VivoSim Labs, INC.

Previous wording

We are now offering liver toxicology predictive screening and research services as well as working on predicting and studying the intestinal side effect profiles of drugs that are therapeutic candidates of pharmaceutical and biotech companies at all stages of drug development. Our services offer the potential benefit of reducing the significant risk and cost of bringing therapeutics to market through the regulatory process. It is estimated that less than 10% of drug candidates entering clinical trials are approved, with a portion of the failures due to unexpected liver toxicity or intestinal intolerability. In addition, even approved drugs are occasionally withdrawn after liver toxicity is determined to be caused by the drug in a phenomenon called drug induced liver injury. We presented findings at the May 2025 Digestive Disease Week scientific conference showing that our liver toxicology platform had a best-in-class predictive power. Our liver predictive power was shown to be 87.5% for a set of challenging liver toxicity cases – inclusive of classic cases of “liver tox misses” drugs with unforeseen liver toxicity found in clinical trials or drugs that were withdrawn from the market after liver toxicity issues emerged later. The platform identified correctly that 87.5% of the known liver-toxic drugs could be seen as liver toxic using NAMkind™ liver. This is known as the sensitivity of the platform, which at 87.5% is a world’s best. Importantly, the specificity was 100%, meaning that none of the compounds tested that are not liver toxic were incorrectly identified as having liver toxicity issues by the platform.

Current wording

We are now offering liver toxicology predictive screening and research services as well as working on predicting and studying the intestinal side effect profiles of drugs that are therapeutic candidates of pharmaceutical and biotech companies at all stages of drug development. We plan to not only market this directly to pharmaceutical and biotech companies, but also partner with specific contract research organizations to complement our offering and to quickly grow our portfolio of clients. Our services offer the potential benefit of reducing the significant risk and cost of bringing therapeutics to market through the regulatory process. It is estimated that less than 10% of drug candidates entering clinical trials are approved, with a portion of the failures due to unexpected liver toxicity or intestinal intolerability. In addition, even approved drugs are occasionally withdrawn after liver toxicity is determined to be caused by the drug in a phenomenon called drug induced liver injury. We presented findings at the May 2025 Digestive Disease Week scientific conference showing that our liver toxicology platform had a best-in-class predictive power. Our liver predictive power was shown to be 87.5% for a set of challenging liver toxicity cases – inclusive of classic cases of “liver tox misses” drugs with unforeseen liver toxicity found in clinical trials or drugs that were withdrawn from the market after liver toxicity issues emerged later. The platform identified correctly that 87.5% of the known liver-toxic drugs could be seen as liver toxic using NAMkind™ liver. This is known as the sensitivity of the platform, which at 87.5% is a world’s best. Importantly, the specificity was 100%, meaning that none of the compounds tested that are not liver toxic were incorrectly identified as having liver toxicity issues by the platform.

Previous 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.

Current wording

For the three months ended December 31, 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 December 31, 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. Going forward, we expect to generate service revenues related to our service model.

Previous wording

For the three months ended September 30, 2025 and 2024, cost of revenues was zero and less than $0.1 million, respectively. Cost of 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 December 31, 2025 and 2024, cost of revenues was zero and less than $0.1 million, respectively. Cost of revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025. Going forward, we expect cost of revenues to increase as we execute our service model.

Previous 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.

Current wording

For the three months ended December 31, 2025, total research and development expenses were $1.1 million, a decrease of approximately $0.6 million, or 36%, from the prior year period. Our average full-time research and development staff decreased from an average of thirteen full-time employees for the three months ended December 31, 2024, to an average of ten full-time employees for the three months ended December 31, 2025. Our operations for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024 resulted in a $0.1 million decrease in personnel related expenses, which included salary and share-based compensation expense, due to the decrease in headcount. There was also a $0.5 million decrease in material related expenses mainly due to the write-down of inventory in the prior fiscal year. Going forward, we expect research and development expenses to increase as we execute our service model.

Previous 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.

Current wording

For the three months ended December 31, 2025, total selling, general and administrative expenses were approximately $1.6 million, a decrease of approximately $0.1 million, or 4%, from the prior year period. Our average full-time selling, general and administrative staff remained at an average of four full-time employees for each of the three months ended December 31, 2025 and 2024. Our operations for the three months ended December 31, 2025 as compared to the three months ended December 31, 2024 resulted in a $0.2 million decrease in corporate related expenses, mostly due to decreases in legal costs and investor relations costs, which was offset by $0.1 increase in consulting expenses.

Previous wording

The following table summarizes our results of operations for the six months ended September 30, 2025 and 2024 (in thousands, except %):

Current wording

The following table summarizes our results of operations for the nine months ended December 31, 2025 and 2024 (in thousands, except %):

Previous wording

For each of the six months ended September 30, 2025 and 2024, total revenue was $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 six 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.

Current wording

For each of the nine months ended December 31, 2025 and 2024, total revenue was $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 nine months ended December 31, 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. Going forward, we expect to generate service revenues related to our service model.

Previous wording

For the six months ended September 30, 2025 and 2024, total cost of revenues was zero and less than $0.1 million, respectively, and related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Current wording

For the nine months ended December 31, 2025 and 2024, total cost of revenues was zero and less than $0.1 million, respectively, and related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025. Going forward, we expect cost of revenues to increase as we execute our service model.

Previous wording

The following table summarizes our research and development expenses for the six months ended September 30, 2025 and 2024 (in thousands, except %):

Current wording

The following table summarizes our research and development expenses for the nine months ended December 31, 2025 and 2024 (in thousands, except %):

Previous wording

For the six months ended September 30, 2025, total research and development expenses were $1.9 million, a decrease of $0.5 million, or approximately 19%, from the prior year period. Our average full-time research and development staff decreased from an average of fourteen full-time employees for the six months ended September 30, 2024 to an average of nine full-time employees for the six months ended September 30, 2025. Our operations for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024 resulted in a $0.4 million decrease in personnel related costs, which includes stock-based compensation, due to the decrease in headcount. Our fiscal 2026 operations also resulted in a $0.1 million decrease 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.

Current wording

For the nine months ended December 31, 2025, total research and development expenses were $3.1 million, a decrease of $1.1 million, or approximately 26%, from the prior year period. Our average full-time research and development staff decreased from an average of fourteen full-time employees for the nine months ended December 31, 2024 to an average of ten full-time employees for the nine months ended December 31, 2025. Our operations for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024 resulted in a $0.6 million net decrease in personnel related costs, which includes stock-based compensation, due to the decrease in headcount. The net decrease included a $0.2 million increase in recruiting expenses related to the hiring of the Chief Scientific Officer. There was also a $0.6 million decrease in material related costs mainly due to the write-down of inventory in the prior fiscal year. The decreases were offset by a $0.1 million increase in consulting related costs. Going forward, we expect research and development expenses to increase as we execute our service model.

Previous wording

The following table summarizes our selling, general and administrative expenses for the six months ended September 30, 2025 and 2024 (in thousands, except %):

Current wording

The following table summarizes our selling, general and administrative expenses for the nine months ended December 31, 2025 and 2024 (in thousands, except %):

Previous wording

For the six months ended September 30, 2025 and 2024, total selling, general and administrative expenses were approximately $3.7 million, approximately the same as prior year period. Our average full-time selling, general and administrative staff decreased from an average of five full-time employees for the six months ended September 30, 2024 to an average of four full-time employees for the six months ended September 30, 2025. Our operations for the six months ended September 30, 2025 as compared to the six months ended September 20, 2024 resulted in a $0.1 million decrease in personnel related expenses, which includes stock-based compensation, due to the decrease in headcount. Our fiscal 2026 operations also resulted in a $0.1 million decrease in general corporate costs, which includes legal and investor relations expenses. These decreases were offset by a $0.2 million increase in consulting costs, which is related to strategic consultants and services that were used for our service model.

Current wording

For the nine months ended December 31, 2025 and 2024, total selling, general and administrative expenses were approximately $5.3 million, a decrease of $0.1 million, or approximately 1%, compared to nine months ended December 31, 2024. Our average full-time selling, general and administrative staff decreased from an average of five full-time employees for the nine months ended December 31, 2024 to an average of four full-time employees for the nine months ended December 31, 2025. Our operations for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024 resulted in a $0.1 million net decrease in personnel related expenses, which includes stock-based compensation, due to the decrease in headcount. Of the $0.1 million net decrease, there was a $0.2 million decrease in stock-based compensation due to certain equity awards fully vesting in prior year. Additionally, there was a $0.2 million increase in recruiting expenses related to hiring the new Chief Commercial Officer. The remaining $0.1 million decrease in personnel related expenses was related to the decrease in salary due to lower headcount. There was also a $0.3 million decrease in general corporate costs, which includes legal and investor relations expenses. Legal and investor relations expenses decreased due to allocating more budget in fiscal 2026 to the execution of the new service model strategy. The decrease in general corporate costs was offset by a $0.3 million increase in consulting costs, which was due to consulting costs incurred to execute the new service model strategy.

Previous wording

Other income was approximately $0.2 million and $0.1 million for the six months ended September 30, 2025 and 2024, respectively, which was related to interest income.

Current wording

Other income was approximately $0.2 million and $0.1 million for the nine months ended December 31, 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 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.

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 December 31, 2025, we had cash and cash equivalents of approximately $4.3 million, restricted cash of approximately $0.1 million and an accumulated deficit of $350.2 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 $8.6 million during the nine months ended December 31, 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 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.

Current wording

At December 31, 2025, we had total current assets of approximately $6.0 million and current liabilities of approximately $2.5 million, resulting in working capital of $3.5 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 six months ended September 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes the primary sources and uses of cash for the nine months ended December 31, 2025 and 2024 (in thousands):

Previous 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.

Current wording

Net cash used in operating activities for the nine months ended December 31, 2025, was approximately $8.6 million as compared to $7.4 million used in operating activities for the nine months ended December 31, 2024. This $1.2 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 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.

Current wording

There were no investing activities for the nine months ended December 31, 2025. Net cash provided by investing activities was less than $0.1 million for the nine months ended December 31, 2024, which consisted of interest income.

Previous 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.

Current wording

Net cash provided by financing activities was $1.6 million and $5.7 million for the nine months ended December 31, 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 $0.2 million for the nine months ended December 31, 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 nine months ended December 31, 2024.

Previous 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.

Current wording

During the nine months ended December 31, 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 December 31, 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 December 31, 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.