What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-08 · 311 added, 236 removed, 411 unchanged (57% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2025

December 31, 2024

Current assets

Cash and cash

Cash and cash equivalents

Marketable investment securities

1 unchanged sentence

Inventory, net

expenses and other current assets

Prepaid expenses and other current assets

Total current assets

Property and equipment,

Operating lease right-of-use

Property and equipment, net

Operating lease right-of-use asset

Intangible assets, net

in joint venture

Investment in joint venture

Liabilities and stockholders’ equity

2 unchanged sentences

Accrued expenses

Operating lease liability,

Contingent consideration

liabilities, current

Operating lease liability, current

Contingent consideration liabilities, current

Deferred revenue

Total current liabilities

2 unchanged sentences

Operating lease liability

consideration liabilities

long-term liabilities

Contingent consideration liabilities

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 10)

2 unchanged sentences

5,000,000 shares authorized;

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

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

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

38,421,321 shares issued and 33,572,643 shares outstanding as of March 31, 2025 and 37,902,222 shares issued and

33,053,544 shares outstanding as of December 31, 2024

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 March 31, 2025 and December 31, 2024, respectively

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

( 15,575,795 )

1 unchanged sentence

Additional paid-in capital

Accumulated other comprehensive

Accumulated other comprehensive income

Accumulated deficit

1 unchanged sentence

( 33,040,842 )

stockholders’ equity

liabilities and stockholders’ equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to unaudited condensed consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Product revenue

6 unchanged sentences

Research and development

and amortization

operating expenses

from operations

Depreciation and amortization

Total operating expenses

Loss from operations

( 8,057,764 )

( 7,679,962 )

( 16,609,720 )

( 17,939,349 )

Other income, net

1 unchanged sentence

Realized gain on investments

Gain on remeasurement of

acquisition contingencies

on equity method investment in joint venture

other income, net

Gain (loss) on disposition of assets

Gain (loss) on remeasurement of acquisition contingencies

Loss on equity method investment in joint venture

Total other income, net

Loss before income taxes

1 unchanged sentence

( 7,578,728 )

( 15,239,057 )

( 16,868,007 )

Income tax provision

1 unchanged sentence

$ ( 7,599,318 )

$ ( 15,263,388 )

$ ( 16,911,361 )

Other comprehensive income (loss)

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

Total other comprehensive

income (loss)

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

Total other comprehensive income (loss)

$ ( 196,585 )

$ ( 284,375 )

Comprehensive loss

1 unchanged sentence

$ ( 7,454,665 )

$ ( 15,547,763 )

$ ( 16,686,853 )

Loss per common share:

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Months Ended March 31,

Cash flows from operating

Six Months Ended June 30,

Cash flows from operating activities

$ ( 15,263,388 )

$ ( 16,911,361 )

Adjustments to reconcile net loss to cash used

in operating activities:

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

Depreciation and amortization

Stock-based compensation

Change in fair value of

acquisition contingencies

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

Provision for (recoveries

of) credit losses

Inventory obsolescence

expense (recovery)

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

Prepaid expenses and other assets

Deferred revenue

Income taxes payable

payable, accrued expenses and other liabilities

Accounts payable, accrued expenses and other liabilities

( 3,213,100 )

cash used in operating activities

Net cash used in operating activities

( 17,033,044 )

( 13,694,532 )

Cash flows from investing

Cash flows from investing activities

Purchases of property and equipment

Proceeds from maturities of marketable investment

Purchases of marketable

Proceeds from maturities of marketable investment securities

Purchases of marketable securities

( 6,588,577 )

cash provided by investing activities

Cash flows from financing

Issuance of common stock

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

cash provided by financing activities

( 13,699,301 )

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

( 1,058,012 )

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Supplemental disclosure

of cash flow information

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

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Preferred Stock

Comprehensive

Stockholders’

Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2024

2 unchanged sentences

$ ( 33,040,842 )

Issuance of common stock related to at-the-market

offering, net of offering costs

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

Stock-based compensation

Other comprehensive income (loss), net of

Other comprehensive loss, net of tax

( 7,533,271 )

3 unchanged sentences

( 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

( 7,730,117 )

Preferred Stock

Comprehensive

Stockholders’

Balance as of December 31, 2023

( 7,730,117 )

Balance as of June 30, 2025

$ ( 15,575,795 )

$ 104,843,320

$ ( 48,304,230 )

Convertible Preferred Stock

Additional Paid-in

Accumulated Other Comprehensive

Accumulated Earnings

Total Stockholders’

Balance as of December 31, 2023

$ ( 15,575,795 )

Stock-based compensation

Other comprehensive income (loss), net of

Other comprehensive income, net of tax

( 9,312,043 )

5 unchanged sentences

( 4,713,877 )

Stock-based compensation

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax

( 7,599,318 )

Balance as of June 30, 2024

$ ( 15,575,795 )

$ ( 12,313,195 )

$ ( 15,575,795 )

$ ( 12,313,195 )

accompanying notes to unaudited condensed consolidated financial statements

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Condensed Consolidated Financial Statements

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting

principles generally accepted in the United States of America (“U.S.

GAAP”) and the rules and regulations of the

Securities and Exchange Commission (“SEC”) for interim financial information as they are prescribed for smaller

reporting companies.

As permitted under those rules and regulations, certain notes or other financial information normally included

in financial statements prepared in accordance with U.S.

accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) and the rules and regulations of the Securities and Exchange

Commission (“SEC”) for interim financial information as they are prescribed for smaller reporting companies.

under those rules and regulations, certain notes or other financial information normally included in financial statements prepared in

accordance with U.S.

GAAP have been condensed or omitted.

Accordingly, the accompanying

unaudited condensed consolidated financial statements do not include all the information and footnotes required by U.S.

complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered

necessary to make the financial statements not misleading have been included.

Operating results for the three months ended March 31,

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 financial statements and related notes for the year ended December

31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2025.

A summary of the

Company’s significant accounting policies is set forth in Note 2 to the consolidated financial statements in its Annual

Report on Form 10-K for the year ended December 31, 2024.

Accordingly, the accompanying unaudited condensed consolidated financial statements

do not include all the information and footnotes required by U.S.

GAAP for complete financial statements.

In the opinion of management,

all adjustments (consisting of normal recurring adjustments) considered necessary to make the financial statements not misleading have

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.

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

financial statements and related notes for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K

filed with the SEC on March 27, 2025.

A summary of the Company’s significant accounting policies is set forth in Note 2 to the

consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2024.

preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates

10 unchanged sentences

Based on the Company’s

cash, cash equivalents, and short-term investments as of March 31, 2025, the Company’s current and forecasted level of operations,

cash, cash equivalents, and short-term investments as of June 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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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 March 31, 2025 have been prepared under the assumption that the Company will continue

condensed consolidated financial statements as of June 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

9 unchanged sentences

Company operates as one operating segment.

Operating segments are defined as components of an entity for which separate

financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the

Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance.

The Company’s CODM

evaluates financial information and resources and assesses the performance of these resources on a consolidated basis.

expense or asset information that is supplemental to information disclosed within the condensed consolidated financial statements,

that is regularly provided to the CODM.

The allocation of resources and assessment of performance of the operating segment is based

on consolidated net loss and functional expenses as reported on our condensed consolidated statements of operations and

comprehensive loss.

Because the Company operates as one operating segment, financial segment information, including

expense and asset information, can be found in the condensed consolidated financial statements.

All material long-lived assets are

based in the United States.

Operating segments are defined as components of an entity for which separate financial information

is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer,

in deciding how to allocate resources and assess performance.

The Company’s CODM evaluates financial information and resources

and assesses the performance of these resources on a consolidated basis.

There is no expense or asset information that is supplemental

to information disclosed within the condensed consolidated financial statements, that is regularly provided to the CODM.

The allocation

of resources and assessment of performance of the operating segment is based on consolidated net loss and functional expenses as reported

on our condensed consolidated statements of operations and comprehensive loss.

Because the Company operates as one operating segment,

financial segment information, including expense and asset information, can be found in the condensed consolidated financial statements.

All material long-lived assets are located in the United States and India.

accounts receivable are recorded at the invoiced amount (net of allowance) and do not bear interest.

6 unchanged sentences

written off are recorded when collected.

At March 31, 2025 total accounts receivable was $ 240,805 with an allowance for uncollectable

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

accounts of $ 87,023 resulting in a net amount of $ 210,968 .

6 unchanged sentences

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

At March 31, 2025, the Company had $ 1,083,309 in inventory, of which $ 588,494 was finished

goods and $ 494,815 was raw materials.

At December 31, 2024, the Company had $ 1,072,724 in 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 to their estimated

useful or scrap values.

The Company recognized $ 41,474 and $ 311,339 related to the change in inventory reserves during the three months

ended March 31, 2025 and 2024, respectively.

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.

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

to their estimated useful or scrap values.

The Company recognized $ 59,591 and $ 101,065 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.

Company generates revenue from customers from product and license sales.

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Company may submit applications to receive grant funding from governmental and non-governmental entities.

The Company accounts for

grants by analogizing to the contribution accounting model under ASC 958-605, Not-for-Profit Entities (“ASC 958”).

Revenues from grants, contracts, and awards provided by governmental and non-governmental agencies are recorded based upon the terms

of the specific agreements.

The Company recognizes grant funding without conditions or continuing performance obligations as revenue

in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes grant funding with conditions

or continuing performance obligations as deferred revenue in the consolidated balance sheets if the conditions or performance

obligations have not yet been met.

The Company recognized grant funding revenue of $ 0 and

million during the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, and December 31, 2024, the Company

has also recorded $ 0.1

million of deferred revenue related to grant funding for which the cash was received, but the underlying conditions or performance

The Company accounts for grants

by analogizing to the contribution accounting model under ASC 958-605, Not-for-Profit Entities (“ASC 958”).

Revenues from

grants, contracts, and awards provided by governmental and non-governmental agencies are recorded based upon the terms of the specific

The Company recognizes grant funding without conditions or continuing performance obligations as revenue in the consolidated

statements of operations and comprehensive income (loss).

The Company recognizes grant funding with conditions or continuing performance

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.

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 months ended

March 31, 2025.

Three customers accounted for approximately 59 % of product revenue recognized during the three months ended March 31,

Three customers accounted for approximately 69 % of product revenue, and one granting agency accounted for 100 % of grant revenue

recognized during the three months ended March 31, 2024.

customers individually accounted for more than 10 % of accounts receivable at March 31, 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 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.

These customers together accounted for approximately 82 % and 94 % of accounts

receivable at March 31, 2025 and December 31, 2024, respectively.

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

Issued Accounting Standards

4 unchanged sentences

November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures

about significant segment expenses.

Improvements to

Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about

significant segment expenses.

The standard is effective for full year 2024 reporting, and for interim reporting beginning in 2025.

The adoption of this ASU did not change the way the Company evaluates its reportable segments and, as a result, did not have a material

impact on the Company’s segment-related disclosures.

adoption of this ASU did not change the way the Company evaluates its reportable segments and, as a result, did not have a material impact

on the Company’s segment-related disclosures.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Schedule of Cash, Cash Equivalents and Marketable Investment Securities

Unrealized Gains / (Losses)

and Cash Equivalents

Investment Securities

June 30, 2025

Adjusted Cost

Total Unrealized Gains / (Losses)

Cash and Cash Equivalents

Marketable Investment Securities

treasury securities

Unrealized Gains / (Losses)

and Cash Equivalents

Investment Securities

December 31, 2024

Adjusted Cost

Total Unrealized Gains / (Losses)

Cash and Cash Equivalents

Marketable Investment Securities

treasury securities

investment securities held as of March 31, 2025 mature over the next 12 months.

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

4 – Fair Value Measurements

7 unchanged sentences

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 March 31, 2025 and December 31,

following table summarizes the assets and liabilities measured at fair value on a recurring basis as of June 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

securities (U.S.

Marketable securities (U.S.

treasury bills and notes)

Total assets measured

at fair value

Contingent consideration

- common stock

consideration - warrants

Total liabilities measured

at fair value

Total assets measured at fair value

Contingent consideration - common stock

Contingent consideration - warrants

Total liabilities measured at fair value

December 31, 2024

Cash equivalents

securities (U.S.

Marketable securities (U.S.

treasury bills and notes)

Total assets measured

at fair value

Contingent consideration

- common stock

consideration - warrants

Total liabilities measured

at fair value

Total assets measured at fair value

Contingent consideration - common stock

Contingent consideration - warrants

Total 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 March 31, 2025 and December 31, 2024.

of June 30, 2025 and December 31, 2024.

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

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Fair value as of December 31, 2024

in fair value of contingent consideration issued for business acquisitions

Fair value as of March 31, 2025

Change in fair value of contingent consideration issued for business acquisitions

Fair value as of June 30, 2025

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

6 unchanged sentences

Schedule of Contingent Consideration Common Stock and Warrants

June 30, 2025

December 31, 2024

Risk-free rate

7 unchanged sentences

Schedule of Intangible Assets, Net

June 30, 2025

Weighted-Average

5 unchanged sentences

$ ( 1,094,000 )

December 31, 2024

Weighted-Average

5 unchanged sentences

$ ( 1,094,000 )

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

Based 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

Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

United States

Product revenue

Grant revenue

Total United States

1 unchanged sentence

Product revenue

Rest of World

geographic area

Grant revenue

Total Rest of World

Revenue geographic area

Percentage of revenue by area:

1 unchanged sentence

Rest of World

in the Company’s deferred revenue balance for the three months ended March 31, 2025 were as follows:

in the Company’s deferred revenue balance for the six months ended June 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

due to prepayments from customers

Balance as of March 31, 2025

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

7 – Loss Per Share

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

March 31, 2025 and 2024, respectively:

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:

Schedule of Basis and Diluted Earnings Per Share

Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net loss, as reported

$ ( 7,730,117 )

$ ( 7,599,318 )

$ ( 15,263,388 )

$ ( 16,911,361 )

Weighted average shares, basic

Dilutive effect of stock

options, warrants and RSUs

Shares used to compute

diluted loss per share

Basic loss per share

Diluted loss per share

computation of diluted loss per share for the three months ended March 31, 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 months ended March 31, 2025 and 2024, respectively, no potentially dilutive securities

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 March 31, 2025, consisting of:

securities as of June 30, 2025, consisting of:

(i) 2,535,184 restricted stock units and (ii) 982,918 options and warrants.

had potentially dilutive securities as of March 31, 2024, consisting of:

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

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

9 unchanged sentences

The number of awards available for issuance under

the Incentive Plan was 3,182,340 at March 31, 2025.

following table summarizes option activity during the three months ended March 31, 2025:

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

Incentive Plan will expire on December 31, 2025.

The Company’s board of directors adopted in March 2025, and in May 2025 our shareholders

approved, the Co-Diagnostics, Inc.

2025 Equity Incentive Plan (the “2025 Plan”) providing for the issuance of stock-based

incentive awards to employees, officers, consultants, directors and independent contractors.

The number of awards available for issuance

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

No awards have been made under the 2025 Plan.

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

Schedule of Option Activity

Exercise Price

Number of Options

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2024

Forfeited/Cancelled

Outstanding at March 31, 2025

Exercisable at March 31, 2025

aggregate intrinsic value of outstanding options at March 31, 2025 and 2024 was approximately $ 0 and $ 0.1 million, respectively.

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.

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

1 unchanged sentence

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

As of March 31, 2025, there

As of June 30, 2025, there

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

2 unchanged sentences

The following table sets forth the outstanding

RSUs and related activity for the three months ended March 31, 2025:

RSUs and related activity for the six months ended June 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

Forfeited/Cancelled

Unvested at March 31, 2025

of March 31, 2025, there was approximately $ 3.8 million 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.

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.

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

2 unchanged sentences

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 three months ended March 31, 2025:

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

Schedule of Warrant Activity

Exercise Price

Number of Warrants

Weighted Average Exercise Price

Weighted Average Fair Value

Weighted Average Remaining Contractual Life (Years)

Outstanding at December 31, 2024

Forfeited/Cancelled

Outstanding at March 31, 2025

aggregate intrinsic value of outstanding warrants at March 31, 2025 was $ 0 .

total number of warrants exercisable at March 31, 2025 is 20,000 .

The ability to exercise the remaining 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

There was no unrecognized stock-based compensation expense related to warrants.

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.

no unrecognized stock-based compensation expense related to warrants.

Compensation Expense

1 unchanged sentence

Schedule of Recognized Stock-Based Compensation Expense

Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

2 unchanged sentences

Research and development

stock-based compensation expense

Total stock-based compensation expense

9 – Income Taxes

the three months ended March 31, 2025, the Company recognized expense from income taxes of $ 12,004 , representing an effective tax rate

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

tax rate of 0.2 %.

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 months ended March 31, 2024,

the Company recognized expense from income taxes of $ 22,764 .

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.

10 – Commitments and Contingencies

1 unchanged sentence

cancellable with one month notice.

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

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

expedient elected.

1 unchanged sentence

Schedule of Lease Expense

Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating lease costs

1 unchanged sentence

Total lease costs

of March 31, 2025, the maturities of the Company’s lease liabilities are as follows:

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

Schedule of Maturities on Company Lease Liabilities

Ending December 31,

Years Ending December 31,

2025 (remainder)

6 unchanged sentences

Schedule of Other Information Related to Operating Leases

March 31, 2025

Cash paid for operating leases

included in operating cash flows

Six Months Ended June 30, 2025

Cash paid for operating leases included in operating cash flows

Remaining lease term of operating leases

29 unchanged sentences

issued but not outstanding.

No shares were repurchased during the three months ended March 31, 2025.

No shares were repurchased during the three and six months ended June 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 March 31, 2025, the Company has sold 833,806

shares of common stock under the ATM Agreement resulting in net proceeds to the Company of $ 0.6 million.

As of March 31, 2025, the

Company has up to $ 16.5 million remaining in aggregate gross proceeds that can be issued through the ATM Agreement.

(“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.

13 – Related Party Transactions

1 unchanged sentence

under which CoSara provides certain research and development consulting and support services.

The Company recognized $ 0.2 million and

$ 0.1 million of expense related to this agreement during the three months ended March 31, 2025 and 2024, respectively.

The Company recognized $ 182,364 and $ 422,467

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.

14 – 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.

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