned serum specimens, with minimal adjustments for returns or refunds due to their rarity [340]. Derivative Liabilities - The company evaluated convertible notes with embedded conversion features, which are classified as derivative liabilities under ASC 815 due to their variable conversion price [342]. - Warrants are assessed for equity or liability classification based on specific terms, with those meeting equity criteria recorded as additional paid-in capital [343]. - Changes in fair value of liability-classified warrants are recognized in the statement of operations each period [344].
20/20 GeneSystems(AIDX) - 2025 Q4 - Annual Report