Sonoma Pharmaceuticals, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 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 6, 2026
SNOA$1.11+3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-10.
0001683168-26-000889
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001683168-26-006024
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 103 previous paragraphs and 77 current paragraphs.
48 unchanged; 25 reworded; 4 added; 21 removed; 9 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 9 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 (4)
Current report
Revenues
Current report
Cost of Revenues and Gross Profit
Current report
Other Expense, net
Current report
The following table provides the net loss for each period along with the computation of basic and diluted net loss per share:
Removed paragraphs (21)
Previous report
Revenue
Previous report
Cost of Revenue and Gross Profit
Previous report
Other (Expense) Income, net
Previous report
Income Tax Benefit (Expense)
Previous report
Income tax benefit (expense) for the three months ended December 31, 2025 and 2024 was $130,000 and ($9,000), respectively. The benefit for the current period was related to an expected tax loss in Mexico this fiscal year. The expense for the prior period was primarily related to the use of our Mexico deferred tax asset.
Previous report
Comparison of the Nine Months Ended December 31, 2025 and 2024
Previous report
Revenue
Previous report
Cost of Revenue and Gross Profit
Previous report
The cost of revenue and gross profit metrics for the nine months ended December 31, 2025 and 2024 are as follows:
Previous report
The increase in gross profit of $1,297,000 for the nine months ended December 31, 2025, as compared to the prior period, was primarily due to an increase in revenue and overall product mix.
Previous report
Research and Development Expense
Previous report
Selling, General and Administrative Expense
Previous report
The increase in selling, general and administrative expenses for the nine months ended December 31, 2025 of $30,000 was the result of ongoing efforts to generate increased revenues across all geographic regions.
Previous report
Other (Expense) Income, net
Previous report
Other (expense) income, net for the nine months ended December 31, 2025 was ($812,000) compared to $675,000 for the nine months ended December 31, 2024. Other (expense) income, net in the current period primarily relates to exchange rate fluctuations, offset by the recognition of income of approximately $323,000 related to employee retention credits. Other (expense) income, net in the prior period primarily relates to exchange rate fluctuations.
Previous report
Income Tax Benefit (Expense)
Previous report
Income tax benefit (expense) for the nine months ended December 31, 2025 and 2024 was $328,000 and ($302,000), respectively. The benefit for the current period was related to an expected tax loss in Mexico this fiscal year. The expense for the prior period is primarily related to the use of our Mexico deferred tax asset.
Previous report
Net Loss
Previous report
We believe we have access to additional capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, we cannot provide any assurance that other new financings will be available on commercially acceptable terms, if needed. If the economic climate in the U.S. deteriorates, our ability to raise additional capital could be negatively impacted. If we are unable to secure additional capital, we may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet our obligations. These measures could cause significant delays our continued efforts to commercialize products, which is critical to the realization of our business plan and our future operations. This uncertainty along with our history of losses indicates that there is substantial doubt about the our ability to continue as a going concern within one year after the date that these financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that may be necessary should we be unable to continue as a going concern.
Previous report
Sources of Liquidity
Previous report
On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act ("OBBBA"), which changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company anticipates an insignificant impact to deferred tax assets and liabilities and to income taxes payable in the period of enactment. We continue to evaluate the impact the new legislation will have on our consolidated financial statements.
Reworded paragraphs (25)
Previous wording
We have developed unique, differentiated, and safe dermatologic products that support paths to healing for various dermatologic conditions. Our products are primarily targeted at the treatment of redness and irritation, the management of scars and symptoms of eczema/atopic dermatitis. In Europe and the United Kingdom, we have developed products to treat acne. We are strategically focused on introducing innovative new products that are supported by human clinical data with applications that address specific dermatological procedures currently in demand. In addition, we look for markets where we can provide effective product line extensions and pricing to new product families.
Current wording
We have developed unique, differentiated, and safe dermatologic products that support paths to healing for various dermatologic conditions. Our products are primarily targeted at relieving pain and itch from skin irritations, the management of scars and managing symptoms of eczema/atopic dermatitis. In Europe and the United Kingdom, we have developed products to assist in the treatment of acne. We are strategically focused on introducing innovative new products that are supported by human clinical data with applications that address specific dermatological procedures currently in demand. In addition, we look for markets where we can provide effective product line extensions and pricing to new product families.
Previous wording
Other over-the-counter dermatology products in the United States include Regenacyn® Advanced Scar Gel, which is clinically proven to improve the overall appearance of scars while reducing pain, itch and redness, Reliefacyn® Advanced Itch-Burn-Rash-Pain Relief Hydrogel for the alleviation of red bumps, rashes, shallow skin fissures, peeling, and symptoms of eczema/atopic dermatitis, and Rejuvacyn® Advanced Skin Repair Cooling Mist for management of minor skin irritations following cosmetic procedures as well as daily skin health and hydration. Rejuvacyn is certified as a Natural Personal Care Product by the Natural Products Association, and Reliefacyn received the National Eczema Association Seal of Acceptance TM in 2023, the National Psoriasis Foundation Seal of Recognition in 2025 and the National Rosacea Society Seal of Acceptance in 2025. In January 2024, we launched Lumacyn TM Clarifying Mist, a direct-to-consumer skin care product in the United States. Lumacyn is an all-natural daily toner to soothe skin, reduce redness and irritation, and manage blemishes by reducing infection.
Current wording
Other over-the-counter dermatology products in the United States include Regenacyn® Advanced Scar Gel, which is clinically proven to improve the overall appearance of scars while reducing pain, itch and redness, Reliefacyn® Advanced Itch-Burn-Rash-Pain Relief Hydrogel for the alleviation of red bumps, rashes, shallow skin fissures, peeling, and symptoms of eczema/atopic dermatitis, and Rejuvacyn® Advanced Skin Repair Cooling Mist for management of minor skin irritations following cosmetic procedures as well as daily skin health and hydration. Rejuvacyn is certified as a Natural Personal Care Product by the Natural Products Association, and Reliefacyn received the National Eczema Association Seal of Acceptance TM in 2023, the National Psoriasis Foundation Seal of Recognition in 2025 and the National Rosacea Society Seal of Acceptance in 2025. In January 2024, we launched Lumacyn TM Clarifying Mist, a direct-to-consumer skin care product in the United States. Lumacyn is an all-natural daily toner to soothe and cleanse the skin.
Previous wording
Our consumer products are available through online retailers, our online store and third-party distributors. On January 29, 2025, we entered into a Master Supply Agreement with WellSpring Pharmaceutical Corporation for the sale of our Microcyn® technology-based products to large retailers in the United States. The agreement is for an initial term of two years, subject to three automatic one-year renewal periods. We amended the agreement on March 21, June 2, and July 23, 2025 to include additional products for distribution.
Current wording
Our consumer products are available through online retailers, our online store and third-party distributors.
Previous wording
In the United States, our prescription product Acuicyn® Eyelid & Eyelash Cleanser is an effective solution for symptoms of blepharitis and the daily hygiene of eyelids and lashes, and helps manage red, itchy, crusty and inflamed eyes. It is strong enough to kill the bacteria that causes discomfort, fast enough to provide near instant relief, and gentle enough to use as often as needed.
Current wording
In the United States, our prescription product Acuicyn® Eyelid & Eyelash Cleanser is an effective solution for symptoms of blepharitis and the daily hygiene of eyelids and lashes.
Previous wording
In April 2023, we launched Podiacyn® Advanced Everyday Foot Care direct to consumers for over-the-counter use in the United States, intended for management of foot odors, infections, and irritations, as well as daily foot health and hygiene. Podiacyn is available through our online store and third-party distributors.
Current wording
In April 2023, we launched Podiacyn® Advanced Everyday Foot Care direct to consumers for over-the-counter use in the United States, intended for daily foot health and hygiene. Podiacyn is available through our online store and third-party distributors.
Previous wording
MicrocynAH® is an HOCl-based topical product that cleans, debrides and treats a wide spectrum of animal wounds and infections. It is intended for the safe and rapid treatment of a variety of animal afflictions including cuts, burns, lacerations, rashes, hot spots, rain rot, post-surgical sites, pink eye symptoms and wounds to the outer ear.
Current wording
MicrocynAH® is an HOCl-based topical product line that cleans, debrides and supports healing of a wide spectrum of animal wounds and infections. It is intended for a variety of animal afflictions including cuts, burns, lacerations, rashes, hot spots, rain rot, post-surgical sites, pink eye symptoms and wounds to the outer ear.
Previous wording
The following table shows our consolidated total revenue and revenue by geographic region for the three months ended December 31, 2025 and 2024:
Current wording
The following table shows our consolidated total revenues and revenues by geographic region for the three months ended June 30, 2026 and 2025:
Previous wording
Revenues in the U.S. increased 98%, primarily as a result of an increase in sales of over-the-counter products and increasing sales by new and existing distributors.
Current wording
Revenues in the U.S. increased 141%, primarily as a result of an increase in sales of over-the-counter products and increased sales by new and existing distributors.
Previous wording
Europe revenues increased 24% as a result of increased demand for our products.
Current wording
Europe revenues increased 34% as a result of increased demand for our products and favorable exchange rates.
Previous wording
Revenues in Asia increased 38% and Rest of World revenues increased 50%. Revenues from these regions tend to fluctuate when viewed on a quarterly basis due to customers placing larger, but less frequent, orders to benefit from quantity discounts and reduced shipping costs when ordering larger quantities.
Current wording
Revenues in Asia increased 37% and Rest of World revenues increased 52% due to timing of customer orders. Revenues from these regions tend to fluctuate due to customers placing larger, but less frequent, orders to benefit from quantity discounts and reduced shipping costs when ordering larger quantities.
Previous wording
Latin America revenues decreased 38%, primarily due to timing of customer orders for overflow manufacturing.
Current wording
Latin America revenues increased 11%, primarily due to timing of customer orders for overflow manufacturing.
Previous wording
The cost of revenue and gross profit metrics for the three months ended December 31, 2025 and 2024 are as follows:
Current wording
The cost of revenues and gross profit metrics for the three months ended June 30, 2026 and 2025 are as follows:
Previous wording
The increase in gross profit of $380,000 for the three months ended December 31, 2025, as compared to the prior period, was primarily due to an increase in revenue and overall product mix.
Current wording
Increase in gross profit for the three months ended June 30, 2026 of 76% was primarily due to an increase in revenues. Gross profit % also increased due to improvements made in our manufacturing process and customer mix.
Previous wording
The increase in research and development expenses for the three months ended December 31, 2025 of $130,000 was primarily due to increased product development to support new product releases.
Current wording
Increase in research and development expenses for the three months ended June 30, 2026 of 1% was primarily due to increased product development to support new product releases.
Previous wording
The decrease in selling, general and administrative expenses for the three months ended December 31, 2025 of $103,000 was the result of ongoing efforts to control expenses.
Current wording
The increase in selling, general and administrative expenses for three months ended June 30, 2026 of 3% was primarily due to inflation driven salary increases in Mexico.
Previous wording
Other (expense) income, net for the three months ended December 31, 2025 was $(271,000) compared to $112,000 for the three months ended December 31, 2024. Other (expense) income, net primarily relates to exchange rate fluctuations.
Current wording
Other expense, net for the three months ended June 30, 2026 was $290,000 compared to $147,000 for the three months ended June 30, 2025. Other expense, net in the current period primarily relates to exchange rate fluctuations.
Previous wording
We reported a net loss of $2,594,000 and $2,681,000 for the nine months ended December 31, 2025 and December 31, 2024, respectively. At December 31, 2025 and March 31, 2025, our accumulated deficit amounted to $200,400,000 and $197,806,000, respectively. At December 31, 2025 and March 31, 2025, we had cash and cash equivalents of $2,561,000 and $5,374,000, respectively. At December 31, 2025 and March 31, 2025, we had working capital of $7,928,000 and $8,552,000, respectively.
Current wording
We reported a net loss of $330,000 and $1,241,000 for the three months ended June 30, 2026 and 2025, respectively. At June 30, 2026 and March 31, 2026, our accumulated deficit amounted to $201,311,000 and $200,981,000, respectively. At June 30, 2026 and March 31, 2026, we had cash and cash equivalents of $5,338,000 and $2,399,000, respectively. At June 30, 2026 and March 31, 2026, we had working capital of $10,821,000 and $7,268,000, respectively. Since our inception, substantially all of our operations have been financed through sales of equity securities. Other sources of financing that we have used to date include our revenues, as well as various loans and the sale of certain assets to customers.
Previous wording
The following table presents a summary of our condensed consolidated cash flows for operating, investing and financing activities for the nine months ended December 31, 2025 and 2024 as well as balances of cash and cash equivalents and working capital:
Current wording
The following table presents a summary of our unaudited condensed consolidated cash flows for operating, investing and financing activities for the three months ended June 30, 2026 and 2025 as well as balances of cash and cash equivalents and working capital:
Previous wording
Net cash used in operating activities during the nine months ended December 31, 2025 was $3,414,000, primarily due to our net loss of $2,594,000, an increase in inventory of $484,000, and an increase in prepaid expenses of $1,226,000, offset by an increase in accounts payable of $589,000, a decrease in accounts receivable of $46,000 and stock compensation of $120,000.
Current wording
Net cash used in operating activities during the three months ended June 30, 2026 was $649,000, primarily due to our net loss of $330,000, an increase in accounts receivable of $650,000 an increase in inventory of $81,000, an increase in prepaid expenses of $364,000 offset by stock compensation of $58,000 and an increase in accounts payable of $216,000.
Previous wording
Net cash provided by operating activities during the nine months ended December 31, 2024 was $7,000, primarily due to a net loss of $2,681,000 offset by a decrease in prepaid expenses of $1,547,000, a decrease in accounts receivable of $219,000 and an increase in accounts payable of $864,000.
Current wording
Net cash used in operating activities during the three months ended June 30, 2025 was $2,015,000, primarily due to our net loss of $1,241,000, an increase in accounts receivable of $216,000 an increase in inventory of $652,000, an increase in prepaid expenses of $819,000 offset by stock compensation of $57,000 and an increase in accounts payable of $1,026,000.
Previous wording
Net cash used in investing activities was $163,000 for the nine months ended December 31, 2025, primarily related to the purchase of equipment.
Current wording
Net cash used in investing activities was $2,000 for the three months ended June 30, 2026, primarily related to the purchase of equipment.
Previous wording
Net cash used in investing activities was $33,000 for nine months ended December 31, 2024, primarily related to the purchase of equipment.
Current wording
Net cash used in investing activities was $106,000 for the three months ended June 30, 2025, primarily related to the purchase of equipment.
Previous wording
Net cash provided by financing activities was $2,788,000 for the nine months ended December 31, 2024, primarily due to net proceeds from the sale of common stock of $3,079,000 offset by $323,000 of principal payments on a short-term loan related to financing of insurance premiums.
Current wording
Net cash provided by financing activities was $3,454,000 for the three months ended June 30, 2026, primarily related to the sale of common stock offset by $82,000 of principal payments on a short-term loan related to financing of insurance premiums.
Previous wording
Net cash provided by financing activities was $90,000 for the nine months ended December 31, 2025, primarily related to net proceeds from the sale of common stock of $266,000 and exercise of stock options of $44,000, offset by $220,000 of principal payments on a short-term loan related to financing of insurance premiums.
Current wording
Net cash used in financing activities was $58,000 for the three months ended June 30, 2025, primarily related to exercise of stock options of $23,000 offset by $81,000 of principal payments on a short-term loan related to financing of insurance premiums.
Previous wording
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant estimates and assumptions include the valuation allowance relating to our deferred tax assets. Periodically, we evaluate and adjust estimates accordingly.
Current wording
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates and those differences could be material. Significant estimates and assumptions include the valuation allowance relating to the Company’s deferred tax assets.
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
Revenues in Asia increased 38% and Rest of World revenues decreased 11%. Revenues from these regions tend to fluctuate when viewed on a quarterly basis due to customers placing larger, but less frequent, orders to benefit from quantity discounts and reduced shipping costs when ordering larger quantities.
Previous report — wording carried elsewhere
The following table shows our consolidated total revenue and revenue by geographic region for the nine months ended December 31, 2025 and 2024:
Previous report — wording carried elsewhere
Revenues in the U.S. increased 90%, primarily as a result of an increase in sales of over-the-counter products and increasing sales by new and existing distributors.
Previous report — wording carried elsewhere
Europe revenues increased 31% as a result of increased demand for our products.
Previous report — wording carried elsewhere
Latin America revenues decreased 26%, primarily due to timing of customer orders for overflow manufacturing.
Previous report — wording carried elsewhere
The research and development expense metrics for the nine months ended December 31, 2025 and 2024 are as follows:
Previous report — wording carried elsewhere
The increase in research and development expenses for the nine months ended December 31, 2025 of $323,000 was primarily due to increased product development to support new product releases.
Previous report — wording carried elsewhere
The selling, general and administrative expense metrics for the nine months ended December 31, 2025 and 2024 are as follows:
Previous report — wording carried elsewhere
Since our inception, substantially all of our operations have been financed through sales of equity securities. Other sources of financing that we have used to date include our revenues, as well as various loans and the sale of certain assets to customers.