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Item 1. Financial Statements

2025-11-13 compared with 2025-08-14 · 329 added, 327 removed, 395 unchanged (62% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2025

December 31, 2024

and cash equivalents

investment securities

receivable, net

expenses and other current assets

current assets

Cash and cash equivalents

Marketable investment securities

Accounts receivable, net

Inventory, net

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use asset

Intangible assets, net

Investment in joint venture

Liabilities and stockholders’ equity

and equipment, net

lease right-of-use asset

in joint venture

and stockholders’ equity

lease liability, current

consideration liabilities, current

current liabilities

Accounts payable

Accrued expenses

Operating lease liability, current

Contingent consideration liabilities, current

Deferred revenue

Total current liabilities

taxes payable

lease liability

consideration liabilities

long-term liabilities

Income taxes payable

Operating lease liability

Contingent consideration liabilities

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 10)

Stockholders’ equity

Convertible preferred stock, $ 0.001 par value;

and contingencies (Note 10)

Stockholders’

preferred stock, $ 0.001 par value;

5,000,000 shares authorized;

0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.001 par value;

0 shares issued and outstanding as of September 30, 2025 and December

31, 2024, respectively

stock, $ 0.001 par value;

100,000,000 shares authorized;

41,031,146 shares issued and 36,182,468 shares outstanding as of June 30, 2025 and 37,902,222 shares issued and 33,053,544 shares outstanding as of December 31, 2024

Treasury stock, at cost;

4,848,678 shares held as of June 30, 2025 and December 31, 2024, respectively

52,991,260 shares issued and 48,142,582 shares outstanding as of September

30, 2025 and 37,902,222 shares issued and 33,053,544 shares outstanding as of December 31, 2024

stock, at cost;

4,848,678 shares held as of September 30, 2025 and December 31, 2024, respectively

( 15,575,795 )

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

paid-in capital

other comprehensive income

( 54,191,053 )

( 33,040,842 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended June 30,

Six Months Ended June 30,

Product revenue

Grant revenue

Total revenue

Cost of revenue

Months Ended September 30,

and marketing

and administrative

and development

and amortization

operating expenses

Sales and marketing

General and administrative

Research and development

Depreciation and amortization

Total operating expenses

Loss from operations

from operations

( 7,013,848 )

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( 28,174,286 )

Other income, net

Interest income, net

Realized gain on investments

Gain (loss) on disposition of assets

Gain (loss) on remeasurement of acquisition contingencies

income (expense), net

gain on investments

(loss) on disposition of assets

(loss) on remeasurement of acquisition contingencies

(loss) on equity method investment in joint venture

Total other income, net

Loss before income taxes

other income (expense), net

before income taxes

( 7,053,416 )

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( 26,542,273 )

Income tax provision

tax provision (benefit)

( 1,166,593 )

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$ ( 9,696,455 )

Other comprehensive income (loss)

Change in net unrealized gains (losses) on marketable securities, net of tax

Total other comprehensive income (loss)

$ ( 21,150,211 )

$ ( 26,607,816 )

Comprehensive loss

comprehensive income (loss)

in net unrealized gains (losses) on marketable securities, net of tax

other comprehensive income (loss)

$ ( 323,555 )

Comprehensive

$ ( 5,926,003 )

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$ ( 21,473,766 )

$ ( 26,346,150 )

Loss per common share:

Basic and Diluted

Weighted average shares outstanding:

Basic and Diluted

Weighted average

shares outstanding:

accompanying notes to unaudited condensed consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Cash flows from operating activities

Months Ended September 30,

flows from operating activities

$ ( 21,150,211 )

$ ( 26,607,816 )

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

Stock-based compensation expense

Common stock issued for financial advisory services

Change in fair value of acquisition contingencies

Non-cash lease expense

Realized gain on investments

Loss from equity method investment

(Gain) loss on disposition of assets

Provision for (recoveries of) credit losses

Inventory obsolescence expense (recovery)

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

Deferred revenue

Income taxes payable

Accounts payable, accrued expenses and other liabilities

to reconcile net loss to cash used in operating activities:

and amortization

compensation expense

stock issued for financial advisory services

in fair value of acquisition contingencies

lease expense

gain on investments

from equity method investment

loss on disposition of assets

for credit losses (recoveries of)

obsolescence expense (recovery)

in assets and liabilities:

expenses and other assets

taxes payable

payable, accrued expenses and other liabilities

( 3,193,366 )

Net cash used in operating activities

cash used in operating activities

( 22,937,629 )

( 20,924,039 )

Cash flows from investing activities

Purchases of property and equipment

Proceeds from maturities of marketable investment securities

Purchases of marketable securities

flows from investing activities

of property and equipment

from maturities of marketable investment securities

of marketable securities

( 6,590,939 )

( 27,408,061 )

Net cash provided by investing activities

Cash flows from financing activities

Issuance of common stock related to at-the-market offering, net of offering costs

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

in joint venture

cash provided by investing activities

flows from financing activities

of common stock related to at-the-market offering, net of offering costs

of common stock related to registered direct offering, net of offering costs

cash provided by financing activities

increase (decrease) in cash and cash equivalents

( 4,119,248 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information

Income taxes paid

and cash equivalents at beginning of period

and cash equivalents at end of period

disclosure of cash flow information

paid (received) for income taxes

accompanying notes to unaudited condensed consolidated financial statements

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2024

Preferred Stock

Other Comprehensive

Stockholders’

as of December 31, 2024

$ ( 15,575,795 )

1 unchanged sentence

$ ( 33,040,842 )

Issuance of common stock related to at-the-market offering, net of offering costs

Stock-based compensation

Other comprehensive loss, net of tax

of common stock related to at-the-market offering, net of offering costs

comprehensive loss, net of tax

( 7,533,271 )

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( 40,574,113 )

Issuance of common stock related to at-the-market offering, net of offering costs

Stock-based compensation

Issuance of common stock related to financial advisory services

Other comprehensive loss, net of tax

of common stock related to at-the-market offering, net of offering costs

of common stock related to financial advisory services

comprehensive loss, net of tax

( 7,730,117 )

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( 48,304,230 )

of common stock related to at-the-market offering, net of offering costs

of common stock related to registered direct offering, net of offering costs

comprehensive income, net of tax

( 5,886,823 )

Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2023

( 5,886,823 )

Stock-based compensation

Other comprehensive income, net of tax

as of September 30, 2025

$ ( 15,575,795 )

$ 109,447,214

Balance as of March 31, 2024

$ ( 54,191,053 )

Preferred Stock

Other Comprehensive

Stockholders’

as of December 31, 2023

$ ( 15,575,795 )

comprehensive income, net of tax

( 9,312,043 )

Stock-based compensation

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax

Balance as of March

( 15,575,795 )

( 4,713,877 )

comprehensive income, net of tax

( 7,599,318 )

Balance as of June

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( 12,313,195 )

comprehensive income, net of tax

comprehensive income (loss), net of tax

( 9,696,455 )

as of September 30, 2024

$ ( 15,575,795 )

$ 100,924,241

$ ( 22,009,650 )

$ ( 15,575,795 )

$ 100,924,241

$ ( 22,009,650 )

accompanying notes to unaudited condensed consolidated financial statements

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been included.

Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that

may be expected for the year ending December 31, 2025.

Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results

that may be expected for the year ending December 31, 2025.

These statements should be read in conjunction with the Company’s audited

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Based on the Company’s

cash, cash equivalents, and short-term investments as of June 30, 2025, the Company’s current and forecasted level of operations,

cash, cash equivalents, and short-term investments as of September 30, 2025, the Company’s current and forecasted level of operations,

and its forecasted cash flows, the Company’s ability to continue as a going concern is dependent upon its ability to obtain the

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Management plans to provide for the Company’s capital requirements through equity

financing, including through selling shares under the Company’s ATM Agreement, seeking additional grant funding, and through operational

financing, seeking additional grant funding, and through operational

efficiencies.

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to continue as a going concern for 12 months from the date these condensed consolidated financial statements are issued.

condensed consolidated financial statements as of June 30, 2025 have been prepared under the assumption that the Company will continue

condensed consolidated financial statements as of September 30, 2025 have been prepared under the assumption that the Company will continue

as a going concern for the next 12 months after these financial statements are issued, and that contemplates the realization of assets

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written off are recorded when collected.

At June 30, 2025 total accounts receivable was $ 297,991 with an allowance for uncollectable

At September 30, 2025 total accounts receivable was $ 101,965 with an allowance for uncollectable

accounts of $ 46,060 resulting in a net amount of $ 55,905 .

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average cost in accordance with ASC 330-10-30-12.

At June 30, 2025, the Company had $ 1,084,627 in net inventory, of which $ 601,756 was

finished goods and $ 482,871 was raw materials.

At December 31, 2024, the Company had $ 1,072,724 in net inventory, of which $ 567,281 was

finished goods and $ 505,443 was raw materials.

At September 30, 2025, the Company had $ 1,089,956 in net inventory, of which $ 607,085

was finished goods and $ 482,871 was raw materials.

At December 31, 2024, the Company had $ 1,072,724 in net inventory, of which $ 567,281

was finished goods and $ 505,443 was raw materials.

The Company establishes reserves to reduce low-moving, obsolete, or unusable inventories

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The Company recognized $ 43,681 and $ 144,747 related to the change in inventory reserves during

the three and six months ended June 30, 2025, respectively, compared to $ 24,333 and $ 287,006 during the three and six months ended June

30, 2024, respectively.

the three and nine months ended September 30, 2025, respectively, compared to $ 72,872 and $ 214,134 during the three and nine months ended

September 30, 2024, respectively.

Company generates revenue from customers from product and license sales.

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obligations as deferred revenue in the consolidated balance sheets if the conditions or performance obligations have not yet been met.

The Company recognized no grant funding revenue during the three and six months ended June 30, 2025, respectively, compared to $ 2,495,738

and $ 2,710,847 during the three and six months ended June 30, 2024, respectively.

At June 30, 2025, and December 31, 2024, the Company

has recorded $ 40,857 of deferred revenue related to grant funding for which the cash was received, but the underlying conditions or performance

obligations have not yet been met.

Cash received from federal grants, contracts, and awards can be subject to audit by the grantor and,

if the examination results in a disallowance of any expenditure, repayment could be required.

The Company recognized no grant funding revenue during the three and nine months ended September 30, 2025, respectively, compared to

$ 434,265 and $ 3,145,112 during the three and nine months ended September 30, 2024, respectively.

At September 30, 2025, and December

31, 2024, the Company has recorded $ 40,857 of deferred revenue related to grant funding for which the cash was received, but the underlying

conditions or performance obligations have not yet been met.

Cash received from federal grants, contracts, and awards can be subject

to audit by the grantor and, if the examination results in a disallowance of any expenditure, repayment could be required.

Company accounts for income taxes in accordance with the liability method of accounting for income taxes.

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Risk and Significant Customers

Company had certain customers which were each responsible for generating 10 %

or more of the total revenue for the three and six months ended June 30, 2025 and 2024.

Three customers accounted for approximately 53 %

of product revenue recognized during the three months ended June 30, 2025.

Three customers accounted for approximately 41 %

of product revenue recognized during the six months ended June 30, 2025.

Two customers accounted for approximately 37 %

of product revenue, and two granting agencies accounted for approximately 94 %

of grant revenue recognized during the three months ended June 30, 2024.

One customer accounted for approximately 29 %

of product revenue, and two granting agencies accounted for approximately 95 %

of grant revenue recognized during the six months ended June 30, 2024.

customers individually accounted for more than 10 % of accounts receivable at June 30, 2025 and two customers individually accounted for

more than 10 % of accounts receivable at December 31, 2024.

Company had certain customers which were each responsible for generating 10 % or more of the total revenue for the three and nine months

ended September 30, 2025 and 2024.

Three customers accounted for approximately 48 % of product revenue recognized during the three months

ended September 30, 2025.

Four customers accounted for approximately 75 % of product revenue, and one granting agency accounted for 100 %

of grant revenue recognized during the three months ended September 30, 2024.

Two customers accounted for approximately 31 % of product

revenue, and two granting agencies accounted for approximately 95 % of grant revenue recognized during the nine months ended September

customers individually accounted for more than 10 % of accounts receivable at September 30, 2025 and two customers individually accounted

for more than 10 % of accounts receivable at December 31, 2024.

These customers together accounted for approximately 74 % and 94 % of accounts

receivable at June 30, 2025 and December 31, 2024, respectively.

receivable at September 30, 2025 and December 31, 2024, respectively.

Issued Accounting Standards

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its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05,

Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which

provides all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract

assets arising from transactions accounted for under Topic 606.

Early adoption is permitted and entities should apply the practical expedient,

if elected, prospectively to financial statements issued for reporting periods after the effective date.

The standard becomes effective

for the Company for interim and full year 2026 reporting.

The Company is currently evaluating the impact of this new standard on its

consolidated financial statements.

3 – Cash, Cash Equivalents, and Financial Instruments

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Schedule of Cash, Cash Equivalents and Marketable Investment Securities

June 30, 2025

Adjusted Cost

Total Unrealized Gains / (Losses)

Cash and Cash Equivalents

Marketable Investment Securities

treasury securities

December 31, 2024

Adjusted Cost

Total Unrealized Gains / (Losses)

Cash and Cash Equivalents

Marketable Investment Securities

treasury securities

investment securities held as of June 30, 2025 mature over the next 12 months.

4 – Fair Value Measurements

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Unobservable inputs that are not corroborated by market data.

following table summarizes the assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31,

following table summarizes the assets and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December

31, 2024, by level within the fair value hierarchy:

Schedule of Fair Value Assets and Liabilities

June 30, 2025

Cash equivalents

Marketable securities (U.S.

treasury bills and notes)

Total assets measured at fair value

Contingent consideration - common stock

Contingent consideration - warrants

Total liabilities measured at fair value

December 31, 2024

Cash equivalents

Marketable securities (U.S.

consideration - common stock

liabilities measured at fair value

securities (U.S.

treasury bills and notes)

Total assets measured at fair value

Contingent consideration - common stock

Contingent consideration - warrants

Total liabilities measured at fair value

assets measured at fair value

consideration - common stock

consideration - warrants

liabilities measured at fair value

Company’s financial instruments that are measured at fair value on a recurring basis consist of U.S.

treasury bills and notes as

of June 30, 2025 and December 31, 2024.

of December 31, 2024.

fair value of contingent consideration is calculated using a discounted probability weighted valuation model.

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Schedule of Changes in the Fair Value Measurement

Fair value as of December 31, 2024

Change in fair value of contingent consideration issued for business acquisitions

Fair value as of June 30, 2025

value as of December 31, 2024

in fair value of contingent consideration issued for business acquisitions

value as of September 30, 2025

fair value of the contingent consideration is based on the fair value of the contingent consideration-common stock and contingent consideration-warrants.

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Schedule of Contingent Consideration Common Stock and Warrants

June 30, 2025

December 31, 2024

Risk-free rate

Expected term (years)

Value of Other Financial Instruments

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Schedule of Intangible Assets, Net

June 30, 2025

Weighted-Average

Useful Life (1)

In-process research and development

Non-competition agreements

research and development

Non-competition

( 1,094,000 )

Total intangible assets

intangible assets

$ ( 1,094,000 )

December 31, 2024

Weighted-Average

Useful Life (1)

In-process research and development

Non-competition agreements

research and development

Non-competition

( 1,094,000 )

Total intangible assets

intangible assets

$ ( 1,094,000 )

Based on weighted-average

useful life established as of the acquisition date.

on weighted-average useful life established as of the acquisition date.

following table sets forth revenue by geographic area:

Summary of Revenue by Geographic Area

Three Months Ended June 30,

Six Months Ended June 30,

Months Ended September 30,

United States

Product revenue

Grant revenue

Total United States

Rest of World

Product revenue

Grant revenue

Total Rest of World

Revenue geographic area

Percentage of revenue by area:

United States

Rest of World

in the Company’s deferred revenue balance for the six months ended June 30, 2025 were as follows:

of revenue by area:

in the Company’s deferred revenue balance for the nine months ended September 30, 2025 were as follows:

Schedule of Deferred Revenue

Balance as of December 31, 2024

Revenue recognized included in deferred revenue balance at the beginning of the period

Increase due to prepayments from customers

Balance as of June 30, 2025

as of December 31, 2024

recognized included in deferred revenue balance at the beginning of the period

due to prepayments from customers

as of September 30, 2025

7 – Loss Per Share

following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three and six months

ended June 30, 2025 and 2024, respectively:

following table reconciles the numerator and the denominator used to calculate basic and diluted loss per share for three and nine months

ended September 30, 2025 and 2024, respectively:

Schedule of Basis and Diluted Earnings Per Share

Three Months Ended June 30,

Six Months Ended June 30,

Net loss, as reported

Months Ended September 30,

loss, as reported

$ ( 5,886,823 )

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$ ( 26,607,816 )

Weighted average shares, basic

Dilutive effect of stock options, warrants and RSUs

Shares used to compute diluted earnings per share

Loss per share, basic and diluted

computation of diluted loss per share for the three and six months ended June 30, 2025 and 2024, respectively, also excludes approximately

1.4 million shares of common stock and approximately 465,000 warrants to purchase shares of common stock that are contingent upon the

achievement of certain milestones.

a result of incurring a net loss for the three and six months ended June 30, 2025 and 2024, respectively, no potentially dilutive securities

are included in the calculation of diluted loss per share because such effect would be anti-dilutive.

The Company had potentially dilutive

securities as of June 30, 2025, consisting of:

Weighted average

shares, basic

effect of stock options, warrants and RSUs

used to compute diluted earnings per share

per share, basic and diluted

computation of diluted loss per share for the three and nine months ended September 30, 2025 and 2024, respectively, also excludes approximately

million shares of common stock and approximately 465,000

warrants to purchase shares of common stock that are contingent

upon the achievement of certain milestones.

a result of incurring a net loss for the three and nine months ended September 30, 2025 and 2024, respectively, no potentially dilutive

securities are included in the calculation of diluted loss per share because such effect would be anti-dilutive.

The Company had potentially

dilutive securities as of September 30, 2025, consisting of:

(i) 2,317,465 restricted stock units and (ii) 978,757 options and warrants.

had potentially dilutive securities as of June 30, 2024, consisting of:

(i) 1,758,323 restricted stock units and (ii) 532,112 options

and warrants.

The Company had potentially dilutive securities as of September 30, 2024, consisting of:

(i) 1,598,891 restricted stock units and (ii)

532,112 options and warrants.

8 – Stock-Based Compensation

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The number of awards available for issuance under

the Incentive Plan was 3,237,236 at June 30, 2025.

the Incentive Plan was 655,702 at September 30, 2025.

Incentive Plan will expire on December 31, 2025.

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The number of awards available for issuance

under the 2025 Plan was 6,700,000 at June 30, 2025.

under the 2025 Plan was 6,700,000 at September 30, 2025.

No awards have been made under the 2025 Plan.

following table summarizes option activity during the six months ended June 30, 2025:

following table summarizes option activity during the nine months ended September 30, 2025:

Schedule of Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2024

Weighted Average Exercise

Weighted Average Fair

Weighted Average Remaining

Contractual Life (Years)

at December 31, 2024

Forfeited/Cancelled

Outstanding at June 30, 2025

Exercisable at June 30, 2025

aggregate intrinsic value of outstanding options at June 30, 2025 and 2024 was approximately $ 0 and $ 152,521 , respectively.

at September 30, 2025

aggregate intrinsic value of outstanding options at September 30, 2025 and 2024 was approximately $ 0

and $ 152,521 ,

respectively.

compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting

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The Company uses the Black-Scholes model to value options granted.

As of June 30, 2025, there

As of September 30, 2025, there

were no unvested options and no unrecognized stock-based compensation expense related to options.

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The following table sets forth the outstanding

RSUs and related activity for the six months ended June 30, 2025:

RSUs and related activity for the nine months ended September 30, 2025:

Schedule of Outstanding Restricted Stock Units and Related Party

Number of RSUs

Weighted Average Grant Date Fair Value

Unvested at December 31, 2024

Average Grant Date Fair Value

at December 31, 2024

Forfeited/Cancelled

Unvested at June 30, 2025

of June 30, 2025, there was approximately $ 3,000,770 of unrecognized stock-based compensation expense related to outstanding RSUs which

is expected to be recognized over a weighted-average period of 1.5 years.

at September 30, 2025

of September 30, 2025, there was approximately $ 3,100,827 of unrecognized stock-based compensation expense related to outstanding RSUs

which is expected to be recognized over a weighted-average period of 1.7 years.

Company has issued warrants related to financings, acquisitions and as compensation to third parties for services provided.

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the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services.

following table summarizes warrant activity during the six months ended June 30, 2025:

following table summarizes warrant activity during the nine months ended September 30, 2025:

Schedule of Warrant Activity

Number of Warrants

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2024

Average Exercise Price

Average Fair Value

Average Remaining Contractual Life (Years)

at December 31, 2024

Forfeited/Cancelled

Outstanding at June 30, 2025

aggregate intrinsic value of outstanding warrants at June 30, 2025 was $ 0 .

are no warrants exercisable at June 30, 2025.

The ability to exercise the 465,000 warrants issued in connection with acquisitions in

prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027.

at September 30, 2025

aggregate intrinsic value of outstanding warrants at September 30, 2025 was $ 0 .

are no warrants exercisable at September 30, 2025.

The ability to exercise the 465,000 warrants issued in connection with acquisitions

in prior years is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027.

no unrecognized stock-based compensation expense related to warrants.

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Schedule of Recognized Stock-Based Compensation Expense

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

Sales and marketing

General and administrative

Research and development

Total stock-based compensation expense

Months Ended September 30,

and marketing

and administrative

and development

stock-based compensation expense

9 – Income Taxes

the three months ended June 30, 2025, the Company recognized expense from income taxes of $ 12,327 , representing an effective tax rate

For the six months ended June 30, 2025, the Company recognized expense from income taxes of $ 24,331 , representing an effective

the three months ended September 30, 2025, the Company recognized a benefit from income taxes of $ 1,166,593 , representing an effective

tax rate of 16.5 %.

For the nine months ended September 30, 2025, the Company recognized a benefit from income taxes of $ 1,142,262 , representing

an effective tax rate of 5.1 %.

The Company’s effective tax rate will generally differ from the U.S.

Federal statutory rate of 21.0 %, primarily

due to the full valuation allowance as well as state taxes, permanent items, and discrete items.

For the three and six months ended June

30, 2024, the Company recognized expense from income taxes of $ 20,590 and $ 43,354 , respectively.

Federal statutory rate of 21.0 %,

primarily due to the full valuation allowance as well as state taxes, permanent items, and discrete items.

For the three and nine months

ended September 30, 2024, the Company recognized expense from income taxes of $ 22,189 and $ 65,543 , respectively.

10 – Commitments and Contingencies

Company leases administrative, R&D, sales and marketing and manufacturing facilities under non-cancellable operating leases and leases

cancellable with one month notice.

The Company expenses the cancellable leases in the period incurred in accordance with the practical

expedient elected.

Company leases administrative, R&D, sales and marketing and manufacturing facilities under non-cancellable operating leases.

components of lease expense are summarized as follows:

Schedule of Lease Expense

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease costs

Short-term lease costs

Total lease costs

of June 30, 2025, the maturities of the Company’s lease liabilities are as follows:

Months Ended September 30,

of September 30, 2025, the maturities of the Company’s lease liabilities are as follows:

Schedule of Maturities on Company Lease Liabilities

Years Ending December 31,

2025 (remainder)

Total lease payments

lease payments

imputed interest

Present value of operating lease liabilities

value of operating lease liabilities

current portion

Long-term portion

information related to operating leases was as follows:

Schedule of Other Information Related to Operating Leases

Six Months Ended June 30, 2025

Cash paid for operating leases included in operating cash flows

Remaining lease term of operating leases

Discount rate of operating leases

paid for operating leases included in operating cash flows

lease term of operating leases

rate of operating leases

for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable

2 unchanged sentences

are expensed as incurred.

Company is a defendant in one class action claim and four derivative actions claiming that the Company promulgated false and misleading

Company is a defendant in one class action claim and three derivative actions claiming that the Company promulgated false and misleading

press releases to increase the price of our stock to improperly benefit the officers and directors of the Company.

4 unchanged sentences

of contract claims against the Company.

The Company believes these lawsuits are without merit and intends to defend the cases vigorously.

The Company believes these lawsuits are without merit and is defending the cases vigorously.

The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in these cases.

15 unchanged sentences

issued but not outstanding.

No shares were repurchased during the three and six months ended June 30, 2025.

No shares were repurchased during the three and nine months ended September 30, 2025.

12 – At-the-Market Agreement

Company has entered into an Amended and Restated Equity Distribution Agreement (the “ATM Agreement”) with Piper Sandler &

(“Piper Sandler”) and Clear Street, LLC (“Clear Street”), pursuant to which it may offer and sell shares

of its common stock having an aggregate offering price of up to $ 17,111,650 from time to time through Piper Sandler and Clear Street

acting as agents, under the prospectus supplement dated October 18, 2024.

As of June 30, 2025, the Company has sold 2,209,131 shares

of common stock under the ATM Agreement resulting in net proceeds to the Company of $ 1,016,988 .

As of June 30, 2025, the Company has

up to $ 16,063,209 remaining in aggregate gross proceeds that can be issued through the ATM Agreement.

The Company previously maintained

an Amended and Restated Equity Distribution Agreement (the “Prior ATM Agreement”) with Piper Sandler & Co.

Sandler”) and Clear Street, LLC (“Clear Street”), pursuant to which the Company could offer and sell shares of its common

stock having an aggregate offering price of up to $ 17,111,650 from time to time through Piper Sandler and Clear Street, acting as sales

agents, under a prospectus supplement dated October 18, 2024.

As of September 30, 2025, the Company had sold 4,550,245 shares of common

stock under the Prior ATM Agreement, resulting in net proceeds to the Company of approximately $ 1,660,805 .

The Prior ATM Agreement was

subsequently terminated, and no further sales will be made under that program.

On October 20, 2025, the Company entered into a new Equity Distribution Agreement (the “Agreement”) with

Maxim Group LLC (“Maxim”) to establish an at-the-market (“ATM”) equity offering program.

Pursuant to the Agreement,

the Company may offer and sell shares of its common stock, par value $ 0.001 per share, having an aggregate offering price of up to $ 10.0

million, from time to time through Maxim, acting as the Company’s sales agent.

Under the terms of the Agreement, the Company will

pay Maxim a commission equal to 3.0% of the gross proceeds from the sale of any shares and will reimburse Maxim for certain legal and

other out-of-pocket expenses incurred in connection with its services.

Sales of common stock, if any, may be made in transactions deemed

to be “at-the-market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made

by means of ordinary brokers’ transactions on The Nasdaq Capital Market or otherwise at market prices prevailing at the time of

sale or at prices negotiated with Maxim.

The Company is not obligated to sell any shares under the Agreement and may terminate the offering

at any time in accordance with its terms.

The shares will be issued pursuant to the Company’s shelf Registration Statement on Form

S-3 (File No.

333-270628), which was declared effective by the Securities and Exchange Commission on April 6, 2023.

On October 20, 2025,

the Company filed a prospectus supplement with the SEC relating to the new ATM program, registering up to approximately $ 4.1 million of

shares under the shelf registration statement.

13 – Registered Direct Offering

September 17, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with two institutional

investors (the “Investors”) named therein, pursuant to which the Company agreed to issue and sell, in a registered direct

offering priced at-the-market under Nasdaq rules by the Company directly to the Investors (the “Offering”) an aggregate of

9,619,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.01 per share, at an offering price of $ 0.40

The offering closed on September 18, 2025.

The gross proceeds to the Company from the offering were approximately $ 3,847,600 ,

before deducting the placement agent’s fees and other offering expenses.

The Offering Shares were offered and sold by the Company

pursuant to an effective shelf registration statement on Form S-3 (File No.

The Company agreed to pay Maxim Group LLC (“Maxim”),

as placement agent, an aggregate fee equal to 7.0 % of the gross proceeds received by the Company from the sale of the securities in the

offering as well as up to $ 50,000 for fees and expenses of legal counsel.

14 – Related Party Transactions

2 unchanged sentences

The Company recognized $ 192,958 and $ 615,425

of expense related to this agreement during the three and six months ended June 30, 2025, respectively, compared to $ 74,040 and $ 179,965

of expense during the three and six months ended June 30, 2024, respectively.

of expense related to this agreement during the three and nine months ended September 30, 2025, respectively, compared to $ 181,878 and

$ 361,843 of expense during the three and nine months ended September 30, 2024, respectively.

15 – Subsequent Events

United States tax legislation was signed into law on July 4, 2025.

Income tax effects of changes in tax law or rates on deferred tax

assets or liabilities are recognized at the date of enactment.

The Company is still evaluating the impact of the changes included in

this new legislation but does expect to realize material future benefits from certain aspects of the new law.

July 10, 2025, the Company received notification from the NASDAQ Stock Market indicating that the Company will have an additional 180-day

grace period, until January 5, 2026, to regain compliance with NASDAQ’s $ 1.00 minimum bid requirement.

The notification indicated

that the Company did not regain compliance during the initial 180-day grace period provided under the rule.

In accordance with NASDAQ

Marketplace Rule 5810(c)(3)(A), the Company is eligible for the additional grace period because it meets the continued listing requirement

for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with

the exception of the bid price requirement, and provided written notice of its intention to cure the deficiency during the second compliance

period by effecting a reverse stock split, if necessary.

Subsequent to September 30, 2025, on

October 20, 2025, the Company entered into an Equity Distribution Agreement with Maxim Group LLC to establish an at-the-market equity

offering program, as described in Note 12 – At-the-Market Offering.

October 28, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with two

institutional investors (the “Investors”) pursuant to which the Company agreed to issue and sell, in a registered direct

offering priced at-the-market under Nasdaq rules (the “Offering”), (i) 12,002,272 shares

of its common stock, par value $ 0.001 per

share (the “Shares”), at an offering price of $ 0.55 per

share, and (ii) pre-funded common stock purchase warrants (the “Pre-Funded Warrants”) to purchase an aggregate

shares of common stock at an offering price of $ 0.5499

per Pre-Funded Warrant.

The Pre-Funded Warrants have an exercise price of $ 0.0001

per share, are exercisable immediately upon issuance, and will remain exercisable until exercised in full.

The Offering closed on

October 29, 2025.

Gross proceeds to the Company were approximately $ 7.0

million , before deducting placement agent fees and other offering expenses.

The securities were offered and sold pursuant to

the Company’s shelf Registration Statement on Form S-3 (File No.

333-270628), which was declared effective by the Securities

and Exchange Commission on April 6, 2023.

Maxim Group LLC (“Maxim”) acted as placement agent for the Offering.

Company agreed to pay Maxim a fee equal to 7.0 %

of the gross proceeds from the sale of the securities, as well as up to $ 50,000

for the fees and expenses of its legal counsel.

The Company intends to use the net proceeds from the Offering for working capital

and general corporate purposes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements