iSpecimen Inc.
For the period ended Sep 30, 2025. Filed Nov 17, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 17, 2025
ISPC$0.81+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001213900-25-076629
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-17.
0001213900-25-111547
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 123 current paragraphs.
76 unchanged; 37 reworded; 7 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
On July 31, 2025, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we agreed to issue and sell, in a Private Placement, an aggregate of 1,559,828 securities, comprised of (i) 267,379 shares of Common Stock at a purchase price of $1.122 per Share, and (ii) pre-funded warrants to purchase up to 1,292,449 shares of Common Stock at a purchase price of $1.1219 per Share, for aggregate gross proceeds of $1,749,998, before deducting placement agent fees and other offering expenses. The pre-funded warrants are immediately exercisable until such time as the pre-funded warrants are exercised in full. The Private Placement closed on August 4, 2025.
Current report
We incurred offering costs of approximately $100,000, resulting in net proceeds of approximately $1,649,998.
Current report
Underwritten Offering
Current report
On July 23, 2025, the Company entered into an underwriting agreement with WestPark, pursuant to which the Company agreed to issue and sell, in an underwritten public offering, an aggregate of 5,714,283 securities, consisting of (i) 1,482,644 shares of Common Stock, and (ii) pre-funded warrants to purchase up to 4,231,639 shares of Common Stock, at an exercise price of $0.0001 per share. The securities were sold at a public offering price of $0.70 per share (or $0.6999 per pre-funded warrant), for gross proceeds of $3,999,574, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The pre-funded warrants are immediately exercisable until such time as the pre-funded warrants are exercised in full. The offering closed on July 25, 2025.
Current report
Sales and marketing expenses increased by approximately $509,000, or 81%, from approximately $632,000 for the three months ended September 30, 2024 to approximately $1,141,000 for the three months ended September 30, 2025. The increase was primarily attributable to increases in external marketing expense of approximately $973,000, which was partially offset by the decrease in payroll and related expenses of approximately $425,000 and advertising and promotions expense of approximately $39,000.
Current report
Comparison of the Nine Months Ended September 30, 2025 and 2024
Current report
Supply development expenses decreased by approximately $205,000, or 49%, from approximately $420,000 for the nine months ended September 30, 2024 to approximately $215,000 for the nine months ended September 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $85,000 and payroll and related expenses of approximately $120,000.
Removed paragraphs (4)
Previous report
Comparison of the Six Months Ended June 30, 2025 and 2024
Previous report
Sales and marketing expenses decreased by approximately $1,143,000, or 65%, from approximately $1,749,000 for the six months ended June 30, 2024 to approximately $606,000 for the six months ended June 30, 2025. The decrease was primarily attributable to decrease in payroll and related expenses of approximately $937,000, advertising and promotions expense of approximately $176,000 and external marketing expense of approximately $34,000, which was partially offset by the general operating expenses related to sales and marketing of approximately $4,000.
Previous report
Supply development expenses decreased by approximately $143,000, or 43%, from approximately $335,000 for the six months ended June 30, 2024 to approximately $193,000 for the six months ended June 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $76,000 and payroll and related expenses of approximately $67,000.
Previous report
Net cash used in financing activities was approximately $1,000 for the six months ended June 30, 2025, which consisted of approximately $1,000 for the payment of offering costs in connection with the on-going Public Offering.
Reworded paragraphs (37)
Previous wording
On March 5, 2024, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Rodman & Renshaw LLC as agent (the “Sales Agent”) pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $1,500,000 (the “ATM Shares”), from time to time through the Sales Agent. The ATM Shares when issued will be registered pursuant to our shelf registration statement on Form S-3 (File No 333- 265976), which became effective on July 12, 2022. We sold the ATM Shares, from time to time, pursuant to the ATM Agreement, in transactions that are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the year ended December 31, 2024, we issued 199,004 shares of common stock for gross proceeds of approximately $1,494,000 under the ATM Agreement. In connection with the ATM Offering, we incurred offering costs of approximately $255,000, resulting in net proceeds of approximately $1,239,000.
Current wording
On March 5, 2024, we entered into the ATM Agreement with Rodman & Renshaw LLC as agent (the “Sales Agent”) pursuant to which we may issue and sell shares of our common stock, having an aggregate offering price of up to $1,500,000, from time to time through the Sales Agent. The ATM Shares when issued will be registered pursuant to our shelf registration statement on Form S-3 (File No 333- 265976), which became effective on July 12, 2022. We sold the ATM Shares, from time to time, pursuant to the ATM Agreement, in transactions that are “at the market offerings” as defined in Rule 415(a)(4) promulgated under the Securities Act. During the year ended December 31, 2024, we issued 199,004 shares of common stock for gross proceeds of approximately $1,494,000 under the ATM Agreement. In connection with the ATM Offering, we incurred offering costs of approximately $255,000, resulting in net proceeds of approximately $1,239,000.
Previous wording
On September 19, 2024, we entered into the Purchase Agreement with the Lender. Pursuant to the provisions of the Purchase Agreement, the Lender agreed to provide a loan to us in the amount of $1,000,000 and we agreed to issue to the Lender a promissory note in the principal amount of $1,000,000 payable within 12 months after the date of issuance, with interest accruing and payable at a rate of 18% per annum. The Purchase Agreement contains customary representations and warranties and obligates the Lender to provide an additional loan to us, in the form of a revolving line of credit of up to $1,000,000, upon our initial filing of a Registration Statement for an underwritten or best-efforts public offering for gross proceeds of at least $5,000,000. On September 25, 2024, we and the Lender closed the transactions described in the Purchase Agreement, the Lender provided funds to the Company in the net amount of $959,980 and we issued the Note to the Lender in the principal amount of $1,000,000. WestPark Capital, Inc. (“WestPark”) served as the placement agent in connection with the Loan and was paid a placement agent fee in the amount of $40,020 for its services.
Current wording
On September 19, 2024, we entered into the Note Purchase Agreement with the Lender. Pursuant to the provisions of the Note Purchase Agreement, the Lender agreed to provide a loan to us in the amount of $1,000,000 and we agreed to issue to the Lender a promissory note in the principal amount of $1,000,000 payable within 12 months after the date of issuance, with interest accruing and payable at a rate of 18% per annum. The Note Purchase Agreement contains customary representations and warranties and obligates the Lender to provide an additional loan to us, in the form of a revolving line of credit of up to $1,000,000, upon our initial filing of a Registration Statement for an underwritten or best-efforts public offering for gross proceeds of at least $5,000,000. On September 25, 2024, we and the Lender closed the transactions described in the Note Purchase Agreement, the Lender provided funds to the Company in the net amount of $959,980 and we issued the Note to the Lender in the principal amount of $1,000,000. WestPark served as the placement agent in connection with the Loan and was paid a placement agent fee in the amount of $40,020 for its services.
Previous wording
On October 29, 2024, we entered into a placement agency agreement (the “Placement Agency Agreement”) with WestPark. (the “Placement Agent”), and a securities purchase agreement (the “Securities Purchase Agreement”) with investors pursuant to which we agreed to issue and sell, in a “reasonable best efforts” public offering (the “Offering”) (i) 132,814 shares (the “Shares”) of our common stock, par value $0.0001 per share (the “Common Stock”) at an offering price of $2.999 per share, and (ii) pre-funded warrants to purchase up to 1,533,852 shares of Common Stock (the “Pre-Funded Warrants”) at an offering price of $3.00 per Share, less $0.0001 per Pre-Funded Warrant, for aggregate gross proceeds of $4,998,464 (or $4,999,998 assuming the full exercise of the Pre-Funded Warrants), before deducting placement agent fees and other offering expenses. As part of its compensation for acting as Placement Agent for the Offering, we paid the Placement Agent a cash fee of 4.0% of the aggregate gross proceeds plus reimbursement of certain expenses and legal fees. We intend to use the net proceeds of the offering for repayment of outstanding debt, potential acquisitions of assets or investments in businesses, products and technologies, and for marketing and advertising services. The remainder of the net proceeds will be used for working capital purposes.
Current wording
On October 29, 2024, we entered into a the Placement Agency Agreement with WestPark and the Securities Purchase Agreement with investors pursuant to which we agreed to issue and sell, in a “reasonable best efforts” public offering (i) 132,814 shares of Common Stock at an offering price of $2.999 per share, and (ii) pre-funded warrants to purchase up to 1,533,852 shares of Common Stock at an offering price of $3.00 per Share, less $0.0001 per pre-funded warrant, for aggregate gross proceeds of $4,998,464 (or $4,999,998 assuming the full exercise of the pre-funded warrants), before deducting placement agent fees and other offering expenses.
Previous wording
The Offering closed on October 31, 2024. The securities sold in the Offering were offered and sold pursuant to a registration statement on Form S-1 (File No. 333-282736), which was filed with the Securities and Exchange Commission (the “Commission”) on October 18, 2024, and subsequently declared effective by the Commission on October 29, 2024.
Current wording
The Offering closed on October 31, 2024. The securities sold in the offering were offered and sold pursuant to a registration statement on Form S-1 (File No. 333-282736), which was filed with the Commission on October 18, 2024, and subsequently declared effective by the Commission on October 29, 2024.
Previous wording
The Company’s financial performance is subject to global economic conditions and their impact on levels of spending by our customer research organizations, particularly discretionary spending for procurement of specimens used for research. Economic recessions may have adverse consequences across industries, including the health and biospecimen industries, which may adversely affect our business and financial condition. We increased our allowance for doubtful accounts in accounts receivables by $17,579 as of June 30, 2025 due to certain customers either lack liquidity or have filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers to mitigate the risk to future collectability of receivables.
Current wording
The Company’s financial performance is subject to global economic conditions and their impact on levels of spending by our customer research organizations, particularly discretionary spending for procurement of specimens used for research. Economic recessions may have adverse consequences across industries, including the health and biospecimen industries, which may adversely affect our business and financial condition. We increased our allowance for doubtful accounts in accounts receivables by $14,057 as of September 30, 2025 due to certain customers either lack liquidity or have filed for bankruptcy. We have enhanced procedures related to our credit check process for new and existing customers to mitigate the risk to future collectability of receivables.
Previous wording
Throughout the years ended December 31, 2024 and 2023, we have initiated efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in our workforce while streamlining operations and rationalizing our resources to focus on key market opportunities. As a result, we began to experience significant decreases in expenditures starting in the second half of 2023. The reductions in workforce since January 1, 2023 through December 31, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 146% and technology costs of approximately 64% during the year December 31, 2024 when compared to the year ended December 31, 2023. During the second quarter of 2025, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 76% and technology costs of approximately 71% during the six months ended June 30, 2025, when compared to the six months ended June 30, 2024.
Current wording
Throughout the years ended December 31, 2024 and 2023, we have initiated efforts to decrease our capital and operational expenditures by cutting costs and right sizing the Company through reductions in our workforce while streamlining operations and rationalizing our resources to focus on key market opportunities. As a result, we began to experience significant decreases in expenditures starting in the second half of 2023. The reductions in workforce since January 1, 2023 through December 31, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 146% and technology costs of approximately 64% during the year December 31, 2024 when compared to the year ended December 31, 2023. During the third quarter of 2025, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 76% and technology costs of approximately 69% during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024.
Previous wording
We completed the implementation of a next day quote system in the third quarter of 2023 and we continue to see positive results in 2024 and up to the second quarter of 2025, as evidenced by increased conversion ratios of quotes to purchase orders of 43%. Previously, it took an extended number of days to complete a feasibility study in order to provide a customer quote, which negatively impacted the time to convert a quote to a purchase order.
Current wording
We completed the implementation of a next day quote system in the third quarter of 2023 and we continue to see positive results in 2024 and up to the third quarter of 2025, as evidenced by increased conversion ratios of quotes to purchase orders of 43%. Previously, it took an extended number of days to complete a feasibility study in order to provide a customer quote, which negatively impacted the time to convert a quote to a purchase order.
Previous wording
While we are committed to developing our technology, we are investing at a significantly lower level in 2025 when compared to 2024 and prior years, while we focus on growing our revenues through key market opportunities and assessing our capital raise prospects. During the six months ended June 30, 2025 and 2024, we capitalized approximately $0 and $448,000, respectively, of internally developed software costs. These investments have resulted in multiple process improvements, streamlining workflows and providing deeper insights into orders for all users of our marketplace.
Current wording
While we are committed to developing our technology, we are investing at a significantly lower level in 2025 when compared to 2024 and prior years, while we focus on growing our revenues through key market opportunities and assessing our capital raise prospects. During the nine months ended September 30, 2025 and 2024, we capitalized approximately $1,000,000 and $588,000, respectively, of internally developed software costs. These investments have resulted in multiple process improvements, streamlining workflows and providing deeper insights into orders for all users of our marketplace, as well as digital transformation of our marketplace.
Previous wording
Financial Operations Overview and Analysis for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)
Current wording
Financial Operations Overview and Analysis for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)
Previous wording
Revenue decreased by approximately $2,151,000, or 75%, from approximately $2,864,000 for the three months ended June 30, 2024 to approximately $713,000 for the three months ended June 30, 2025. This was primarily due to the decrease of 3,385, or approximately 57%, in specimen count from 5,918 specimens in the three months ended June 30, 2024 to 2,533 specimens in the three months ended June 30, 2025. The significant decrease in specimen count was mainly due to the change in revenue recognition during the fourth quarter of 2024. The specimen counts during the second quarter of 2024 consists of accessioned specimens that were both delivered and not yet delivered specimens to customers, while the specimen counts during the second quarter of 2025 consists only of delivered specimens.
Current wording
Revenue decreased by approximately $2,555,000, or 96%, from approximately $2,662,000 for the three months ended September 30, 2024 to approximately $107,000 for the three months ended September 30, 2025. This was primarily due to the decrease of 8,181, or approximately 97%, in specimen count from 8,461 specimens in the three months ended September 30, 2024 to 280 specimens in the three months ended September 30, 2025. The significant decrease in specimen count was mainly due to the change in revenue recognition during the fourth quarter of 2024. The specimen count during the third quarter of 2024 consists of accessioned specimens that were both delivered and not yet delivered specimens to customers, while the specimen count during the third quarter of 2025 consists only of delivered specimens.
Previous wording
The effect of the decrease in specimen count have also caused a decrease to the average selling price by approximately $202, or 42%, from approximately $484 in the three months ended June 30, 2024 to approximately $282 in the three months ended June 30, 2025.
Current wording
The effect of the decrease in specimen count have also caused an increase to the average selling price by approximately $66, or 21%, from approximately $315 in the three months ended September 30, 2024 to approximately $381 in the three months ended September 30, 2025.
Previous wording
Cost of revenue decreased by approximately $1,323,000, or 55%, from approximately $2,424,000 for the six months ended June 30, 2024 to approximately $1,101,000 for the six months ended June 30, 2025, which was attributable to an approximately 57% decrease in the number of specimens delivered for the current period as compared to the accessioned specimens in the same period in the prior year, offset by an approximately $10, or 5%, increase in the average cost per specimen.
Current wording
Cost of revenue decreased by approximately $1,350,000, or 87%, from approximately $1,554,000 for the three months ended September 30, 2024 to approximately $204,000 for the three months ended September 30, 2025, which was attributable to an approximately 97% decrease in the number of specimens delivered for the current period as compared to the accessioned specimens in the same period in the prior year, offset by an approximately $547, or 298%, increase in the average cost per specimen.
Previous wording
Technology expenses decreased by approximately $376,000, or 41%, from approximately $912,000 for the three months ended June 30, 2024 to approximately $536,000 for the three months ended June 30, 2025. The decrease was related to decrease in amortization expense of internally developed software of approximately $175,000 and payroll and related expenses of approximately $214,000, which was partially offset by the increase in professional fees of approximately $13,000.
Current wording
Technology expenses decreased by approximately $204,000, or 37%, from approximately $755,000 for the three months ended September 30, 2024 to approximately $551,000 for the three months ended September 30, 2025. The decrease was related to decrease in amortization expense of internally developed software of approximately $86,000 and payroll and related expenses of approximately $192,000, which was partially offset by the increase in professional fees of approximately $74,000.
Previous wording
Technology expenditures capitalized as internally developed software costs decreased by approximately $172,000, or 100%, from approximately $172,000 for the six months ended June 30, 2024 to $0 for the three months ended June 30, 2025 due to reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2025 when compared to 2024 and prior years.
Current wording
Technology expenditures capitalized as internally developed software costs increased by approximately $860,000, or 614%, from approximately $140,000 for the three months ended September 30, 2024 to $1,000,000 for the three months ended September 30, 2025 due to installation of a new platform to modernize the Company’s internally developed software, as part of the digital transformation program in 2025 when compared to the reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2024 and 2023.
Previous wording
Supply development expenses decreased by approximately $38,000, or 28%, from approximately $138,000 for the three months ended June 30, 2024 to approximately $99,000 for the three months ended June 30, 2025. The decrease was primarily attributable to a decrease in payroll and related expenses of approximately $48,000, offset by the increase in professional fees of approximately $10,000.
Current wording
Supply development expenses decreased by approximately $63,000, or 74%, from approximately $85,000 for the three months ended September 30, 2024 to approximately $22,000 for the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in payroll and related expenses of approximately $53,000 and professional fees of approximately $10,000.
Previous wording
Fulfillment costs decreased by approximately $185,000, or 43%, from approximately $433,000 for the three months ended June 30, 2024 to approximately $248,000 for the three months ended June 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $4,000, payroll and related expenses of approximately $179,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment and general operating expenses related to fulfillment of approximately $2,000.
Current wording
Fulfillment costs decreased by approximately $295,000, or 66%, from approximately $449,000 for the three months ended September 30, 2024 to approximately $154,000 for the three months ended September 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $8,000 and payroll and related expenses of approximately $305,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, which was partially offset by the increase in general operating expenses related to fulfillment of approximately $18,000.
Previous wording
General and administrative expenses decreased by approximately $107,000, or 10%, from approximately $1,055,000 for the three months ended June 30, 2024 to approximately $948,000 for the three months ended June 30, 2025. The decrease was attributable to a decrease in general operating expenses of approximately $38,000, utilities and facilities expenses of approximately $33,000, doubtful account expense of approximately $100,000 and taxes and insurance of approximately $169,000, which were partially offset by increases in compensation costs of approximately $84,000, professional fees of approximately $68,000, depreciation and amortization of approximately $1,000 and franchise tax of $80,000.
Current wording
General and administrative expenses decreased by approximately $29,000, or 3%, from approximately $893,000 for the three months ended September 30, 2024 to approximately $864,000 for the three months ended September 30, 2025. The decrease was attributable to a decrease in general operating expenses of approximately $37,000, utilities and facilities expenses of approximately $7,000, doubtful account expense of approximately $5,000, taxes and insurance of approximately $91,000, compensation costs of approximately $135,000 and franchise tax of $89,000, which were partially offset by the increase in professional fees of approximately $334,000 and depreciation and amortization of approximately $1,000.
Previous wording
Other income, net, increased by approximately $702,000, or 966%, from an income of approximately $73,000 for the three months ended June 30, 2024 to approximately $774,000 for the three months ended June 30, 2025. The increase in other income, net, was attributable to an increase of other income of approximately $696,000 and increase in recovery of interest and penalties on sales tax liability of approximately $10,000, which was partially offset by a decrease in interest income of approximately $9,000 and decrease in interest expense of approximately $4,000.
Current wording
Other income, net, decreased by approximately $216,000, or 81%, from an income of approximately $266,000 for the three months ended September 30, 2024 to approximately $50,000 for the three months ended September 30, 2025. The decrease in other income, net, was attributable to the decrease of other income of approximately $224,000, decrease in interest income of approximately $1,000, increase in recovery of interest and penalties on sales tax liability of approximately $2,000 and decrease in interest expense of approximately $7,000.
Previous wording
Revenue decreased by approximately $3,383,000, or 66%, from approximately $5,154,000 for the six months ended June 30, 2024 to approximately $1,771,000 for the six months ended June 30, 2025. This was primarily due to the decrease of 6,317, or approximately 57%, in specimen count from 11,159 specimens in the six months ended June 30, 2024 to 4,842 specimens in the six months ended June 30, 2025. The significant decrease in specimen count was mainly due to the change in revenue recognition during the fourth quarter of 2024. The specimen counts during the second quarter of 2024 consists of accessioned specimens that were both delivered and not yet delivered specimens to customers, while the specimen counts during the second quarter of 2025 consists only of delivered specimens.
Current wording
Revenue decreased by approximately $5,938,000, or 76%, from approximately $7,816,000 for the nine months ended September 30, 2024 to approximately $1,877,000 for the nine months ended September 30, 2025. This was primarily due to the decrease of 14,498, or approximately 74%, in specimen count from 19,620 specimens in the nine months ended September 30, 2024 to 5,122 specimens in the nine months ended September 30, 2025. The significant decrease in specimen count was mainly due to the change in revenue recognition during the fourth quarter of 2024. The specimen count during the third quarter of 2024 consists of accessioned specimens that were both delivered and not yet delivered specimens to customers, while the specimen count during the third quarter of 2025 consists only of delivered specimens.
Previous wording
The effect of the decrease in specimen count have also caused a decrease to the average selling price by approximately $96, or 21%, from approximately $462 in the six months ended June 30, 2024 to approximately $366 in the six months ended June 30, 2025.
Current wording
The effect of the decrease in specimen count have also caused a decrease to the average selling price by approximately $32, or 8%, from approximately $398 in the nine months ended September 30, 2024 to approximately $366 in the nine months ended September 30, 2025.
Previous wording
Cost of revenue decreased by approximately $980,000, or 69%, from approximately $1,424,000 for the three months ended June 30, 2024 to approximately $444,000 for the three months ended June 30, 2025, which was attributable to an approximately 57% decrease in the number of specimens delivered for the current period as compared to the accessioned specimens in the same period in the prior year, and an approximately $65, or 27%, decrease in the average cost per specimen.
Current wording
Cost of revenue decreased by approximately $2,673,000, or 67%, from approximately $3,979,000 for the nine months ended September 30, 2024 to approximately $1,306,000 for the nine months ended September 30, 2025, which was attributable to an approximately 74% decrease in the number of specimens delivered for the current period as compared to the accessioned specimens in the same period in the prior year, offset by an approximately $52, or 26%, increase in the average cost per specimen.
Previous wording
Technology expenses decreased by approximately $742,000, or 41%, from approximately $1,824,000 for the six months ended June 30, 2024 to approximately $1,082,000 for the six months ended June 30, 2025. The decrease was related to professional fees of approximately $17,000, amortization expense of internally developed software of approximately $340,000 and payroll and related expenses of approximately $384,000 and general operating expenses related to technology expenses of approximately $1,000.
Current wording
Technology expenses decreased by approximately $946,000, or 37%, from approximately $2,579,000 for the nine months ended September 30, 2024 to approximately $1,633,000 for the nine months ended September 30, 2025. The decrease was primarily attributable to decrease in amortization expense of internally developed software of approximately $426,000, payroll and related expenses of approximately $576,000 and general operating expenses related to technology expenses of approximately $1,000, which was partially offset by the increase in professional fees of approximately $57,000.
Previous wording
Technology expenditures capitalized as internally developed software costs decreased by approximately $448,000, or 100%, from approximately $448,000 for the six months ended June 30, 2024 to $0 for the six months ended June 30, 2025 due to reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2025 when compared to 2024 and prior years.
Current wording
Technology expenditures capitalized as internally developed software costs increased by approximately $412,000, or 100%, from approximately $588,000 for the nine months ended September 30, 2024 to $1,000,000 for the nine months ended September 30, 2025 due to installation of a new platform to modernize the Company’s internally developed software, as part of the digital transformation program in 2025 when compared to the reductions in workforce stemming from our decision to invest in the software at a significantly lower level in 2024 and 2023.
Previous wording
Sales and marketing expenses decreased by approximately $825,000, or 76%, from approximately $1,083,000 for the three months ended June 30, 2024 to approximately $258,000 for the three months ended June 30, 2025. The decrease was primarily attributable to decrease in payroll and related expenses of approximately $668,000, advertising and promotions expense of approximately $97,000 and external marketing expense of approximately $62,000, which was partially offset by the increase in general operating expenses related to sales and marketing of approximately $2,000.
Current wording
Sales and marketing expenses decreased by approximately $634,000, or 27%, from approximately $2,381,000 for the nine months ended September 30, 2024 to approximately $1,746,000 for the nine months ended September 30, 2025. The decrease was primarily attributable to decrease in payroll and related expenses of approximately $1,362,000 and advertising and promotions expense of approximately $215,000, which was partially offset by the increase in general operating expenses related to sales and marketing of approximately $4,000 and external marketing expense of approximately $939,000.
Previous wording
Fulfillment costs decreased by approximately $302,000, or 36%, from approximately $844,000 for the six months ended June 30, 2024 to approximately $542,000 for the six months ended June 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $7,000 and payroll and related expenses of approximately $296,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, which was partially offset by the general operating expenses related to fulfillment of approximately $1,000.
Current wording
Fulfillment costs decreased by approximately $597,000, or 46%, from approximately $1,293,000 for the nine months ended September 30, 2024 to approximately $696,000 for the nine months ended September 30, 2025. The decrease was primarily attributable to a decrease in professional fees of approximately $15,000 and payroll and related expenses of approximately $601,000 for personnel engaged in pre-sales feasibility assessments and order fulfillment, which was partially offset by the general operating expenses related to fulfillment of approximately $19,000.
Previous wording
General and administrative expenses decreased by approximately $1,452,000, or 46%, from approximately $3,159,000 for the six months ended June 30, 2024 to approximately $1,707,000 for the six months ended June 30, 2025. The decrease was attributable to a decrease in compensation costs of approximately $503,000, general operating expenses of approximately $73,000, professional fees of approximately $145,000, utilities and facilities expenses of approximately $65,000, doubtful account expense of approximately $187,000, taxes and insurance of approximately $259,000 and franchise tax of approximately $222,000, which was partially offset by the increase in depreciation and amortization of approximately $2,000.
Current wording
General and administrative expenses decreased by approximately $1,481,000, or 37%, from approximately $4,052,000 for the nine months ended September 30, 2024 to approximately $2,571,000 for the nine months ended September 30, 2025. The decrease was attributable to a decrease in compensation costs of approximately $639,000, general operating expenses of approximately $108,000, utilities and facilities expenses of approximately $73,000, doubtful account expense of approximately $192,000, taxes and insurance of approximately $351,000 and franchise tax of approximately $310,000, which was partially offset by the increase in professional fees of approximately $189,000 and depreciation and amortization of approximately $3,000.
Previous wording
Other income, net, increased by approximately $583,000, or 341%, from an income of approximately $171,000 for the six months ended June 30, 2024 to approximately $754,000 for the six months ended June 30, 2025. The increase in other income, net, was attributable to an increase of other income of approximately $622,000, partially offset by increase in interest and penalties on sales tax liability of approximately $9,000, a decrease in interest income of approximately $36,000, and decrease in interest expense of approximately $7,000.
Current wording
Other income, net, increased by approximately $367,000, or 84%, from an income of approximately $437,000 for the nine months ended September 30, 2024 to approximately $804,000 for the nine months ended September 30, 2025. The increase in other income, net, was attributable to an increase of other income of approximately $397,000, increase in interest and penalties on sales tax liability of approximately $7,000, decrease in interest income of approximately $37,000, and decrease in interest expense of approximately $14,000.
Previous wording
We have recurring losses since inception. As of June 30, 2025, our available cash and cash equivalents totaled approximately $589,000, which represented a decrease of approximately $1,290,000 from approximately $1,878,000, as of December 31, 2024. We had working capital deficit of approximately $4,005,000, an accumulated deficit of approximately $74,568,000, cash and cash equivalents of approximately $589,000 and accounts payable and accrued expenses of approximately $4,961,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the six months ended June 30, 2025, the Company continued its efforts, which had begun in 2023, to decrease its capital and operational expenditures by cutting costs and right sizing the Company through a reduction in workforce while streamlining operations and rationalizing resources to focus on key market opportunities. The reductions in workforce since January 1, 2023 through December 31, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 146% and technology costs of approximately 64% during the year December 31, 2024 when compared to the year ended December 31, 2023. During the second quarter of 2025, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 76% and technology costs of approximately 71% during the six months ended June 30, 2025, when compared to the six months ended June 30, 2024. While we plan to improve our sales and revenues, we are taking steps to significantly reduce and manage expenditures to improve our financial position and ensure continued funding of operations. However, as certain elements of our operating plan are not within our control, we are unable to assess their probability. During the year ended December 31, 2024, we engaged in raising capital through debt financing as discussed in Note 7 and through public equity as discussed in Note 10.
Current wording
We have recurring losses since inception. As of September 30, 2025, our available cash and cash equivalents totaled approximately $2,783,000, which represented a decrease of approximately $904,000 from approximately $1,878,000, as of December 31, 2024. We had working capital deficit of approximately $2,097,000, an accumulated deficit of approximately $77,349,000, cash and cash equivalents of approximately $2,783,000 and accounts payable and accrued expenses of approximately $5,488,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the nine months ended September 30, 2025, the Company continued its efforts, which had begun in 2023, to decrease its capital and operational expenditures by cutting costs and right sizing the Company through a reduction in workforce while streamlining operations and rationalizing resources to focus on key market opportunities. The reductions in workforce since January 1, 2023 through December 31, 2024, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 146% and technology costs of approximately 64% during the year December 31, 2024 when compared to the year ended December 31, 2023. During the third quarter of 2025, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 76% and technology costs of approximately 69% during the nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024. While we plan to improve our sales and revenues, we are taking steps to significantly reduce and manage expenditures to improve our financial position and ensure continued funding of operations. However, as certain elements of our operating plan are not within our control, we are unable to assess their probability. During the nine months ended September 30, 2025, the Company engaged in raising capital through equity financing as discussed in Note 10.
Previous wording
For the six months ended June 30, 2025, net cash used in operating activities was approximately $1,288,000, which consisted of a net loss of approximately $2,706,000 offset by non-cash charges of approximately $901,000, which included approximately of $735,000 related to amortization of internally developed software, approximately $18,000 in stock-based compensation, approximately $18,000 in bad debt expense, approximately $34,000 related to depreciation of property and equipment, and approximately $96,000 related to amortization of other intangible assets.
Current wording
For the nine months ended September 30, 2025, net cash used in operating activities was approximately $3,324,000, which consisted of a net loss of approximately $5,486,000 offset by non-cash charges of approximately $1,357,000, which included approximately of $1,128,000 related to amortization of internally developed software, approximately $20,000 in stock-based compensation, approximately $14,000 in bad debt expense, approximately $51,000 related to depreciation of property and equipment, and approximately $144,000 related to amortization of other intangible assets.
Previous wording
Total changes in assets and liabilities of approximately $517,000 were attributable to an approximately $1,055,000 decrease in accounts receivable, an approximately $60,000 decrease in prepaid expenses, an approximately $29,000 decrease in operating lease right-of-use asset, and an approximately $197,000 decrease in deferred revenue, offset by an approximately $117,000, increase in accounts payable, an approximately $523,000 decrease in accrued expenses and an approximately $24,000 decrease in operating lease liability.
Current wording
Total changes in assets and liabilities of approximately $805,000 were attributable to an approximately $1,310,000 decrease in accounts receivable, an approximately $44,000 decrease in operating lease right-of-use asset and an approximately $573,000 increase in accounts payable, offset by an approximately $432,000 increase in prepaid expenses, an approximately $452,000 decrease in accrued expenses, an approximately $31,000 decrease in operating lease liability and an approximately $205,000 decrease in deferred revenue.
Previous wording
For the six months ended June 30, 2024, net cash used in operating activities was approximately $3,612,000, which consisted of a net loss of approximately $5,011,000 offset by non-cash charges of approximately $1,553,000, which included approximately $1,076,000 related to amortization of internally developed software, approximately $205,000 in bad debt expense, approximately $174,000 in stock-based compensation, approximately $96,000 related to amortization of other intangible assets, approximately $32,000 related to depreciation of property and equipment, and approximately $1,000 of losses from sales of available-for-sale securities, which were offset by approximately $29,000 of accretion of discount on available-for-sale securities.
Current wording
For the nine months ended September 30, 2024, net cash used in operating activities was approximately $4,691,000, which consisted of a net loss of approximately $6,451,000 offset by non-cash charges of approximately $2,167,000, which included approximately $1,554,000 related to amortization of internally developed software, approximately $239,000 in stock-based compensation, approximately $206,000 in bad debt expense, approximately $144,000 related to amortization of other intangible assets, approximately $49,000 related to depreciation of property and equipment, approximately $4,000 related to amortization of discount and debt issuance costs on the senior note payable, and approximately $1,000 of losses from sales of available-for-sale securities, which were partially offset by approximately $29,000 of accretion of discount on available-for-sale securities.
Previous wording
Total changes in assets and liabilities of approximately $154,000 were attributable to an approximately $369,000 increase in accounts receivable, an approximately $221,000 decrease in accrued expense, an approximately $157,000 decrease in deferred revenue, and an approximately $81,000 decrease in lease liability, offset by an approximately $280,000 increase in accounts payable, an approximately $259,000 decrease in accounts receivable-unbilled, an approximately $82,000 decrease in operating lease right-of-use asset, and an approximately $55,000 decrease in prepaid expenses and other current assets.
Current wording
Total changes in assets and liabilities of approximately $407,000 were attributable to an approximately $518,000 decrease in accrued expense, an approximately $452,000 increase in accounts receivable, an approximately $132,000 decrease in deferred revenue, an approximately $108,000 decrease in lease liability, and an approximately $12,000 increase in security deposits, offset by an approximately $558,000 decrease in accounts receivable-unbilled, an approximately $130,000 increase in accounts payable, an approximately $113,000 decrease in operating lease right-of-use asset, and an approximately $14,000 decrease in prepaid expenses and other current assets.
Previous wording
Net cash used in investing activities was less than $1,000 for the six months ended June 30, 2025, which consisted of approximately $400 of purchase of property and equipment.
Current wording
Net cash used in investing activities was approximately $1,000,000 for the nine months ended September 30, 2025, which consisted of approximately $1,000,000 of capitalization of internally developed software.
Previous wording
Net cash provided by investing activities was approximately $2,233,000 for the six months ended June 30, 2024, which consisted of approximately $3,150,000 of proceeds from sales and maturities of available-for-sale securities, which were offset by approximately $461,000 of purchases of available-for-sale securities, approximately $448,000 of capitalization of internally developed software, and approximately $9,000 of purchase of property and equipment.
Current wording
Net cash provided by investing activities was approximately $2,053,000 for the nine months ended September 30, 2024, which consisted of approximately $3,150,000 of proceeds from sales and maturities of available-for-sale securities, which were offset by approximately $588,000 of capitalization of internally developed software, approximately $461,000 of purchases of available-for-sale securities, approximately $25,000 of purchase of leasehold improvements, and approximately $24,000 of purchase of property and equipment.
Previous wording
Net cash provided by financing activities was approximately $1,187,000 for the six months ended June 30, 2024, which consisted of approximately $1,494,000 of proceeds received from the issuance of common stock in connection with the ATM Offering, offset by approximately $255,000 for the payment of offering costs in connection with the issuance of common stock in connection with the ATM Offering and approximately $53,000 for the repurchase of common stock exercisable under PIPE Warrants.
Current wording
Net cash provided by financing activities was approximately $2,047,000 for the nine months ended September 30, 2024, which consisted of approximately $1,494,000 of proceeds received from the issuance of common stock in connection with the ATM Offering, and $1,000,000 of proceeds received from the issuance of the senior note payable, offset by approximately $255,000 for the payment of offering costs in connection with the issuance of common stock in connection with the ATM Offering, approximately $140,000 for the payment of debt issuance costs in connection with the senior note payable, and approximately $53,000 for the repurchase of common stock exercisable under PIPE Warrants.
Previous wording
Our operations are heavily reliant on specimen availability, and as a result, we often receive more requests than we can fulfill. While the Company is subject to these types of supply chain constraints that are specific to the specimen industry, we have not been materially affected by the more common supply chain issues currently affecting the economy, specifically surrounding transportation. Due to the small size of the packages that we ship, our carriers were able to continue making timely deliveries during the six months ended June 30, 2025. However, there had been an increase in our shipping costs period over period during the six months ended June 30, 2025.
Current wording
Our operations are heavily reliant on specimen availability, and as a result, we often receive more requests than we can fulfill. While the Company is subject to these types of supply chain constraints that are specific to the specimen industry, we have not been materially affected by the more common supply chain issues currently affecting the economy, specifically surrounding transportation. Due to the small size of the packages that we ship, our carriers were able to continue making timely deliveries during the nine months ended September 30, 2025. However, with the decrease in sales during the period, there was a decrease in our shipping costs during the nine months ended September 30, 2025.
Previous wording
The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our unaudited condensed financial statements or are the most sensitive to change from outside factors, are discussed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in our critical accounting policies and procedures during the six months ended June 30, 2025.
Current wording
The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our unaudited condensed financial statements or are the most sensitive to change from outside factors, are discussed in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in our critical accounting policies and procedures during the nine months ended September 30, 2025.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
As part of its compensation for acting as Placement Agent for the offering, the Company paid the Placement Agent a cash fee of 4.0% of the aggregate gross proceeds plus reimbursement of certain expenses and legal fees. The Company incurred offering costs of approximately $366,189, resulting in net proceeds of approximately $4,632,275.
Current report — wording carried from elsewhere
As part of its compensation for acting as Underwriter for the Offering, the Company paid the Underwriter a cash fee of 4.0% of the aggregate gross proceeds plus reimbursement of certain expenses and legal fees. The Company incurred offering costs of approximately $419,983 and settled non-offering related legal fees of approximately $93,837, resulting in net proceeds of approximately $3,485,754.
Current report — wording carried from elsewhere
Net cash provided by financing activities was approximately $5,228,000 for the nine months ended September 30, 2025, which consisted of approximately $1,750,000 of proceeds received from the issuance of common stock in connection with the PIPE financing and approximately $4,000,000 of proceeds received from the issuance of common stock in connection with the Underwritten financing, offset by approximately $521,000 for the payment of offering costs in connection with the completed PIPE and Underwritten financings.