Spectral AI, Inc.
For the period ended Jun 30, 2026. Filed Aug 11, 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.
Jun 30, 2026 · Filed Aug 11, 2026
MDAI$1.49+8.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001213900-26-055226
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001213900-26-087764
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 97 previous paragraphs and 72 current paragraphs.
39 unchanged; 20 reworded; 12 added; 37 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 7 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 (12)
Current report
*Operating Expenses.*Following regulatory approval of the DeepView System, we expect operating expenses to increase as we invest in commercialization activities, including sales and marketing, manufacturing scale-up, and personnel growth. Operating expenses may fluctuate from period to period based on the timing of commercialization initiatives, product enhancements, hiring activities, and other strategic investments, which may impact the comparability of our results of operations.
Current report
Research and Development Revenue
Current report
Research and Development Revenue
Current report
*Research and development revenue was $3.5 million and $7.5 million for the three and six months ended June 30, 2026, respectively, a decrease of 30.4% and 36.2%, respectively compared to the same periods in 2025, reflecting the anticipated reduction in reimbursed costs under the PBS BARDA Contract following the FDA’s De Novo authorization of the DeepView System, as the remaining scope of work narrowed to specific development projects, together with the cost-share provisions applicable to the follow-on development phase of that contract. Revenue from the Company’s other U.S. governmental contracts declined in the three months ended June 30, 2026 and which was offset by an increase primarily related to work on the Company’s handheld device, in the six months ended June 30, 2026.
Current report
Cost of revenue for the three and six months ended June 30, 2026 was $2.4 million and $4.4 million, respectively, a decrease of 13.1% and 30.7%, respectively, compared to the same periods in 2025, due to the cost share provisions applicable to the follow-on development phase of the PBS BARDA Contract, under which the Company funds a portion of the development costs it incurs.
Current report
Gross margin for the three and six months ended June 30, 2026 was 31.6% and 41.8%, respectively, a decrease of 13.6 percentage points and 4.6 percentage points, respectively, as compared to the same periods in 2025, reflecting the cost-share provisions of the follow-on development phase of the PBS BARDA Contract, under which the Company continues to incur development costs that are not fully reimbursable, and a lower margin on the Company’s fixed-fee MTEC contract. For the six months ended June 30, 2026, the decrease primarily reflects the lower proportion of costs billed under the follow-on development phase of that contract, partially offset by the higher gross margin realized in the first quarter of 2026 prior to the commencement of that phase.
Current report
Operating Expense
Current report
Research and development expense was $1.7 million and $3.3 million for the three and six months ended June 30, 2026, respectively, an increase of 16.4% and 17.6%, respectively, as compared to the same period in 2025 due to an increase in non-revenue generating research and development activities.
Current report
General and administrative expense was $3.1 million and $5.3 million for the three and six months ended June 30, 2026, respectively, an increase of 18.0% and 5.0%, respectively, as compared to the same period in 2025 due to higher stock-based compensation associated with awards granted in the second quarter of 2026, partially offset for the six-month period by lower consultant fees.
Current report
Selling and marketing expense was $0.7 million and $0.9 million for the three and six months ended June 30, 2026, respectively, an increase of 92.1% and 33.3%, respectively, as compared to the same period in 2025 due to increased sales and marketing activities in advance of first commercial sales, including a third-party pricing study.
Current report
The Company also has an effective shelf registration statement on Form S-3 with an aggregate capacity of $50.0 million, of which approximately $12.1 million had been utilized as of June 30, 2026. Because the aggregate market value of the Common Stock held by non-affiliates is less than $75.0 million, the Company’s ability to sell securities in primary offerings under that registration statement is limited, in any twelve-month period, to one-third of the aggregate market value of the Common Stock held by non-affiliates. After giving effect to approximately $5.8 million of securities sold under that registration statement in the preceding twelve months, approximately $10.9 million remained available to the Company under that limitation based on the Company’s public float as of August 11, 2026. The amount available is not fixed and will increase or decrease with the Company’s share price and public float.
Current report
The Company has the ability under its Avenue Financing agreement to borrow up to $15.0 million. The Company initially drew down $8.5 million in March 2025. On June 18, 2026, the Company drew down the second financing tranche under the Avenue Financing following the achievement of the required funding conditions. The Company received net proceeds of approximately $6.5 million.
Removed paragraphs (37)
Previous report
Business Combination
Previous report
On September 12, 2023, following completion of the Business Combination, the Company began trading its shares of the Company Common Stock and the Public Warrants on the Nasdaq Global Market (the “Nasdaq”) under the symbols “MDAI” and “MDAIW”, respectively.** **
Previous report
Key Operating and Financial Metrics
Previous report
We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented are useful in evaluating our operating performance, as they are similar to measures by our public competitors and are regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is a non-GAAP measure, as it is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for net loss, calculated in accordance with GAAP. See “Non-GAAP Financial Measures” for additional information on adopted non-GAAP financial measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures.
Previous report
Comparison of Three Months Ended March 31, 2026 and 2025
Previous report
The following table summarizes these metrics for the three months ended March 31, 2026 and 2025 (in thousands):
Previous report
See “Non-GAAP Financial Measures” below for a reconciliation of net loss to Adjusted EBITDA.
Previous report
We define research and development revenue as revenue generated from the research, testing and development of our DeepView System as utilized in connection with our burn indication. This research and development revenue reflects applied research and experimental development costs relating to our burn application as developed in connection with our BARDA, MTEC, and DHA contracts.
Previous report
Gross Profit and Gross Margin
Previous report
We define gross profit as research and development revenue, less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue. Gross profit and gross margin can be used to understand our financial performance and efficiency and as we begin commercialization, it will allow investors to evaluate our pricing strategy and compare against our competitors. Our management uses these metrics to make strategic decisions, pricing decisions, identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.
Previous report
Adjusted EBITDA
Previous report
We define adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as net loss excluding income taxes, depreciation of property and equipment, net interest income, stock compensation, transaction costs and any non-operating financial income and expense. See “Non-GAAP Financial Measures” for a reconciliation of GAAP net loss to Adjusted EBITDA.
Previous report
Research and development revenue was $4.0 million for the three months ended March 31, 2026, a decrease of 40.5% compared to the same periods in 2025, reflecting a decrease in the completed work under the PBS BARDA Contract as the contract progressed to the end of the base phase of such contract, partially offset by an increase in revenue from the awards and work performed under the Company’s other U.S. governmental contracts.
Previous report
Cost of revenue for the three months ended March 31, 2026 was $2.0 million, a decrease of 44.5% compared to the same periods in 2025, due to decreased development activity to fulfill our U.S. governmental contracts, consistent with the decrease in research and development revenue.
Previous report
Gross margin for the three months ended March 31, 2026 was 50.8%, an increase of 3.6% as compared to the same periods in 2025, reflecting a decreased concentration of direct labor as a component of our overall revenue.
Previous report
General and Administrative Expense
Previous report
General and administrative expense was $4.0 million for the three months ended March 31, 2026, a decrease of 1.6%, as compared to the same period in 2025 reflecting an overall decrease in expense offset by an increase in non-revenue generating research and development activities, primarily related to salaries and related costs and consulting fees. Additionally, the Company incurred less put option and premium expense for financing transactions in the current three-month period.
Previous report
Non-GAAP Financial Measures
Previous report
We use Adjusted EBITDA as a non-GAAP metric when measuring performance, including when measuring current period results against prior periods’ Adjusted EBITDA. This non-GAAP financial measure should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, Adjusted EBITDA should not be construed as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address.
Previous report
Because of their non-standardized definitions, non-GAAP measures (unlike GAAP measures) may not be comparable to the calculation of similar measures of other companies. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Supplemental non-GAAP measures are presented solely to permit investors to more fully understand how Spectral AI’s management assesses underlying performance.
Previous report
Adjusted EBITDA
Previous report
We define Adjusted EBITDA as net loss excluding income taxes, depreciation of property and equipment, net interest income, stock compensation, transaction costs and any non-operating financial income and expense.
Previous report
The following table presents our Adjusted EBITDA for the three months ended March 31, 2026 and 2025 (in thousands):
Previous report
The Avenue Financing also included warrant coverage equal to 8.5% of the total funding commitment from Avenue, with an exercise price equal to the lower of (i) average of the daily volume weighted average price of Common Stock as reported for each of five (5) consecutive trading days, determined as of the end of the trading on the last trading day before the date of issuance, which was $1.66 and (ii) the lowest price per share paid to the Company by cash investors for Common Stock issued in any sale of Common Stock in a bona-fide equity raising that closes at any time commencing from March 21, 2025 through (but excluding) December 31, 2025.
Previous report
On March 21, 2025, as a condition to the Avenue Financing, the Company entered into securities purchase agreements with certain investors in the United States and the United Kingdom for the sale of an aggregate of 2,076,923 shares of the Company’s Common Stock, at an offering price of $1.30 per Share which raised an additional $2.7 million.
Previous report
The Company has the ability with the LSA to borrow up to $15.0 million in funding from Avenue with an initial drawdown of $8.5 million from the Avenue Financing.
Previous report
Quantitative and Qualitative Disclosures About Market Risk
Previous report
We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate, foreign exchange, credit and inflation risks.
Previous report
Interest Rate Sensitivity
Previous report
We maintain a large amount of our assets in cash. Our cash is held primarily in cash deposits. The fair value of our cash would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments. Additionally, changes to interest rates will impact on the cost of any future borrowings. With respect to our current borrowings, the interest rates on the notes are Prime plus 5%. Changes in prevailing interest rates could have a material impact on our results of operations.
Previous report
Foreign Currency Risk
Previous report
Our revenue is denominated in U.S. dollars. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States and United Kingdom, with an insignificant portion of expenses incurred in our wholly owned subsidiaries in the UK and denominated in British pound sterling.
Previous report
Credit Risk
Previous report
Financial instruments that subject us to concentrations of credit risk consist primarily of cash and accounts receivable. The vast majority of our cash is held in U.S. financial institutions which, at times, exceed federally insured limits. We have not recognized any losses from credit risks on such accounts. We believe we are not exposed to significant credit risk on cash.
Previous report
Additional credit risk is related to our concentration of receivables and revenues. One customer (which is a U.S. government agency) represents the majority of our research and development revenue and accounts receivable.
Previous report
Inflation Risk
Previous report
If the cost of our products, employee costs, or other costs continue to be subject to significant inflationary pressures, such inflationary pressure may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expense. As a result, our inability to quickly respond to inflation could harm our cash flows and results of operations in the future.
Reworded paragraphs (20)
Previous wording
We are an artificial intelligence (“AI”) company focused on predictive medical diagnostics. We operate in one segment. Currently, we are devoting substantially all of our efforts towards research and development of our DeepView System, an internally developed multi-spectral imaging (“MSI”) device that has previously received FDA breakthrough device designation (“BDD”) status for an earlier version. Given our receipt of the UKCA mark for burn indication on our DeepView System, we expect to begin commercialization activities in the United Kingdom in 2026. Our DeepView System uses proprietary algorithms to distinguish between damaged and healthy human tissue invisible to the naked eye, providing “Day One” healing assessments. DeepView’s output is specifically engineered to allow the physician to make a more accurate, timely and informed decision regarding the treatment of the patient’s wound. Our focus has been on the burn indication which is supported by the BARDA PBS contract.
Current wording
We are an artificial intelligence (“AI”) company focused on predictive medical diagnostics. We operate in one segment. Currently, we are devoting substantially all of our efforts towards research and development of our DeepView System, an internally developed multi-spectral imaging device that has previously received FDA breakthrough device designation status for an earlier version. On May 26, 2026, the FDA granted De Novo classification for the DeepView System for the burn indication, which authorizes the Company to commence commercial distribution activities in the United States. We expect to generate our first commercial sales in the United States by the end of 2026. Given our receipt of the UKCA mark for the burn indication, we also expect to begin commercialization activities in the United Kingdom in 2026. Our DeepView System uses proprietary algorithms to distinguish between damaged and healthy human tissue invisible to the naked eye, providing “Day One” healing assessments. DeepView’s output is specifically engineered to allow the physician to make a more accurate, timely and informed decision regarding the treatment of the patient’s wound. Our focus has been on the burn indication which is supported by the BARDA PBS contract.
Previous wording
We have not generated any product revenue to date. We have received substantial support from the U.S. government for our DeepView System’s application for burn wounds, particularly from the Biomedical Advanced Research and Development Authority (“BARDA”), which is part of the HHS Office of the Assistant Secretary for Preparedness and Response in the United States, established to aid in securing the United States from chemical, biological, radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases. We have also received funding from the National Science Foundation (the “NSF”), the National Institute of Health (the “NIH”) and the Defense Health Agency (the “DHA”). Since 2013, we have received approximately $281.9 million in funding awards from government contracts, primarily from BARDA, which accounts for $272.9 million. This has allowed us to develop our technology and further our clinical trials.
Current wording
We have not generated any product revenue to date. We have received substantial support from the U.S. government for our DeepView System’s application for burn wounds, particularly from the Biomedical Advanced Research and Development Authority (“BARDA”), which is part of the HHS Office of the Assistant Secretary for Preparedness and Response in the United States, established to aid in securing the United States from chemical, biological, radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases. We have also received funding from the National Science Foundation, the National Institute of Health and the Defense Health Agency (the “DHA”). Since 2013, we have been awarded approximately $282.5 million in funding from government contracts, substantially all of which is from BARDA, which accounts for $272.9 million. This has allowed us to develop our technology and further our clinical trials.
Previous wording
In September 2023, we executed our third contract with BARDA for a multi-year Project BioShield (“PBS”) agreement, valued at up to approximately $150.0 million (the “PBS BARDA Contract”). This included an initial award of approximately $54.9 million to support the clinical validation study and the distribution of up to 30 DeepView Systems in various burn centers and emergency departments to support our validation study and approximately another $95.0 million for further follow-on development and procurement activities related to the DeepView System. The funding also supported the Company’s FDA De Novo submission of our DeepView AI – Burn software, which was completed on June 30, 2025. In March 2026, BARDA exercised a portion of its contractual options under the contract, providing the Company with (i) a no-cost extension of the base phase of the contract from March, 2026 to June 2026 and (ii) accelerated funding of approximately $31.7 million for further follow-on development and procurement activities related to the DeepView System. The contract continues to provide additional options, similar to our prior BARDA contracts, with an additional total value of approximately $63.4 million which can be exercised for additional product development, and the expanded procurement and deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research studies to support the broader clinical adoption of the DeepView System. As part of this funding advance, the Company has committed to fund $9.7 million of the total overall development costs associated with these feature advancements. This contract funding is non-dilutive to our shareholders, and we believe it validates the important nature of our mission and technology.
Current wording
In September 2023, we executed our third contract with BARDA for a multi-year Project BioShield (“PBS”) agreement, valued at up to approximately $150.0 million (the “PBS BARDA Contract”). This included an initial award of approximately $54.9 million to support the clinical validation study and the distribution of up to 30 DeepView Systems in various burn centers and emergency departments to support our validation study and approximately another $95.1 million for further follow-on development and procurement activities related to the DeepView System. The funding also supported the Company’s FDA De Novo submission of our DeepView AI – Burn software, which was completed on June 30, 2025. In March 2026, BARDA exercised a portion of its contractual options under the contract, providing the Company with (i) a no-cost extension of the base phase of the contract from March 2026 to June 2026 and (ii) accelerated funding of approximately $31.7 million for further follow-on development and procurement activities related to the DeepView System. The contract continues to provide additional options, similar to our prior BARDA contracts, with an additional total value of approximately $63.4 million which can be exercised for additional product development, and the expanded procurement and deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research studies to support the broader clinical adoption of the DeepView System. As part of this funding advance, the Company has committed to fund $9.7 million of the total overall development costs associated with these feature advancements. This contract funding is non-dilutive to our shareholders, and we believe it validates the important nature of our mission and technology.
Previous wording
In addition to our PBS BARDA contract, we received a $4.0 million grant award from the Medical Technology Enterprise Consortium (“MTEC”) in April 2023, which, building on prior awards from the DHA, is to be used to support military battlefield burn evaluation via a handheld version of the DeepView System device (the “MTEC Agreement”). In August 2024, the MTEC award was increased to $4.9 million and was extended to run through December 2025 with funding dependent on various milestones. In December 2025, the MTEC contract was extended to run through June 2026. In March 2024, we received an additional $0.5 million award from the DHA to further this development, for a total contract value of approximately $2.8 million.
Current wording
In addition to our PBS BARDA contract, we received a $4.0 million grant award from the Medical Technology Enterprise Consortium (“MTEC”) in April 2023, which, building on prior awards from the DHA, is to be used to support military battlefield burn evaluation via a handheld version of the DeepView System device (the “MTEC Agreement”). In August 2024, the MTEC award was increased to $4.9 million and was extended to run through December 2025 with funding dependent on various milestones. In December 2025, the MTEC Agreement was extended to run through December 31, 2026. In March 2024, we received an additional $0.5 million award from the DHA to further this development, bringing the total value of our DHA awards supporting the handheld device to approximately $2.8 million.
Previous wording
To date, we have not generated any revenues from the sale or license of our products. Our primary source of revenue is research and development revenue. Currently, we are highly dependent upon the reimbursements from BARDA for the burn diagnostic testing of our DeepView System and other U.S. government awards. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). The provisions of ASC 606 require the following steps to determine revenue recognition: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company’s product revenue is recognized when the performance obligation is satisfied by transferring control of the promised goods or services to a customer. Our research and development revenue is affected by the amount of research and development that is expended each month with respect to our contract with BARDA and other U.S. governmental contract awards, such as our grant under the MTEC Agreement which we earn based on the achievement of milestones and performance milestones. Our revenue growth is dependent upon a number of factors, including expanding the research and development activities under the BARDA contract, research and development reimbursed expenses relating to other contract awards from U.S. governmental agencies and the intended future commercial sales of our DeepView System. See “Liquidity and Capital Resources” for additional information.
Current wording
To date, we have not generated any revenues from the sale or license of our products. Our primary source of revenue is research and development revenue. Currently, we are highly dependent upon the reimbursements from BARDA for the burn diagnostic testing of our DeepView System and other U.S. government awards. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Our research and development revenue is affected by the amount of research and development that is expended each month with respect to our contract with BARDA and other U.S. governmental contract awards, such as our grant under the MTEC Agreement which we earn based on the achievement of milestones and performance milestones. Our revenue growth is dependent upon a number of factors, including expanding the research and development activities under the BARDA contract, research and development reimbursed expenses relating to other contract awards from U.S. governmental agencies and the intended future commercial sales of our DeepView System. See “Liquidity and Capital Resources” for additional information.
Previous wording
Operating costs and expenses consist of general and administrative expense. These expenses primarily relate to salaries and related costs of our organization’s support and operations staff, consulting fees, rent, insurance and office expenses, and our non-revenue generating research and development expenses, primarily related to salaries and related costs and consulting fees.
Current wording
Operating costs and expenses consist of research and development, general and administrative and selling and marketing expenses. These expenses primarily relate to salaries and related costs of our organization’s support and operations staff, consulting fees, rent, insurance and office expenses, and our non-revenue generating research and development expenses, primarily related to salaries and related costs and consulting fees.
Previous wording
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):
Current wording
The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
For the three months ended March 31, 2026 and 2025, the Company’s revenues disaggregated by the major sources were as follows (in thousands):
Current wording
For the three and six months ended June 30, 2026 and 2025, the Company’s revenues disaggregated by the major sources were as follows (in thousands):
Previous wording
Net interest expense for the three months ended March 31, 2026 primarily relate to interest expense associated with the Avenue Financing as well as costs related to the Company’s insurance policy financing.
Current wording
Net interest expense for the three and six months ended June 30, 2026 primarily relate to interest expense associated with the Avenue Financing as well as costs related to the Company’s insurance policy financing.
Previous wording
Financing related costs decreased $0.6 million for the three months ended March 31, 2026, as compared to the comparable period in 2025 primarily due to the elimination of the expenses relating to the Company’s prior financings that were expensed during fiscal year 2025. Amortization of debt discount of $0.2 million for the three months ended March 31, 2026 relates to amortization of the discount on the Avenue note payable.
Current wording
Financing related costs increased $0.1 million and decreased $0.6 million, respectively, for the three and six months ended June 30, 2026, as compared to the comparable period in 2025 primarily due to the elimination of the expenses relating to the Company’s prior financings that were expensed during fiscal year 2025. Amortization of debt discount of $0.1 million and $0.3 million, respectively for the three and six months ended June 30, 2026 relates to amortization of the discount on the Avenue note payable.
Previous wording
Change in fair value of warrant liability increased by approximately $5.3 million for the three months ended March 31, 2026 as compared to the comparable period in 2025. Change in fair value of warrant liability was an expense of $1.0 million for the three months ended March 31, 2026, as compared to a benefit of $4.3 million for same period in 2025. The changes reflect fluctuations in the fair value of the Company’s warrants during the three-month period ended March 31, 2026. The Company’s warrants are classified as liabilities and remeasured to fair value at each reporting period, with changes recognized in net loss. As a result, fluctuations in the warrant price of Public Warrants and fluctuations in the fair value of other outstanding warrants may cause significant non-cash gains or losses, leading to volatility in reported net loss.
Current wording
Change in fair value of warrant liability reflected a favorable change of approximately $6.2 million and $0.9 million, respectively, for the three and six months ended June 30, 2026 as compared to the comparable periods in 2025. Change in fair value of warrant liability was a benefit of $0.7 million and expense of $0.3 million, respectively, for the three and six months ended June 30, 2026, as compared to an expense of $5.4 million and expense of $1.2 million, respectively, for same periods in 2025. The changes reflect fluctuations in the fair value of the Company’s warrants during the three and six month periods ended June 30, 2026. The Company’s warrants are classified as liabilities and remeasured to fair value at each reporting period, with changes recognized in net loss. As a result, fluctuations in the warrant price of Public Warrants and fluctuations in the fair value of other outstanding warrants may cause significant non-cash gains or losses, leading to volatility in reported net loss.
Previous wording
As of March 31, 2026 and December 31, 2025, the Company had approximately $11.7 million and $15.4 million, respectively, in cash, and an accumulated deficit of $59.2 million and $55.8 million, respectively. As of March 31, 2026 and December 31, 2025, the Company had approximately $8.4 million and $8.4 million, respectively, of debt outstanding of which $4.5 million and $5.5 million represented long-term debt as of such periods, respectively.
Current wording
As of June 30, 2026 and December 31, 2025, the Company had approximately $14.0 million and $15.4 million, respectively, in cash and cash equivalents, and an accumulated deficit of $63.4 million and $55.8 million, respectively. As of June 30, 2026 and December 31, 2025, the Company had approximately $14.9 million and $8.4 million, respectively, of debt outstanding of which $11.1 million and $5.5 million represented long-term debt as of such periods, respectively. The Company also had approximately $1.4 million of remaining undiscounted operating lease payments as of June 30, 2026, extending through February 2028.
Previous wording
As of March 31, 2026, based on our current operating plan, we believe that our cash and cash equivalents, together with the PBS BARDA Contract, the MTEC Agreement, the Avenue Financing, the Hudson Bay Financing, the Yorkville SEPA and certain research and development cost-saving measures, the Company believes it has, sufficient working capital to fund operations for at least one year beyond the release date of the condensed consolidated financial statements. We have based this determination on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Changing circumstances could also cause us to consume capital significantly faster than we currently anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of circumstances beyond our control. To the extent additional capital is necessary, there are no assurances that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to execute our business plans and the continued work on indications beyond expanding our burn indication.
Current wording
As of June 30, 2026, based on our current operating plan, our cash and cash equivalents, together with the PBS BARDA Contract, and the Yorkville SEPA, provide sufficient working capital to fund operations for at least one year beyond the release date of the condensed consolidated financial statements. We have based this determination on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Changing circumstances could also cause us to consume capital significantly faster than we currently anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of circumstances beyond our control. To the extent additional capital is necessary, there are no assurances that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to execute our business plans and the continued work on indications beyond expanding our burn indication.
Previous wording
The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):
Current wording
The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
Net cash used in operating activities increased to approximately $3.7 million for the three months ended March 31, 2026, as compared to $1.5 million for the three months ended March 31, 2025, primarily driven by a higher net operating loss as a result of reduced reimbursed research and development revenue, based on lower BARDA activity, and higher cash used from changes in operating assets and liabilities, primarily due to a decrease in accounts payable.
Current wording
Net cash used in operating activities increased to approximately $7.8 million for the six months ended June 30, 2026, as compared to $4.9 million for the six months ended June 30, 2025, primarily driven by higher net loss and higher cash used from changes in operating assets and liabilities, primarily due to a decrease in accounts payable and accrued expenses.
Previous wording
Net cash used by financing activities for the three months ended March 31, 2026 reflects repayments of insurance notes payable, offset by proceeds received from the exercise of stock options. Net cash provided by financing activities of $10.4 million for the three months ended March 31, 2025 was primarily attributable to proceeds from the Avenue Financing of $8.3 million, proceeds from the exercise of common stock warrants of $2.0 million and the attendant equity raise of $3.1 million, partially offset by the loan repayments on the Yorkville debt facility.
Current wording
Net cash provided by financing activities for the six months ended June 30, 2026 reflects proceeds received from Avenue Financing and stock option and warrant exercises, offset by repayments of insurance notes payable. Net cash provided by financing activities of $10.2 million for the six months ended June 30, 2025 was primarily attributable to proceeds from the Avenue Financing of $8.3 million partially offset by the loan repayments on the Yorkville debt facility and 2024 Insurance Note.
Previous wording
The loans under the LSA mature on March 1, 2028, with an interest-only payment period of no less than 15 months, which can be extended to 24 months upon the achievement of certain milestones prior to the end of such 15 month period as described in the Tranche 2 Milestone Date (as defined in the Supplement). The Tranche 2 Commitment (as defined in the Supplement) includes an additional $6.5 million in debt financing and is contingent upon, among other things, (i) U.S. FDA’s clearance of the Company’s DeepView System and (ii) an additional $7.0 million equity raise to be completed by the Company.
Current wording
The loans under the Avenue Financing mature on March 1, 2028, with an interest-only payment period of no less than 15 months, which has been extended to 24 months upon the achievement of certain milestones prior to the end of such 15-month period as described in the Tranche 2 Milestone Date (as defined in the Supplement to the Loan Agreement). The Company achieved the Tranche 2 Milestone during the three months ended June 30, 2026, and as such, the interest-only period was extended to 24 months.
Previous wording
The Avenue Financing also includes warrant coverage equal to 8.5% of the total funding commitment from Avenue, with an exercise price equal to the lower of (i) average of the daily volume weighted average price of Common Stock as reported for each of five (5) consecutive trading days, determined as of the end of the trading on the last trading day before the date of issuance, which was $1.66 and (ii) the lowest price per share paid to the Company by cash investors for Common Stock issued in any sale of Common Stock in a bona-fide equity raising that closes at any time commencing from March 21, 2025 through (but excluding) December 31, 2025.
Current wording
The Avenue Financing also includes warrant coverage equal to 8.5% of the total funding commitment from Avenue, with an exercise price equal to $1.66.
Previous wording
For the three-month period ended March 31, 2026, the Company did not have any related party transactions.** **
Current wording
For the six-month period ended June 30, 2026, the Company did not have any related party transactions.
Previous wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 25, 2026. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those previously disclosed.
Current wording
Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 25, 2026. During the six months ended June 30, 2026, there were no material changes to our critical accounting policies from those previously disclosed.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Foreign exchange transaction loss for the three months ended March 31, 2026 and 2025 is immaterial due to lower balances in our deposit accounts and accounts payable denominated in British pound sterling and less fluctuation in the exchange rate between the U.S. dollar and the British pound sterling. In addition, these amounts include costs associated with buying British pound sterling for payment of our employees and vendors in the UK.