FEMASYS INC

Previous wording

We are a leading biomedical innovator, addressing significant unmet needs in women’s health worldwide, with a broad patent-protected portfolio of disruptive, accessible, in-office therapeutic and diagnostic products. The Company is a U.S. manufacturer that has received global regulatory approvals for our product portfolio, which is currently being commercialized in the U.S. and key international markets. FemaSeed® Intratubal Insemination, a groundbreaking first-step infertility treatment delivering sperm directly to the site of conception, is U.S. FDA-cleared and approved in Europe, United Kingdom (“UK”), Canada, Israel, Australia and New Zealand. A peer-reviewed publication of positive data from its pivotal clinical trial of FemaSeed demonstrated effectiveness and safety with high satisfaction from both patients and practitioners. FemSperm®, which includes setup, preparation and analysis kits designed to expand our infertility portfolio and, for the first time, enable gynecologists to perform in-office sperm preparation and analysis for use with FemaSeed. FemVue®, a companion diagnostic for fallopian tube assessment via ultrasound, is U.S. FDA-cleared and approved in Europe, UK, Canada, Japan, Israel, Australia and New Zealand. FemVue Controlled is a US FDA-cleared diagnostic device and is the next-generation design integrating features of FemVue and FemChec® technologies into a single platform, enabling multiple clinical uses within one solution, including confirmation of tubal patency prior to use with FemaSeed. FemCerv®, an endocervical tissue sampler for cervical cancer diagnosis, is U.S. FDA-cleared and approved in Europe, UK, Canada, Israel and New Zealand.

Current wording

We are a leading biomedical innovator, addressing significant unmet needs in women’s health worldwide, with a broad patent-protected portfolio of disruptive, accessible, in-office therapeutic and diagnostic products. The Company is a U.S. manufacturer that has received global regulatory approvals for its product portfolio, which is currently being commercialized in the U.S. and key international markets. FemaSeed® Intratubal Insemination, a groundbreaking first-step infertility treatment delivering sperm directly to the site of conception, is U.S. FDA-cleared and approved in Europe, United Kingdom (“UK”), Canada, Israel, Australia and New Zealand. A peer-reviewed publication of positive data from its pivotal clinical trial of FemaSeed demonstrated effectiveness and safety with high satisfaction from both patients and practitioners. FemSperm®, which includes setup, preparation and analysis kits designed to expand our infertility portfolio and, for the first time, enable gynecologists to perform in-office sperm preparation and analysis for use with FemaSeed. FemVue®, a companion diagnostic for fallopian tube assessment via ultrasound, is U.S. FDA-cleared and approved in Europe, UK, Canada, Japan, Israel, Australia and New Zealand. FemHSG™ Catheter, used with FemVue for in-office ultrasound-based evaluation is CE mark approved in Europe. FemVue Controlled is a U.S. FDA-cleared diagnostic device and is the next-generation design integrating features of FemVue and FemChec® technologies into a single platform, enabling multiple clinical uses within one solution, including confirmation of tubal patency prior to use with FemaSeed. FemCerv®, an endocervical tissue sampler for cervical cancer diagnosis, is U.S. FDA-cleared and approved in Europe, UK, Canada, Israel and New Zealand.

Previous wording

FemBloc® permanent birth control is a revolutionary first-in-class non-surgical solution which involves minimally-invasive placement of a patented delivery system for precise delivery of our proprietary synthetic tissue adhesive (blended polymer) into both fallopian tubes simultaneously. Over time, the blended polymer fully degrades and produces nonfunctional scar tissue to permanently block the fallopian tubes in a safe and natural approach. This is in stark contrast to centuries-old surgical sterilization with reported risks that include infection, minor or major bleeding, injury to nearby organs, anesthesia-related events, and even death. Along with the various surgical risks, some patients may not qualify as good surgical candidates due to obesity or medical comorbidities. The FemBloc non-surgical approach has the potential to offer a safe and effective, more accessible in-office alternative with fewer risks, contraindications, and substantially lower cost than the surgical alternative. A peer-reviewed publication of positive data from its initial clinical trials of FemBloc has demonstrated compelling effectiveness and five-year safety with high satisfaction from both patients and practitioners. In March 2025, we announced Conformité Européenne (“CE”) mark certification under European Union (“EU”) Medical Device Regulation (“MDR”) as the first regulatory approval in the world for the FemBloc delivery system for non-surgical female permanent birth control and in June 2025, we announced CE mark certification under EU MDR for the class III blended polymer component, achieving approval for the entire FemBloc system in the EU. In August and September 2025, we announced UK and New Zealand regulatory approvals, respectively, for FemBloc. In March and September 2025, we announced strategic distribution partnerships for FemBloc in Spain and France/Benelux region, respectively. We received FDA approval in November 2025 of our investigational device exemption (“IDE”) supplement to move forward to the final phase of the pivotal clinical trial (clinicaltrials.gov: NCT05977751) for U.S. approval. In March 2026, we announced the initiation of enrollment in this final phase. FemChec, a companion diagnostic product for FemBloc’s ultrasound-based confirmation test, is U.S. FDA-cleared and approved in Europe, UK, Canada, Israel, Australia and New Zealand. FemCath® for selective fallopian tube evaluation is U.S. FDA-cleared and approved in Europe, Canada and Israel for selective fallopian tube evaluation. We are a woman-founded and led company with an expansive, internally created intellectual property portfolio with approximately 228 issued patents globally, in-house chemistry, manufacturing, and controls (CMC) and device manufacturing capabilities and proven ability to develop products with commercialization efforts underway. Our suite of products and U.S. product candidate address what we believe are multi-billion dollar global market segments in which there …

Excerpt shortened here; the source contains the full paragraph.

Current wording

FemBloc® permanent birth control is a revolutionary first-in-class non-surgical solution which involves minimally-invasive placement of a patented delivery system for precise delivery of our proprietary synthetic tissue adhesive (blended polymer) into both fallopian tubes simultaneously. Over time, the blended polymer fully degrades and produces nonfunctional scar tissue to permanently block the fallopian tubes in a safe and natural approach. This is in stark contrast to centuries-old surgical sterilization with reported risks that include infection, minor or major bleeding, injury to nearby organs, anesthesia-related events, and even death. Along with the various surgical risks, some patients may not qualify as good surgical candidates due to obesity or medical comorbidities. The FemBloc non-surgical approach has the potential to offer a safe and effective, more accessible in-office alternative with fewer risks, contraindications, and substantially lower cost than the surgical alternative. A peer-reviewed publication of positive data from its initial clinical trials of FemBloc has demonstrated compelling effectiveness and five-year safety with high satisfaction from both patients and practitioners. In March 2025, we announced Conformité Européenne (“CE”) mark certification under European Union (“EU”) Medical Device Regulation (“MDR”) as the first regulatory approval in the world for the FemBloc delivery system for non-surgical female permanent birth control and in June 2025, we announced CE mark certification under EU MDR for the class III blended polymer component, achieving approval for the entire FemBloc system in the EU. In August and September 2025, we announced UK and New Zealand regulatory approvals, respectively, for FemBloc. In March and September 2025, we announced strategic distribution partnerships for FemBloc in Spain and the France/Benelux region, respectively. We received FDA approval in November 2025 of our investigational device exemption (“IDE”) supplement to move forward to the final phase of the pivotal clinical trial (clinicaltrials.gov: NCT05977751) for U.S. approval. In March 2026, we announced the initiation of enrollment in this final phase. FemChec, a companion diagnostic product for FemBloc’s ultrasound-based confirmation test, is U.S. FDA-cleared and approved in Europe, UK, Canada, Israel, Australia and New Zealand.

Previous wording

On April 1, 2026, we announced appointment of John Canning as Chief Operating Officer, who will drive operational execution and support commercial growth.

Current wording

On April 1, 2026, we announced the appointment of John Canning as Chief Operating Officer, who will drive operational execution and support commercial growth.

Previous wording

On April 22,2026, we announced the commercial launch of FemaSeed Complete, a comprehensive fertility solution that enables OB/GYNs to perform first-line insemination entirely within their own practices.

Current wording

On April 22, 2026, we announced the commercial launch of FemaSeed Complete, a comprehensive fertility solution that enables OB/GYNs to perform first-line insemination entirely within their own practices.

Previous wording

Sales increased by $83,625, or 24.5%, to $424,889 for the three months ended March 31, 2026 from $341,264 for the three months ended March 31, 2025, primarily attributable to sales of FemVue.

Current wording

Sales decreased by $77,441, or 18.9%, to $331,827 for the three months ended June 30, 2026 from $409,268 for the three months ended June 30, 2025, primarily attributable to lower international sales of FemVue.

Previous wording

Cost of sales increased by $41,340 or 35.3%, to $158,606 for the three months ended March 31, 2026 from $117,266 for the three months ended March 31, 2025, and is primarily attributed to increased sales.

Current wording

Cost of sales decreased by $15,735 or 9.9%, to $142,436 for the three months ended June 30, 2026 from $158,171 for the three months ended June 30, 2025, and is primarily attributed to decreased sales.

Previous wording

R&D expenses decreased by $1,659,071 or 55.9%, to $1,309,401 for the three months ended March 31, 2026 from $2,968,472 for the three months ended March 31, 2025. The decrease primarily reflects the transition of development products into inventory to support commercialization, along with lower development, clinical, compensation and professional service costs.

Current wording

R&D expenses increased by $532,449 or 37.6%, to $1,946,878 for the three months ended June 30, 2026 from $1,414,429 for the three months ended June 30, 2025. The increase primarily reflects the transition of development products into inventory to support commercialization during 2025, and increased clinical costs, partially offset by reduced compensation costs.

Previous wording

Sales and marketing expenses increased by $407,188 or 44.8%, to $1,315,755 for the three months ended March 31, 2026 from $908,567 for the three months ended March 31, 2025. The increase resulted primarily from higher compensation costs, professional fees and travel expenses.

Current wording

Sales and marketing expenses increased by $309,021 or 31.4%, to $1,293,998 for the three months ended June 30, 2026 from $984,977 for the three months ended June 30, 2025. The increase resulted primarily from higher compensation costs and travel expenses.

Previous wording

General and administrative expenses increased by $59,677, or 3.5%, to $1,782,390 for the three months ended March 31, 2026 from $1,722,713 for the three months ended March 31, 2025. The increase resulted primarily from increased professional fees, offset by reduced compensation costs.

Current wording

General and administrative expenses increased by $314,606, or 19.5%, to $1,931,578 for the three months ended June 30, 2026 from $1,616,972 for the three months ended June 30, 2025. The increase resulted primarily from increased professional fees, compensation costs and facility costs.

Previous wording

Depreciation and amortization expenses decreased by $2,583, or 3.0%, to $82,270 for the three months ended March 31, 2026 from $84,853 for the three months ended March 31, 2025. The decrease resulted from certain fixed assets reaching the end of their useful lives and no longer depreciating.

Current wording

Depreciation and amortization expenses decreased by $3,474, or 4.0%, to $82,811 for the three months ended June 30, 2026 from $86,285 for the three months ended June 30, 2025. The decrease resulted from certain fixed assets reaching the end of their useful lives and no longer depreciating.

Previous wording

Other income (expense), net increased by $5,510,053 or 1,251.1%, to $5,069,633 for the three months ended March 31, 2026 from $440,420 for the three months ended March 31, 2025. The increase resulted from the change in fair value on the Conversion Option liability and Warrants liabilities, interest income earned on our cash and cash equivalents and reduced non-cash interest expense related to amortization for our convertible note. Refer to table below for further details.

Current wording

Other income (expense), net increased by $1,332,000 or 181.4%, to $597,644 of income for the three months ended June 30, 2026 from $734,356 of expense for the three months ended June 30, 2025. The increase resulted from the change in fair value on the Conversion Option liability and Warrants liabilities, interest income earned on our cash and cash equivalents, reduced non-cash interest expense related to amortization for our convertible notes and debt issuance costs incurred in 2025. Refer to the table below for further details.

Previous wording

Income tax benefit decreased by $4,188 or 100%, to $0 for the three months ended March 31, 2026 from $4,188 for the three months ended March 31, 2025 due to an estimation of lower income tax expense in the first quarter of 2026 compared to 2025.

Current wording

Income tax expense increased by $865 or 100%, to $865 for the three months ended June 30, 2026 from $0 for the three months ended June 30, 2025 due to an estimation of higher income tax expense in the second quarter of 2026 as compared to 2025.

Previous wording

Since our inception through March 31, 2026, our operations have been financed primarily by net proceeds from the sale of our common stock and convertible preferred stock, indebtedness and, to a lesser extent, product revenue. As of March 31, 2026, we had $5,386,041 of cash and cash equivalents and an accumulated deficit of $144,980,044.

Current wording

Since our inception through June 30, 2026, our operations have been financed primarily by net proceeds from the sale of our common stock and convertible preferred stock, indebtedness and, to a lesser extent, product revenue. As of June 30, 2026, we had $1,443,502 of cash and cash equivalents and an accumulated deficit of $149,449,139.

Previous wording

In July 2022, we entered into an Equity Distribution Agreement with Piper Sandler & Co. (the “Sales Agent”) and filed a related prospectus establishing an “at-the-market” facility, pursuant to which we may offer and sell shares of our common stock from time to time through the Sales Agent. In December 2025, we filed a new prospectus pursuant to which we may sell up to $9.8 million under the Equity Distribution Agreement. As of March 31, 2026, approximately 624,000 shares of common stock had been sold for aggregate proceeds of approximately $353,000 under the Equity Distribution Agreement pursuant to the prospectus. As of March 31, 2026, the amount we were authorized to sell was subject to baby-shelf limitations. As of March 31, 2026, the available amount pursuant to the prospectus was approximately $9.5 million.

Current wording

In July 2022, we entered into an Equity Distribution Agreement with Piper Sandler & Co. (the “Sales Agent”) and filed a related prospectus establishing an “at-the-market” facility, pursuant to which we may offer and sell shares of our common stock from time to time through the Sales Agent. In December 2025, we filed a new prospectus pursuant to which we may sell up to $9.8 million under the Equity Distribution Agreement. As of June 30, 2026, 31,195 shares of common stock had been sold for aggregate proceeds of approximately $353,000 under the Equity Distribution Agreement pursuant to the prospectus. As of June 30, 2026, the amount we were authorized to sell was subject to baby-shelf limitations. As of June 30, 2026, the available amount pursuant to the prospectus was approximately $9.4 million.

Previous wording

In June 2025, we sold 3,600,000 shares of common stock in an underwritten public offering at $0.85 per share. Separately and concurrently, we sold 1,686,275 shares of common stock in a private placement at a price of $0.85 per share to certain existing institutional stockholders and a price of $1.02 per share to certain directors and officers. Net proceeds from the transaction were $3,705,061.

Current wording

In June 2025, we sold 180,000 shares of common stock in an underwritten public offering at $17.00 per share. Separately and concurrently, we sold 84,314 shares of common stock in a private placement at a price of $17.00 per share to certain existing institutional stockholders and a price of $20.40 per share to certain directors and officers. Net proceeds from the transaction were $3,705,061.

Previous wording

On June 30, 2025, we entered into an Any Market Purchase Agreement (“Purchase Agreement” or “AMPA”) with Alumni Capital LP (“Alumni”) whereby we have the right, but not obligation, to sell to Alumni up to an aggregate of $10 million in shares of common stock in a series of purchases until December 31, 2026. We may elect that Alumni purchase up to $1 million in shares of common stock (or up to $5 million if mutually agreed) at either (i) the lowest traded price for 4 previous business days, multiplied by 90%, or (ii) up to the lesser of (a) $1 million in shares of common stock, or (b) 100% of the average daily trading volume of common stock for previous two business days at lowest daily dollar volume-weighted average price, multiplied by 97%. We are limited to issuances to Alumni or 19.99% of the shares of common stock outstanding immediately prior to the execution of the Purchase Agreement.

Current wording

On June 30, 2025, we entered into an Any Market Purchase Agreement (“Purchase Agreement” or “AMPA”) with Alumni Capital LP (“Alumni”) whereby we have the right, but not the obligation, to sell to Alumni up to an aggregate of $10 million in shares of common stock in a series of purchases until December 31, 2026. We may elect that Alumni purchase up to $1 million in shares of common stock (or up to $5 million if mutually agreed) at either (i) the lowest traded price for the four previous business days, multiplied by 90%, or (ii) up to the lesser of (a) $1 million in shares of common stock, or (b) 100% of the average daily trading volume of common stock for the previous two business days at the lowest daily dollar volume-weighted average price, multiplied by 97%. We are limited to issuances to Alumni of 19.99% of the shares of common stock outstanding immediately prior to the execution of the Purchase Agreement.

Previous wording

In August 2025, we sold an aggregate of (i) 10,434,586 shares of common stock in a public offering and to certain Company officers (ii) pre-funded warrants to purchase up to 11,750,000 shares of common stock and (iii) common warrants to purchase up to 22,184,586 shares of common stock. Additionally, common warrants to purchase 443,692 shares of common stock were issued to the underwriter as compensation for services performed. The purchase price per share for the common stock was $0.36, except for shares sold to certain company officers, which was $0.5151 per share. The purchase price per share for the pre-funded warrants was $0.3599. The net proceeds from the August 2025 Financing at closing were approximately $7.1 million. As of March 31, 2026, 5,000,000 pre-funded warrants and 9,219,110 common warrants were exercised for approximately $3.3 million.

Current wording

In August 2025, we sold an aggregate of (i) 521,731 shares of common stock in a public offering and to certain Company officers (ii) pre-funded warrants to purchase up to 587,500 shares of common stock and (iii) common warrants to purchase up to 1,109,237 shares of common stock. Additionally, common warrants to purchase 22,185 shares of common stock were issued to the underwriter as compensation for services performed. The purchase price per share for the common stock was $7.20, except for shares sold to certain company officers, which was $10.31 per share. The purchase price per share for the pre-funded warrants was $7.20. The net proceeds from the August 2025 Financing at closing were approximately $7.1 million. As of June 30, 2026, 250,000 pre-funded warrants and 460,959 common warrants were exercised for approximately $3.3 million.

Previous wording

In November 2025, we entered into a definitive agreement for the issuance of (i) senior secured convertible notes in an aggregate principal amount of $12,000,000, convertible into shares of 16,378,563 common stock at a conversion price of $0.73 per share, (ii) Series A-1 Warrants to purchase up to an aggregate of 16,378,563 shares of common stock at an exercise price of $0.81 per share, subject to adjustments (iii) Series B-1 Warrants to purchase an aggregate of 16,378,563 shares of common stock at an exercise price of $0.92 per share, subject to adjustments, and (iv) Series C-1 Warrants to purchase an aggregate of 16,378,563 shares of common stock at an exercise price of $1.10 per share, subject to adjustments. The financing resulted in aggregate gross proceeds of $12,000,000, with total potential funding of approximately $58 million, if all warrants are exercised for cash. In March 2026, we modified the November 2025 agreement to remove the non-standard adjustment to the conversion price of the notes and exercise prices of the Series A-1 Warrants, Series B-1 Warrants and Series C-1 Warrants, respectively, upon a Share Combination Event. As consideration for this modification, the Company issued the holders of the 2025 Notes and related Warrants new Series D-1 Warrants which allow the holders to purchase an aggregate number of 16,378,563 shares of the Company’s common stock at an exercise price of $0.58 per share.

Current wording

In November 2025, we entered into a definitive agreement for the issuance of (i) senior secured convertible notes in an aggregate principal amount of $12,000,000, convertible into 818,544 shares of common stock at a conversion price of $14.66 per share, (ii) Series A-1 Warrants to purchase up to an aggregate of 818,937 shares of common stock at an exercise price of $16.20 per share, subject to adjustments (iii) Series B-1 Warrants to purchase an aggregate of 818,937 shares of common stock at an exercise price of $18.40 per share, subject to adjustments, and (iv) Series C-1 Warrants to purchase an aggregate of 818,937 shares of common stock at an exercise price of $22.00 per share, subject to adjustments, if all warrants are exercised for cash. In March 2026, we modified the November 2025 agreement to remove the non-standard adjustment to the conversion price of the notes and exercise prices of the Series A-1 Warrants, Series B-1 Warrants and Series C-1 Warrants, respectively, upon a Share Combination Event. As consideration for this modification, the Company issued the holders of the 2025 Notes and related Warrants new Series D-1 Warrants which allow the holders to purchase an aggregate number of 818,937 shares of the Company’s common stock at an exercise price of $11.60 per share. The financing resulted in aggregate gross proceeds of $12,000,000, with total potential funding of approximately $68 million, including the D-1 Warrants. In April 2026, shareholders approved the issuance of shares of common stock issuable upon conversion of the 2025 Notes and exercise of Series A-1, B-1, C-1, and D-1 Warrants, including any issuances to directors and officers of the Company who are holders of these instruments, in excess of 19.99% of the issued and outstanding shares of common stock of the Company (to the extent that anti-dilution or price adjustment provisions in the instruments result in an effective conversion or exercise price below the Nasdaq Minimum Price).

Previous wording

Based on our current operating plan, our current cash and cash equivalents and anticipated revenues from product sales are expected to be sufficient to fund our ongoing operations into the third quarter of 2026. However, it is not sufficient to fund our ongoing operations for twelve months from the date of these financial statements and we will need to obtain additional financing to fund our ongoing operations. Our convertible notes contain restrictions that limit our ability to issue securities without complying with certain participation rights. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate. As a result of our current limited financial liquidity, we have concluded that substantial doubt exists about our ability to continue as a going concern.

Current wording

Based on our current operating plan, our current cash and cash equivalents, proceeds from our recently completed private placement of $30 million, and anticipated revenues from product sales are expected to be sufficient to fund our ongoing operations for at least twelve months. Our convertible notes contain restrictions that limit our ability to issue securities without complying with certain participation rights. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate. If we are unable to obtain additional financing when needed, we may need to terminate, significantly modify, or delay the development of our U.S. product candidate, or we may need to obtain funds through collaborations or otherwise on terms that may require us to relinquish rights to our technologies or our U.S. product candidate that we might otherwise seek to develop or commercialize independently. If we are unable to raise adequate additional capital as and when required in the future, we could be forced to cease development and commercialization activities and terminate our operations, and you could experience a complete loss of your investment.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:

Previous wording

For the three months ended March 31, 2026, cash used in operating activities was $4,143,508, attributable to net income of $846,100, offset by net non-cash gains of $4,667,748 and a net change in our net operating assets and liabilities of $321,860. Non-cash activity primarily consisted of a change in fair value of the Conversion Option liability and warrants liabilities of $1,513,413 and $3,683,000, respectively, $176,607 of amortization of the discount on convertible notes, $151,608 in share-based compensation, $118,180 in right-of-use asset amortization and $82,270 in depreciation and amortization. The change in our net operating assets and liabilities was primarily due to an increase in inventory of $365,018, decreases in accounts payable of $253,439, accrued expenses of $193,226, lease liabilities of $125,280, offset by a decrease in accounts receivable of $444,336 and decreases in prepaid and other assets of $168,722. We intend to meet future operating cash requirements through increased sales of commercial products and fundraising, as discussed inFunding requirements.

Current wording

For the six months ended June 30, 2026, cash used in operating activities was $8,079,197, attributable to net loss of $3,622,995, net non-cash gains of $4,837,472 and a net change in our net operating assets and liabilities of $381,270. Non-cash activity primarily consisted of a change in fair value of the Conversion Option liability and warrants liabilities of $1,732,413 and $4,228,000, respectively, $362,657 of amortization of the discount on convertible notes, $362,428 in share-based compensation, $232,775 in right-of-use asset amortization and $165,081 in depreciation and amortization. The change in our net operating assets and liabilities was primarily due to increases in accounts payable of $499,250, decreases in accounts receivable of $465,551 and prepaid and other assets of $308,488, offset by an increase in inventory of $451,028 and decreases in lease liabilities of $249,081 and accrued expenses of $184,220. We intend to meet future operating cash requirements through increased sales of commercial products and fundraising, as discussed in Funding requirements.

Previous wording

For the three months ended March 31, 2025, cash used in operating activities was $4,765,214, attributable to a net loss of $5,896,839, partially offset by non-cash charges of $984,503 and a net change in our net operating assets and liabilities of $147,122. Non-cash charges primarily consisted of $367,237 in share-based compensation, $356,699 in amortization of the discount on convertible notes, $132,207 in right-of-use asset amortization and $84,853 in depreciation and amortization. The change in our net operating assets and liabilities was primarily due to a decrease in accounts receivable of $254,775 and an increase in accounts payable and accrued expenses of $909,917, partially offset by an increase in inventory of $815,865, a decrease in lease liabilities of $133,076 and increase in prepaid and other assets of $53,523. The Company intends to meet future operating cash requirements through increased sales of commercial products and fundraising, as discussed in Funding requirements.

Current wording

For the six months ended June 30, 2025, cash used in operating activities was $9,117,950, attributable to a net loss of $10,482,761 and a net change in our net operating assets and liabilities of $416,139, partially offset by non-cash charges of $1,780,950. Non-cash charges primarily consisted of $746,612 in amortization of the discount on convertible notes, $549,208 in share-based compensation, $260,819 in right-of-use asset amortization, $171,138 in depreciation and amortization and $53,173 in loss on property and equipment dispositions. The change in our net operating assets and liabilities was primarily due to increases in inventory of $2,186,415, decreases in lease liabilities of $264,580 and accrued expenses of $98,297, partially offset by an increase in accounts payable of $1,758,162 and decreases in accounts receivable of $233,789 and prepaid and other assets of $165,056. We intend to meet future operating cash requirements through increased sales of commercial products and fundraising, as discussed in Funding requirements.

Previous wording

For the three months ended March 31, 2026, cash used in investing activities for the purchase of property and equipment was $79,138.

Current wording

For the six months ended June 30, 2026, cash used in investing activities for the purchase of property and equipment and acquisition of patents was $101,317.

Previous wording

For the three months ended March 31, 2025, cash used in investing activities for the purchase of property and equipment was $96,605.

Current wording

For the six months ended June 30, 2025, cash used in investing activities for the purchase of property and equipment and acquisition of patents was $193,567.

Previous wording

For the three months ended March 31, 2026, cash provided by financing activities was $342,334, attributable to proceeds from sales under the at-the-market facility, net of issuance costs.

Current wording

For the six months ended June 30, 2026, cash provided by financing activities was $357,663, attributable to proceeds from sales under the at-the-market facility and proceeds from the issuance of shares under the ESPP Plan.

Previous wording

For the three months ended March 31, 2025, cash provided by financing activities was $5,230,266, attributable to proceeds from sales under the at-the-market facility, net of issuance costs.

Current wording

For the six months ended June 30, 2025, cash provided by financing activities was $9,077,823, attributable to proceeds from sales under the at-the-market facility, net of issuance costs of $5,331,887, proceeds from the June 2025 financing, net of issuance costs of $3,705,061 and proceeds from the issuance of shares under the ESPP Plan of $40,875.

Previous wording

Our policy is to recognize revenue when a customer obtains control of the promised goods under Accounting Standards Update (ASU) 2020-05, Revenue from Contracts with Customers (Topic 606), which we adopted effective January 1, 2018. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods, and we have elected to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price. We do not have multiple performance obligations in our customer orders, so revenue is recognized upon shipment of our goods based upon contractually stated pricing at standard payment terms typically ranging from 30 to 60 days. All revenue is recognized at a point in time.

Current wording

Our policy is to recognize revenue when a customer obtains control of the promised goods under ASC 606, Revenue from Contracts with Customers, which we adopted effective January 1, 2018. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods, and we have elected to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price. We do not have multiple performance obligations in our customer orders, so revenue is recognized upon shipment of our goods based upon contractually stated pricing at standard payment terms typically ranging from 30 to 60 days. All revenue is recognized at a point in time.

Previous wording

The Company accounts for debt and equity instruments issued in financing transactions, including the senior secured convertible notes (“2025 Notes”) and related warrants issued in its November 2025 financing transaction, using significant judgments and estimates. The financial instruments issued contain complex embedded features, including conversion options, exercise price adjustment provisions, redemption features, and other settlement terms that require evaluation under applicable accounting guidance to determine whether such features should be classified as equity or as derivative liabilities.

Current wording

The Company accounts for debt and equity instruments issued in financing transactions, including the senior secured convertible notes (“2025 Notes”) and related warrants issued in its November 2025 financing transaction, which require significant management judgments and estimates. The financial instruments issued contain complex embedded features, including conversion options, exercise price adjustment provisions, redemption features, and other settlement terms that require evaluation under applicable accounting guidance to determine whether such features should be classified as equity or derivative liabilities.

Previous wording

Management concluded that certain embedded conversion features within the 2025 Notes and the related warrants were not indexed to the Company’s common stock under ASU 815-40 and did not qualify for equity classification, primarily due to shareholder approval requirements that limited settlement in shares and, prior to the March 2026 modification, certain market-based adjustment provisions. Accordingly, the conversion option embedded in the 2025 Notes and the warrants were recognized as derivative liabilities and initially recorded at fair value in accordance with ASC 820, with subsequent changes in fair value recognized in earnings each reporting period.

Current wording

Management concluded that certain embedded conversion features within the 2025 Notes and the related warrants were not indexed to the Company’s common stock under ASC 815-40 and therefore did not qualify for equity classification, primarily due to shareholder approval requirements that limited settlement in shares and, prior to the March 2026 modification, certain market-based adjustment provisions. Accordingly, the Conversion Option embedded in the 2025 Notes and the Warrants were recognized as derivative liabilities and initially measured at fair value in accordance with ASC 820, with subsequent changes in fair value recognized in earnings each reporting period.

Previous wording

In March 2026, the Company modified the 2025 Notes and related warrants to remove certain market-based adjustment provisions and issued additional Series D-1 warrants in connection with the modification. The Company evaluated the modification under applicable accounting guidance and recorded the new Series D-1 warrants as derivative liabilities at fair value upon issuance.

Current wording

In March 2026, the Company modified the 2025 Notes and related warrants to remove certain market-based adjustment provisions and issued additional Series D-1 warrants in connection with the modification. The Company evaluated the modification under the applicable accounting guidance and recorded the new Series D-1 warrants as derivative liabilities at fair value upon issuance.

Previous wording

The valuation of the derivative liabilities requires the use of significant estimates and assumptions, including the Company’s stock price, expected volatility, expected term, risk-free interest rates, probability and timing of potential future events, and assumptions related to conversion and exercise probability. Changes in these assumptions could materially impact the estimated fair value of the derivative liabilities and the related gains or losses recognized in the Company’s statements of comprehensive income (loss).

Current wording

The valuation of the derivative liabilities required the use of significant estimates and assumptions, including the Company’s stock price, expected volatility, expected term, risk-free interest rates, probability and timing of potential future events, and assumptions related to conversion and exercise probability. Management also exercised significant judgment in evaluating whether the Conversion Option and Warrants met the liability or equity classification criteria under ASC 815-40, particularly in connection with the March 2026 modification and the April 2026 shareholder approval. Changes in these assumptions could have materially impacted the estimated fair value of the derivative liabilities and the related gains or losses recognized in the Company’s condensed statements of operations and comprehensive loss, and the classification of these instruments.