VivoSim Labs, INC.

Previous wording

For the three months ended June 30, 2025 and 2024, total revenue was less than $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. Product revenue was zero and less than $0.1 million for the three months ended June 30, 2025 and 2024, respectively. Product revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Current wording

For the three months ended September 30, 2025 and 2024, total revenue was less than $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. We expect royalty revenue to remain consistent going forward. Product revenue was zero and less than $0.1 million for the three months ended September 30, 2025 and 2024, respectively. Product revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Previous wording

For the three months ended June 30, 2025, total research and development expenses were $1.0 million, a decrease of $0.4 million, or approximately 29%, from the prior year period. Our average full-time research and development staff decreased from an average of fifteen full-time employees for the three months ended June 30, 2024 to an average of ten full-time employees for the three months ended June 30, 2025. Our operations for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 resulted in a $0.1 million decrease in personnel related costs and a $0.3 million decrease in materials related costs.

Current wording

For the three months ended September 30, 2025, total research and development expenses were $0.9 million, a decrease of approximately $0.1 million, or 6%, from the prior year period. Our average full-time research and development staff decreased from an average of fourteen full-time employees for the three months ended September 30, 2024, to an average of nine full-time employees for the three months ended September 30, 2025. Our operations for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted in a $0.3 million decrease in personnel related expenses, which included salary and share-based compensation expense, due to the decrease in headcount. These decreases were offset by a $0.2 million increase in materials related costs, mainly due to the capitalization of materials costs in the prior fiscal year. Going forward, we expect research and development expenses to decrease, cost of revenues to increase, and service revenue to increase as we execute our service model.

Previous wording

For the three months ended June 30, 2025 and 2024, total selling, general and administrative expenses were approximately $2.0 million, a decrease of approximately 3%, from the prior year period. Our average full-time selling, general and administrative staff decreased from an average of five full-time employees for the three months ended June 30, 2024 to an average of three full-time employees for the three months ended June 30, 2025. Our operations for the three months ended June 30, 2025 as compared to the three months ended June 20, 2024 resulted in a $0.2 million decrease in personnel related expenses which includes stock-based compensation, which was offset by a $0.2 million increase in consulting costs.

Current wording

For the three months ended September 30, 2025, total selling, general and administrative expenses were approximately $1.7 million, an increase of approximately $0.1 million, or 5%, from the prior year period. Our average full-time selling, general and administrative staff decreased from an average of five full-time employees for the three months ended September 30, 2024 to an average of four full-time employees for the three months ended September 30, 2025. Our operations for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted in a $0.1 million increase in personnel related expenses. Of the $0.1 million increase in personnel expenses, there was $0.2 million increase in recruiting expenses, which was offset by $0.1 decrease in stock-based compensation.

Previous wording

Other income was $0.1 million and less than $0.1 million for the three months ended June 30, 2025 and 2024, respectively, which was related to interest income.

Current wording

Other income was approximately $0.1 million and less than $0.1 million for the three months ended September 30, 2025 and 2024, respectively, which was related to interest income.

Previous wording

The accompanying Condensed Consolidated Financial Statements have been prepared on the basis that we are a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of June 30, 2025, we had cash and cash equivalents of approximately $9.1 million, restricted cash of approximately $0.1 million and an accumulated deficit of $345.0 million. The restricted cash was pledged as collateral for a letter of credit that the Company is required to maintain as a security deposit under the terms of the lease agreement for its facilities. We had negative cash flow from operations of approximately $3.9 million during the three months ended June 30, 2025. At March 31, 2025, we had cash and cash equivalents of approximately $11.3 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $342.2 million.

Current wording

The accompanying Condensed Consolidated Financial Statements have been prepared on the basis that we are a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2025, we had cash and cash equivalents of approximately $6.7 million, restricted cash of approximately $0.1 million and an accumulated deficit of $347.5 million. The restricted cash was pledged as collateral for a letter of credit that the Company is required to maintain as a security deposit under the terms of the lease agreement for its facilities. We had negative cash flow from operations of approximately $6.3 million during the six months ended September 30, 2025. At March 31, 2025, we had cash and cash equivalents of approximately $11.3 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $342.2 million.

Previous wording

At June 30, 2025, we had total current assets of approximately $9.7 million and current liabilities of approximately $2.1 million, resulting in working capital of $7.6 million. At March 31, 2025, we had total current assets of approximately $12.1 million and current liabilities of approximately $3.7 million, resulting in working capital of $8.4 million.

Current wording

At September 30, 2025, we had total current assets of approximately $7.6 million and current liabilities of approximately $2.4 million, resulting in working capital of $5.2 million. At March 31, 2025, we had total current assets of approximately $12.1 million and current liabilities of approximately $3.7 million, resulting in working capital of $8.4 million.

Previous wording

The following table summarizes the primary sources and uses of cash for the three months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes the primary sources and uses of cash for the six months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Net cash used in operating activities for the three months ended June 30, 2025, was approximately $3.9 million as compared to $3.0 million used in operating activities for the three months ended June 30, 2024. This $0.9 million increase in operating cash usage can be attributed primarily to the timing of R&D projects and related payables.

Current wording

Net cash used in operating activities for the six months ended September 30, 2025, was approximately $6.3 million as compared to $5.6 million used in operating activities for the six months ended September 30, 2024. This $0.7 million increase in operating cash usage can be attributed primarily to the timing of payables and R&D projects.

Previous wording

There were no investing activities for the three months ended June 30, 2025. Net cash provided by investing activities was less than $0.1 million for the three months ended June 30, 2024, which consisted of interest income.

Current wording

There were no investing activities for the six months ended September 30, 2025. Net cash provided by investing activities was less than $0.1 million for the six months ended September 30, 2024, which consisted of interest income.

Previous wording

Net cash provided by financing activities was $1.7 million and $6.2 million for the three months ended June 30, 2025 and 2024, respectively. Financing activities consisted of the sale of common stock through at-the-market (“ATM”) share offerings for proceeds of approximately $1.8 million as well as the repayment of the insurance premium financing liability of $0.1 million for the three months ended June 30, 2025. Financing activities consisted of the sale of common stock through at-the-market (“ATM”) share offerings and a public offering of common stock and accompanying common warrants and pre-funded warrants for the three months ended June 30, 2024.

Current wording

Net cash provided by financing activities was $1.7 million and $5.9 million for the six months ended September 30, 2025 and 2024, respectively. Financing activities consisted of the sale of common stock through at-the-market (“ATM”) share offerings for proceeds of approximately $1.8 million as well as the repayment of the insurance premium financing liability of $0.1 million for the six months ended September 30, 2025. Financing activities consisted of the sale of common stock through at-the-market ("ATM") share offerings and a public offering of common stock and accompanying common warrants and pre-funded warrants for the six months ended September 30, 2024.

Previous wording

Our ongoing cash requirements include research and development expenses, compensation for personnel, consulting fees, legal and accounting support, insurance premiums, facilities, maintenance of our intellectual property portfolio, license and collaboration agreements, listing on the Nasdaq Capital Market, and other miscellaneous fees to support our operations. We expect our total operating expense for the fiscal year ending March 31, 2026 to be between $10 million and $11 million. Based on our current operating plan and available cash resources, we will need substantial additional funding to support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Current wording

Our ongoing cash requirements include research and development expenses, compensation for personnel, consulting fees, legal and accounting support, insurance premiums, facilities, maintenance of our intellectual property portfolio, license and collaboration agreements, listing on the Nasdaq Capital Market, and other miscellaneous fees to support our operations. We expect our total operating expense for the fiscal year ending March 31, 2026 to be between $10 million and $12 million. Based on our current operating plan and available cash resources, we will need substantial additional funding to support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Previous wording

During the three months ended June 30, 2025, we issued 701,729 shares of common stock for net proceeds of approximately $1.8 million, all of which were sold pursuant to the 2024 Shelf. As of June 30, 2025, we have sold an aggregate of 1,198,134 shares of common stock in ATM offerings under the 2024 ATM Prospectus, with gross proceeds of approximately $6.9 million and net proceeds of approximately $6.7 million. As of June 30, 2025, there was approximately $140.1 million available for future offerings under the 2024 Shelf, and approximately $3.1 million available for future offerings through our ATM program under the 2024 ATM Prospectus, as amended on April 11, 2025.

Current wording

During the six months ended September 30, 2025, we issued 701,729 shares of common stock for net proceeds of approximately $1.8 million, all of which were sold pursuant to the 2024 Shelf. As of September 30, 2025, we have sold an aggregate of 1,198,134 shares of common stock in ATM offerings under the 2024 ATM Prospectus, with gross proceeds of approximately $6.9 million and net proceeds of approximately $6.7 million. As of September 30, 2025, there was approximately $140.1 million available for future offerings under the 2024 Shelf, and approximately $3.1 million available for future offerings through our ATM program under the 2024 ATM Prospectus, as amended on April 11, 2025.