What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-28 · 41 added, 42 removed, 164 unchanged (34% of the section changed)

14 unchanged sentences

Our collection of hpSCs, known as UniStemCell, currently consists of 15 stem cell lines.

We have facilities and manufacturing protocols that comply with the requirements of Good Manufacturing Practice (GMP) standards as promulgated by the U.S.

We have manufacturing protocols that comply with the requirements of Good Manufacturing Practice (GMP) standards as promulgated by the U.S.

Code of Federal Regulations and enforced by the United States Food and Drug Administration (FDA).

7 unchanged sentences

In June 2016, we published the results of a 12-month pre-clinical non-human primate study, which demonstrated the safety, efficacy, and mechanism of action of the ISC- hpNSC®.

In 2017, we dosed four patients in our Phase I trial of ISC-hpNSC®, human parthenogenetic stem cell-derived neural stem cells for the treatment of Parkinson’s disease.

In 2017, we dosed four patients in our Phase 1 trial of ISC-hpNSC®, human parthenogenetic stem cell-derived neural stem cells for the treatment of Parkinson’s disease.

We reported 12-month results from the first cohort and 6-month interim results of the second cohort at the Society for Neuroscience annual meeting (Neuroscience 2018) in November 2018.

7 unchanged sentences

The % ON-Time increased an average of 42% above the initial evaluation at 12 months post-transplantation in the second cohort.

We expect to announce the full Phase 1 clinical trial results in the second half of 2026.

In August 2014, we announced the launch of a stroke program, evaluating the use of ISC-hpNSC® transplantation for the treatment of ischemic stroke using a rodent model of the disease.

The Company has a considerable amount of safety data on ISC-hpNSC® from the Parkinson’s disease program and, as there is evidence that transplantation of ISC-hpNSC® may improve patient outcomes as an adjunctive therapeutic strategy in stroke, having a second program that can use this safety dataset is therefore a logical

The Company has a considerable amount of safety data on ISC-hpNSC® from the Parkinson’s disease program and, as there is evidence that transplantation of ISC-hpNSC® may improve patient

outcomes as an adjunctive therapeutic strategy in stroke, having a second program that can use this safety dataset is therefore a logical extension.

In 2015, the Company together with Tulane University demonstrated that NSC can significantly reduce neurological dysfunction after a stroke in animal models.

37 unchanged sentences

Research and development

Other (expense) income, net

Other expense, net

As a % of revenues

* denotes a change in excess of 100%

Product Sales

Product sales revenue for the year ended December 31, 2025 was $9,100 thousand, compared to $9,085 thousand for the year ended December 31, 2024.

The increase of $1,296 thousand, or 17%, was attributable to an increase of $1,211 thousand and $213 thousand in media and cell product sales, respectively, within our biomedical market segment primarily due to increases in original equipment manufacturer (OEM) sales.

These increases were partially offset by a decrease of $128 thousand in sales of our skin care products in our anti-aging market segment during 2024 compared to 2023 due to a decrease in demand.

The increase of $15 thousand, or less than 1%, was attributable to an increase of $359 thousand in cells product sales offset by a decrease of $147 thousand in media product sales within our biomedical market segment (a net increase of $212 thousand), primarily due to increases in OEM sales.

This increase in our biomedical market product sales was partially offset by a decrease of $197 thousand in sales of our skin care products in our anti-aging market segment during 2025 compared to 2024 due to a decrease in demand.

Our OEM sales in our biomedical market segment have increased year-over-year and accounted for approximately 64% of biomedical product sales in 2025 as compared to 63% in 2024.

The mix of media and cell product sales has remained relatively consistent with media product sales accounting for approximately 72% of biomedical product sales, up from 69% in 2023.

The increase in biomedical product sales was therefore primarily driven by the increase in media product sales.

The overall increase in biomedical product sales is believed to be the result of normalization of OEM planning systems and lead time measurement and is expected to remain a key component of our biomedical business.

Our anti-aging product line is sold to consumers exclusively through our ecommerce channel with less marketing and store front or medical office exposure contributing to the decrease in product sales.

The mix of media and cell product sales has changed slightly with media product sales accounting for approximately 68% of biomedical product sales, down from 72% in 2024.

The increase in biomedical product sales was therefore primarily driven by the increase in cell product sales.

The slight overall increase in biomedical product sales is the result of normalization of OEM planning systems and lead time measurement and is expected to remain a key component of our biomedical business.

Our anti-aging product line is sold to consumers exclusively through our ecommerce channel with less marketing expenditures contributing to the decrease in product sales.

Cost of Sales

Cost of sales for the year ended December 31, 2025 was $4,033 thousand, compared to $3,764 thousand for the year ended December 31, 2024.

The increase of $583 thousand, or 18%, was primarily attributable to an increase in biomedical product sales resulting in higher costs of direct materials of $900 thousand, partially offset by positive manufacturing variances attributed to efficiencies from higher production volumes of approximately $286 thousand.

The net increase in cost of sales was also partially offset by an overall decrease in cost of sales in our anti-aging market segment of $31 thousand as a result of a decrease in product sales.

Profit margin was 59% for both the years ended December 31, 2024 and 2023.

Margins remained consistent despite slightly higher OEM sales as a result of manufacturing efficiencies in our biomedical market segment and normalization of some raw material costs post COVID.

Cost of sales consists primarily of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies and an allocation of overhead.

The increase of $269 thousand, or 7%, was primarily attributable to an increase in biomedical product sales resulting in higher costs of direct materials of $182 thousand, combined with net increases in manufacturing variances, shipping costs, and inventory transactions including expired inventory write-offs of approximately $212 thousand.

The net increase in cost of sales was partially offset by an overall decrease in cost of sales in our anti-aging market segment of $126 thousand as a result of a decrease in product sales.

Profit margin was 56% versus 59% for the years ended December 31, 2025 and 2024, respectively.

Margins were slightly affected by higher OEM sales as a percentage of biomedical sales in total.

Cost of sales consists of salaries and benefits associated with employee efforts expended directly on the production of the Company’s products, as well as related direct materials, general laboratory supplies, and an allocation of overhead.

We aim to continue refining our manufacturing processes and supply chain management to improve the cost of sales as a percentage of revenue for both LCT and LSC.

1 unchanged sentence

General and administrative expenses for the year ended December 31, 2025 was $3,532 thousand, compared to $3,516 thousand for the year ended December 31, 2024.

The change in general and administrative expenses for the year ended December 31, 2024 was

primarily attributable to increases in personnel-related costs, including from salaries, benefits and travel expenses, of $94 thousand, audit fees of $92 thousand, temporary services of $21 thousand, foreign currency loss due to unfavorable exchange rates of $20 thousand, write off of bad debt of $4 thousand and patent impairment from abandonment of $2 thousand.

These increases were offset by decreases in consulting fees of $157 thousand, legal fees of $42 thousand, D&O and other insurance related costs of $19 thousand and $12 thousand in other general and administrative expenses.

The increase of $16 thousand, or less than 1%, was primarily attributable to increases of $56 thousand in consulting expenses, $43 thousand in legal expenses, $13 thousand in filing fees, and $13 thousand in rent and building expenses related to the reallocation of space and costs in 2025 in response to the amendment to the Company’s co-tenant agreement

(refer to Note 9 – Related Party Transactions to the consolidated financial statements for further discussion).

These increases were mostly offset by decreases in audit fees of $38 thousand, temporary services of $21 thousand, foreign currency gain due to favorable exchange rates of $15 thousand, D&O and general liability insurance expense of $21 thousand, and personnel-related costs including travel expenses of $14 thousand.

In addition, there was a decrease in write off of bad debt of $4 thousand and patent impairment from abandonment of $2 thousand in other general and administrative expenses.

Our general and administrative expenses consist primarily of employee-related expenses including salaries, bonuses, benefits, and stock-based compensation.

2 unchanged sentences

Selling and marketing expenses for the year ended December 31, 2025 was $1,118 thousand, compared to $1,216 thousand for the year ended December 31, 2024.

The decrease of $30 thousand, or 2%, was primarily attributable to decreases in advertising costs, including creative and web service fees, of $33 thousand, merchandising fees of $18 thousand, marketing materials and other general expenses of $10 thousand, dues and subscriptions of $9 thousand, and personnel-related costs of $5 thousand.

These decreases were partially offset by increases in temporary services of $29 thousand and in license fees of $4 thousand.

The decrease of $98 thousand, or 8%, was primarily attributable to decreases in advertising costs, including creative and web service fees, of $73 thousand, temporary service fees of $34 thousand, and consulting costs of $22 thousand.

These decreases were partially offset by increases in personnel-related costs of $16 thousand, license fees of $8 thousand, bank and merchant fees of $6 thousand, and rent of $3 thousand.

The overall change in expense year-over-year is primarily attributable to a decrease in selling and marketing expenses attributable to our anti-aging market segment.

2 unchanged sentences

Research and development expenses for the year ended December 31, 2025 was $684 thousand, compared to $657 thousand for the year ended December 31, 2024.

The increase of $146 thousand, or 29%, was primarily attributable to increases in personnel-related costs, including increased salaries, stock-based compensation awards grants and travel expense, of $144 thousand, depreciation expense of $9 thousand and other general expenses of $7 thousand, as well as a decrease in the Australian research and development tax credit for qualified expenditures incurred by our Australian subsidiary, Cyto Therapeutics, of $5 thousand.

The increase in research and development expense was partially offset by decreases in general materials and supplies of $15 thousand and consulting fees of $4 thousand.

The increase of $27 thousand, or 4%, was primarily attributable to increases in depreciation expense of $11 thousand and rent of $72 thousand related to the change in expense allocation resulting from the 2025 amendment to the Company’s co-tenant agreement (refer to Note 9 – Related Party Transactions to the consolidated financial statements for further discussion), combined with a decrease in the Australian research and development tax credit for qualified expenditures incurred by our Australian subsidiary, Cyto Therapeutics, of $42 thousand.

These increases were partially offset by decreases in personnel-related costs, including salaries and stock-based compensation expense, of $66 thousand combined with a decrease in consulting expense of $32 thousand.

Our research and development efforts are primarily focused on the development of treatments for Parkinson’s disease, traumatic brain injury, liver diseases, stroke, and the creation of new GMP grade human parthenogenetic stem cell lines.

2 unchanged sentences

However, much of our research has potential applicability to each of our projects.

Other Income (Expense), Net

Other expense, net for the year ended December 31, 2024 was $141 thousand, compared to other income, net of $532 thousand for the year ended December 31, 2023.

The decrease in other income (expense), net of $673 thousand was primarily attributable to the one-time receipt of the Employee Retention Tax Credit for certain employment taxes enacted by the U.S.

government in response to the COVID-19 outbreak of $663 thousand in 2023 (refer to Note 8 – Employee Retention Credit within the accompanying consolidated financial statements for further discussion), which was partially offset by other expense.

Other expense in both periods primarily relate to interest expense on our related party note payable (refer to Note 10 – Related Party Transactions within the accompanying consolidated financial statements for further discussion).

Other Expense, Net

Other expense, net for the year ended December 31, 2025 was $151 thousand, compared to other expense, net of $141 thousand for the year ended December 31, 2024.

The increase in other expense, net of $10 thousand, or 7%, was primarily attributable to interest expense on our related party note payable (refer to Note 9 – Related Party Transactions to the consolidated financial statements for further discussion).

Liquidity and Capital Resources

4 unchanged sentences

At December 31, 2025, we had an accumulated deficit of approximately $111.1 million and have, on an annual basis, incurred net losses since inception.

Substantially all of our operating losses have resulted from the funding of our research and development programs

and general and administrative expenses associated with our operations.

Substantially all of our operating losses have resulted from the funding of our research and development programs and general and administrative expenses associated with our operations.

At December 31, 2025, operating cash flows were positive and we had cash of $993 thousand, compared to $1,230 thousand at December 31, 2024.

Licensed Patents

The Company had a minimum annual license fee of $75 thousand payable in two installments per year to Astellas Pharma pursuant to the amended UMass IP license agreement.

The Company had a minimum annual license fee of $75 thousand payable in two installments per year to Astellas pursuant to the amended UMass IP license agreement.

The patents, along with the license agreement, expired at the end of July 2022.

7 unchanged sentences

Net cash used in financing activities

Net (decrease) increase in cash

Net decrease in cash

Operating Cash Flows

For the year ended December 31, 2024, net cash provided by operating activities was $13 thousand, resulting primarily from our net loss of $209 thousand and net changes in operating assets and liabilities of $809 thousand, consisting primarily of increases in accounts receivable of $484 thousand, accrued liabilities of $42 thousand and prepaid expenses and other current assets of $27 thousand, and decreases in operating lease liabilities of $276 thousand, accounts payable of $178 thousand, and inventories of $114 thousand.

The decrease in cash is offset by non-cash adjustments to net loss of $1,031 thousand pertaining to stock-based compensation expense, depreciation and amortization expense, non-cash operating lease expense, interest expense on our related party note payable, changes in inventory reserve and impairment of intangible assets.

For the year ended December 31, 2023, net cash provided by operating activities was $929 thousand, resulting primarily from our net loss of $131 thousand, which includes the one-time receipt of the Employee Retention Tax Credit of $663 thousand, and changes in operating assets and liabilities of $3 thousand, offset by recurring non-cash adjustments to net loss of $1,063 thousand, including stock-based compensation expense, depreciation and amortization expense, non-cash operating lease expense, interest expense on our related party note payable and changes in inventory reserve.

For the year ended December 31, 2025, net cash provided by operating activities was $8 thousand, resulting primarily from our net loss of $418 thousand and net changes in operating assets and liabilities of $581 thousand, consisting of increases in inventories of $387 thousand and prepaid expenses and other current assets of $58 thousand, and decreases in accounts receivable of $335 thousand, operating lease liabilities of $354 thousand, accounts payable of $18 thousand, and accrued liabilities of $99 thousand.

The decrease in cash is offset by non-cash adjustments to net loss of $1,007 thousand pertaining to stock-based compensation expense, depreciation and amortization expense, non-cash operating lease expense, interest expense on our related party note payable, and changes in inventory reserve.

For the year ended December 31, 2024, net cash provided by operating activities was $13 thousand, resulting primarily from our net loss of $209 thousand and changes in operating assets and liabilities of $809 thousand, offset by recurring non-cash adjustments to net loss of $1,031 thousand, including stock-based compensation expense, depreciation and amortization expense, non-cash operating lease expense, interest expense on our related party note payable, changes in inventory reserve, and impairment of intangible assets.

Investing Cash Flows

Net cash used in investing activities for the year ended December 31, 2025 was $45 thousand, compared to $171 thousand for the year ended December 31, 2024.

The increase in cash used in investing activities was primarily attributable to purchases of property and equipment of $166 thousand for lab and manufacturing equipment as compared to $80 thousand used for leasehold improvements in 2023.

The decrease in cash used in investing activities was primarily attributable to purchases of property and equipment of $43 thousand including lab and manufacturing equipment and leasehold improvements as compared to $166 thousand for purchases of property and equipment in 2024.

There were also payments for patent licenses of $2 thousand during the year ended December 31, 2025 versus $5 thousand during the year ended December 31, 2024.

Financing Cash Flows

Net cash used in financing activities for the year ended December 31, 2024 was $200 thousand, compared to no net cash flows provided by or used in financing activities for the year ended December 31, 2023.

Cash used in financing activities was wholly attributable to the partial repayment of principal on our related party note payable (refer to Note 10 – Related Party Transactions within the accompanying consolidated financial statements for further discussion).

Net cash used in financing activities for the both years ended December 31, 2025 and December 31, 2024 were $200 thousand.

Cash used in financing activities was wholly attributable to the partial repayment of principal on our related party note payable in both 2025 and 2024 (refer to Note 9 – Related Party Transactions to the consolidated financial statements for further discussion).

Going Concern

1 unchanged sentence

We will need to obtain significant additional capital from sources including exercise of outstanding warrants, equity and/or debt financings, license arrangements, grants and/or collaborative research arrangements to sustain our operations and develop products.

Unless we obtain additional financing, we do not have sufficient cash on hand to sustain our

operations at least through one year after the issuance date.

Unless we obtain additional financing, we do not have sufficient cash on hand to sustain our operations at least through one year after the issuance date.

The timing and degree of any future capital requirements will depend on many factors, including:

8 unchanged sentences

• the number and type of product candidates that we pursue;

• the development of major public health concerns, such as the novel coronavirus outbreak, or other pandemics arising globally, and its impact on our business operations and funding requirements.

• the development of major public health concerns or other pandemics arising globally, natural catastrophes, cyber-attacks or other crises and their impact on our business operations and funding requirements.

Our failure to raise capital or enter into applicable arrangements when needed would have a negative impact on our financial condition.

23 unchanged sentences

The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory with a corresponding adjustment to cost of sales.

If we are able to sell such inventory, any related reserves are reduced in the period of sale.

If we are able to sell such inventory, any related reserves

are reduced in the period of sale.

The Company’s allowance for excess and obsolete inventory was $781 thousand and $736 thousand at December 31, 2025 and 2024, respectively.

9 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis