Financial Performance - Vor Bio has incurred significant operating losses, reporting net losses of $812.7 million and $2,418.8 million for the three and nine months ended September 30, 2025, respectively, with an accumulated deficit of $2,875.8 million as of the same date [112]. - The net loss for the three months ended September 30, 2025, was $812.7 million, compared to a net loss of $27.6 million in the same period of 2024, reflecting a significant increase in losses [130]. - The net loss for the nine months ended September 30, 2025, was $2,418.8 million, with non-cash charges of $2,291.9 million primarily due to changes in fair value of warrant liabilities [149]. - For the nine months ended September 30, 2025, research and development expenses surged to $302.3 million from $68.0 million in 2024, an increase of $234.4 million, largely due to a $222.6 million upfront payment for a license agreement [133]. - General and administrative expenses for the three months ended September 30, 2025, were $14.0 million, an increase of $7.3 million compared to $6.7 million in 2024, mainly due to higher stock-based compensation [134]. Cash and Funding - The company has cash, cash equivalents, and marketable securities totaling $170.5 million as of September 30, 2025, which is expected to fund operations into the second quarter of 2027 [113]. - The company has raised approximately $711.7 million through equity financing since inception, with $329.5 million remaining available under a universal shelf registration statement as of September 30, 2025 [138]. - The company sold 540,750 shares under the Stifel ATM Facility during the nine months ended September 30, 2025, generating net proceeds of $20.3 million [139]. - The company expects to fund its operating expenses and capital requirements into the second quarter of 2027 based on current cash resources and anticipated proceeds from recent offerings [143]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $119.9 million, an increase of $44.3 million compared to $75.6 million for the same period in 2024 [149][150][151]. Clinical Development - Telitacicept, a novel therapy for autoimmune diseases, is currently in a global Phase 3 clinical trial for generalized myasthenia gravis, with patient recruitment ongoing in multiple regions [106]. - In the Phase 3 trial, patients on telitacicept achieved a mean MG-ADL change of -7.5 from baseline, with 96.2% of continuous patients reaching a ≥3-point improvement [109]. - The Phase 3 trial results for Sjögren's disease showed a mean change in ESSDAI score of -4.6 (160mg) at week 48, indicating durable improvement in systemic disease activity [108]. - The company plans to explore the development of telitacicept in additional autoantibody-driven diseases, including Sjögren's disease, where no approved disease-modifying therapies currently exist [107]. - The company has not observed new safety signals for telitacicept, with most adverse events reported as mild to moderate in severity [109]. Operational Changes - The company reported restructuring costs of $29.7 million during the nine months ended September 30, 2025, due to a workforce reduction of approximately 99% [111]. - General and administrative expenses are expected to increase as the company expands its operations and hires additional personnel to support telitacicept's development [124]. - For the three months ended September 30, 2025, total operating expenses were $28.1 million, a decrease of $0.4 million compared to $28.5 million in the same period of 2024 [130]. - Research and development expenses for the three months ended September 30, 2025, were $14.1 million, down from $21.8 million in 2024, primarily due to lower stock-based compensation and personnel costs [131]. Lease and Contractual Obligations - The company amended its lease for corporate office and laboratory space, terminating it on August 4, 2025, and has no remaining contractual payments related to the abandoned space [154]. - The company entered into a non-cancellable lease for corporate office space expiring in August 2031 [154]. - Ongoing payments are required under license and collaboration agreements, including the Telitacicept License Agreement, which involve milestone payments and royalties [155]. - There were no significant changes in contractual obligations and commitments during the nine months ended September 30, 2025, compared to the previous year [156]. - The company is not required to provide additional market risk disclosures as it qualifies as a smaller reporting company [159].

Exploration and Resource Development - The company has submitted applications for exploration licenses covering 187,017 square kilometers and a commercial recovery permit for 25,160 square kilometers, estimated to hold approximately 1.639 billion wet tonnes of mineral resources, including 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese [121]. - The company is in the evaluation stage following the release of the S-K 1300 NORI Area D Technical Report, declaring mining reserves for a seafloor polymetallic nodule project [118]. - The company is focused on developing a commercial offshore nodule collection system and onshore technology to process collected polymetallic nodules into various metal products [125]. - The company aims to build a "metal commons" for sustainable recovery and reuse of metals to meet rising demand [117]. - The company is working to assess the environmental and social impacts of offshore nodule collection as part of its commercial production strategy [125]. - The pre-feasibility study for NORI Area D indicates that development is technically and economically viable, but further project planning is required before a development decision can be made [230]. - Approximately 97% of the NORI Area D resource is categorized as measured or indicated, while only about 6% of the resources in NORI (Areas A to C) and TOML Properties are similarly categorized [233]. - The initial assessment of the NORI and TOML Properties suggests potential viability of mineral resources, but economic viability has not yet been demonstrated [230]. - The company cautions that mineral resources do not have demonstrated economic value and that significant exploration is needed to upgrade inferred resources [233]. Financial Performance - The company reported a net loss of $184.4 million for Q3 2025, compared to a net loss of $20.5 million in Q3 2024, representing a 799% increase [149][163]. - The net loss before tax for the first nine months of 2025 was $279.3 million, compared to a net loss of $65.9 million in the same period of 2024, indicating a significant increase in losses [172]. - General and administrative expenses surged by 461% to $45.7 million in Q3 2025, driven by a $35 million increase in share-based compensation [161][166]. - General and administrative expenses rose to $65.7 million in the first nine months of 2025, up from $22.6 million in the same period of 2024, reflecting an increase of $43.1 million [174]. - The fair value of the royalty liability increased by $131 million in Q3 2025, totaling $145 million for NORI Areas A to D [161][169]. - The fair value of the royalty liability increased to $145 million as of September 30, 2025, an increase of $131 million in the first nine months of 2025 [178]. - The company has an accumulated deficit of approximately $910.9 million from inception through September 30, 2025 [149]. - The company has not generated any revenue to date and expects to do so only after receiving a commercial recovery permit [151]. - The company is currently a pre-revenue entity and does not anticipate earning revenues until it receives an exploitation contract or commercial recovery permit [147]. Financing and Capital Management - The company plans to seek additional financing to support ongoing operations, which may include public or private equity, debt financings, or other sources [184]. - The company entered into a 2024 Credit Facility allowing borrowing up to $20 million, later increased to $44 million, with a maturity date extended to June 30, 2026 [192][193][196]. - The company raised gross proceeds of $14.9 million from a registered direct offering of 17.5 million common shares at $1.00 per share, with net proceeds of $14.2 million after expenses [196]. - A subsequent offering in May 2025 raised gross proceeds of $37 million from the sale of 12.33 million common shares at $3.00 per share [197]. - The company received $85.2 million from Korea Zinc for the issuance of 19.62 million common shares and accompanying warrants, with a purchase price of $4.34 per share [198]. - As of September 30, 2025, the company had cash on hand of $115.6 million, which is expected to be sufficient to meet obligations for the next twelve months [182]. - For the nine months ended September 30, 2025, net cash used in operating activities was $31.5 million, primarily due to payroll costs and environmental work [201]. - Net cash provided by financing activities for the same period was $143.5 million, driven by proceeds from various offerings and loans [204]. - The company recorded a net cash generated from investing activities of $0.2 million for the nine months ended September 30, 2025 [203]. Regulatory and Compliance - The company maintains two ISA exploration contracts in the CCZ while pursuing commercial production through the U.S. regulatory pathway under DSHMRA [123]. - The company received notice of full compliance from NOAA on its exploration applications, confirming priority rights over both exploration areas [129]. - The certification process for exploration licenses and commercial recovery permits is ongoing, with no assurance of favorable outcomes or timely issuance [241]. - The timing of NOAA's review and decision on the company's applications remains uncertain and is outside the company's control [147]. - The company is currently analyzing the complex regulatory system under DSHMRA to determine its impact on development plans and potential commercial operations [242]. Strategic Partnerships and Collaborations - The company has established key strategic partnerships with Allseas, PAMCO, Korea Zinc, and Glencore to advance its commercial production strategy [124]. - A strategic alliance with Allseas was established on March 29, 2019, for the collection and transportation of 200 million metric tonnes of polymetallic nodules on a cost-plus 50% profit basis [211]. - The pilot nodule collection system trials in NORI Area D were successfully completed in November 2022, leading to further development of the commercial system [212]. - The company entered into a Working Capital Loan Agreement with Allseas Investments for $5 million on September 10, 2024, which was later increased to $7.5 million [220]. - As of September 30, 2025, the company made payments to Allseas totaling $10 million in cash and 10.85 million Common Shares valued at $1.00 per share [213][215]. Market and Risk Factors - The company expects to face increased credit risk once commercial production begins due to a larger customer base [240]. - The company is exposed to various market risks, including interest rate changes, inflation, and foreign currency translation [237]. - The current investment strategy involves placing excess cash in secure, highly liquid interest-bearing investments, with a focus on maintaining availability for operational needs [239].

Financial Performance - Total sales decreased by $224,767, or 16%, for the three months ended September 30, 2025, compared to the same period in 2024, with product sales down 9% and engineering services down 33%[105]. - Gross loss for the three months ended September 30, 2025, was $411,307, or 35%, compared to a gross loss of $259,848, or 19%, in the same period in 2024, representing a 58% increase in gross loss[108]. - Net loss for the three months ended September 30, 2025, was $7,354,225, a decrease of $1,868,054, or 20%, compared to a net loss of $9,222,279 in the same period in 2024[105]. - Gross loss for the nine months ended September 30, 2025, was $1,437,792, representing a gross loss percentage of 36%, compared to a gross loss of $646,245, or 14%, in the same period in 2024[125]. - The company reported net losses of $23,658,106 for the nine months ended September 30, 2025, compared to $73,538,157 for the year ended December 31, 2024[143]. Revenue and Sales - Total sales for the nine months ended September 30, 2025, decreased by $444,555, or 10%, compared to the same period in 2024, with product sales down 4% and engineering services sales down 27%[123]. - Cost of sales for products decreased by $118,895, or 14%, for the three months ended September 30, 2025, compared to the same period in 2024[108]. - Engineering services cost of sales increased by $83,201, or 123%, for the three months ended September 30, 2025, compared to the same period in 2024[108]. - Total cost of sales decreased by $73,308, or 4%, for the three months ended September 30, 2025, compared to the same period in 2024[108]. - The cost of sales for products sold increased by $197,402, or 5%, for the nine months ended September 30, 2025, compared to the same period in 2024[122]. Expenses - Research and development expenses increased by $602,173, or 26%, for the three months ended September 30, 2025, primarily due to increased external development costs and depreciation related to under-utilized new manufacturing equipment[112][114]. - Selling and marketing expenses decreased by $619,052, or 35%, for the three months ended September 30, 2025, compared to the same period in 2024[105]. - General and administrative expenses for the three months ended September 30, 2025, decreased by $1,771,926, or 41%, largely due to a significant reduction in non-cash stock-based compensation[118]. - Research and development expenses for the nine months ended September 30, 2025, increased by $705,771, or 10%, driven by higher external development costs for new products[129]. - Total selling and marketing expenses for the nine months ended September 30, 2025 decreased by $2,207,762, or 35%, compared to the same period in 2024, primarily due to reductions in cash salary and benefits, bad debt expenses, and advertising costs[131]. - General and administrative expenses for the nine months ended September 30, 2025 decreased by $3,648,677, or 28%, largely due to a significant reduction in non-cash stock-based compensation expenses[133]. - Non-cash stock-based compensation expense related to general and administrative expenses decreased by $1,788,006, or 80%, for the three months ended September 30, 2025[118]. Income and Other Income - Investment income increased by $61,526, or 65%, for the three months ended September 30, 2025, compared to the same period in 2024[105]. - Total other income for the three months ended September 30, 2025, was $139,669, an increase of $62,670 from $76,999 in the comparable period in 2024, primarily due to higher investment income[120]. - Total other income increased by $225,610 to $465,506 for the nine months ended September 30, 2025, driven by a decrease in foreign exchange losses and other taxes[135]. Cash Flow and Financing - Cash outflows from operating activities were $13,234,835 for the nine months ended September 30, 2025, a reduction of $6,482,362 from the comparable 2024 period[139]. - The company raised $19,747,292 from financing activities during the nine months ended September 30, 2025, including $10,000,000 from the sale of Series B Convertible Preferred Stock[141]. - As of September 30, 2025, the company had cash and cash equivalents of $22,608,529, an increase of $4,422,023 from $18,186,506 as of December 31, 2024[137]. Management and Controls - Management plans to alleviate substantial doubt about the company's ability to continue as a going concern by raising further capital and implementing operational improvements[145]. - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2025[155]. - There have been no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the most recent fiscal quarter[156].

Financial Performance - PEDMARK® recorded net product sales of $12,462,000 in Q3 2025, a 78% increase from $6,974,000 in Q3 2024, driven by increased market penetration and focus on the adolescent and young adult population [163]. - Net product sales for the first three quarters of 2025 reached $30,865, a 42.5% increase from $21,655 in 2024, driven by increased market penetration and focus on the adolescent and young adult population [167]. - Total revenue for the nine months ended September 30, 2025, was $30,865, down from $39,613 in 2024, reflecting a decrease of $8,748 [165]. - The net loss for the nine months ended September 30, 2025, was $4,954, compared to a net income of $1,549 in 2024, representing a decline of $6,503 [165]. Expenses - Selling and marketing expenses rose to $5,210,000 in Q3 2025 from $4,601,000 in Q3 2024, reflecting enhanced commercial and marketing efforts in the U.S. [163]. - General and administrative expenses increased by $631,000 in Q3 2025 compared to the same period in 2024 [164]. - Operating expenses totaled $34,593 for the nine months ended September 30, 2025, a decrease of $1,518 compared to $36,111 in 2024 [165]. - Selling and marketing expenses decreased to $12,510 in 2025 from $14,482 in 2024, primarily due to the completion of European pre-commercial activities [167]. Cash Flow and Liabilities - Cash and equivalents decreased to $21,947 as of September 30, 2025, from $26,634 as of December 31, 2024, a net decrease of $4,687 [169]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(6,511), compared to $28,454 provided in 2024 [170]. - Current liabilities increased to $9,815 as of September 30, 2025, from $6,919 as of December 31, 2024, an increase of $2,896 [169]. Product Development and Approvals - The company received European Commission Marketing Authorization for PEDMARQSI® in June 2023, with U.K. approval following in October 2023 [156]. - An exclusive licensing agreement with Norgine was established in March 2024, providing approximately $43,200,000 upfront and potential future milestone and royalty payments of up to $230,000,000 [141]. - PEDMARK® is the first and only FDA- and EMA-approved therapy to reduce the risk of cisplatin-induced hearing loss in pediatric patients aged one month and older [146]. - The company received Orphan Drug Exclusivity for PEDMARK® in January 2023, granting seven years of market exclusivity until September 20, 2029 [143]. - Norgine plans to launch PEDMARQSI® in Germany and the U.K. in early 2025 [159]. Market Potential - It is estimated that over 10,000 pediatric patients receive platinum-based chemotherapy annually in the U.S. and Europe, with more than 50% potentially suffering permanent hearing loss due to cisplatin [149][155]. - The company has six patents listed for PEDMARK® in the FDA Orange Book, with expiration dates extending to 2039 [143]. Shareholder Information - Outstanding common shares increased to 28,062 as of September 30, 2025, from 27,527 as of December 31, 2024, an increase of 535 shares [174]. - Common shares are recorded as net proceeds after deducting share issuance costs and the fair value of investor warrants, which are recorded as additional paid-in capital [193]. Stock Options and Performance Units - The fair value of stock options is estimated using the Black-Scholes model with a risk-free rate of 3.93-4.19% and expected volatility ranging from 71.04% to 161.67% [191]. - Performance-based units (PSUs) were granted in May and August 2025, with vesting dependent on revenue performance milestones, which are deemed probable as of September 30, 2025 [192].

Financial Performance - Q1 FY '26 revenue was approximately $1.40 million, a 43% decrease from Q1 FY '25 revenue of approximately $2.44 million, attributed to timing of contracts and U.S. Government budget delays [3] - Adjusted EBITDA loss for Q1 FY '26 was -$0.92 million, compared to -$0.46 million for Q1 FY '25, indicating a decline in revenue [3] - The net loss for Q1 FY '26 was $1.03 million, with a basic and diluted net loss per share of $0.05 [16] - For the three months ended September 30, 2025, the net loss was $1.03 million, compared to a net loss of $1.02 million in 2024, indicating a slight increase in losses year-over-year [19] - Adjusted EBITDA loss for Q3 2025 was $0.92 million, compared to a loss of $0.46 million in Q3 2024, reflecting a deterioration in operational performance [19] - Cash flows used in operating activities for Q3 2025 totaled $1.29 million, significantly higher than $0.43 million in Q3 2024, indicating increased cash outflows [18] Assets and Liabilities - The company's cash and equivalents as of September 30, 2025, were approximately $5.56 million, with an additional $0.66 million in accounts receivable [3] - Total current assets as of September 30, 2025, were approximately $7.33 million, down from $8.17 million as of June 30, 2025 [14] - Total liabilities as of September 30, 2025, were approximately $2.20 million, compared to $2.34 million as of June 30, 2025 [14] - The company reported a cash and cash equivalents balance of $5.56 million at the end of Q3 2025, down from $6.83 million at the beginning of the period [18] Revenue Recognition and Contracts - Brightline Interactive made an initial delivery on a multi-million annual SpatialCore contract with a Department of War entity, with further significant opportunities anticipated [3] - The company signed several contracts with a major oil service company, with an aggregate contract value in the mid 6-figure dollars for 3D brand environments and corporate presentations [3] - Deferred revenue increased by $0.02 million in Q3 2025, contrasting with a substantial decrease of $0.38 million in Q3 2024, indicating a shift in revenue recognition [18] Expenses and Compensation - Gross Margin for Q1 FY '26 was approximately 72%, compared to approximately 68% for FY '25, with expectations to remain in the 65-75% range [3] - Stock-based compensation expenses for Q3 2025 were $0.25 million, down from $0.37 million in Q3 2024, showing a reduction in employee compensation costs [19] - Depreciation and amortization expenses decreased to $0.06 million in Q3 2025 from $0.16 million in Q3 2024, indicating lower asset depreciation [19] IPO and Future Prospects - The company initiated the IPO/Spin-out process for Brightline Interactive in October 2025, with a potential IPO expected in the first half of calendar year 2026 [9] Changes in Accounts Receivable - The company experienced a significant change in accounts receivable, with an increase of $0.18 million in Q3 2025 compared to a decrease of $0.15 million in Q3 2024 [18]

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Financial Performance - For Q3 2025, total revenues were $37.7 million, a slight increase from $37.6 million in Q3 2024, with residential revenue rising by $1.9 million (6.9%) and commercial revenue decreasing by $1.8 million[5]. - The net loss for Q3 2025 was $5.6 million ($0.14 per share), compared to a net loss of $1.1 million ($0.05 per share) in Q3 2024, primarily due to the impact of the Prospect House and the termination of the New York City lease at the 250 Livingston Street property[6]. - Adjusted funds from operations (AFFO) for Q3 2025 were $5.6 million ($0.13 per share), down from $7.8 million ($0.18 per share) in Q3 2024[7]. - Net operating income (NOI) for Q3 2025 was $20.8 million, compared to $21.8 million in Q3 2024[8]. - Net loss for the nine months ended September 30, 2025, was $41,066,000, compared to a net loss of $5,496,000 for the same period in 2024[22]. - Funds from Operations (FFO) for the nine months ended September 30, 2025, was $(18,119,000), compared to $16,793,000 for the same period in 2024[30]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $56,631,000, compared to $54,629,000 for the same period in 2024, indicating an increase of approximately 4%[34]. - Net Operating Income (NOI) for the nine months ended September 30, 2025, was $64,673,000, compared to $63,022,000 for the same period in 2024, reflecting a growth of about 2.6%[36]. Cash Flow and Assets - Net cash provided by operating activities for the nine months ended September 30, 2025, was $16,464,000, down from $21,337,000 in 2024, representing a decrease of approximately 23%[22]. - Cash and cash equivalents and restricted cash at the end of the period was $56,645,000, up from $36,094,000 at the end of the previous period, marking an increase of approximately 57%[22]. - Total cash paid for interest for the nine months ended September 30, 2025, was $35,675,000, compared to $32,672,000 in 2024, representing an increase of about 9%[22]. - Cash used in financing activities for the nine months ended September 30, 2025, was $(10,752,000), a significant decrease from $35,629,000 in 2024[22]. Expenses and Impairments - The company experienced increased operating expenses, including higher property operating expenses and real estate taxes, contributing to the net loss[6]. - The company recorded an impairment of long-lived assets amounting to $33,780,000 during the nine months ended September 30, 2025[22]. - The company reported stock-based compensation of $3,298,000 for the nine months ended September 30, 2025, compared to $1,987,000 in 2024, indicating an increase of approximately 66%[22]. Dividends and Occupancy - The company declared a dividend of $0.095 per share for Q3 2025, consistent with the previous quarter[11]. - The occupancy rate for residential properties remained high, with new leases exceeding previous rents by nearly 14% and renewals by over 6%[3]. - The Prospect House property is in its initial lease-up phase, generating limited initial revenue but incurring fully loaded expenses[4]. Property Management - The company is actively seeking solutions for the vacancy at the 250 Livingston Street commercial property following the tenant's departure in mid-August[3].

Revenue and Profitability - Revenue for the three months ended September 30, 2025, was $1,173,000, a 32% increase from $887,000 in the same period of 2024[99] - Gross profit for the three months ended September 30, 2025, was $773,000, representing a gross profit margin of 66%, compared to 47% in the same period of 2024[100] - The net loss for the three months ended September 30, 2025, was $3,339,000, compared to a net loss of $3,184,000 in the same period of 2024[99] Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $4,165,000, a 15% increase from $3,633,000 in the same period of 2024[102] - Research and development expenses for the three months ended September 30, 2025, decreased by 35% to $428,000 from $657,000 in the same period of 2024[102] - Sales and marketing expenses for the three months ended September 30, 2025, increased by 27% to $1,538,000 from $1,212,000 in the same period of 2024[103] - General and administrative expenses for the three months ended September 30, 2025, increased by 25% to $2,199,000 from $1,764,000 in the same period of 2024[104] Cash Flow and Financing - As of September 30, 2025, the company had cash and cash equivalents of $3.4 million and an accumulated deficit of $78.5 million[106] - For the nine months ended September 30, 2025, net cash used in operating activities was $(8,521) thousand, a 19% increase in cash used compared to $(7,101) thousand for the same period in 2024[110] - Cash used in investing activities for the nine months ended September 30, 2025 was $(831) thousand, a 273% increase from $(223) thousand in 2024[110] - Cash provided by financing activities for the nine months ended September 30, 2025 was $6,259 thousand, a 56% decrease from $14,012 thousand in 2024[111] - The company plans to raise $2,850,000 through a PIPE financing, issuing 2,217,904 shares of common stock at a price of $1.285 per share[108] Future Outlook and Concerns - The company expects operating expenses to increase in absolute dollars as it continues to invest in growth and product development[96] - The company expects to incur additional losses in the future and has not achieved positive cash flow from operations to date[106] - The company may face challenges in raising additional capital, which could delay or suspend sales and marketing efforts, research and development activities, or other operations[109] - The company has substantial doubt about its ability to continue as a going concern for the next twelve months due to uncertainty in raising capital[109] - The company recorded a net decrease in cash and cash equivalents of $(3,039) thousand for the nine months ended September 30, 2025, compared to an increase of $6,734 thousand in 2024, representing a 385% decrease[111] Revenue Sources - The Catamaran System and the SImmetry SI Joint Fusion System are the primary revenue sources, with fluctuations based on surgical procedure volumes and discounts[91]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-41232 NSTS BANCORP, INC. (Exact name of the registrant as specified in its charter) Delaware 87-2522769 (State or Other Jurisdiction of (I.R ...

Revenue Performance - Total product sales for the three months ended September 30, 2025, were approximately $2.36 million, a decrease of about $154,000 or 6% compared to $2.51 million in the same period of 2024[116] - Dental revenue for the three months ended September 30, 2025, was approximately $2.32 million, down $149,212 from $2.47 million in the prior year[115] - International dental revenue decreased to approximately $1.0 million in Q3 2025, compared to $1.2 million in Q3 2024, a reduction of approximately $242,000 or 20%[119] - Revenue from Dental Service Organizations (DSOs), government agencies, and dental schools increased slightly to approximately $83,000 for the three months ended September 30, 2025, compared to $81,000 in the prior-year period[117] - E-commerce dental revenue totaled approximately $1.0 million for the three months ended September 30, 2025, compared to $1.1 million for the same period in 2024, a decrease of approximately $105,000 or 9%[118] - Consolidated revenue for the nine months ended September 30, 2025, was approximately $6.9 million, representing an increase of approximately $300,000, or 5%, compared to $6.6 million in 2024[130] - International revenue for the nine months ended September 30, 2025, was approximately $2.9 million, an increase of approximately $211,000, or 8%, compared to $2.7 million in 2024[133] Profitability and Loss - Gross profit for the three months ended September 30, 2025, was $1.64 million, compared to $1.84 million in the same period of 2024[114] - The net loss for the three months ended September 30, 2025, was $1.15 million, compared to a net loss of $1.46 million in the same period of 2024[114] - The loss from operations for the three months ended September 30, 2025, was approximately $1.1 million, an improvement of approximately $335,000, or 22%, compared to $1.5 million in 2024[128] - The loss from operations for the nine months ended September 30, 2025, was approximately $4.6 million, an improvement of approximately $98,000, or 2%, compared to $4.7 million in 2024[141] Expenses - Operating expenses for the three months ended September 30, 2025, totaled $2.78 million, down from $3.31 million in the prior year[114] - Consolidated selling, general, and administrative (SG&A) expenses for the three months ended September 30, 2025, were approximately $2.7 million, a decrease of approximately $325,000, or 10%, compared to $3.1 million in 2024[124] - Consolidated research and development (R&D) expenses for the three months ended September 30, 2025, were approximately $16,000, representing a decrease of approximately $216,000, or 93%, compared to $232,000 in 2024[126] - Consolidated research and development (R&D) expenses for the nine months ended September 30, 2025, were approximately $437,000, a decrease of approximately $204,000, or 32%, compared to $641,000 in 2024[138] Cash Flow and Financial Position - Net cash provided by financing activities increased by approximately $553,000 for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to the issuance of $800,000 in convertible notes payable during 2025[146] - As of September 30, 2025, the Company had cash and cash equivalents of approximately $1.3 million and working capital of approximately $3.1 million[149] - Net cash flows used in operating activities were approximately $2.7 million for the nine months ended September 30, 2025, compared to $1.4 million for the same period in 2024[149] Going Concern and Future Outlook - Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern for a period of one year from the date these unaudited condensed financial statements are issued[149] - The Company is actively pursuing additional sources of funding through equity and debt financing to support its operating plan[150] - The continuation of operations is dependent upon the Company's ability to raise additional capital and achieve sustained profitability[151] - The Company continues to focus on generating positive cash flow from operations by increasing revenue from its dental business and expanding sales of medical devices and disposables[151] Market Developments - The company has received FDA clearance for the CompuFlo® Epidural Computer Controlled Anesthesia System, expanding its market potential in medical applications[109] - The recent issuance of a CPT code by the American Medical Association enhances reimbursement potential for epidural procedures using the CompuFlo® system, supporting broader adoption in the U.S.[110] - Sales in China for the three months ended September 30, 2025, were approximately $200,000, compared to no sales in the same period of 2024, reflecting successful reestablishment of operations[120] - Revenue from the medical segment totaled approximately $41,000 for the three months ended September 30, 2025, a decrease of approximately $6,000, or 13%, compared to the same period in 2024[121] Consolidated Financial Performance - Consolidated gross profit for the three months ended September 30, 2025, was approximately $1.6 million, representing a decrease of approximately $195,000, or 11%, compared to $1.8 million in 2024[123]