Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis together with our Consolidated Financial Statements and the notes thereto included elsewhere in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. For additional discussion, see "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS" above.

Overview

We are a clinical-stage medical diagnostics company developing rapid tests using whole blood on our Symphony platform ("Symphony") to improve patient outcomes in critical care settings, with a focus on sepsis. Our Symphony technology platform is an exclusively licensed, patented system that consists of an analyzer and single-use protein detection cartridges that we believe, if cleared, authorized, or approved by the U.S. Food and Drug Administration ("FDA"), could provide a solution to a significant market need in the United States. The Symphony device candidate is designed to produce laboratory-quality results in approximately 20 minutes in critical care settings, including Intensive Care Units ("ICUs") and Emergency Rooms ("ERs"), where rapid and reliable results are required.

Since inception, we have incurred net losses from operations each year and we expect to continue to incur losses for the foreseeable future. We incurred net losses of approximately $6.8 million and $7.7 million for the years ended December 31, 2025 and 2024, respectively. We had negative cash flow from operating activities of approximately $6.1 million and $7.8 million for the years ended December 31, 2025 and 2024, respectively, and had an accumulated deficit of approximately $41.5 million and $34.7 million as of December 31, 2025 and 2024, respectively.

Results of Operations

Comparison of Years Ended December 31, 2025 and 2024

The following table sets forth our results of operations for the years ended December 31, 2025 and 2024:

		For Years Ended December 31,
		2025				2024
Operating expenses:
Research and development		$	3,046,448			$	3,471,671
General and administrative			3,906,524				3,689,648
Sales and marketing			-				8,297
Total operating expenses			6,952,972				7,169,616
Operating loss			(6,952,972	)			(7,169,616	)
Other income (expense):
Interest expense			(839	)			(823,028	)
Interest income			97,559				145,823
Other income, net			7,769				129,027
Total other income (expense)			104,489				(548,178	)
Net loss			(6,848,483	)			(7,717,794	)
Deemed dividend on warrant modification			-				13,223,053
Net loss applicable to common shareholders		$	(6,848,483	)		$	(20,940,847	)

Research and development

Research and development expenses decreased approximately $0.4 million, or 12%, for the year ended December 31, 2025, as compared to 2024. The decrease in research and development expenses was primarily due to a $0.2 million decrease in personnel related costs, a $0.1 million decrease in other costs, and a $0.2 million decrease in product development costs, which was partially offset by a $0.1 million increase in clinical development costs.

The decrease in research and development expenses was primarily due to a reduction in technology transfer efforts which offset increased clinical trial expenses. We expect future research and development expenses to be focused on costs specifically associated with our clinical trial program supporting our regulatory strategy, technology transfer efforts and any necessary manufacturing improvements.

General and administrative

General and administrative expenses increased approximately $0.2 million, or 6%, for the year ended December 31, 2025, as compared to 2024. The increase in general and administrative expenses is primarily due to a $0.3 million increase in Delaware franchise tax cost and a $0.1 million increase in personnel related costs, with was partially offset by a $0.2 million decrease in consulting expenses.

We expect to monitor and continue to reduce our general and administrative spend, as necessary, to optimize operational alignment.

Sales and marketing

Sales and marketing expenses decreased 100%, for year ended December 31, 2025, as compared to 2024. The low sales and marketing expenses in 2025 are due to a reduction in spending in all sales and marketing efforts.

Other income (expense)

Total other income (expense) decreased approximately $0.7 million for the year ended December 31, 2025 as compared to 2024. The decreases primarily related to the $0.8 million in interest expense associated with the 2024 Bridge Note Financing.

Deemed dividend on warrant modification

Upon stockholder approval of the issuance of Class C Warrants and Class D Warrants on August 21, 2024, the Class C Warrants, which had an initial exercise price of $392.00 per share of common stock, were adjusted to be exercisable at an exercise price of $65.20 per share and the number of shares of common stock issuable upon exercise was proportionately increased to 343,146 shares. Concurrently, the number of shares of common stock issuable upon exercise of the Class D Warrants increased to four shares per warrant for the remaining unexercised warrants. In connection with the reset in the exercise price and number of shares issuable pursuant to exercise of the Class C Warrants and Class D Warrants, we recorded a deemed dividend of $13,223,053 based on the excess of the fair value of the modified Class C Warrants and Class D Warrants over the fair value of the Class C Warrants and Class D Warrants before the modification, the effect of which was an increase in the net loss attributable to common shareholders in the statement of operations for the year ended December 31, 2024.

Summary Statement of Cash Flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented.

		Years Ended December 31,
		2025				2024
Cash proceeds provided by (used in):
Operating activities		$	(6,053,575	)		$	(7,820,822	)
Investing activities			(173,735	)			(306,783	)
Financing activities			7,090,240				10,221,034
Net increase in cash and cash equivalents		$	862,930			$	2,093,429

Net cash used in operating activities

During 2025, we used approximately $6.1 million in cash for operating activities, a decrease of approximately $1.8 million from 2024. The decrease in net cash used in operating activities was primarily due to a decrease in the net loss and partially offset by the timing of payments to vendors and other decreases in working capital during 2025.

Net cash used in investing activities

During 2025, we used approximately $0.2 million in cash from investing activities, an approximately $0.1 million decrease from 2024. The Company acquired less manufacturing equipment for the development of the Symphony devices in 2025 and 2024.

Net cash provided by financing activities

During 2025, we generated approximately $7.1 million in cash from financing activities, as compared to $10.2 million in 2024. The decrease in net cash provided by financing activities was primarily due to the proceeds from our private placements in April 2025 and October 2025 compared to our public offerings in January 2024 and June 2024.

Contractual Obligations

See Note 9 to consolidated financial statements for our lease obligations and Note 10 to the consolidated financial statements for our other non-cancellable contractual obligations.

Liquidity and Going Concern

The Company had cash and cash equivalents of $5,164,875 and current liabilities of $1,119,197 on its balance sheet as of December 31, 2025. The Company has incurred net losses since its inception, and has negative cash flows from operations and had an accumulated deficit of $41,517,267 as of December 31, 2025. The Company continues to develop its Symphony device and its first test for the measurement of IL-6. The Company remains committed to obtaining FDA clearance and hopes to conduct clinical trials to obtain sufficient data to support its FDA submission, while also continuing to build its manufacturing operations with its contract manufacturing organizations. Current cash resources and expected operating expenses are considered in determining its liquidity requirements. The Company estimates cash resources will be sufficient to fund its operations up to the third quarter of 2026. The Company will need additional capital to fund its planned operations for the next 12 months. These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year from the date these financial statements are issued.

The consolidated financial statements for the years ended December 31, 2025 and 2024 were prepared under the assumption that the Company will continue as a going concern, and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

The Company expects that it will seek to raise such additional capital through public or private equity offerings. Additional funds may not be available when it needs them on terms that are acceptable to them, or at all. If adequate funds are not available, it may be required to delay its FDA regulatory strategy, and to delay or reduce the scope of its research or development programs, its commercialization efforts or its manufacturing commitments and capacity. In addition, if it raises additional funds through collaborations, strategic alliances or distribution arrangements with third parties, it may have to relinquish valuable rights to its technologies or future revenue streams.

Recent Offerings

January 2024 Public Offering

On January 2, 2024, the Company sold in a public offering (such transaction, the "January 2024 Offering") (i) 336 shares of the Company's common stock and (ii) prefunded warrants to purchase up to an aggregate 1,346 shares of common stock (the "January Prefunded Warrants"). The Shares and January Prefunded Warrants were sold together with warrants to purchase up to an aggregate of 1,682 shares of common stock at an exercise price of $2,080.00 per share (the "January 2024 Warrants"). The combined public offering price was $2,080.00 per share of common stock and related January 2024 Warrant and $2,079.84 per January Prefunded Warrant and related January 2024 Warrant.

As of December 31, 2024, all January Prefunded Warrants have been exercised in full. The January 2024 Warrants are exercisable for a period of five years following the date of issuance.

Pursuant to an engagement letter, dated as of August 7, 2023, as amended October 11, 2023, by and between the Company and the Placement Agent, the Company paid the Placement Agent a total cash fee of $245,000 equal to 7.0% of the gross proceeds received in the January 2024 Offering. The Company also paid the Placement Agent in connection with the January Offering a management fee of $35,000 equal to 1.0% of the gross proceeds raised in the January 2024 Offering and certain expenses incurred in connection with the January Offering. In addition, the Company issued to the Placement Agent, warrants to purchase up to an aggregate 117 shares of common stock (the "January 2024 Placement Agent Warrants"), which represents 7.0% of the aggregate number of shares of common stock and Prefunded Warrants sold in the January 2024 Offering. The January 2024 Placement Agent Warrants have substantially the same terms as the January 2024 Warrants, except that the January 2024 Placement Agent Warrants have an exercise price equal to $2,600.00, or 125% of the offering price per share of common stock and related January 2024 Warrant sold in the January Offering and expire on the fifth anniversary from the date of the commencement of sales in the January 2024 Offering.

The gross proceeds to the Company from the January 2024 Offering were $3,500,000. The Company incurred offering costs of $711,031.

May 2024 Bridge Note Financing

On May 31, 2024, the Company entered into a Note Purchase Agreement with an accredited investor (the "NPA"), and a Securities Purchase Agreement with three accredited investors (the "SPA"). Under the terms of the NPA, the investor provided the Company with a $1,000,000 cash subscription in exchange for the issuance of a senior secured note. As of December 31, 2024, a total of $1,176,470 was repaid to the NPA investors. The difference between such note and the subscription amount, initially recorded as a discount on the notes, was the result of the discount factor included in the NPA of approximately 17.6%.

Under the terms of the SPA, the three investors agreed to collectively provide the Company with a separate $1,000,000 cash subscription in exchange for the issuance of senior secured notes ($333,333 each), and the collective issuance of 362 shares of the Company's common stock. The fair value of the common stock issued in connection with the SPA was $307,563. As of December 31, 2024, a total of $1,111,110 was repaid to the SPA investors. The difference between such notes and the subscription amounts, initially recorded as a discount on the notes, was the result of the discount factor included in the SPA of 11.11%.

Interest expense recorded on the NPA and SPAs was $807,797 for the year ended December 31, 2024, including debt issuance costs related to the NPA and SPA totaling $212,654.

June 2024 Offering

On June 28, 2024, the Company sold in a public offering ( the "June 2024 Offering"), (i) 2,888 common units (the "Common Units"), each consisting of one share of common stock, two Class C Warrants and one Class D Warrant and (ii) 23,953 prefunded warrants (the "Prefunded Units"), each consisting of one prefunded warrant to purchase one share of common stock (each, a "Prefunded Warrant"), two Class C Warrants and one Class D Warrant to purchase Common Shares. Aegis Capital Corp. ("Aegis" or, the "Underwriter") partially exercised its over-allotment option in respect to 3,393 Class C Warrants and 1,696 Class D Warrants (the "Over-Allotment Warrants"). The Common Units were sold at a price of $326.00 per unit and the Prefunded Warrants were sold at a price of $325.98 per unit. As of December 31, 2024, all Prefunded Warrants have been exercised in full.

Pursuant to an engagement letter dated June 6, 2024, by and between the Company and Aegis, the Company paid Aegis a total cash fee of $743,750 equal to 8.5% of the gross proceeds received in the June 2024 Offering.

The gross proceeds to the Company from the June 2024 Offering were $8,569,075. The Company incurred offering costs of $1,133,419.

April 2025 Private Placement

On April 7, 2025, the Company entered into inducement letter agreements with certain existing holders of the Company's Class C Warrants, pursuant to which such holders agreed to purchase an aggregate of 271,277 shares of the Company's common stock (or, to the extent the applicable holder would have exceeded a specified beneficial ownership limitation, prefunding the future exercise of such warrants, other than a remaining $0.0004 per share exercise price). The Class C Warrants were originally issued on June 28, 2024 for an exercise price of $392.00 per share and were subsequently reduced to $65.20 per share pursuant to stockholder approval on August 21, 2024. Pursuant to the inducement letter agreements, the applicable holders agreed to exercise their Series C Warrants at a reduced exercise price of $13.68 per share, and to purchase an equivalent number of new Class E Warrants for an additional $0.50 per share. The Class E Warrants have an exercise price of $13.68 per share and expire on April 8, 2030.

The transaction closed on April 8, 2025. The exercise of the Class C Warrants resulted in the Company issuing 170,551 shares of common stock at closing pursuant to the inducement letters, and the exercise price of 100,726 of the Class C Warrants being amended to 0.0004 per share. As of December 31, all such reduced exercise price Class C Warrants had been exercised.

The gross proceeds to the Company from the exercise of the Class C Warrants and the sale of the new Class E Warrants were $3,846,692 million. The Company incurred total offering costs of $464,670, including a 10% financial advisory fee to Aegis Capital Corp. of $384,670.

The modification of the terms or conditions of the Class C Warrants in this transaction is treated as an exchange of the original instrument for a new instrument. Using the Black Scholes option pricing model, the fair value of the Series C Warrants immediately prior to the inducement transaction was $479,299 and immediately after the inducement transaction was $1,590,930. In addition, Series E Warrants with a fair value of $1,730,652 were provided as part of the inducement transaction for a purchase price of $135,638. The Company recorded additional equity issuance costs of $2,706,645 related to the modification of the Series C Warrants and issuance of Series E Warrants related to the inducement transaction. As this equity issuance cost was a non-cash transaction, the Company recorded an increase to additional paid-in capital to offset the expense.

October 2025 Private Placement

On October 9, 2025, the Company entered into a securities purchase agreement with two institutional investors pursuant to which the Company sold in a private placement (i) an aggregate of 43,750 shares of common stock and prefunded warrants to purchase up to 518,750 shares of common stock (the "October 2025 Prefunded Warrants"), and (ii) Series F warrants (the "Series F Warrants") to purchase up to 1,125,000 shares of common stock. The combined price of the securities sold in the private placement was $8.00 per share of common stock (or prefunded warrant in lieu thereof, in which case such price was reduced by $0.0004) and accompanying Series F Warrants to acquire two shares of common stock. The October 2025 Prefunded Warrants, were exercisable for shares of common stock at an exercise price of $0.0004 per share and were immediately exercisable, have all been fully exercised as of the date hereof. The Series F Warrants are exercisable for shares of common stock at an exercise price of $7.00 per share, are immediately exercisable and expire five and one-half years from the date of issuance.

The transaction closed on October 10, 2025. The gross proceeds to the Company from the sale of the securities sold in the private placement were approximately $4.5 million. The Company incurred total offering costs of $787,755, including a 8% financial advisory fee to Rodman and Renshaw LLC ("Rodman"), the placement agent, of approximately $360,000. Under the terms of the Company's engagement letter with Rodman, the Company issue Rodman's designees warrants to purchase up to 45,000 of common stock at an exercise price of $10.00 per share, which expire 5.5 years from the date of issuance (the "October 2025 Placement Agent Warrants").

In connection with this private placement, the Company filed a registration statement on Form S-3, which became effective on November 26, 2025, to register 1,732,500 shares of common stock (including any shares of common stock issued in the future pursuant to the Series F Warrants or October 2025 Placement Agent Warrants) for resale in public markets.

Critical Accounting Policies and Estimates

Some of our critical accounting policies require us to make difficult, subjective or complex judgments or estimates. An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made, and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur from period to period may have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

As an emerging growth company, we have elected to opt-in to the extended transition period for new or revised accounting standards. As a result, our consolidated financial statements may not be comparable to those of companies that comply with public company effective dates.

See Note 2 to consolidated financial statements for a summary of significant accounting policies.

Recently Adopted Accounting Standards

See Note 2 to consolidated financial statements (under the caption "Recently Adopted Accounting Standards").

Recently Issued Accounting Standards

See Note 2 to consolidated financial statements (under the caption "Recently Issued Accounting Standards").