Vyome Holdings, Inc

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements that involve risks and uncertainties. In some cases, these statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “could,” “intends,” “might,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. These statements involve known and unknown risks and uncertainties that may cause our results, level of activity, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among others, those discussed in the “Risk Factors” section included in Item 1A of our most recent Annual Report on Form 10-K. Except as may berequired* by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this report.*

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements that involve risks and uncertainties. In some cases, these statements may be identified by terminology such as “may,” “will,” “should,” “expects,” “could,” “intends,” “might,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of such terms and other comparable terminology. These statements involve known and unknown risks and uncertainties that may cause our results, level of activity, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among others, those discussed in the “Risk Factors” section included in Item 1A of our most recent Annual Report on Form 10-K. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this report.

Previous wording

The Company is a Cambridge, MA/Princeton, NJ/ New Delhi, India-based clinical-stage specialty pharmaceutical company working to treat immune-inflammatory and rare diseases of unmet need with next-generation therapeutic solutions, with a business advantage of the US-India innovation corridor. The lead program, VT-1953, is a topical gel that is being developed to treat signs and symptoms of malignant fungating wounds, a potentially orphan drug designation program. The Company is planning to have discussions with the Food & Drug Administration (FDA) on a pivotal trial protocol in the first half of 2026. The Company also has a Pre-Investigational New Drug application stage ophthalmic drops program, a potentially orphan drug program, VT-1908, a repurposed immune modulator to treat steroid-sparing anterior uveitis. Another late clinical-stage program, VB-1953, for moderate to severe acne, has completed its Phase II clinical trial, and this program is Phase 3-ready.

Current wording

The Company is a Cambridge, MA/Princeton, NJ/New Delhi, India-based clinical-stage specialty pharmaceutical company working to treat immune-inflammatory and rare diseases of unmet need with next-generation therapeutic solutions, with a business advantage of the US-India innovation corridor. The lead program, VT-1953, is a topical gel that is being developed to treat signs and symptoms of malignant fungating wounds, a potentially orphan drug designation program. The Company had initiated a Phase II investigator-initiated trial in the first quarter of 2025 for VT-1953 and announced interim results in September 2025 and final results in December 2025. The Company has filed an application for Orphan Drug Designation for the VT-1953 program with the FDA in January 2026. In March 2026, the Company submitted a pre-IND briefing package to the FDA for its VT-1953 program including its proposed pivotal clinical study strategy for the treatment of malodor and other symptoms associated with malignant fungating wounds. During the second quarter of 2026, the Company received the FDA’s written response on the proposed clinical development program described in the pre-IND briefing package submitted in March 2026. The Company is incorporating the FDA’s feedback and plans to continue its engagement with the FDA through a Type C meeting prior to advancing the pivotal clinical development program. The Company also has a Pre-Investigational New Drug application stage ophthalmic drops program, a potentially orphan drug program, VT-1908, a repurposed immune modulator to treat steroid-sparing anterior uveitis. Another late clinical-stage program, VB-1953, for moderate to severe acne, has completed its Phase II clinical trial, and this program is Phase 3-ready. The Company is also developing other assets for treating immune-inflammatory diseases, which are in pre-clinical or early clinical development.

Previous wording

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.001 per share, of Vyome, and each share of preferred stock, par value $0.001 per share, of Vyome issued and outstanding immediately prior to the Effective Time (other than the shares that were owned by the Company, Vyome, or Merger Sub and shares that will be subject to put-call option agreements with certain stockholders of Vyome and Vyome’s subsidiary Vyome Therapeutics Limited (“Vyome Limited”) who are located in India) were converted into the right to receive a number of fully-paid and non-assessable shares of common stock of the Company, $0.001 par value per share according to a predetermined ratio; provided that the shares to be received by certain stockholders of Vyome and Vyome Limited located in India shall be subject to the put-call option agreements with the Company which entitles such holders to receive shares of Common Stock of the Company upon certain occurrences. In addition, each outstanding warrant, stock option, restricted stock award, stock grant or other equity award to purchase capital stock of Vyome were converted into right, warrants or equity awards to purchase a number of the Company’s shares of common stock equal to the number of shares of Vyome common stock issuable upon exercise of such Vyome right, warrant or equity award multiplied by the predetermined ratio, with an exercise price, in the case of warrants and stock options, equal to the exercise price of such Vyome warrant or option divided by the predetermined ratio.

Current wording

At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.001 per share, of Vyome, and each share of preferred stock, par value $0.001 per share, of Vyome issued and outstanding immediately prior to the Effective Time (other than the shares that were owned by the Company, Vyome, or Merger Sub and shares that will be subject to put-call option agreements with certain stockholders of Vyome and Vyome’s subsidiary Vyome Therapeutics Limited (“Vyome Limited”) who are located in India) were converted into the right to receive a number of fully-paid and non-assessable shares of common stock of the Company, $0.001 par value per share (the “Common Stock” or “common stock”), according to a predetermined ratio; provided that the shares to be received by certain stockholders of Vyome and Vyome Limited located in India shall be subject to the put-call option agreements with the Company which entitles such holders to receive shares of Common Stock of the Company upon certain occurrences. In addition, each outstanding warrant, stock option, restricted stock award, stock grant or other equity award to purchase capital stock of Vyome were converted into right, warrants or equity awards to purchase a number of the Company’s shares of common stock equal to the number of shares of Vyome common stock issuable upon exercise of such Vyome right, warrant or equity award multiplied by the predetermined ratio, with an exercise price, in the case of warrants and stock options, equal to the exercise price of such Vyome warrant or option divided by the predetermined ratio.

Previous wording

On August 20, 2025, the Company entered into Amendment No. 1 (the “Amendment”) to that certain Equity Distribution Agreement dated May 30, 2025 with Maxim Group LLC to act as the Company’s exclusive sales agent with respect to the issuance and sale of up to $12,000,000 of the Company’s shares of common stock, par value $0.001 per share, from time to time, in an at-the-market public offering (the “ATM Offering”). The Amendment increased the amount that may be offered and sold in the Offering from $3,420,926 to $12,000,000. In February 2026, the Company sold 1,089,545 shares of common stock at prices between $3.09 and $4.86 per share under the Equity Distribution Agreement, resulting in net proceeds of $5,291,868.

Current wording

On August 20, 2025, the Company entered into Amendment No. 1 (the “Amendment”) to that certain Equity Distribution Agreement dated May 30, 2025 (the “Equity Distribution Agreement”) with Maxim Group LLC to act as the Company’s exclusive sales agent with respect to the issuance and sale of up to $12,000,000 of the Company’s shares of common stock, par value $0.001 per share, from time to time, in an at-the-market public offering (the “ATM Offering”), less a 3% discount. The Amendment increased the amount that may be offered and sold in the ATM Offering from $3,420,926 to $12,000,000. In January 2026, the Company sold 1,089,545 shares of common stock at prices approximately between $4.00 and $6.00 per share under the Equity Distribution Agreement, resulting in net proceeds of $5,291,868, before deducting $6,000 for due diligence fees incurred with the ATM Offering.

Previous wording

We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from where we get revenues from milestone payments, royalties and the sale of a proprietary ingredient. These payments are recorded as service fee revenue in the period earned. We have occasionally received payments for milestones specified under the license of our products to Sun Pharma, but do not expect to receive any significant further milestone payments. We expect to continue to receive a minor amount of royalties under such licenses. Such revenues are part of our pharmaceutical segment.

Current wording

We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from which we get revenues from milestone payments, royalties and the sale of a proprietary ingredient. These payments are recorded as service fee revenue in the period earned. We have occasionally received payments for milestones specified under the license of our products to Sun Pharma, but do not expect to receive any significant further milestone payments. We expect to continue to receive a minor amount of royalties under such licenses. Such revenues are part of our pharmaceutical segment.

Previous wording

The Company derives revenues from the sale of products, including royalties related to sales of such products, and from the license of our technology. Substantially all revenues for the three months ended March 31, 2026, and 2025 were derived from one customer, Sun Pharma, based in India. During 2023, the Company amended its arrangement with Sun Pharma such that the Company will no longer be responsible for purchasing and selling inventory of the dandruff lotion and shampoo but instead will receive a net service fee payment for sales of such products made by Sun Pharma. This arrangement was terminated in 2024. We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from which we get revenues from milestone payments, royalties, and the sale of a proprietary ingredient.

Current wording

The Company derives revenues from the sale of products, including royalties related to sales of such products, and from the license of our technology. Substantially all revenues for the three months ended June 30, 2026, and 2025 were derived from one customer, Sun Pharma, based in India. We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from which we get revenues from milestone payments, royalties, and the sale of a proprietary ingredient.

Previous wording

Research and development expenses were $666,405 and $90,268 for the three months ended March 31, 2026 and 2025, respectively. The increase in research and development costs was primarily due to the focusing of the Company’s resources on scaling up the regulatory consulting and CMC preparation work of the VT-1953 project.

Current wording

Research and development expenses were $506,723 and $80,061 for the three months ended June 30, 2026 and 2025, respectively. The increase in research and development costs was primarily due to the focusing of the Company’s resources on scaling up the regulatory consulting and CMC preparation work of the VT-1953 project.

Previous wording

General and administrative expenses were $477,575 and $259,626 for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to an increase in legal, accounting, auditing, and related professional fees associated with preparing for the Merger, and the stock-based compensation for stock options of $5,696 in the three months ended March 31, 2026.

Current wording

General and administrative expenses were $364,891 and $265,395 for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily due to an increase in legal, accounting, auditing, and related professional fees associated with being a public company and increased staff, and the stock-based compensation for stock options in the three months ended June 30, 2026.

Previous wording

Interest income and other were $147,264 and ($4,014) for the three months ended March 31, 2026, and 2025, respectively. The increase was driven by funds held in our bank accounts after merger-related proceeds and draws on the ATM.

Current wording

Interest income and other income were $146,208 and $5,049 for the three months ended June 30, 2026 and 2025, respectively. The increase was driven by funds held in our bank accounts after merger-related proceeds and draws on the ATM.

Previous wording

The fair value adjustment related to the fair value of the Company’s outstanding convertible notes was favorable/(unfavorable) Nil and ($36,008) for the three months ended March 31, 2026, and 2025, respectively, reflecting the probability and timing of the Merger completion and resultant valuation considerations.

Current wording

The fair value adjustment related to the fair value of the Company’s outstanding convertible notes was favorable/(unfavorable) Nil and $66,519 for the three months ended June 30, 2026 and 2025, respectively, reflecting the probability and timing of the Merger completion and resultant valuation considerations. All of the notes were converted into equity instruments in connection with the Merger.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2026, and 2025 indicated:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:

Previous wording

During the three months ended March 31, 2026, net cash used in operating activities was $1,435,966, consisting primarily of net losses of $985,521 less stock compensation expenses of $5,696, a decrease of $278,628 of post-employment benefits and a decrease of accounts payable and accrued expenses of $184,697 partially offset by a decrease in prepaid expenses of $89,189. The Company continues to operate under cost-efficient operations for capital efficiency.

Current wording

During the six months ended June 30, 2026, net cash used in operating activities was $2,339,674, consisting primarily of net losses of $1,705,204 less stock compensation expenses of $16,747, a decrease of $374,508 in post-employment benefits, and a decrease in accounts payable and accrued expenses of $259,356, partially offset by a decrease in prepaid expenses of $192,001. The Company continues to operate under cost-efficient operations for capital efficiency.

Previous wording

During the three months ended March 31, 2025, net cash used in operating activities was $203,535, consisting primarily of net losses of $293,974 less the non-cash charge for interest expense of $50,939 and an increase in accrued compensation and post-employment benefits of $68,021, offset by the loss on fair value adjustment of convertible debt of $36,008 and a decrease in accounts payable and accrued expenses of $73,168.

Current wording

During the six months ended June 30, 2025, net cash used in operating activities was $509,784, consisting primarily of net losses of $602,732 less the non-cash charge for interest expense of $108,476 and an increase in accrued compensation and post-employment benefits of $66,913, offset by the income on fair value adjustment of convertible debt of $30,511 and a decrease in accounts payable and accrued expenses of $96,523.

Previous wording

During 2025 prior to the Merger, we have primarily used the proceeds of the sale of our convertible notes to incrementally develop our biotechnology products and prepare the Company for an offering of its securities and activities related thereto. We had been operated under an austerity program for several years, delaying projects and payments until sufficient funds could be raised. As a result of the Merger, we were able to close on the funding from the Concurrent Financing (approximately $6.6 million) and subsequently from the ATM facility (approximately $6,500,000). The Company had $8,795,783 of cash at March 31, 2026.

Current wording

During 2025 prior to the Merger, we have primarily used the proceeds of the sale of our convertible notes to incrementally develop our biotechnology products and prepare the Company for an offering of its securities and activities related thereto. We had been operating under an austerity program for several years, delaying projects and payments until sufficient funds could be raised. As a result of the Merger, we were able to close on the funding from the Concurrent Financing (approximately $6.6 million) and subsequently from the ATM facility (approximately $6,500,000 through June 30, 2026). The Company had $7,887,510 of cash on June 30, 2026.

Previous wording

During the three months ended March 31, 2026, cash provided by financing activities was $5,288,868, principally from the net proceeds from the sale of common stock pursuant to the ATM. During the three months ended March 31, 2025, cash provided by financing was $160,000, consisting primarily of $160,000 from the sale of convertible notes.

Current wording

During the six months ended June 30, 2026, cash provided by financing activities was $5,285,868, principally from the net proceeds from the sale of common stock pursuant to the ATM. During the six months ended June 30, 2025, cash provided by financing was $791,253, consisting primarily of $191,253 from the sale of convertible notes and $600,000 from the proceeds from a promissory note.

Previous wording

Since inception, we have incurred significant operating losses. As of March 31, 2026, we had a cash balance of $8,795,783 and have operated under an austerity plan for several years. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacturing of our drug product and drug supply, regulatory approval for our current and future product candidates, maintenance and expansion of our intellectual property portfolio, hiring of additional research, development and business personnel and operations as a public company. In addition, if we obtain marketing approval for any of our current or future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties.

Current wording

Since inception, we have incurred significant operating losses. As of June 30, 2026, we had a cash balance of $7,887,510 and have operated under an austerity plan for several years. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacturing of our drug product and drug supply, regulatory approval for our current and future product candidates, maintenance and expansion of our intellectual property portfolio, hiring of additional research, development and business personnel and operations as a public company. In addition, if we obtain marketing approval for any of our current or future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties.

Previous wording

On March 27, 2026, the Company received an order from the GST authorities in India relating to the refund of Integrated Goods and Services Tax (IGST) of approximately ₹3.57 crore (~$400K) previously claimed on certain R&D services provided to its U.S. affiliate. The matter pertains to the determination of the place of supply under the IGST Act, 2017, for services rendered before October 1, 2019. The GST authorities have taken the position that such services do not qualify as “export of services” and have proposed recovery of the refund along with applicable interest and penalties under relevant provisions of the Central Goods & Services Tax Act. The Company believes that its position is supported by applicable law, judicial precedents, and clarificatory guidance, including the nature of services being provided on a principal-to-principal basis and not constituting services in respect of goods physically made available. Accordingly, the Company intends to contest the order through appropriate legal remedies. Based on its assessment and advice from legal and tax counsel, management believes that it has a strong case on the merits and does not expect a material adverse impact on its financial position; accordingly, no provision has been recorded as of March 31, 2026.

Current wording

On March 27, 2026, the Company received an order from the goods and services tax (“GST”) authorities in India relating to the refund of Integrated Goods and Services Tax (“IGST”) of approximately ₹3.57 crore, or approximately $378,000, previously claimed on certain R&D services provided to its U.S. affiliate. The matter pertains to the determination of the place of supply under the IGST Act, 2017, for services rendered before October 1, 2019. The GST authorities have taken the position that such services do not qualify as “export of services” and have proposed recovery of the refund along with applicable interest and penalties under relevant provisions of the Central Goods & Services Tax Act. The total amount of the demand order by IGST with respect to this matter, including interest and penalty, is approximately $750,000 as of June 30, 2026.

Previous wording

The Company received a civil court notice with respect to deferred unpaid salary of approximately $95,000 to a past employee. Thies liability is already accrued in the balance sheet.

Current wording

The Company received a civil court notice with respect to deferred unpaid salary of approximately $95,000 to a past employee. This liability is already accrued in the balance sheet.

Previous wording

We believe that our existing cash, together with the proceeds from the private placement offering, and proceeds from our ATM facility to date, will enable us to fund our operating expenses and capital expenditure requirements for at least 15 months, including the initiation of the pivotal trial of our lead candidate, VT-1953, but will not be sufficient to complete the trial and or work on the other indications or the development of any other product candidate. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our failure to raise capital or enter into such agreements as, and when needed, could have a material adverse effect on our business, results of operations, and financial condition.

Current wording

We believe that our existing cash, together with the proceeds from the private placement offering, and proceeds from our ATM facility to date, will enable us to fund our operating expenses and capital expenditure requirements for at least 15 months, including the initiation of the pivotal trial of our lead candidate, VT-1953, but will not be sufficient to complete the trial and or work on the other indications or the development of any other product candidate. For the six months ended June 30, 2026, the Company raised net proceeds of $5,291,868 from the sale of common stock pursuant to ATM Offering. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our failure to raise capital or enter into such agreements as, and when needed, could have a material adverse effect on our business, results of operations, and financial condition.

Previous wording

We also have employment agreements with certain employees and consulting agreements that require the funding of a specific level of payments if certain events, such as a change in control, termination without cause, or retirement, occur. We also have an agreement on Resignation and Separation Letter dated January 11, 2021, Craig Tooman, a past employee, to pay a certain amount on change of control.

Current wording

We also have employment agreements with certain employees and consulting agreements that require the funding of a specific level of payments if certain events, such as a change in control, termination without cause, or retirement, occur. We also have an agreement on Resignation and Separation Letter dated January 11, 2021, with Craig Tooman, a past employee, to pay a certain amount on change of control.

Previous wording

Inflation generally affects us by increasing the cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2026 or 2025.

Current wording

Inflation generally affects us by increasing the cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the six months ended June 30, 2026 or 2025.