FiEE, 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
FIEE$3.12+2.3%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 2026-04-30.
0001829126-26-004296
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.
0001829126-26-008898
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 74 previous paragraphs and 80 current paragraphs.
41 unchanged; 29 reworded; 10 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 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 (10)
Current report
As part of our ongoing strategic initiatives, we have integrated blockchain technology into our digital authentication services through the acquisition of HGK, enhancing the security, transparency, and efficiency of our services and systems. Through our acquisition of Yinlian Culture and its VIE, Maltose Culture, we have further expanded into the AI music business, combining music content creation and distribution with AI capabilities to build an advanced AI music ecosystem.
Current report
We also provide digital authentication services that combine advanced imaging technology, AI-driven analysis, and expert validation to deliver reliable verification and certification, supporting clients in meeting relevant compliance and risk management requirements.
Current report
Additionally, we have expanded into the MCN business, offering content production and account management services across key platforms, serving as a bridge between content creators and the global market, and facilitating valuable connections in this rapidly evolving digital space. In the future, we plan to further expand our service offerings to include brokerage services to assist clients with promotional activities and enhance their international market influence.
Current report
For our SaaS - MCN digital services, as of June 30, 2026, we onboarded 939 customers, representing total service fees of $9.2 million, of which $7.9 million has been recognized as revenue cumulatively. During the six months ended June 30, 2026, we added 138 new customers and recognized $2.6 million in revenue from this business.
Current report
Forecasting gross margin percentages is difficult, and there are several risks related to our ability to maintain or improve our current gross margin levels. Our cost of revenue, as a percentage of revenue, can vary significantly based upon factors such as uncertainties surrounding revenue, including future pricing and/or potential discounts as a result of the economy, competition, and the timing of sales.
Current report
For the remainder of the fiscal year 2026, we expect our selling and marketing expenses to fluctuate depending on sales levels achieved as certain expenses, such as commissions, are determined based upon revenue Forecasting selling and marketing expenses is highly dependent on expected revenue levels and could vary significantly depending on actual revenue achieved in any given quarter. Marketing expenses may also fluctuate depending upon the timing, extent and nature of marketing programs.
Current report
Income Tax Expense
Current report
Income tax expense was $526,897 and $663,726 for the three and six months ended June 30, 2026, respectively, compared to $0 for the three and six months ended June 30, 2025. The increase in income tax expense was primarily attributable to the profitability of the Company’s Hong Kong and Singapore subsidiaries during the six months ended June 30, 2026. In the prior year period, the Company’s operations were in the early stage of business transition and had not yet generated significant taxable profits, resulting in no income tax expense for the three and six months ended June 30, 2025.
Current report
In June 2026, we entered into the Sales Agreement with A.G.P. under which we may offer and sell up to an estimated $6,272,809 of shares of our Common Stock from time to time through an “at the market” offering program under which A.G.P. will act as sales agent. Pursuant to the Sales Agreement, we have agreed to pay A.G.P. a commission of 3.25% of the aggregate gross proceeds from any shares of Common Stock sold by A.G.P. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. During the six months ended June 30, 2026, we did not sell any shares of Common Stock pursuant to the Sales Agreement.
Current report
In June 2026, the Company entered into the Sales Agreement with A.G.P. under which the Company may offer and sell up to an estimated $6,272,809 of shares of the Company’s Common Stock from time to time through an “at the market” offering program under which A.G.P. will act as sales agent. The Company has no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement.
Removed paragraphs (4)
Previous report
As part of our ongoing strategic initiatives, we are actively planning to develop and integrate blockchain technology into our operations in the future. Through the acquisition of HGK, we have successfully applied blockchain technology to our digital authentication services. This advancement is aimed at enhancing the security, transparency, and efficiency of our services and systems.
Previous report
Additionally, we are exploring entry into the MCN business. Our goal is to serve as a bridge between influencers or content creators and the global market, facilitating valuable connections and expanding our reach in this rapidly evolving digital space.
Previous report
As of March 31, 2026, we onboarded approximately 818 customers, corresponding to SaaS – MCN digital service fees totaling $6.9 million, of which $6.4 million was recognized as revenue cumulatively, including $1.1 million recognized in the three months ended March 31, 2026.
Previous report
The Closing occurred on March 31, 2026.
Reworded paragraphs (29)
Previous wording
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and involves numerous risks and uncertainties. Forward-looking statements may include, among others, statements relating to our ability to predict revenue and reduce costs related to our products or service offerings, our ability to forecast product and services sales volumes, the sufficiency of our capital resources and the availability of debt and equity financing, the continuing impact of uncertain global economic conditions on the demand for our products and services, our ability to maintain and scale adequate and secure software platform infrastructure, the impact of competition on demand for our products and services, our competitive position, our future financial position and results of operations, and our ability to grow in new and existing markets. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and generally contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “strives,” “goal,” “estimates,” “forecasts,” “projects” or “anticipates” and the negative of these terms or similar expressions. Our forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied by the forward-looking statement, due to reasons including, but not limited to, competition; the effectiveness of our strategies; general economic conditions, including any impact from inflation; current geopolitical conditions including conflicts in the Middle East, the ongoing Russia-Ukraine War and geopolitical tensions between China and Taiwan; our ability to successfully implement our business strategy; the success of our initiatives to increase sales; changes in commodity, energy, labor and other costs; our ability to attract and retain management and employees; price and availability of commodities; consumer confidence and spending patterns; and weather conditions. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Special Note Regarding Forward-Looking Statements” included in our Annual R…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and involves numerous risks and uncertainties. Forward-looking statements may include, among others, statements relating to our ability to predict revenue and reduce costs related to our products or service offerings, our ability to forecast product and services sales volumes, the sufficiency of our capital resources and the availability of debt and equity financing, the continuing impact of uncertain global economic conditions on the demand for our products and services, our ability to maintain and scale adequate and secure software platform infrastructure, the impact of competition on demand for our products and services, our competitive position, our future financial position and results of operations, and our ability to grow in new and existing markets. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and generally contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “strives,” “goal,” “estimates,” “forecasts,” “projects” or “anticipates” and the negative of these terms or similar expressions. Our forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied by the forward-looking statement, due to reasons including, but not limited to, competition; the effectiveness of our strategies; general economic conditions, including any impact from inflation; current geopolitical conditions including conflicts in the Middle East, the ongoing Russia-Ukraine War and geopolitical tensions between China and Taiwan; our ability to successfully implement our business strategy; the success of our initiatives to increase sales; changes in commodity, energy, labor and other costs; our ability to attract and retain management and employees; price and availability of commodities; consumer confidence and spending patterns; and weather conditions. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Special Note Regarding Forward-L…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We historically delivered comprehensive WiFi/SaaS platform to make everyone’s connected home safe and supportive for life and work. We continue to grow and expand our SaaS operations as a digital service provider focused on integrating AI and data analytics into content creation and brand management. In addition to our SaaS solutions, we now also offer customized software development services and digital authentication services.
Current wording
We historically delivered comprehensive WiFi/SaaS platform to make everyone’s connected home safe and supportive for life and work. We continue to grow and expand our operations as a digital service provider focused on integrating AI and data analytics into content creation and brand management. In addition to our SaaS solutions, we offer customized software development services, digital authentication services, and music services.
Previous wording
In line with our growth strategy, we are also targeting potential acquisitions in key sectors such as AI, hardware, and the Internet of Things (IoT). The acquisitions completed in 2025 have enabled us to strengthen our technological capabilities and expand our market presence.
Current wording
In line with our growth strategy, we are also targeting potential acquisitions in key sectors such as AI, hardware, and the Internet of Things (IoT). The acquisitions completed in 2025 and 2026 have enabled us to strengthen our technological capabilities and expand our market presence.
Previous wording
Our future growth is largely dependent on our ability to acquire new customers, which is crucial for expanding our SaaS - MCN digital services, software services, and digital authentication services. This will rely on the effectiveness of our marketing and sales efforts to reach teams and organizations across diverse industries. The success of our growth strategy, as well as our future prospects, hinges on our ability to attract and retain new customers. While we see a substantial market opportunity in the MCN business, continued investment in sales and marketing, research and development, and customer support will be essential to further grow our international customer base.
Current wording
Our future growth is largely dependent on our ability to acquire new customers, which is crucial for expanding our SaaS - MCN digital services, software services, digital authentication services, and music services. This will rely on the effectiveness of our marketing and sales efforts to reach teams and organizations across diverse industries. The success of our growth strategy, as well as our future prospects, hinges on our ability to attract and retain new customers. While we see a substantial market opportunity in the MCN business, continued investment in sales and marketing, research and development, and customer support will be essential to further grow our international customer base.
Previous wording
The following table sets forth certain financial data derived from our condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025, presented in absolute dollars and as a percentage of revenues, with dollars and percentage change period over period:
Current wording
The following table sets forth certain financial data derived from our condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025, presented in absolute dollars, with dollars and percentage change period over period:
Previous wording
Comparison of the three months ended March 31, 2026 to the three months ended March 31, 2025
Current wording
Comparison of the three and six months ended June* 30, 2026 to the three and six months ended June *30, 2025
Previous wording
The following table sets forth our revenues by product and the changes in revenues for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:
Current wording
The following table sets forth our revenues by product and the changes in revenues for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025:
Previous wording
Our revenues increased by $2.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase in revenues primarily reflects the Company’s strategic transition from legacy hardware operations to SaaS solutions, with a new business model focusing on integrating AI and big data into content creation and brand management. Notably, during March 2025, we successfully secured our first customer orders and generated initial sales, marking a critical milestone in the strategic pivot. Our target clients are individuals or entities seeking to grow their online presence as influencers or content creators.
Current wording
Our revenues increased by $4.8 million and $6.9 million for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. The increase in revenues primarily reflects the Company’s strategic transition from legacy hardware operations to SaaS solutions, with a new business model focusing on integrating AI and big data into content creation and brand management, and the successful expansion into multiple new business lines, including SaaS - MCN digital services, software services, digital authentication services, and other services, most of which experienced rapid growth following their launch. Notably, during March 2025, we successfully secured our first customer orders and generated initial sales, marking a critical milestone in the strategic pivot. Our target clients are individuals or entities seeking to grow their online presence as influencers or content creators, enterprises requiring customized software solutions, art owners and institutions in need of authentication services, and participants in the music industry.
Previous wording
Building on this momentum, we introduced customized software services in July 2025. As of March 31, 2026, we secured contracts totaling $1.5 million for software services, a portion of which was recognized as revenue in the three months ended March 31, 2026 in accordance with the relevant revenue recognition models (over time or at a point in time, as applicable). During the three months ended March 31, 2026, we added five new customers, bringing the total number of customers for these services to 17 as of March 31, 2026. The related accounts receivable balance as of March 31, 2026 was $1.0 million.
Current wording
Building on this momentum, we introduced customized software services in July 2025. As of June 30, 2026, we secured contracts totaling $2.9 million for software services, $1.7 million of which was recognized as revenue in the six months ended June 30, 2026 in accordance with the relevant revenue recognition models (over time or at a point in time, as applicable). During the six months ended June 30, 2026, we added 18 new customers, bringing the total number of customers for these services to 31 as of June 30, 2026.
Previous wording
Through the acquisition of HGK in November 2025, we added the ability to provide digital authentication services. As of March 31, 2026, this business had generated cumulative revenue of $768 thousand, including $439 thousand recognized in the three months ended March 31, 2026, serving five corporate clients and 52 individual clients in total, with related accounts receivable amounting to $0.4 million. This business leverages AI and blockchain technology to provide authentication, certification, and display services for artworks, further diversifying our revenue streams.
Current wording
Through the acquisition of HGK in November 2025, we added the ability to provide digital authentication services. As of June 30, 2026, this business had generated cumulative revenue of $2.9 million, including $2.6 million recognized in the six months ended June 30, 2026, serving five corporate clients and 459 individual clients in total, with related accounts receivable amounting to $2.0 million. This business leverages AI and blockchain technology to provide authentication, certification, and display services for artworks, further diversifying our revenue streams.
Previous wording
Cost of revenue for the three months ended March 31, 2026 consisted primarily of direct labor costs; amortization of certain acquired intangible assets and software development costs; outsourced authentication service costs; and other costs attributable to the provision of service offerings.
Current wording
Cost of revenue for the three and six months ended June 30, 2026 consisted primarily of direct labor costs; amortization of certain acquired intangible assets and software development costs; outsourced authentication service costs; and other costs attributable to the provision of service offerings.
Previous wording
Cost of revenue for the three months ended March 31, 2025 consisted primarily of the cost of direct labor.
Current wording
Cost of revenue for the three and six months ended June 30, 2025 consisted primarily of the cost of direct labor and cloud service costs.
Previous wording
The increase in gross profit was attributable to higher revenue in the three months ended March 31, 2026. Our gross margin can be affected by a number of factors, including fluctuation in labor cost, foreign exchange rates, sales returns, changes in average selling prices, end-user customer rebates and other channel sales incentives, changes in our cost of revenue due to fluctuations and increases in prices paid for components, overhead costs, inbound freight and duty/tariffs, conversion costs, and charges for excess or obsolete inventory.
Current wording
The increase in gross profit was attributable to higher revenue in the three and six months ended June 30, 2026. Our gross margin can be affected by a number of factors, primarily including changes in average selling price and foreign exchange rates, as well as fluctuations in our cost of revenue due to changes in labor costs, outsourced authentication service costs and cloud service costs.
Previous wording
Gross margin increased significantly in the three months ended March 31, 2026, compared to the three months ended in the prior fiscal year period. In the three months ended March 31, 2025, the Company had just launched its SaaS-based MCN digital services in March 2025 and had not yet introduced customized software services or digital authentication services, resulting in minimal revenue and negative gross profit.
Current wording
Gross margin increased significantly in the three and six months ended June 30, 2026, compared to the three and six months ended in the prior fiscal year period. In the three and six months ended June 30, 2025, the Company had just launched its SaaS- MCN digital services in March 2025 and had not yet introduced customized software services, digital authentication services or others, resulting in minimal revenue and low gross profit.
Previous wording
Selling and marketing expenses consist primarily of business promotion and corporate publicity expenses. The following table presents sales and marketing expenses for the periods indicated:
Current wording
Selling and marketing expenses consist primarily of business promotion and corporate publicity expenses. The following table presents selling and marketing expenses for the periods indicated:
Previous wording
Sales and marketing expenses increased by $34 thousand in the three months ended March 31, 2026, compared to the three months ended in the prior fiscal year period, primarily due to the Company’s business transformation. For the three months ended March 31, 2026, selling and marketing expenses primarily reflected costs related to the expansion of our three core business lines—MCN digital services, software development services, and digital authentication services—as well as corporate branding initiatives. For the three months ended March 31, 2025, the Company had just launched its new business lines and had not yet incurred any selling and marketing expenses.
Current wording
Selling and marketing expenses increased by $236 thousand and $270 thousand in the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, primarily due to the Company’s business transformation and stock-based compensation expenses in connection with equity awards granted in May 2026 under the 2025 Equity Incentive Plan. For the six months ended June 30, 2026, selling and marketing expenses primarily reflected costs related to the expansion of our four core business lines– SaaS- MCN digital services, software services, digital authentication services, and other services – as well as corporate branding initiatives.
Previous wording
General and administrative expenses increased by $656 thousand, or 192.8%, to $997 thousand for the three months ended March 31, 2026, compared to $340 thousand for the three months ended March 31, 2025. The increase was primarily attributable to certain non-recurring professional service fees incurred during the quarter, including legal and advisory fees related to strategic initiatives.
Current wording
General and administrative expenses increased by $334 thousand and $991 thousand in the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025. The increase was primarily attributable to certain non-recurring professional service fees incurred during the six months ended June 30, 2026, including legal and advisory fees related to strategic initiatives and stock-based compensation expenses in connection with equity awards granted in May 2026 under the 2025 Equity Incentive Plan.
Previous wording
Research and development expenses increased by approximately $7 thousand in the three months ended March 31, 2026, compared to the three months ended in the prior fiscal year period. The increase primarily reflects ongoing enhancements and optimizations to our system during the current period.
Current wording
Research and development expenses increased by $22 thousand and $28 thousand in the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025. The increase primarily reflects ongoing enhancements and optimizations to our system during the six months ended June 30, 2026.
Previous wording
The Company’s operations have historically been primarily financed through the issuance of Common Stock and Preferred Stock. Since inception, the Company has incurred significant losses and negative cash flows from operation and an accumulated deficit of $95.3 million. The Company began generating operating profit in the fourth quarter of 2025 and has continued to do so thereafter During the three months ended March 31, 2026, the Company reported a net income of $352 thousand. As of March 31, 2026, we had cash of $4.6 million as compared to $3.1 million on December 31, 2025. On March 31, 2026, we had no outstanding borrowings and a positive working capital of $3.3 million. Our ability to maintain adequate levels of liquidity depends in part on our ability to generate cash from operations and our ability to raise additional funds through equity or debt financing. We are evaluating options related to our liquidity and will continue to monitor our costs in relation to our sales and adjust our cost structure accordingly.
Current wording
The Company’s operations have historically been primarily financed through the issuance of Common Stock and Preferred Stock. Since inception, the Company has incurred significant losses and negative cash flows from operations and an accumulated deficit of $93.2 million. The Company began generating operating profit in the fourth quarter of 2025 and has continued to do so thereafter. During the six months ended June 30, 2026, the Company reported a net income of $2.5 million. As of June 30, 2026, we had cash of $5.4 million as compared to $3.1 million on December 31, 2025. On June 30, 2026, we had no outstanding borrowings and a positive working capital of $7.1 million. Our ability to maintain adequate levels of liquidity depends in part on our ability to generate cash from operations and our ability to raise additional funds through equity or debt financing. We are evaluating options related to our liquidity and will continue to monitor our costs in relation to our sales and adjust our cost structure accordingly.
Previous wording
***Cash Flows from Operating Activities.***Cash provided by operating activities of $67 thousand during the three months ended March 31, 2026 reflected our net income of $352 thousand, adjusted for non-cash expenses, consisting primarily of $344 thousand in depreciation and amortization expense. Sources of cash were primarily from decreases in other receivables of $1.1 million and increases in accounts payable of $106 thousand. Uses of cash were primarily from increases in accounts receivable of $1.0 million, decreases in contract liabilities of $829 thousand, and decreases in income tax payable of $116 thousand.
Current wording
***Cash Flows from Operating Activities.***Cash provided by operating activities of $90 thousand during the six months ended June 30, 2026 reflected our net income of $2.5 million, adjusted for non-cash expenses, consisting primarily of $696 thousand in depreciation and amortization expense and $310 thousand in stock-based compensation. Sources of cash were primarily from decreases in other receivables of $1.1 million, increases in accounts payable of $670 thousand, increases in income tax payable of $410 thousand and increases in accrued expenses and other current liabilities of $351 thousand. Uses of cash were primarily from increases in accounts receivable of $5.0 million, decreases in contract liabilities of $1.2 million. The increase in accounts receivable was partially driven by the introduction of post-paid arrangements for MCN digital services and digital authentication services during the second quarter of 2026, under which customers are granted payment terms of 90 days from the contract signing date. Unlike prepaid arrangements that provide upfront cash inflows, post-paid arrangements result in cash collections subsequent to service delivery, which impacted the timing of operating cash flows during the period. The Company continues to monitor the collectability of receivables arising from post-paid arrangements.
Previous wording
Cash used in operating activities of $371 thousand during the three months ended March 31, 2025 reflected our net loss of $374 thousand, adjusted for non-cash expenses, consisting primarily of $60 thousand in depreciation and amortization expense. Uses of cash included a decrease in accounts payable of $43 thousand and other assets of $88 thousand. Sources of cash included decrease of prepaid expenses and other current assets of $40 thousand.
Current wording
Cash provided by operating activities of $172 thousand during the six months ended June 30, 2025 reflected our net loss of $1 million, adjusted for non-cash expenses, consisting primarily of $91 thousand in depreciation and amortization expense. Uses of cash included an increase in other receivables of $520 thousand. Sources of cash included an increase of contract liabilities of $1.5 million.
Previous wording
***Cash Flows from Investing Activities.***During the three months ended March 31, 2026, cash used in investing activities consisted of $0.5 million for the purchase of property.
Current wording
***Cash Flows from Investing Activities.***During the six months ended June 30, 2026, cash provided by investing activities consisted of $877 thousand of cash acquired in the business acquisition of Yinlian Culture, and $510 thousand of cash used for the purchase of property.
Previous wording
During the three months ended March 31, 2025, the Company had no cash flows generated or used by investing activities.
Current wording
During the six months ended June 30, 2025, the Company had no cash flows generated or used by investing activities.
Previous wording
Cash Flows from Financing Activities. Cash provided from financing activities during the three months ended March 31, 2026 consisted of gross proceeds from issuance of Common Stock of $2.0 million, partially offset by payment of deferred financing costs of $25 thousand.
Current wording
Cash Flows from Financing Activities. Cash provided by financing activities during the six months ended June 30, 2026 consisted of gross proceeds from issuance of Common Stock of $2.0 million, partially offset by payment of deferred financing costs of $83 thousand.
Previous wording
Cash provided from financing activities during the three months ended March 31, 2025 primarily consisted of proceeds from the issuance of convertible note of $300 thousand.
Current wording
Cash provided by financing activities during the six months ended June 30, 2025 consisted of proceeds from the issuance of Common Stock of $4 million and the net proceeds from the issuance of a convertible note of $300 thousand.
Previous wording
Our capital expenditures are largely discretionary and within our control. We expect that our product sales and the resulting operating loss, as well as the status of each of our product development programs, will significantly impact our cash management decisions.
Current wording
Our capital expenditures are largely discretionary and within our control. We expect that the level and timing of our service revenues, the associated operating results, and the status of each of our business development and technology enhancement initiatives will significantly impact our cash management decisions.
Previous wording
As of March 31, 2026, we have U.S. federal net operating loss carry forwards of approximately $66.8 million available to reduce future U.S. federal taxable income. A valuation allowance has been established for the full amount of deferred tax assets recognized in our U.S. entity as management has concluded that it is more-likely than-not that the benefits from such assets will not be realized. As a result, as of March 31, 2026 and December 31, 2025, we recorded a valuation allowance against our net deferred tax assets to the extent that such assets were recognized in our U.S. entity.
Current wording
As of June 30, 2026, we have U.S. federal net operating loss carryforwards of approximately $63.9 million available to reduce future U.S. federal taxable income. A valuation allowance has been established for the full amount of deferred tax assets recognized in our U.S. entity as management has concluded that it is more likely than not that the benefits from such assets will not be realized. As a result, as of June 30, 2026 and December 31, 2025, we recorded a valuation allowance against our net deferred tax assets to the extent that such assets were recognized in our U.S. entity.
Previous wording
On January 30, 2026, the Company entered into the 2026 Purchase Agreement with the Purchasers, pursuant to which the Company agreed to sell the Shares at an offering price of $5.07 per Share. The sales made pursuant to the 2026 Purchase Agreement are exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act.
Current wording
On January 30, 2026, the Company entered into the 2026 Purchase Agreement with two Purchasers, pursuant to which the Company agreed to sell an aggregate of 394,476 shares of Common Stock (the “Shares”) at an offering price of $5.07 per Share. The Company received aggregate gross proceeds of $1,999,993 from the issuance. The sales made pursuant to the 2026 Purchase Agreement are exempt from the registration requirements of the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act. The Closing occurred on March 31, 2026.
Previous wording
Our critical accounting policy is revenue recognition, and no critical accounting estimates were identified, as described under “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10‑K for the year ended December 31, 2025. For the three months ended March 31, 2026, the Company’s critical accounting policy remains revenue recognition, and no critical accounting estimates were identified.
Current wording
Our critical accounting policy is revenue recognition, and no critical accounting estimates were identified, as described under “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025. For the six months ended June 30, 2026, the Company’s critical accounting policy remains revenue recognition, and no critical accounting estimates were identified.