What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 63 added, 32 removed, 79 unchanged (55% of the section changed)

19 unchanged sentences

● our ability to obtain additional funds for our operations and our intended use of any such funds;

● our ability to remain eligible on an over-the-counter quotation system;

● our ability to remain eligible on an over-the-counter quotation system if our common stock is delisted from Nasdaq;

● our receipt and timing of any royalties, milestone payments or payments for products, under any current or future collaboration, license or other agreements or arrangements;

21 unchanged sentences

Our TRUFLEX® semiconductor polymers enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost, high-performance displays.

Our semiconductor platform can be used in a range of display technologies including MicroLED, miniLED and AMOLED, as well as in applications in advanced chip packaging, sensors, and logic .

Our semiconductor platform can be used in a range of display technologies including MicroLED, LCD and AMOLED, as well as in applications in advanced computer and AI chip packaging, sensors, and logic .

We design and develop our materials at our research and development facility in Manchester, UK and provide prototyping services at the Centre for Process Innovation (“CPI”) in Sedgefield, UK.

We also operate a field application office in Hsinchu, Taiwan, close to our collaboration partner, The Industrial Technology Research Institute of Taiwan (“ITRI”).

With our collaboration partners, we are developing a commercial-scale production process and EDA tools for our materials to demonstrate the commercial viability of manufacturing a new generation of displays using our materials.

With our collaboration partners, we are developing a commercial-scale production process and Electronic Design Automation (EDA) tools for our materials to demonstrate the commercial viability of manufacturing a new generation of displays using our materials.

We have an extensive IP portfolio including 140 granted patents across 17 patent families, 14 pending patents and 40 codified trade secrets .

Since our inception in 2009, we have devoted substantial resources to the research and development of materials and production processes for the manufacture of organic thin film transistors and the enhancement of our intellectual property.

Our loss before income taxes was $2.1 million and $1.7 million for the three months ended March 31, 2025 and 2024.

As of March 31, 2025, our accumulated deficit was $116.8 million.

Our loss before income taxes was $4.5 million and $4.8 million for the six months ended June 30, 2025 and 2024.

As of June 30, 2025, our accumulated deficit was $119.2 million.

Substantially all our operating losses have resulted from expenses incurred in connection with research and development activities and from general and administrative costs associated with our operations.

Results of Operations for the three months ended March 31, 2025

Three months ended March 31, 2025 compared with three months ended March 31, 2024

Results of Operations for the three and six months ended June 30, 2025

Three months ended June 30, 2025 compared with three months ended June 30, 2024

Revenue and Cost of revenue

We had revenue of $23.0 thousand and cost of revenue of $1.0 thousand in the three months ended March 31, 2025.

We had no revenue or cost of revenue in the same period of 2024.

Both revenue and related cost of revenue for the three months ended March 31, 2025 are a result of sales of OTFT backplanes and TRUFLEX® materials for customer assessment and development purposes.

We had revenue of $32.0 thousand and $40.0 thousand and cost of revenue of $28.0 thousand and $32.0 thousand in the three months ended June 30, 2025 and 2024, respectively.

Both revenue and related cost of revenue for the three months ended June 30, 2025 and 2024 are a result of sales of OTFT backplanes and TRUFLEX® materials for customer assessment and development purposes.

Other operating income

Other operating income was $0.3 million in the three months ended March 31, 2025, compared to $0.2 million in the same period of 2024.

The primary source of other operating income is related to a research grant and research and development tax credits.

Other operating income was $0.3 million in the three months ended June 30, 2025, compared to $0.2 million in the same period of 2024.

The primary source of other operating income is related to multiple research grants from Innovate UK and research and development tax credits.

Operating expenses

Operating expenses were $3.4 million for the three months ended March 31, 2025 compared to $2.7 million for the three months ended March 31, 2024.

Research and development expenses are incurred for the development and process validation for TRUFLEX inks to make OTFT circuits, OTFT based display concepts integrating novel display technology, and provide dielectric solutions for packaging applications.

Operating expenses were $4.7 million for the three months ended June 30, 2025 compared to $3.0 million for the three months ended June 30, 2024, an increase of $1.7 million, or 54.1%.

Research and development expenses are incurred for the development and process validation for TRUFLEX® inks to make OTFT circuits and OTFT based display concepts integrating novel display technology, and to provide dielectric solutions for packaging applications.

The expenses consist primarily of payroll, technical facilities overheads, and development consumables costs.

The research and development expenses represent 43.9% and 48.1% of the total operating expenses for the three months ended March 31, 2025 and 2024, respectively.

Research and development expenses increased $0.2 million for the three months ended March 31, 2025 compared to the same period for the prior year.

This increase primarily resulted from higher personnel expenses.

Research and development expenses were $2.4 million for the three months ended June 30, 2025, compared to $1.2 million for the same period of 2024, an increase of $1.3 million, or 109.5%.

This increase primarily resulted from an $800,000 increase in costs in the second quarter of 2025 pursuant to the terms of the extension of the CPI Framework agreement.

As noted above, we expect those increased costs to continue in future periods.

The increase in research and development expenses also resulted in part from higher personnel expenses.

The research and development expenses represent 52.1% and 38.4% of the total operating expenses for the three months ended June 30, 2025 and 2024, respectively.

General and administrative expenses consist primarily of payroll and professional services such as investor relations, accounting and legal services .

These expenses represent 58.9% and 51.4% of our total operating expenses for the three months ended March 31, 2025 and 2024, respectively.

Selling, general and administrative expenses increased by $0.6 million for the three months ended March 31, 2025 compared to the same period for the prior year.

This increase primarily resulted from an increase in personnel expenses as well as professional service fees primarily related to legal fees and investor relation activities.

General and administrative expenses were $2.4 million for the three months ended June 30, 2025, compared to $1.8 million for the same period of 2024, an increase of $0.6 million, or 28.0%.

These expenses represent 50.7% and 61.0% of our total operating expenses for the three months ended June 30, 2025 and 2024, respectively.

This increase primarily resulted from an increase in professional service fees principally related to investor relations support and consulting agreements, including $0.3 million in non-cash expenses.

Non-Operating income/(expense)

Non-operating income of $0.8 million for the three months ended March 31, 2024 resulted primarily from the revaluation of our warrant liability.

Because of changes in certain of our warrants that occurred as a result of the listing of our common stock on the Nasdaq Capital Market on May 31, 2024, those warrants were accounted for as an equity instrument beginning on that date and as a result there was no similar gain or loss in the same period of 2025.

We recorded a gain on foreign currency of $1.0 million for the three months ended March 31, 2025, with no similar gain or loss in the same period of 2024.

Non-operating income was $2.0 million for the three months ended June 30, 2025, compared to non-operating expenses of $0.3 million for the same period of 2024, an increase of $2.3 million, or 714.6%.

The increase is primarily due to a gain on foreign currency related to the revaluation of the intercompany loans and related interest.

The change in the foreign exchange spot rate of 1.3724 as of June 30, 2025 compared to 1.2944 as of March 31, 2025 resulted in a foreign exchange gain.

The offset of this gain is recorded in other comprehensive income.

Six months ended June 30, 2025 compared with six months ended June 30, 2024

Revenue and Cost of revenue

We had revenue of $55.0 thousand and $40.0 thousand and cost of revenue of $29.0 thousand and $32.0 thousand in the six months ended June 30, 2025 and 2024, respectively.

Both revenue and related cost of

revenue for the six months ended June 30, 2025 and 2024 are a result of sales of OTFT backplanes and TRUFLEX® materials for customer assessment and development purposes.

Other operating income

Other operating income was $0.5 million in the six months ended June 30, 2025, compared to $0.4 million in the same period of 2024.

The primary source of other operating income is related to multiple research grants from Innovate UK and research and development tax credits.

Operating expenses

Operating expenses were $8.1 million for the six months ended June 30, 2025 compared to $5.7 million for the six months ended June 30, 2024, an increase of $2.4 million, or 42.2%.

Research and development expenses are incurred for the development and process validation for TRUFLEX® inks to make OTFT circuits and OTFT based display concepts integrating novel display technology and provide dielectric solutions for packaging applications.

The expenses consist primarily of payroll, technical facilities overheads, and development consumables costs.

Research and development expenses were $3.9 million for the six months ended June 30, 2025, compared to $2.4 million for the same period of 2024, an increase of $ 1.5 million or 61.2% .

This increase primarily resulted from an $800,000 increase in costs in the second quarter of 2025 pursuant to the terms of the extension of the CPI Framework agreement.

As noted above, we expect those increased costs to continue in future periods.

The increase in research and development expenses also resulted in part from higher personnel expenses.

The research and development expenses represent 48.6% and 42.9% of the total operating expenses for the six months ended June 30, 2025 and 2024, respectively.

General and administrative expenses consist primarily of payroll and professional services such as investor relations, accounting and legal services .

General and administrative expenses were $4.4 million for the six months ended June 30, 2025, compared to $3.2 million for the same period of 2024, an increase of $1.2 million, or 36.3%.

These expenses represent 54.2% and 56.5% of our total operating expenses for the six months ended June 30, 2025 and 2024, respectively.

This increase primarily resulted from an increase in professional service fees principally related to investor relations support and consulting agreements, including $0.4 million in non-cash expenses.

Non-Operating income/(expense)

Non-operating income was $3.0 million for the six months ended June 30, 2025, compared to non-operating income of $0.4 million for the same period of 2024, an increase of $2.6 million, or 583.3%.

$3.2 million of the increase is primarily due to a gain on foreign currency.

The increase is primarily due to a gain on foreign currency related to the revaluation of the intercompany loans and related interest.

The change in the foreign exchange spot rate of 1.3724 as of June 30, 2025 compared to 1.2567 as of December 31, 2024 resulted in a foreign exchange gain.

The offset of this gain is recorded in other comprehensive income.

Such gain was offset by a loss of $0.7 million in the six months ended June 30, 2024 related to changes in certain of our warrants that occurred as a result of the listing of our common stock on the Nasdaq Capital Market on May 31, 2024.

Those warrants were accounted for as an equity instrument beginning on that date and as a result there was no similar gain or loss in the same period of 2025.

Liquidity and Capital Resources

As of March 31, 2025, our cash and cash equivalents were $3.9 million compared with $7.1 million as of December 31, 2024.

We believe our cash balance at March 31, 2025 will not be sufficient to fund our operating expenses and capital expenditure requirements for the 12 months from the issuance of these financial statements and that we will require additional capital funding to continue our operations and research development activity.

As of June 30, 2025, our cash and cash equivalents were $1.2 million compared with $7.1 million as of December 31, 2024.

We believe our cash balance at June 30, 2025 will be sufficient to fund our operations through September 30, 2025 and that we will require additional capital funding to continue our operations and research development activity.

It is possible this period could be shortened if there are any significant increases in spending or more rapid progress of development programs than anticipated.

Our expected cash payments over the next twelve months include (a) $1.4 million to satisfy accounts payable and accrued expenses and (b) $24 thousand to satisfy the lease liabilities.

Additional expected cash payments beyond the next twelve months include $21 thousand of lease liabilities.

Our future viability is dependent on our ability to raise additional capital to fund our operations.

In the event that we are unable to raise additional capital in the near term, we may have to curtail our operations or seek protection under applicable bankruptcy or insolvency laws.

Our expected cash payments over the next twelve months include (a) $3.1 million to satisfy accounts payable and accrued expenses and (b) $0.2 million to satisfy the lease liabilities.

Additional expected cash payments beyond the next twelve months include $0.4 million of lease liabilities.

Beyond our near term need for capital, our future viability is dependent on our ability to raise additional capital to fund our operations.

We will need to obtain additional funds to satisfy our operational needs and to fund our sales and marketing efforts, research and development expenditures, and business development activities.

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The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including the market demand for our products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of services.

If we are unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows for operations, then we will need to raise additional funding.

Net cash used in operating activities was $3.3 million for the three months ended March 31, 2025, compared to $1.6 million for the three months ended March 31, 2024, an increase of $1.7 million.

The increase is related to the payout of bonuses and payments made related to business development initiatives.

During the three months ended March 31, 2025, we had no cash flows from investing or financing activities.

Net cash used in operating activities was $6.1 million for the six months ended June 30, 2025, compared to $4.4 million for the six months ended June 30, 2024, an increase of $1.7 million.

The increase resulted primarily from an increase in our comprehensive net loss, offset in part by an increase in accounts payable.

During the six months ended June 30, 2025, we had no cash flows from investing or financing activities .

Contractual Payment Obligations

15 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-Q

Item 2. Management’s Discussion and Analysis