iSpecimen Inc.
For the period ended Mar 31, 2026. Filed May 18, 2026.
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.
Mar 31, 2026 · Filed May 18, 2026
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 2025-09-30; filed 2025-11-17.
0001213900-25-111547
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-18.
0001213900-26-058050
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 123 previous paragraphs and 111 current paragraphs.
66 unchanged; 27 reworded; 17 added; 26 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 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 (17)
Current report
On May 8, 2026, the Company entered into the Purchase Agreement with certain Investors, pursuant to which the Company agreed to issue and sell 488,281 Shares, at a purchase price of $5.12 per Share. In lieu of Shares that would otherwise result in a purchaser’s beneficial ownership exceeding 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of such Shares, certain purchasers may elect to receive Pre-Funded Warrants at a purchase price of $5.1199 per Pre-Funded Warrant (equal to the per Share purchase price less $0.0001). Each Pre-Funded Warrant is exercisable immediately upon issuance for one share of Common Stock at an exercise price of $0.0001 per share and will remain exercisable until exercised in full. The offering closed on May 11, 2026.
Current report
Revenue
Current report
Cost of Revenue
Current report
Technology
Current report
Supply Development
Current report
Fulfillment
Current report
Revenue
Current report
Revenue decreased by approximately $902,000, or 85%, from approximately $1,058,000 for the three months ended March 31, 2025 to approximately $156,000 for the three months ended March 31, 2026. This was primarily due to the decrease of 1,419, or approximately 61%, in specimen count from 2,309 specimens in the three months ended March 31, 2025 to 890 specimens in the three months ended March 31, 2026.
Current report
Cost of Revenue
Current report
Technology
Current report
Supply Development
Current report
Fulfillment
Current report
Net cash used in investing activities was approximately $700,000 for the three months ended March 31, 2026, which consisted of approximately $700,000 of capitalization of intangible assets under development. We intend to continue to use our existing cash to grow our supply network, increase our marketing and sales presence, scale our operations, and for working capital and general corporate purposes.
Current report
During the year ended December 31, 2024, we invested approximately $653,000 in further developing our iSpecimen Marketplace technology, in comparison to the cash invested during the year ended December 31, 2023 of approximately $3,767,000.
Current report
There was no cash provided by investing activities duringthe three months ended March 31, 2026.
Current report
There was no cash provided by financing activities during the three months ended March 31, 2026.
Current report
There was no cash provided by financing activities during the three months ended March 31, 2025.
Removed paragraphs (26)
Previous report
On December 1, 2021, we closed on a private placement offering (“PIPE”) for gross proceeds of approximately $21 million, before deducting approximately $1.4 million for underwriting discounts and commissions and estimated offering expenses, for (i) an aggregate of 87,500 shares of common stock and (ii) warrants, which are exercisable for an aggregate of up to 65,625 shares of common stock, all of which were repurchased by us on February 13, 2024, and are no longer outstanding.
Previous report
We incurred offering costs of approximately $100,000, resulting in net proceeds of approximately $1,649,998.
Previous report
At the Market Offering
Previous report
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 report
Debt Financing
Previous report
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 report
On October 31, 2024, we paid off the outstanding principal balance of $1,000,000 and accrued interest of $18,000 on the Note.
Previous report
Securities Offering on Form S-1
Previous report
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 report
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 report
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 report
Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report
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 report
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 report
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 report
Sales and Marketing Expenses
Previous report
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 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.
Previous report
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 report
General and Administrative Expenses
Previous report
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 report
Other Income, net
Previous report
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 report
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 report
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.
Previous report
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.
Reworded paragraphs (27)
Previous wording
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 wording
On July 31, 2025, the Company entered into a securities purchase agreement with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement (the “Private Placement”), an aggregate of 38,996 securities, comprised of (i) 6,684 shares of Common Stock at a purchase price of $44.88 per Share, and (ii) pre-funded warrants to purchase up to 32,311 shares of Common Stock at a purchase price of $44.88 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.
Previous wording
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 wording
On July 23, 2025, the Company entered into an underwriting agreement with WestPark (the “Underwriter”), pursuant to which the Company agreed to issue and sell, in an underwritten public offering, an aggregate of 142,857 securities, consisting of (i) 37,066 shares of Common Stock, and (ii) pre-funded warrants to purchase up to 105,791 shares of Common Stock, at an exercise price of $0.004 per share. The securities were sold at a public offering price of $28 per share (or $27.99 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.
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 $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.
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 $369 as of March 31, 2026 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 in the first quarter of 2026 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 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.
Current wording
During the three months ended March 31, 2026, 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, 2024 through December 31, 2025, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 67% and technology costs of approximately 39% during the year December 31, 2025 when compared to the year ended December 31, 2024. During the first quarter of 2026, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 70% and technology costs of approximately 36% during the three months ended March 31, 2026, when compared to the three months ended March 31, 2025.
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 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.
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 first quarter of 2026, as evidenced by increased conversion ratios of quotes to purchase orders of 44%. 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 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.
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 three months ended March 31, 2026 and 2025, we capitalized approximately $1,700,000 and $0, respectively, of internally developed software costs, of which $1,000,000 was reclassified from software under development. These investments have resulted in multiple process improvements, streamlining workflows and providing deeper insights into orders for all users of our marketplace.
Previous wording
We have shifted our focus from high volume to high value suppliers that meet our newly defined costs, quality and speed requirements. We established business criteria that focus on supplier capabilities and revenue growth strategies as well as technology criteria for integrating onto our iSpecimen Marketplace platform and participating with us. During the year ended December 31, 2024, we terminated 180 supplier agreements and are in the final stages of what we call our “supplier network refresh project”. This has resulted in fewer key suppliers, supported by our lean workforce and processes more effectively. We have been reengaging our suppliers in a more meaningful manner which assisted us in the implementation of our next day quote system. We now have a key supplier program whereby we proactively engage with the suppliers to promote our business through marketing campaigns and supplier organizations’ offerings.
Current wording
We have shifted our focus from high volume to high value suppliers that meet our newly defined costs, quality and speed requirements. We established business criteria that focus on supplier capabilities and revenue growth strategies as well as technology criteria for integrating onto our iSpecimen Marketplace platform and participating with us. In the year ended December 31, 2024, we terminated 180 supplier agreements and are in the final stages of what we call our “supplier network refresh project”. This has resulted in fewer key suppliers, supported by our lean workforce and processes more effectively. We have been reengaging our suppliers in more meaningful manner which assisted us in the implementation of our next day quote system. We now have a key supplier program whereby we proactively engage with the suppliers to promote our business through marketing campaigns and supplier organizations’ offerings.
Previous wording
Financial Operations Overview and Analysis for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)
Current wording
Financial Operations Overview and Analysis for the Three Months Ended March 31, 2026 and 2025 (Unaudited)
Previous 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.
Current wording
The effect of the decrease in specimen count also caused the average selling price per specimen to decrease by $283, or 62%, from approximately $458 during the three months ended March 31, 2025 to $175 during the three months ended March 31, 2026. The significant decline in revenue was mainly due to decrease in customers’ orders and procurement during the three months ended March 31, 2026.
Previous 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.
Current wording
Cost of revenue decreased by approximately $573,000, or 87%, from approximately $657,000 for the three months ended March 31, 2025 to approximately $84,000 for the three months ended March 31, 2026, which was attributable to an approximately 62% 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 $190, or 67%, decrease in the average cost per specimen.
Previous 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.
Current wording
Technology expenses decreased by approximately $298,000, or 55%, from approximately $545,000 for the three months ended March 31, 2025 to approximately $248,000 for the three months ended March 31, 2026. The decrease was related to decrease in amortization expense of internally developed software of approximately $234,000 and payroll and related expenses of approximately $81,000, which was partially offset by the increase in professional fees of approximately $17,000.
Previous 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.
Current wording
Technology expenditures capitalized as internally developed software costs increased by approximately $700,000, or 100%, from approximately $0 for the three months ended March 31, 2025 to $700,000 for the three months ended March 31, 2026 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 2025 and 2024.
Previous wording
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 wording
Sales and marketing expenses increased by approximately $1,195,000, or 344%, from approximately $347,000 for the three months ended March 31, 2025 to approximately $1,542,000 for the three months ended March 31, 2026. The increase was primarily attributable to increases in external marketing expense of approximately $1,501,000, which was partially offset by the decrease in payroll and related expenses of approximately $259,000 and advertising and promotions expense of approximately $45,000.
Previous 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.
Current wording
Supply development expenses decreased by approximately $60,000, or 64%, from approximately $94,000 for the three months ended March 31, 2025 to approximately $34,000 for the three months ended March 31, 2026. The decrease was primarily attributable to a decrease in payroll and related expenses of approximately $60,000.
Previous 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.
Current wording
Fulfillment costs decreased by approximately $188,000, or 64%, from approximately $294,000 for the three months ended March 31, 2025 to approximately $106,000 for the three months ended March 31, 2026. The decrease was primarily attributable to a decrease in payroll and related expenses of approximately $185,000 for personnel engaged in order fulfillment and general operating expenses related to fulfillment of approximately $3,000.
Previous 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.
Current wording
General and administrative expenses decreased by approximately $78,000, or 10%, from approximately $759,000 for the three months ended March 31, 2025 to approximately $680,000 for the three months ended March 31, 2026. The decrease was attributable to a decrease in professional fees of approximately $91,000, utilities and facilities expenses of approximately $2,000, doubtful account expense of approximately $111,000, amortization and depreciation of approximately $15,000, taxes and insurance of approximately $95,000, and franchise tax of $20,000, which were partially offset by the increase in compensation costs of approximately $253,000 and general operating expenses of approximately $3,000.
Previous 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.
Current wording
Other income, net, increased by approximately $283,000, or 1,415%, from an income of approximately $20,000 for the three months ended March 31, 2025 to approximately $263,000 for the three months ended March 31, 2026. The decrease in other income, net, was attributable to the increase of other income of approximately $266,000, decrease in interest income of approximately $2,000, decrease in recovery of interest and penalties on sales tax liability of approximately $17,000 and increase in interest expense of approximately $2,000.
Previous 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.
Current wording
We have recurring losses since inception. As of March 31, 2026, our available cash and cash equivalents totaled approximately $2,818,989, which represented a decrease of approximately $4,062,000 from approximately $6,881,000, as of December 31, 2025. We had working capital deficit of approximately $2,116,000, an accumulated deficit of approximately $84,625,000, cash and cash equivalents of approximately $2,819,000 and accounts payable and accrued expenses of approximately $5,351,000. Our continued viability is dependent on the ability to successfully obtain additional working capital and/or ultimately attain profitable operations. During the three months ended March 31, 2026, 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, 2024 through December 31, 2025, cumulatively resulted in an estimated reduction in monthly compensation costs of approximately 67% and technology costs of approximately 39% during the year December 31, 2025 when compared to the year ended December 31, 2024. During the first quarter of 2026, the reductions in workforce resulted in an estimated reduction in monthly compensation costs of approximately 70% and technology costs of approximately 36% during the three months ended March 31, 2026, when compared to the three months ended March 31, 2025. While the Company plans to improve its sales and revenues, the Company is taking steps to significantly reduce and manage expenditures to improve its financial position and ensure continued funding of operations. However, as certain elements of the Company’s operating plan are not within the Company’s control, the Company is unable to assess their probability of success. During the year ended December 31, 2025, the Company engaged in raising capital through equity financing as discussed in Note 10.
Previous wording
These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date of this Quarterly Report. Management’s plan to mitigate the conditions that raise substantial doubt includes generating additional revenues, deferring certain projects and capital expenditures and eliminating certain future operating expenses for us to continue as a going concern. However, there can be no assurance that we will be successful in completing any of these options. As a result, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern.
Current wording
These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of one year after the date of this Quarterly Report. Management’s plan to mitigate the conditions that raise substantial doubt includes generating additional revenues through its revenue enhancement projects, deferring certain projects and capital expenditures and eliminating certain future operating expenses for us to continue as a going concern. However, there can be no assurance that we will be successful in completing any of these options. As a result, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern.
Previous 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.
Current wording
For the three months ended March 31, 2026, net cash used in operating activities was approximately $3,362,000, which consisted of a net loss of approximately $2,295,000 offset by non-cash charges of approximately $124,000, which included approximately of $134,000 related to amortization of internally developed software, approximately $1,000 in stock-based compensation, approximately $400 in bad debt expense, approximately $2,000 related to depreciation of property and equipment, and approximately $0 related to amortization of other intangible assets.
Previous 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.
Current wording
Total changes in assets and liabilities of approximately $942,000 were attributable to an approximately $85,000 increase in accounts receivable, an approximately $15,000 decrease in operating lease right-of-use asset and an approximately $374,000 decrease in accounts payable, offset by an approximately $507,000 increase in prepaid expenses, an approximately $24,000 decrease in accrued expenses, an approximately $14,000 decrease in operating lease liability and an approximately $3,000 decrease in deferred revenue.
Previous 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.
Current wording
For the three months ended March 31, 2025, net cash used in operating activities was approximately $1,096,000, which consisted of a net loss of approximately $1,584,000 offset by non-cash charges of approximately $486,000, which included approximately of $368,000 related to amortization of internally developed software, approximately $16,000 in stock-based compensation, approximately $37,000 in bad debt expense, approximately $17,000 related to depreciation of property and equipment, and approximately $48,000 related to amortization of other intangible assets.
Previous 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.
Current wording
Total changes in assets and liabilities of approximately $3,000 were attributable to an approximately $752,000 decrease in accounts receivable, an approximately $101,000 decrease in prepaid expenses, an approximately $14,000 decrease in operating lease right-of-use asset, and an approximately $90,000 decrease in deferred revenue, offset by an approximately $411,000 decrease in accounts payable, an approximately $351,000 decrease in accrued expenses and an approximately $12,000 decrease in operating lease liability.
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 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.
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.
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 nine months ended September 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, 2025. There have been no material changes in our critical accounting policies and procedures during the three months ended March 31, 2026.
Previous wording
On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
Current wording
On April 5, 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
Previous wording
We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 and (ii) complying with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) December 31, 2026; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Current wording
We are in the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including without limitation, (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an “emerging growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) December 31, 2026; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On April 9, 2026, the Company’s board of directors approved a one-for-forty (1:40) reverse stock split of the Company’s issued and outstanding shares of common stock. The Reverse Stock Split became effective on April 27, 2026, and the Company’s common stock began trading on a split-adjusted basis on Nasdaq on April 28, 2026.
Rearranged previous paragraphs (4)
Previous report — wording carried 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.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
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.