FIREFLY NEUROSCIENCE, INC.

Previous wording

We will pay Konik a commission equal to 2.0% of the aggregate gross proceeds from the sales of ATM Shares sold through Konik under the ATM Agreement and will also reimburse Konik for the fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated by the ATM Agreement in an amount not to exceed $50 in the aggregate, and up to an additional $5 per due diligence update session (and in no event more than $20 per fiscal year) for diligence and maintenance of the ATM Agreement. The ATM Agreement contains certain covenants, representations and warranties customary for an agreement of this type. We agreed to provide indemnification and contribution to the Sales Agent against certain liabilities, including liabilities under the Securities Act.

Current wording

We will pay Konik a commission equal to 2.0% of the aggregate gross proceeds from the sales of ATM Shares sold through Konik under the ATM Agreement and will also reimburse Konik for the fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated by the ATM Agreement in an amount not to exceed $50 in the aggregate, and up to an additional $5 per due diligence update session (and in no event more than $20 per fiscal year) for diligence and maintenance of the ATM Agreement. The ATM Agreement contains certain covenants, representations and warranties customary for an agreement of this type. We agreed to provide indemnification and contribution to Konik against certain liabilities, including liabilities under the Securities Act.

Previous wording

Research and development expenses represent costs incurred to conduct research and development, such as the development/enhancements of the Evoke Platform and BNA technology. We recognize all research and development costs as they are incurred. Research and development expenses consist primarily of the following:

Current wording

Research and development expenses represent costs incurred to conduct research and development, such as the development/enhancements of our products. We recognize all research and development costs as they are incurred. Research and development expenses consist primarily of the following:

Previous wording

Other income (expense), consists, primarily of interest bank fees and loan fees, foreign exchange gain or loss, changes in derivative fair value, impairments and penalties.

Current wording

Other income, (expense) consists primarily of interest income, interest and bank fees, foreign exchange gains or losses, and, in prior periods, changes in derivative fair value and losses on settlement of convertible notes.

Previous wording

The following table sets forth amounts from our condensed consolidated statements of operations for the six months ended June 30, 2026, and 2025:

Current wording

The following table sets forth amounts from our condensed consolidated statements of operations for the nine months ended September 30, 2026, and 2025:

Previous wording

Research and development expenses for the six months ended June 30, 2026, were $949, as compared to $648, for the six months ended June 30, 2025, representing a increase of $301, or 46%. The increase was due to the expense of the remainder of a prepaid agreement representing 48% of the increase and the addition of dedicated development staff representing the remainder.

Current wording

Research and development expenses for the nine months ended September 30, 2026, were $1,332, as compared to $1,026, for the nine months ended September 30, 2025, representing an increase of $306, or 30%. The increase reflects continued investment in platform development, including the addition of dedicated development staff, as well as the recognition of the remaining balance of a prepaid agreement in June 2026.

Previous wording

As of June 30, 2026, we had cash of $9,226, compared to $2,747 as of December 31, 2025, an increase of $6,479 during the six months ended June 30, 2026. The increase reflects net proceeds from the Initial Closing and the April 16, 2026 Additional Closing of our March 2026 private placement, partially offset by cash used in operating and investing activities during the period. Total aggregate gross proceeds raised under the Securities Purchase Agreement dated March 8, 2026, including both closings, were $10,250.

Current wording

As of September 30, 2026, we had cash of $8,023, compared to $2,747 as of December 31, 2025, an increase of $5,276 during the nine months ended September 30, 2026. The increase reflects net proceeds from the Initial Closing and the April 16, 2026 Additional Closing of our March 2026 private placement, partially offset by cash used in operating and investing activities during the period. Total aggregate gross proceeds raised under the Securities Purchase Agreement dated March 8, 2026, including both closings, were $10,250.

Previous wording

For the next 12 months, we expect to continue to incur negative cash flows from operations as we integrate the Evoke and BNA products and continue to invest in the expansion of our sales organization. The acquisition has expanded our product portfolio and introduced recurring revenue from Evoke product sales; however, we do not expect revenue to be sufficient to cover operating expenses in the near term.

Current wording

For the next 12 months, we expect to continue to use cash in operations as we continue to invest in the expansion of our sales organization. The acquisition has expanded our product portfolio and introduced recurring revenue from Evoke product sales; however, we do not expect revenue to be sufficient to cover operating expenses in the near term.

Previous wording

Beyond the next 12 months, our ability to achieve profitability will depend on the successful commercialization of our combined Evoke and BNA product portfolio. We expect to incur significant costs associated with continued product development, commercialization, and distribution activities. As a result, we will require substantial additional capital to fund ongoing operations and to implement our business strategy prior to achieving positive cash flows from operating activities.

Current wording

Beyond the next 12 months, our ability to achieve profitability will depend on the successful commercialization of our product portfolio. We expect to incur significant costs associated with continued product development, commercialization, and distribution activities. As a result, we will require substantial additional capital to fund ongoing operations and to implement our business strategy prior to achieving positive cash flows from operating activities.

Previous wording

There is substantial doubt about our ability to continue as a going concern, as evidenced by our accumulated deficit of $115,558 and negative cash flows from operating activities of $3,698 for the six months ended June 30, 2026. The report of our independent registered public accounting firm for the year ended December 31, 2025 also expressed substantial doubt about our ability to continue as a going concern.

Current wording

There is substantial doubt about our ability to continue as a going concern, as evidenced by our accumulated deficit of $117,037 and negative cash flows from operating activities of $4,829 for the nine months ended September 30, 2026. The report of our independent registered public accounting firm for the year ended December 31, 2025 also expressed substantial doubt about our ability to continue as a going concern.

Previous wording

Management's plan to address the conditions giving rise to substantial doubt includes: (i) disciplined operating expense management and integration synergies from the Evoke acquisition; (ii) targeted commercial expansion to drive recurring revenue from the combined Evoke and BNA product portfolio; and (iii) continued access to capital markets through equity financings, including our at-the-market offering program with up to $7.4 million in available capacity. During the six months ended June 30, 2026, the Company raised $10,277 in net proceeds through the Initial Closing and Additional Closing of a private placement of units and the exercise of warrants (see Note 13 - Equity). These plans involve assumptions about capital markets and customer demand that may not occur as expected, and there can be no assurance that the Company will be able to obtain additional funding on satisfactory terms or at all.

Current wording

Management's plan to address the conditions giving rise to substantial doubt includes: (i) disciplined operating expense management and integration synergies from the Evoke acquisition; (ii) targeted commercial expansion to drive recurring revenue; and (iii) continued access to capital markets through equity financings, including our at-the-market offering program with up to $7.4 million in available capacity. During the nine months ended September 30, 2026, the Company raised $10,277 in net proceeds through the Initial Closing and Additional Closing of a private placement of units and the exercise of warrants (see Note 13 - Equity). These plans involve assumptions about capital markets and customer demand that may not occur as expected, and there can be no assurance that the Company will be able to obtain additional funding on satisfactory terms or at all.

Previous wording

For the six months ended June 30, 2026, net cash used in operating activities was $3,698 as compared to $4,901, for the six months ended June 30, 2025, representing a decrease of $1,203, or 25%. This decrease in net cash used in operating activities is primarily due to a reduction in accrued liabilities during the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, net cash used in operating activities was $4,829 as compared to $6,389, for the nine months ended September 30, 2025, representing an improvement of $1,560, or 24%. This improvement in operating cash flow is primarily due to a lower net loss after adjusting for non-cash items, and a smaller decrease in accrued liabilities ($301 compared to $1,058 in the nine months ended September 30, 2025).

Previous wording

For the six months ended June 30, 2026, net cash used in investing activities was $100, as compared to $2,379, cash used in investing activities for the six months ended June 30, 2025, representing a decrease of $2,279, or 96%. The decrease in cash used in investing activities is primarily attributed to the acquisition of Evoke Neuroscience Inc..

Current wording

For the nine months ended September 30, 2026, net cash used in investing activities was $172, as compared to $2,465, cash used in investing activities for the nine months ended September 30, 2025, representing a decrease of $2,293, or 93%. The decrease in cash used in investing activities is primarily attributable to the $2,360 paid, net of cash acquired, for the acquisition of Evoke Neuroscience, Inc. in the prior-year period.

Previous wording

For the six months ended June 30, 2026, net cash provided from financing activities was $10,277, as compared to $11,388, for the six months ended June 30, 2025, representing a decrease of $1,111, or 10%. The decrease was primarily shares being issued through the first half of 2026 vs warrants being exercised in 2025.

Current wording

For the nine months ended September 30, 2026, net cash provided from financing activities was $10,277, as compared to $11,369, for the nine months ended September 30, 2025, representing a decrease of $1,092, or 10%. Financing proceeds in 2026 consisted primarily of the March 2026 private placement of units compared to proceeds from warrant exercises in 2025.

Previous wording

We are increasingly reliant on machine learning models for EEG/ERP interpretation. Model performance depends on training data diversity and ongoing monitoring to ensure generalizability. Evolving regulatory guidance (including the FDA’s approach to AI/ML-enabled medical devices) and payer expectations could impact timelines and costs. Additionally, our handling of PHI and clinical data requires robust cybersecurity, vendor oversight, and compliance with HIPAA and CFR Part 11. A significant data reach, integrity failure, or model drift could adversely affect adoption, revenues, and our reputation.

Current wording

We are increasingly reliant on machine learning models for EEG/ERP interpretation. Model performance depends on training data diversity and ongoing monitoring to ensure generalizability. Evolving regulatory guidance (including the FDA’s approach to AI/ML-enabled medical devices) and payer expectations could impact timelines and costs. Additionally, our handling of PHI and clinical data requires robust cybersecurity, vendor oversight, and compliance with HIPAA and 21 CFR Part 11. A significant data breach, integrity failure, or model drift could adversely affect adoption, revenues, and our reputation.

Previous wording

As with other companies that are in our industry, we will need to successfully manage normal business and scientific risks. Research and development of new technologies is, by its nature, unpredictable. We cannot assure you that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. In addition, the emergence and effects of public health crises, such as pandemics and epidemics, are difficult to predict. Changes in U.S. and international trade policy, including tariffs imposed or threatened by the U.S. government during 2026 — such as the broad tariffs imposed and subsequently withdrawn or replaced following related litigation, new tariffs announced on a large number of U.S. trading partners, and additional tariffs specifically targeting Canadian goods — could have a material and significant impact on our business, including on the cost of components, products, and services sourced from or through affected jurisdictions, and remain subject to further change with limited notice. The consequences of the conflict between Israel and Hamas and the ceasefire framework in effect since October 2025, as well as the 2026 conflict among Israel, the United States, and Iran — including the ceasefire reached in April 2026, the subsequent memorandum of understanding regarding the Strait of Hormuz, and continuing regional tensions, sanctions, and countermeasures — together with the effects of these conflicts on our employees and operations in Israel, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Furthermore, other than as discussed in this Form 10-Q, we have no committed source of financing and may not be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.

Current wording

As with other companies that are in our industry, we will need to successfully manage normal business and scientific risks. Research and development of new technologies is, by its nature, subject to uncertainty. We cannot assure you that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. In addition, the emergence and effects of public health crises, such as pandemics and epidemics, are difficult to predict. Changes in U.S. and international trade policy, including tariffs imposed or threatened by the U.S. government during 2026 — such as the broad tariffs imposed under the International Emergency Economic Powers Act, which the U.S. Supreme Court held unlawful in February 2026, the temporary 10% global import surcharge imposed under Section 122 of the Trade Act of 1974, which expired on July 24, 2026, the tariffs of 10% or 12.5% imposed effective July 24, 2026 under Section 301 of the Trade Act of 1974 on imports from 60 U.S. trading partners, and additional tariffs specifically targeting Canadian goods — could have a material and significant impact on our business, including on the cost of components, products, and services sourced from or through affected jurisdictions, and remain subject to further change with limited notice. The consequences of the conflict between Israel and Hamas and the ceasefire framework in effect since October 2025, as well as the 2026 conflict among Israel, the United States, and Iran — including the ceasefire reached in April 2026, the subsequent memorandum of understanding regarding the Strait of Hormuz, and continuing regional tensions, sanctions, and countermeasures — together with the effects of these conflicts on our employees and operations in Israel, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Furthermore, other than as discussed in this Form 10-Q, we have no committed source of financing and may not be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to curtail, or cease our operations.