Fabric.AI, Inc.
For the period ended Jun 30, 2026. Filed Aug 14, 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.
Jun 30, 2026 · Filed Aug 14, 2026
FABC$1.59+3.9%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 2026-05-15.
0001493152-26-023860
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001493152-26-038445
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 202 previous paragraphs and 204 current paragraphs.
161 unchanged; 16 reworded; 24 added; 17 removed; 8 previous and 3 current paragraphs rearranged.
Tables are not compared: 8 previous and 6 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 (24)
Current report
Cost of goods sold
Current report
Cost of goods sold was $0 for the three months ended June 30, 2026, as compared to $239,040 for the same period in 2025, a decrease of $239,040, or 100%. The decrease was primarily due to impairment charges related to inventory used in the manufacturing of the Vanish.
Current report
Research and development (“R&D”) expense was $689,892 for the three months ended June 30, 2026, as compared to $349,951 for the same period in 2025, an increase of $339,941 or 97.1%. The increase was primarily due to (i) R&D design and re-engineering of the Vanish being substantially completed in the prior year and (ii) expense related to the Kopin JDA for the quarter ended June 30, 2026. The Company expects R&D expenses to continue to increase in future periods as development activities under its Joint Development and License Agreement with Kopin Corporation for the Neural I/o TM chip accelerate.
Current report
General and administrative expense was $2,639,185 for the three months ended June 30, 2026, compared to $1,199,324 for the same period in 2025, an increase of $1,439,861, or 120.1%.
Current report
The increase was primarily due to stock-based compensation expense of $673,666 related to stock options and RSUs granted and vested during the three months ended June 30, 2026, to members of the board and employees, and $655,268 in warrant expense related to consulting services, compared to the same period in 2025.
Current report
Six months ended June 30, 2026, compared to six months ended June 30, 2025
Current report
Cost of goods sold
Current report
Cost of goods sold was $0 for the six months ended June 30, 2026, as compared to $239,040 for the same period in 2025, a decrease of $239,040, or 100%. The decrease was primarily due to impairment charges related to inventory used in the manufacturing of the Vanish.
Current report
Research and development expense
Current report
General and administrative expenses
Current report
General and administrative expense was $4,215,376 for the six months ended June 30, 2026, compared to $2,865,145 for the same period in 2025, an increase of $1,350,231, or 47.1%.
Current report
Other income and expense
Current report
For the six months ended June 30, 2026, the Company recorded a $330,234 increase of other expense, net. The increase for the six months ended June 30, 2026 and 2025, is primarily due to: (i) the Company recognizing a loss of $0 and $12,174,100, respectively, for the change in fair value – warrant liability, a decrease of $12,174,100, due to the Series H-7 Warrants and Series I Warrants being reclassified to equity during the year ended December 31, 2025; (ii) the Company recognizing a gain of $37,000 and $2,661,000, respectively, for the change in fair value – derivative liability, a decrease of $2,624,000, due primarily to the Series H-7 Preferred Stock being fully noticed during the six months ended June 30, 2025, resulting in a gain of $2,661,000; (iii) the Company recognizing a loss of $8,044,334 and $0, respectively, for the change in fair value – anti-dilution liability, due to the Company’s recognition of the anti-dilution liability resulting from the anti-dilution provisions related to the Series J Preferred Stock issued during the six months ended June 30, 2026; and (iv) the Company recognizing a loss of $1,697,889 and a gain of $66,368, respectively, for other income (expense), primarily due to the $1,565,000 in issuance costs related to the Waiver Warrants issued in the six months ended June 30, 2026.
Current report
Our primary uses of cash are to fund our semiconductor development activities, including our obligations under the Joint Development and License Agreement (the “JDA”) with Kopin Corporation, research and development and operational staffing, and general corporate expenses. Historically, our sources of cash have. Consisted principally of proceeds from the sale of equity and debt securities, including preferred stock and warrants. We have incurred recurring losses from operations and expect to continue to incur net losses as we invest in the development of our technologies, and we expect our cash needs to increase as our semiconductor development activities progress.
Current report
In addition to our operating cash needs, we have obligations under the JDA with Kopin to fund initial development of the project technology, and following a successful prototype demonstration, we expect to negotiate a production plan that may require additional payments. We also have obligations associated with out outstanding preferred stock, including quarterly cash dividends and potential cash redemptions upon the occurrence of certain triggering events or a change in control, as described further below. These obligations may require the expenditure of a substantial portion of our cash resources, and if we do not have sufficient cash to satisfy them, we may need to raise additional equity or debt capital, delay, reduce or eliminate certain development programs, sell assets, or merge with another entity. We. Cannot provide any assurance that additional capital will be available on acceptable terms, or at all.
Current report
The increase in cash used in operating activities is primarily due to an increase prepaid expenses resulting from the prepayment of research and development costs to Kopin in connection with the Kopin Joint Development Agreement, which was partially mitigated by a decrease in non-cash items reconciling net loss which consisted of stock-based compensation resulting from stock options, RSUs, and consulting warrants during the six months ended June 30, 2026, non-cash financing expense related to the Waiver Warrants issued for the Series H-7 and Series I preferred stock omnibus amendment on April 27, 2026, and the anti-dilution liability in connection with the Series K Preferred Stock.
Current report
The increase in cash provided was due to (i) $19,720,000 in net proceeds from the sale of the Company’s Series K Preferred Stock and $5,029,269 in proceeds from the exercises of Series H-7 and Series I preferred warrants during the six months ended June 30, 2026. The Company had no cash providing financing activities during the same period in 2025.
Current report
Preferred Stock and Warrant Obligations
Current report
Our outstanding preferred stock and warrants give rise to obligations that may affect our liquidity and our ability to raise capital.
Current report
Series K Preferred Stock
Current report
We issued Series K Convertible Preferred Stock in April 2026 for aggregate gross proceeds of $21,500,000. Holders are entitled to cash dividends of 7% per annum, compounded quarterly, payable in arrears out of funds legally available therefor, which increase to 15% per annum, upon the occurrence and continuance of a triggering event. Upon a triggering event or a change in control, holders may require us to redeem their shares in cash at a premium, and upon certain bankruptcy events the shares become mandatorily redeemable. Our Series K Certificate of Designations also contains restrictive covenants, including requirement to maintain minimum unencumbered cash, restrictions on incurring indebtedness and on redeeming or paying dividends on other capital stock, and participation rights in future offerings, which may limit our flexibility in raising capital. The Series K Preferred Stock and Series K Warrants also contain anti-dilution provisions that could increase dilution to common stockholders and make it more difficult for us to raise additional equity capital.
Current report
Series J Preferred Stock
Current report
In connection with the Joint Development and License Agreement with Kopin, we issued Series J Convertible Preferred Stock to Kopin as non-cash consideration for the license to the project technology; the issuance did not provide us with any cash proceeds. Holders are entitled to dividends of 6% per annum, payable semi-annually, which we may elect to pay in cash or in kind through the issuance of additional shares of Series J Preferred Stock. The Series J Preferred Stock contains anti-dilution provisions that may require us to issue additional shares of Series J Preferred Stock to Kopin upon certain issuances of Common Stock or Common Stock Equivalents, which could increase dilution to our common stockholders and make it more difficult for us to raise additional equity capital.
Current report
The April 2026 amendments extended the maturity dates of our Series H-7 and Series I Preferred Stock to October 27, 2027, and removed the installment (amortization) payment obligations. Holders of each series are entitled to cash dividends (8% per annum for Series H-7 and 7% per annum, for Series I, each compounding and increasing to 15% upon a triggering event), and may require cash redemption at a premium upon the occurrence of a triggering event. Our Series H-7 Certificate of Designations requires us to maintain unencumbered cash and cash equivalents of at least 120% of the aggregate stated value of outstanding Series H-7 Preferred Stock, and our Series I Certificate of Designations requires us to maintain unencumbered cash and cash equivalents of at least 50% of the aggregate stated value of outstanding Series I Preferred Stock. As of June 30, 2026, we had $110,865 in restricted cash. These cash maintenance requirements, together with the potential for cash dividends and cash redemptions upon triggering events, may require the expenditure of a substantial portion of our cash resources.
Removed paragraphs (17)
Previous report
General and administrative expense was $1,576,191 for the three months ended March 31, 2026, compared to $1,665,822 for the same period in 2025, a decrease of $89,631, or 5.4%.
Previous report
Our sources of cash since inception have been predominately from the sale of equity and debt, including the issuance of Preferred Stock.
Previous report
We are evaluating other options for the strategic deployment of capital beyond our ongoing strategic initiatives. We anticipate being opportunistic with our capital, and we intend to explore potential partnerships and acquisitions that could be synergistic with our competitive stance in the market.
Previous report
Series H-7 Preferred Stock
Previous report
On August 7, 2023, the Company entered into the Series H-7 Purchase Agreement with certain accredited investors (the “Series H-7 Investors”), pursuant to which it agreed to sell to the Series H-7 Investors (i) an aggregate of 22,000 Series H-7 Preferred Stock with a stated value of $1,000 per share, initially convertible into up to 171,875 shares of the Company’s common stock at an initial conversion price of $128.00 per share, and (ii) warrants (“Series H-7 Warrants”) initially exercisable for up to an aggregate of 171,875 shares of common stock.
Previous report
The shares of Series H-7 Preferred Stock are convertible into common stock (the “Series H-7 Conversion Shares”) at the election of the holder at any time at an initial conversion price of $128.00 (the “Series H-7 Conversion Price”), which, and pursuant to the stock combination event adjustment provisions in the Certificate of Designations, was subsequently reduced to $32.00. The Series H-7 Conversion Price is subject to adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable Series H-7 Conversion Price (subject to certain exceptions).
Previous report
The holders of the Series H-7 Preferred Stock are entitled to dividends of 8.0% per annum, compounded monthly, which are payable in cash or shares of common stock at the Company’s option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series H-7 Preferred Stock will accrue dividends at the rate of 15% per annum. Upon conversion or redemption, the holders of the Series H-7 Preferred Stock are also entitled to receive a dividend make-whole payment.
Previous report
Notwithstanding the foregoing, the Company’s ability to settle conversions and make dividend payments using shares of common stock is subject to certain limitations set forth in the Certificate of Designations. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of, or dividend make-whole payment under, the Certificate of Designations or Warrants.
Previous report
Series I Preferred Stock
Previous report
On August 4, 2025, the Company entered into the Series I Purchase Agreement with certain accredited investors, pursuant to which it agreed to sell (i) an aggregate of 7,000 shares of the Company’s newly-designated Series I Convertible Preferred Stock, with a par value of $0.0001 per share and a stated value of $1,000 per share, initially convertible into up to 875,000 shares of the Company’s common stock at an initial conversion price of $8.00 per share and (ii) warrants to acquire up to an aggregate of 875,000 shares of common stock (the “Series I Warrants”) at an exercise price of $8.00 per share. The closing of the Series I Private Placement occurred on August 8, 2025. The aggregate gross proceeds from the Series I Private Placement were $7,000,000.
Previous report
The shares of Series I Preferred Stock are convertible into shares of common stock at the election of the holder at any time at an initial conversion price of $8.00 per share (the “Series I Conversion Price”). The Series I Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like and dilutive issuances (in each case, subject to certain exceptions). The Company is required to redeem the Series I Preferred Stock in equal installments, commencing on November 30, 2025, and thereafter on the last trading day of the third calendar month immediately following the previous Installment Date, until the maturity date of October 27, 2027.
Previous report
Notwithstanding the foregoing, the Company’s ability to settle conversions using shares of common stock is subject to certain limitations set forth in the Series I Certificate of Designations. Further, the Series I Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of Common Stock issuable upon conversion of the Series I Preferred Stock under the Series I Certificate of Designations.
Previous report
The Series I Certificate of Designations includes certain Triggering Events, including, among other things, the Company’s failure to pay any amounts due to the holders of the Series I Preferred Stock when due. In connection with a Triggering Event, each holder of Series I Preferred Stock will be able to require the Company to redeem in cash any or all of the holder’s Series I Preferred Stock at a premium set forth in the Series I Certificate of Designations.
Previous report
The Series I Warrants are exercisable for shares of common stock immediately, at an exercise price of $8.00 per share and expire five years from the date of issuance. The exercise price of each Series I Warrant is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like and dilutive issuances (in each case, subject to certain exceptions).
Previous report
The decrease in cash used in operating activities was primarily driven by an improvement in operating results, as net loss after non-cash adjustments decreased by $692,532 to $1,158,157 for the three months ended March 31, 2026, compared to $1,850,689 for the same period in 2025. This improvement was primarily attributable to non-cash expenses recognized during the current period, including $611,468 of stock-based compensation and $613,663 of unrealized loss on digital assets, which were not present in the prior year period.
Previous report
Changes in working capital also contributed to the decrease in cash used in operating activities. Cash used related to accounts payable decreased by $107,608 to $97,898 for the three months ended March 31, 2026, compared to $205,506 in the prior year period, primarily reflecting lower operating expenses and improved expense management. These improvements were partially offset by a decrease in cash provided by prepaid expenses and other current assets, which declined by $489,300 to $156,225 for the three months ended March 31, 2026, compared to $645,525 in the same period in 2025.
Previous report
The decrease in cash used was due to lower cash outflows related to redemptions of the Company’s Series H-7 Preferred Stock and Series I Preferred Stock during the current period.
Reworded paragraphs (16)
Previous wording
As of May 14, 2026, we had zero full-time employees. We also engage consultants and contractors as needed to supplement our internal capabilities. We believe that our future success depends in significant part on our ability to attract, retain, and motivate qualified engineering, scientific, and management personnel. Competition for such personnel in the semiconductor industry is intense. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
Current wording
As of August 14, 2026, we had zero full-time employees. We also engage consultants and contractors as needed to supplement our internal capabilities. We believe that our future success depends in significant part on our ability to attract, retain, and motivate qualified engineering, scientific, and management personnel. Competition for such personnel in the semiconductor industry is intense.
Previous wording
The Company has not generated revenue during the three months ended March 31, 2026 or 2025. The Company does not expect to generate revenue until it has successfully developed and commercialized products, including the Neural I/o TM chip being developed under its Joint Development and License Agreement with Kopin Corporation.
Current wording
The Company has not generated revenue during the three and six months ended June 30, 2026 or 2025. The Company does not expect to generate revenue until it has successfully developed and commercialized products, including the Neural I/o TM chip being developed under its Joint Development and License Agreement with Kopin Corporation.
Previous wording
Cost of goods sold primarily consists of costs of materials and personnel costs associated with manufacturing operations, and an accrual for post-sale warranty claims. The Company did not incur cost of goods sold during the three months ended March 31, 2026 or 2025. The Company does not expect to incur significant cost of goods sold until it has commenced commercialization of products incorporating its semiconductor technologies.
Current wording
Cost of goods sold primarily consists of costs of materials and personnel costs associated with manufacturing operations, and an accrual for post-sale warranty claims. The Company incurred cost of goods sold or $0 and $239,040 during the three and six months ended June 30, 2026 or 2025, respectively. The Company does not expect to incur significant cost of goods sold until it has commenced commercialization of products incorporating its semiconductor technologies.
Previous wording
For the three months ended March 31, 2026, the Company recorded a $3,531,983 decrease of net other income. For the three months ended March 31, 2026 and 2025, the Company recognized a gain of $0 and $1,080,600, respectively, for the change in fair value – warrant liability, a decrease of $1,080,600, due to the Series H-7 Warrants and Series I Warrants being reclassified to equity during the year ended December 31, 2025. For the three months ended March 31, 2026 and 2025, the Company recognized a loss of $6,000 and a gain of $1,531,000, respectively, for the change in fair value – derivative liability, a decrease of $1,537,000, due to the increase in the fair value of the derivative liability associated with the Series I Preferred Stock which was primarily driven by changes in the valuation assumptions, including increases in discount rates and updates to the probability-weighted outcomes of contingent features, which offset the impact of a decline in the Company’s stock price and reduced volatility. For the three months ended March 31, 2026 and 2025, the Company recognized an unrealized loss from remeasurement of digital assets of $613,663 and $0, respectively.
Current wording
For the three months ended June 30, 2026, the Company recorded a $3,201,749 decrease of other expense, net. The decrease for the three months ended June 30, 2026 and 2025, is primarily due to: (i) the Company recognizing a loss of $0 and $13,254,700, respectively, for the change in fair value – warrant liability, a decrease of $13,254,700, due to the Series H-7 Warrants and Series I Warrants being reclassified to equity during the year ended December 31, 2025; (ii) the Company recognizing a gain of $43,000 and $1,130,000, respectively, for the change in fair value – derivative liability, a decrease of $1,087,000, due primarily to the Series H-7 Preferred Stock being fully noticed during the three months ended June 30, 2025, resulting in a gain of $1,130,000; (iii) the Company recognizing a loss of $8,044,334 and $0, respectively, for the change in fair value – anti-dilution liability, due to the Company’s recognition of the anti-dilution liability resulting from the anti-dilution provisions related to the Series J Preferred Stock issued during the three months ended June 30, 2026; and (iv) the Company recognizing a loss of $1,565,000 and a gain of $25,000, respectively, for other income (expense), due to the $1,565,000 in issuance costs related to the Waiver Warrants issued in the three months ended June 30, 2026.
Previous wording
Research and development (“R&D”) expense was $124,864 for the three months ended March 31, 2026, as compared to $307,730 for the same period in 2025, a decrease of $182,866 or 59.4%. The decrease was primarily due to R&D design and re-engineering of the Vanish being substantially completed. The Company expects R&D expenses to increase in future periods as development activities under its Joint Development and License Agreement with Kopin Corporation for the Neural I/o TM chip accelerate.
Current wording
Research and development (“R&D”) expense was $814,756 for the six months ended June 30, 2026, as compared to $657,681 for the same period in 2025, an increase of $157,075 or 23.9%. The increase was primarily due (i) to R&D design and re-engineering of the Vanish being substantially completed and (ii) expense related to the Kopin JDA for the quarter ended June 30, 2026. The Company expects R&D expenses to continue to increase in future periods as development activities under its Joint Development and License Agreement with Kopin Corporation for the Neural I/o TM chip accelerate.
Previous wording
The decrease was primarily due to salaries and related consulting expenses decreasing by $520,720 for the three months ended March 31, 2026, compared to the same period in 2025, due to the decreased headcount and shift in business direction from manufacturing. This decrease was mitigated by an increase of $611,468 in warrant expense related to consulting services during the three months ended March 31, 2026, compared to $0 during the three months ended March 31, 2025.
Current wording
The increase was primarily due to stock-based compensation expense of $673,666 related to stock options and RSUs granted and vested during the six months ended June 30, 2026, to members of the board and employees, and $1,266,736 in warrant expense related to consulting services, compared to the same period in 2025. This was partially mitigated by a decrease in salaries and related consulting expenses decreasing by $399,522 for the six months ended June 30, 2026, compared to the same period in 2025, due to the decreased headcount and shift in business direction from manufacturing.
Previous wording
The Company has incurred recurring losses from operations and has insufficient liquidity to fund its future operations. As of March 31, 2026, we had $3,263,540 in cash and cash equivalents, $110,562 in restricted cash, $3,416,475 in marketable securities, and working capital of $6,475,365. As of December 31, 2025, we had $4,981,798 in cash and cash equivalents, $110,264 in restricted cash, $3,168,362 in marketable securities and working capital of $7,567,805.
Current wording
As of June 30, 2026, we had $3,635,883 in cash and cash equivalents, $5,114,563 in restricted cash, $18,035,777 in marketable securities, and working capital of $30,616,155. As of December 31, 2025, we had $4,981,798 in cash and cash equivalents, $110,264 in restricted cash, $3,168,362 in marketable securities and working capital of $7,567,805.
Previous wording
Subsequent to March 31, 2026, the Company completed financing transactions that generated significant additional liquidity. As of the date of this filing, the Company had approximately $30 million in cash and cash equivalents.
Current wording
As of the date of this filing, the Company had approximately $7.5 million in cash and cash equivalents and $20.4 million in marketable securities.
Previous wording
Subsequent to March 31, 2026, the Company completed several financing transactions that provided additional liquidity to fund the Company’s operations and semiconductor development activities. On April 29, 2026, the Company closed a private placement of Series K Convertible Preferred Stock and warrants for aggregate gross proceeds of $21,500,000. In addition, the Company entered into Omnibus Amendments with the holders of its Series H-7 and Series I Preferred Stock, extending the maturity dates to October 27, 2027 and removing amortization payment obligations. For a more complete description of these financing transactions and the terms thereof, see “Recent Developments” above.
Current wording
During the quarter ended June 30, 2026, we completed several financing transactions that materially increased our liquidity. On April 29, 2026, we. Closed a private placement of Series K Convertible Preferred Stock and warrants for aggregate gross proceeds of $21,500,000, of which $19,720,000 was received in net proceeds. We also entered into omnibus amendments with the holders of our Series H-7 and Series I Preferred Stock that extended the maturity dates of those securities to October 27, 2027, and removed the related installment (amortization) payment obligations. These amendments eliminated near-term mandatory cash redemption and deferred our cash needs to future periods.
Previous wording
We are subject to a number of risks similar to those of earlier stage commercial companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the potential need to obtain additional capital, and competition from larger companies, other technology companies and other technologies. Based on the foregoing, and taking into account the additional liquidity generated by the financing transactions completed subsequent to March 31, 2026, management believes that the existing cash and cash equivalents and marketable securities will be sufficient to fund operations for at least the next twelve months following the date of this report.
Current wording
Based on our current cash position and operating plan, and taking into account the additional liquidity generated by the financing transactions completed during the quarter, management believes that our existing cash and cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months following the date of this report.
Previous wording
Our future liquidity requirements or future capital needs will depend on, among other things, capital required to fund our semiconductor technology development activities, including our obligations under the Joint Development and License Agreement with Kopin Corporation, operational staffing and support requirements, as well as the timing and amount of future revenue and product costs. Our business is capital-intensive, and future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support development efforts, the results of our strategic initiatives, the timing of new product introductions and the continuing market acceptance of our products and services. We are working to control expenses and deploy our capital in the most efficient manner.
Current wording
Our future liquidity requirements or future capital needs will depend on, among other things, capital required to fund our semiconductor technology development activities, including our obligations under the JDA, operational staffing and support requirements, as well as the timing and amount of future revenue and product costs. Our business is capital-intensive, and future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support development efforts, the results of our strategic initiatives, the timing of new product introductions and the continuing market acceptance of our products and services. We are working to control expenses and deploy our capital in the most efficient manner.
Previous wording
During the three months ended March 31, 2026, we used $1,095,447 in cash from operating activities, a decrease in use of $380,703 compared to the cash used in operating activities of $1,476,150 during the same period in 2025.
Current wording
During the six months ended June 30, 2026, we used $7,219,867 in cash from operating activities, a increase in use of $3,118,907 compared to the cash used in operating activities of $4,100,960 during the same period in 2025.
Previous wording
During the three months ended March 31, 2026, the Company had $218,982 in cash used in investing activities as compared to $1,749,462 of cash provided by investing activities during the same period in 2025, a decrease of $1,968,444.
Current wording
During the six months ended June 30, 2026, the Company had $13,467,487 in cash used in investing activities as compared to $1,024,773 of cash provided by investing activities during the same period in 2025, an increase in cash used of $14,492,260.
Previous wording
The change was primarily driven by lower levels of activity in marketable securities during the current period. During the three months ended March 31, 2026, the Company invested $2,956,466 in marketable securities and received $2,737,484 in proceeds from sales of such securities, compared to $16,350,538 of purchases and $18,100,000 of proceeds during the same period in 2025.
Current wording
The change was primarily driven by lower levels of activity in marketable securities during the current period. During the six months ended June 30, 2026, the Company invested $19,504,729 in marketable securities and received $4,755,373 in proceeds from sales of such securities, compared to $23,257,290 of purchases and $24,282,063 of proceeds during the same period in 2025.
Previous wording
During the three months ended March 31, 2026, the Company used cash of $403,531 in financing activities as compared to $3,545,971 cash used in financing activities for the same period in 2025, a decrease of $3,142,440.
Current wording
During the six months ended June 30, 2026, the Company was provided cash of $24,345,738 by financing activities as compared to $7,881,527 cash used in financing activities for the same period in 2025, an increase in cash provided of $32,227,265.
Previous wording
Our critical accounting estimates have not changed materially from those previously reported in our Form 10-K.
Current wording
Except as described below, our critical accounting estimates have not changed materially from those previously reported in our Form 10-K. During the quarter ended June 30, 2026, in connection with our strategic transition and the Kopin Joint Development Agreement, we identified critical accounting estimates and judgments relating to (i) the fair value of the non-cash consideration transferred and the indefinite-lived classification and related impairment assessment of the acquired license intangible asset, (ii) the recurring fair value measurement of the anti-dilution liability, (iii) the initial fair value measurement and temporary (mezzanine) equity classification of the newly issued Series J and Series K Convertible Preferred Stock, and (iv) the significant unobservable inputs used in our Level 3 fair value measurements.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The following table sets forth our results of operations for each of the periods set forth below:
Current report — wording carried from elsewhere
The majority of our operating losses from continuing operations resulted from general and administrative expenses. General and administrative expenses consist primarily of costs associated with our overall operations and with being a public company. These costs include personnel, legal and financial professional services, insurance, investor relations, and compliance related fees.
Current report — wording carried from elsewhere
Series H-7 and Series I Preferred Stock
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
The Certificate of Designations includes certain triggering events including, among other things, the suspension from trading or the failure of the common stock to be trading or listed (as applicable) on an eligible market for a period of five (5) consecutive trading days, the Company’s failure to pay any amounts due to the holders of the Series H-7 Preferred Stock when due. In connection with a triggering event, each holder of Series H-7 Preferred Stock will be able to require the Company to redeem in cash any or all of the holder’s Series H-7 Preferred Stock at a premium set forth in the Certificate of Designations. In addition, pursuant to the Certificate of Designations, the Company is required from January 1, 2025, until no shares of Series H-7 Preferred Stock are outstanding, to maintain unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least 120% of the aggregate Stated Value (as defined in the Series H-7 Certificate of Designations) of the Series H-7 Preferred Stock then outstanding
Previous report — wording carried elsewhere
On April 27, 2026, the Company entered into an Omnibus Waiver, Consent, Notice and Amendment Agreement (the “Series H-7 Omnibus Amendment”) with the Required Holders (as defined in the Series H-7 Certificate of Designations), pursuant to which, the Required Holders agreed to amend and restate the Series H-7 Certificate of Designations by filing an Amended and Restated Certificate of Designations of the Series H-7 Preferred Stock (the “Amended and Restated Series H-7 Certificate of Designations”) with the Secretary of State of the State of Delaware. The Amended and Restated Series H-7 Certificate of Designations (i) extends the maturity date of the Series H-7 Convertible Preferred Stock to October 27, 2027, and (ii) removes the amortization payments and related terms and covenants.
Previous report — wording carried elsewhere
Among other covenants, the Series I Purchase Agreement requires the Company to hold a meeting of its stockholders not later than October 3, 2025, to seek approval for the issuance of shares of common stock in excess of 19.99% of the Company’s issued and outstanding shares of common stock at prices below the “Minimum Price” (as defined in Rule 5635 of the Rules of the Nasdaq Stock Market) on the date of the Series I Purchase Agreement pursuant to the terms of the Series I Preferred Stock and the applicable Series I Warrants.
Previous report — wording carried elsewhere
In connection with the Series I Private Placement, pursuant to (A) an engagement letter (the “GPN Agreement”) with GP Nurmenkari Inc. (“GPN”) and (B) an engagement letter (the “Palladium Agreement,” and collectively with the GPN Agreement, the “Engagement Letters”) with Palladium Capital Group, LLC (“Palladium,” and collectively with GPN, the “Placement Agents”), the Company engaged the Placement Agents to act as non-exclusive placement agents in connection with the Series I Private Placement, pursuant to which, the Company agreed to (i) pay each Placement Agent a cash fee equal to 4% of the gross proceeds of the Series I Private Placement (including any cash proceeds realized by the Company from the exercise of any outstanding warrants of the Company), (ii) reimbursement and payment of certain expenses, and (iii) issue to each of the Placement Agents on the closing date, warrants to purchase up to an aggregate number of shares of common stock equal to 4% of the aggregate number of shares of common stock underlying the securities issued in the Series I Private Placement, including upon exercise of any outstanding warrants of the Company, with terms identical to the Series I Warrants (the “Series I Placement Agent Warrants” and, together with the Series I Warrants and the Consultant Warrants the “Private Placement Warrants”).
Previous report — wording carried elsewhere
In connection with the Series I Purchase Agreement, the Company and the investors entered into a Registration Rights Agreement (the “Series I Registration Rights Agreement”), pursuant to which the Company is required to file a resale registration statement (the “Series I Registration Statement”) with the SEC to register for resale 200% of the shares of common stock issuable upon conversion of the Series I Preferred Stock and upon exercise of the Series I Warrants promptly following the closing date, but in no event later than 30 calendar days after the closing date, and to have such Series I Registration Statement declared effective by the Effectiveness Deadline (as defined in the Series I Registration Rights Agreement). On September 8, 2025, the Company filed the Series I Registration Statement with the SEC and subsequently amended the Series I Registration Statement on October 10, 2025 and December 19, 2025. The Series I Registration Statement was declared effective by the SEC on January 9, 2026.
Previous report — wording carried elsewhere
The terms of the Series I Preferred Stock are as set forth in the form of Certificate of Designations of the Series I Convertible Preferred Stock (“Series I Certificate of Designations”) which was filed with the Secretary of State for the State of Delaware on August 6, 2025. All shares of capital stock of the Company rank junior to shares of the Series I Preferred Stock, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company. Further to the foregoing, the shares of Series I Preferred Stock rank junior to shares of Series H-7 Convertible Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company.
Previous report — wording carried elsewhere
The holders of the Series I Preferred Stock are entitled to dividends of 7% per annum, compounded each calendar quarter, which are payable in arrears on the first trading day of each calendar quarter in cash out of funds legally available therefor. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Series I Certificate of Designations), the Series I Preferred Stock accrue dividends at the rate of 15% per annum.
Previous report — wording carried elsewhere
The Company is subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Series I Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters. In addition, the Company is required to maintain at all times unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least 50% of the aggregate Stated Value of the outstanding shares of Series I Preferred Stock then outstanding.