LQR House Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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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.
Mar 31, 2026 · Filed May 15, 2026
YHC$1.51-6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001213900-25-111071
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001213900-26-057681
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 85 previous paragraphs and 56 current paragraphs.
15 unchanged; 7 reworded; 34 added; 58 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 2 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 (34)
Current report
Through our wholly owned subsidiary SWOL Holdings Inc., we develop and market SWOL Tequila. Through our wholly owned subsidiary YHC Online Limited, we entered into joint venture agreements in December 2025 to cooperate in the creation and monetization of multi-channel network content for digital platforms; subsequent to March 31, 2026, all such joint venture agreements were terminated. See Note 7 — Investment in Joint Ventures and Note 15 — Subsequent Events.
Current report
Reincorporation in Delaware and Increase in Authorized Shares
Current report
On March 2, 2026, the Company’s stockholders approved the reincorporation of the Company from the State of Nevada to the State of Delaware, which was effected on the same date. In connection with the special meeting, stockholders also approved an increase in the number of authorized shares of common stock from 350,000,000 to 1,500,000,000 shares, par value $0.0001 per share.
Current report
At-the-Market Offering
Current report
On March 11, 2026, the Company entered into a sales agreement with A.G.P./Alliance Global Partners, pursuant to which the Company may sell shares of its common stock having an aggregate offering price of up to $50,273,610 from time to time in at-the-market transactions. The sales agent is entitled to a commission of 3.0% of gross proceeds per share sold. No shares had been sold under the agreement as of March 31, 2026.
Current report
Termination of Joint Venture Agreements
Current report
In April 2026, all four joint venture agreements entered into in December 2025 by YHC Online Limited were terminated. In connection with the terminations, all amounts previously funded, aggregating $18,494,000, were returned to the Company in full.
Current report
Termination of Distribution and Marketing Service Agreements
Current report
In April 2026, both distribution and marketing service agreements entered into during 2025 with two Hong Kong entities were terminated. In connection with the terminations, all amounts previously paid under the agreements, aggregating $3,279,000, were returned to the Company in full.
Current report
Fusion Five Continents Securities Limited Share Purchase Agreement
Current report
On April 11, 2026, the Company entered into a share purchase agreement with Fusion Five Continents Securities Limited, a New Zealand limited company, and with its controlling shareholder, pursuant to which the Company agreed to acquire all of the issued and outstanding shares of the company in multiple closings, at a total consideration of $126,880,000, payable in Tether (USDT). The initial tranche, representing 24% of the outstanding shares, closed on April 11, 2026 for $28,080,000. The remaining 76% of outstanding shares are to be acquired at a second closing for $98,800,000, subject to receipt of required regulatory approvals. The Company expects to require additional financing to fund the second tranche consideration of $98,800,000. Failure to secure adequate financing could delay or prevent the consummation of the second closing. The acquisition, if fully consummated, would represent a significant use of capital, and the Company’s ability to meet its other operational and liquidity needs during the interim period will depend on its ability to raise additional funds.
Current report
Service revenues were $12,572 for the three months ended March 31, 2026, compared to $77,356 for the three months ended March 31, 2025, a decrease of $64,784, or approximately 84%. The decrease was primarily attributable to a significant reduction in marketing service engagements through the CWS Platform and lower Vault membership subscription revenue during the period as the Company continued to realign its service offerings.
Current report
Product revenues were $210,111 for the three months ended March 31, 2026, compared to $351,984 for the three months ended March 31, 2025, a decrease of $141,873, or approximately 40%. The decline reflects continued lower customer traffic and order activity through the CWS Platform, consistent with management’s strategic decision to reduce customer acquisition spending and focus on profitability with the existing customer base rather than pursuing top-line growth.
Current report
For the three months ended March 31, 2026 and 2025, service cost of revenues were $13,553 and $1,400, respectively. The increase reflects a fixed cost retainer that commenced in July 2025, which has no corresponding expense in the 2025 period. The increase in service cost of revenue, combined with the significant decline in service revenues, resulted in a service gross loss of $981 in the 2026 period compared to service gross profit of $75,956 in the 2025 period.
Current report
Gross loss was $22,236 for the three months ended March 31, 2026, compared to gross profit of $30,158 for the same period in 2025. The decrease was primarily attributable to the decline in service revenues and the increase in service cost of revenue described above, partially offset by the improvement in product gross loss.
Current report
General and administrative expenses increased $757,739, or 37%, to $2,780,900 in the 2026 period from $2,023,161 in the 2025 period. The increase was primarily due to $1,150,000 of charges recorded, comprising $1,050,000 of indemnification payments and $100,000 of related legal obligations, with no comparable amounts in the 2025 period.
Current report
Sales and marketing expenses were $105,000 for the three months ended March 31, 2026, compared to $406,853 for the three months ended March 31, 2025, a decrease of $301,853, or approximately 74%. The decrease was primarily attributable to reduced advertising and promotional expenditures as the Company continued to execute its strategy of minimizing marketing spend.
Current report
Other Income
Current report
Other income for the three months ended March 31, 2026 was $1,993,167, compared to $10,206 in the same period in 2025, increased of $1,982,961 primarily due to $1,944,603 of proceeds received under the Company’s directors and officers insurance policy, with no comparable amounts in the 2025 period.
Current report
Net loss for the three months ended March 31, 2026 was $914,969, compared to $2,389,650 for the three months ended March 31, 2025, an improvement of $1,474,681, or approximately 62%. The improvement was primarily due to $1,944,603 of insurance proceeds received, partially offset by $1,050,000 of indemnity-related charges included in general and administrative expenses and the decrease in gross profit discussed above.
Current report
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The indicators include: (i) net losses incurred since inception, including a net loss of $914.969 for the three months ended March 31, 2026; (ii) an accumulated deficit of $68,744,390 as of March 31, 2026; and (iii) net cash used in operating activities of $1,450,433 for the three months ended March 31, 2026. Management is actively monitoring its liquidity position and evaluating various strategies to address these conditions. See Note 2 — Going Concern.
Current report
To fund future operations, the Company intends to pursue one or more of the following: additional equity or debt financings, proceeds from its at-the-market offering program, strategic partnerships, or other capital raising transactions. However, there can be no assurance that any such financing will be available on terms acceptable to the Company, or at all. If adequate capital cannot be secured, the Company may be required to curtail operations or take other measures to conserve cash.
Current report
During the three months ended March 31, 2026, the Company did not raise any capital through issuances of common stock. Subsequent to March 31, 2026, the Company received aggregate proceeds of $21,773,000 from April 9, 2026 to April 13, 2026 in connection with the termination of its joint venture agreements and distribution and marketing service agreements. See note 15 — Subsequent Events.
Current report
On March 11, 2026, the Company entered into a sales agreement with A.G.P./Alliance Global Partners, pursuant to which the Company may sell shares of its common stock having an aggregate offering price of up to $50,273,610 from time to time in at-the-market transactions. As of March 31, 2026, no shares had been sold under the agreement.
Current report
Cash Flows
Current report
Net cash used in operating activities for the three months ended March 31, 2026 was $1,450,433, compared to $6,619,373 for the three months ended March 31, 2025, a decrease in cash used of $5,168,940, or approximately 78%. The significant reduction was primarily attributable to the non-recurrence of $4,116,608 in cash payments made during Q1 2025 to settle accrued and other payables to related parties, representing retention, bonus, and settlement obligations that had been accrued in prior periods, with no comparable outflows arising during the three months ended March 31, 2026.
Current report
The primary driver of cash used in operating activities during the three months ended March 31, 2026 was the net loss of $914,969, reflecting the Company’s continued investment in its operations and corporate infrastructure. Non-cash items included depreciation of $17,027 relating to the Company’s fixed assets. No stock-based compensation was recognized during the three months ended March 31, 2026, compared to $868,189 during the three months ended March 31, 2025, as all restricted stock units had been fully vested or forfeited as of December 31, 2025.
Current report
The most significant working capital movements during the three months ended March 31, 2026 were as follows:
Current report
Due to/from related party decreased by $494,478, reflecting net advances made to or payments received from related parties during the period.
Current report
Accrued and other payables increased by $86,975, driven by legal, audit, and consulting fees accrued during the quarter in connection with the Company’s SEC reporting obligations and ongoing corporate activities, which remained outstanding as of March 31, 2026.
Current report
Accrued and other payables — related party decreased by $191,372, reflecting cash payments made during the quarter to settle outstanding obligations to related parties that had been accrued in prior periods.
Current report
Accounts payable increased by $58,945, reflecting the timing of vendor invoice settlements remaining outstanding as of March 31, 2026.
Current report
Net Cash (Used in) Provided by Financing Activities
Current report
Critical Accounting Policies and Estimates
Removed paragraphs (58)
Previous report
Since May 2024, we own a minority stake of common shares of Cannon Estate Winery Ltd., a British Columbia corporation, an owner of Cannon Estate Winery. Since June 2024, we own a minority stake of common shares of DRNK Beverage Corp., a British Columbia corporation (which became Chase Mocktails Ltd.), operating in the non-alcoholic and ready-to-drink beverage markets.
Previous report
Since April 2025, we have a wholly owned subsidiary SWOL Holdings Inc. In July 2025, we also formed a wholly owned subsidiary, YHC Online Limited, in Hong Kong.
Previous report
On September 13, 2024, the Company entered into an at-the-market offering agreement (“ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“HCW”), relating to the sale of common stock. During the three months ended September 30, 2025, the Company issued an aggregate of 11,073,489 shares of common stock pursuant to such ATM Agreement for net proceeds of $31,642,347. The Company paid the sales agent compensation with respect to the sale of such shares in the amount of $980,716. The ATM Agreement expired pursuant to its terms in September 2025, and no further sales will be made under the program.
Previous report
On April 1, 2025, we entered into a Supplementary Distribution Agreement (the “Supplementary Distribution Agreement”) with Of The Earth Distribution Corp., a Canadian corporation (the “Distributor”), pursuant to which the Company granted to Distributor the exclusive right to distribute, market, and sell SWOL Tequila products within Thailand and Greece until June 28, 2029. The Supplementary Distribution Agreement also amends Supplier Agreement between the Company and the Distributor, dated June 28, 2024, by providing the Distributor exclusive distribution rights to sell SWOL Tequila in all of Canada without any territorial limitations.
Previous report
On April 2, 2025, David Lazar resigned as President and as member of our Board of Directors (the “Board”), effective immediately.
Previous report
On April 21, 2025, the Company effected a one-for-thirty-five reverse stock split of its issued, outstanding and authorized common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, the total number of authorized common stock of the Company decreased to 10,000,000 shares. The Reverse Stock Split became effective at 12:01 a.m. Eastern Time on April 21, 2025, and our common stock began trading on a post-split basis on April 21, 2025. No fractional shares were issued in connection with the Reverse Stock Split and fractional amounts were rounded up to the next highest whole number at the participant level.
Previous report
On June 2, 2025, the Company held LQR House Inc. 2025 Annual Meeting of Stockholders (the “Annual Meeting”) at which meeting: (1) the Company’s stockholders approved an amendment to the Articles of Incorporation to authorize the Company to effect the increase of authorized shares of common stock of the Company from 10,000,000 to 350,000,000 shares, (2) the stockholders re-elected Sean Dollinger, Yilin Lu, Lijun Chen, Jing Lu, and Hong Chun Yeung to serve as directors of the Board until the Company’s 2026 annual meeting of stockholders, or until such persons’ successors are duly elected and qualified, or until such persons’ earlier resignation, death, or removal.
Previous report
Following the Annual Meeting, on June 2, 2025, the Company filed the Certificate of Amendment with the Secretary of State of Nevada and effected the increase of the number of authorized shares of common stock of the Company from 10,000,000 shares to 350,000,000 shares, each share of common stock having a par value of $0.0001.
Previous report
Following the Annual Meeting, the Board approved appointment of Lijun Chen as the Chairman of the Board. The Board also approved that the Audit Committee of the Board shall consist of Hong Chun Yeung (Chair), Lijun Chen and Jing Lu, the Compensation Committee of the Board shall consist of Jing Lu (Chair), Yilin Lu, Lijun Chen, and Nominating and Corporate Governance Committee of the Board shall consist of Jing Lu (Chair), Lijun Chen, Yilin Lu.
Previous report
On or about July 11, 2025, the Company, along with over two dozen parties including several officers and directors of the Company, was named as a defendant in an action before the Eight Judicial District, Clark County, Nevada titled Kingbird Ventures, LLC (“Kingbird”) v. Sean Dollinger, et al. The complaint sought damages in an unspecified amount by a recent shareholder of the Company. Along with the complaint, Kingbird filed a motion for the Court to appoint a receiver over the Company and for an injunction. On September 22, 2025, the Company entered into two settlement agreements with Kingbird and other parties named therein to resolve all matters related to this litigation (collectively, the “Settlement Agreements”). The First Settlement Agreement resolved the direct claims asserted by Kingbird against the Company and other defendants and provided for dismissal of such claims with prejudice, mutual releases among the parties, and customary provisions, including no admission of liability and confidentiality. The Second Settlement Agreement resolved stockholder derivative claims brought on behalf of the Company against certain current and former officers and directors and provides for dismissal of those claims with prejudice, subject to court approval, along with mutual releases and customary provisions. Following execution of the Settlement Agreements, the actions were dismissed with prejudice. Pursuant to the Settlement Agreements, a total payment of $7.5 million has been made in September 2025. As of the date of this quarterly report, there is still a cash payment obligation approximately $5.5 million pursuant to the terms of the Settlement Agreements.
Previous report
On August 6, 2025, the Board appointed Yilin Lu to serve as a President of the Company and replaced him on the Compensation Committee and Nominating and Corporate Governance Committee with Hong Chun Yeung.
Previous report
On October 15, 2025, Dr. Jing Lu resigned from the Company’s Board of Directors and all associated committees. The resignation was not due to any disagreement with the Company, its management, or operations. On October 20, 2025, the Board appointed Mr. Kah Loong Randy Yeo as a new independent director. Mr. Yeo was also designated as Chair of the Nominating and Corporate Governance Committee and as a member of the Audit and Compensation Committees.
Previous report
The Services and Brands We Market
Previous report
LQR House is an American online retailer of alcohol products.
Previous report
The CWS Platformis an American online retailer specializing in selling alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases. Combining the personalized service of a neighborhood alcohol shop with the efficiency of e-commerce, we offer a wide selection of products, including our exclusive brand, SWOL Tequila, all at competitive prices with fast shipping and around-the-clock convenience. At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.
Previous report
The following products and services constitute the core elements of our business model and allow us to serve various types of customers in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands:
Previous report
Our operating results are primarily affected by the following factors:
Previous report
Our Growth Strategies
Previous report
The key elements of our strategy to expand our business include the following:
Previous report
For the three months ended September 30, 2025 and 2024, service revenues were $19,960 and $30,918, respectively. Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. The decrease of $10,958, or approximately 35%, was primarily due to a lower volume of marketing services provided during the current period compared to the prior year.
Previous report
For the three months ended September 30, 2025, product revenues were $317,328 compared to $593,546 in the similar 2024 period. The decrease by $276,218 compared to 2024 was primarily attributable to a decrease in sales volume through the CWS Platform during the quarter. The reduction in revenue reflects lower customer traffic and order activity on cwsspirits.com, which the Company believes was driven by less promotional activity compared to the prior year period.
Previous report
For the three months ended September 30, 2025 and 2024, service cost of revenues were $23,852 and $45,870, respectively. Cost of service decreased by $22,018 in 2025. A decrease of approximately 48% was primarily due to overall decline in service-related activity compared to the prior year.
Previous report
Gross profit was $1,232 for the three months ended September 30, 2025, compared to a gross loss of $62,051 for the same period in 2024. The gross loss in 2024 was primarily attributable to the Company’s strategic transition from marketing services toward a focus on the CWS Platform. In 2025, management continues to explore initiatives aimed at improving gross margin performance, including customer acquisition efforts and the formation of new strategic partnerships to drive higher transaction volume through the platform.
Previous report
For the three months ended September 30, 2025 and 2024, general and administrative expenses were $3,470,033 and $1,522,785, respectively. The increase of $1,947,248 was primarily attributable to higher professional fees, primarily legal fees, incurred during the current period.
Previous report
For the three months ended September 30, 2025 and 2024, sales and marketing expenses were $358,711 and $1,919,125, respectively. The decrease was primarily attributable to the absence of website development costs in the current period. In the third quarter of 2024, the Company incurred significant expenses related to advertising, marketing, and investor relations campaigns, which did not recur in 2025. In addition, bonus expenses of $200,000 were recorded under sales and marketing during the three months ended September 30, 2024. The absence of similar charges in 2025 further contributed to the decline in sales and marketing expenses.
Previous report
Other Income (Expense)
Previous report
Other income (expense) for the three months ended September 30, 2025, reflected a net expense of approximately $13.0 million, compared to net other income of $0.1 million in the same period of 2024. The variance is primarily attributable to the recognition of a $13.0 million legal settlement expense related to the resolution of the litigation, as discussed in Note 10 – Contingencies. During the quarter, the Company made a cash payment of $7.5 million and recorded the remaining $5.5 million obligation under accrued expenses on the balance sheet. The settlement represents a non-recurring, non-operational charge and is presented within “Other expense” to distinguish it from the Company’s ongoing business operations. Comparatively, in the prior year period, other income primarily consisted of dividend income of $58,566 and realized gains on securities of $81,241. No similar gains were recognized in the current period.
Previous report
Net loss for the three months ended September 30, 2025 and 2024 was $16,828,913 and $3,363,380, respectively.
Previous report
Comparison of Nine Months Ended September 30, 2025 and September 30, 2024
Previous report
Revenue
Previous report
For the nine months ended September 30, 2025 and 2024, service revenues were $112,635 and $114,689, respectively. Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. The decrease of $2,054, or approximately 2% was immaterial.
Previous report
For the nine months ended September 30, 2025, product revenues were $1,152,521 compared to $1,548,786 in the similar 2024 period. The decrease by $396,265 compared to 2024 was primarily attributable to a decrease in sales volume through the CWS Platform during the quarter. The reduction in revenue reflects lower customer traffic and order activity on cwsspirits.com, which the Company believes was driven by less promotional activity compared to the prior year period.
Previous report
For the nine months ended September 30, 2025 and 2024, service cost of revenues were $25,252 and $152,101, respectively. Cost of service revenues decreased by $126,849 in 2025. The decrease was primarily attributable to lower operating costs associated with service delivery, the significant reduction in cost of service revenues reflects improved cost management and operational efficiencies implemented during the current period.
Previous report
Gross profit (loss) was $115,896 and ($293,738) for the nine months ended September 30, 2025 and 2024. The gross loss in 2024 was primarily attributable to the Company’s strategic transition from marketing services toward a focus on the CWS Platform. In 2025, management continues to explore initiatives aimed at improving gross margin performance, including customer acquisition efforts and the formation of new strategic partnerships to drive higher transaction volume through the platform.
Previous report
General and Administrative
Previous report
For the nine months ended September 30, 2025 and 2024, general and administrative expenses were $7,700,806 and $4,486,641, respectively. The increase of $3,214,165 was primarily attributable to higher professional fees, which were primarily legal costs, incurred during the current period.
Previous report
Sales and Marketing
Previous report
For the nine months ended September 30, 2025 and 2024, sales and marketing expenses were $846,240 and $3,470,348 respectively. The decrease was primarily due to the absence of website development costs in the current period. In 2024, the Company incurred significant expenses related to advertising, marketing, and investor relations campaigns, which did not recur in 2025. Additionally, bonus expenses of $200,000 were recorded under sales and marketing during the nine months ended September 30, 2025, compared to $400,000 in the prior-year period, further contributing to the overall decrease.
Previous report
Other Income (Expense)
Previous report
Other income (expense) for the nine months ended September 30, 2025, reflected a net expense of approximately $12,989,795, compared to net other income of $250,661 in the same period of 2024. The variance is primarily attributable to the recognition of a $13.0 million legal settlement expense related to the resolution of the litigation, as discussed in Note 10 – Contingencies. During the nine months ended September 30, 2025, the Company made a cash payment of $7.5 million and recorded the remaining $5.5 million obligation under accrued expenses on the balance sheet. The settlement represents a non-recurring, non-operational charge and is presented within “Other expense” to distinguish it from the Company’s ongoing business operations. Comparatively, in the prior year period, other income primarily consisted of dividend income of $168,646 and realized gains on securities of $81,241. No similar gains were recognized in the current period.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (7)
Previous wording
The following discussion and analysis are intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information included in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “Commission”, or the “SEC”) on March 31, 2025. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Current wording
The following discussion and analysis are intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and the other information included in our Annual Report on Form 10-K, filed with the SEC on April 15, 2026. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Previous wording
Our company, LQR House Inc. (the “Company”), intends to become the full-service digital marketing and brand development face of the alcoholic beverage space. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform. Additionally, we are in the process of establishing an exclusive wine club. We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform partner.
Current wording
Our company, LQR House Inc. (the “Company”), intends to become the full-service digital marketing and brand development face of the alcoholic beverage space. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy-to-use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform.
Previous wording
Product cost of revenues was $312,204 and $640,645 during the three months ended September 30, 2025 and 2024. The decrease was primarily due to the decline in product revenue during the period, resulting from lower sales volume on the CWS Platform.
Current wording
Product cost of revenues was $231,366 and $397,782 during the three months ended March 31, 2026 and 2025, respectively. The decrease of $166,416, or approximately 42%, was primarily due to the decline in product revenue during the period, resulting from lower sales volume on the CWS Platform.
Previous wording
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $10,039,230 and $5,386,789 respectively. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.
Current wording
As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $4,444,975 and $5,975,408, respectively. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.
Previous wording
The following table presents selected captions from our condensed statement of cash flows for the nine months ended September 30, 2025 and 2024:
Current wording
The following table presents selected captions from our consolidated statement of cash flows for the three months ended March 31, 2026 and 2025:
Previous wording
Net Cash Provided By (Used in) Financing Activities
Current wording
For the three months ended March 31, 2026, cash used in financing activities totaled $80,000, attributable to deferred offering costs related to the SWOL IPO. During the three months ended March 31, 2025, net cash provided by financing activities was $9,122,181, consisting of $4,051,415 from the exercise of outstanding warrants and $5,070,767 from the issuance of common stock pursuant to the Company’s at-the-market offering program.
Previous wording
This discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our unaudited condensed consolidated financial statements included elsewhere in this prospectus, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Current wording
The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements. There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Principal Factors Affecting Our Financial Performance
Previous report — wording carried elsewhere
The following table sets forth key components of our results of operations during the nine months ended September 30, 2025 and September 30, 2024.
Previous report — wording carried elsewhere
Cost of Revenue and Gross Profit (Loss)
Previous report — wording carried elsewhere
Product cost of revenues was $1,124,008 and $1,805,112 during the nine months ended September 30, 2025 and 2024. The decrease of $681,104 was primarily due to the decline in product revenue during the period, resulting from lower sales volume on the CWS Platform.
Previous report — wording carried elsewhere
There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.