UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
FOR THE QUARTERLY PERIOD ENDED
FOR THE TRANSITION PERIOD FROM _________ TO _________
Commission File Number
Firefly Neuroscience, Inc.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
| (I.R.S. Employer |
(Address of principal executive offices) (Zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of May 8, 2026, there were a total of
Quarterly Report on Form 10-Q
Period Ended March 31, 2026
TABLE OF CONTENTS
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Item 1. |
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Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 |
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Condensed Consolidated Statements of Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025 (Unaudited) |
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Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited) |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 1. |
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Item 1A. |
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Financial Information
FIREFLY NEUROSCIENCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF March 31, 2026 AND December 31, 2025
(IN THOUSANDS, EXCEPT SHARE DATA)
| | March 31, | | | December 31, | | ||
| | 2026 | | | 2025 | | ||
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ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | | | $ | | ||
Accounts and other receivables | | | | | | | ||
Prepaid expenses | | | | | | | ||
Inventory | | | | | | | ||
Total current assets | | | | | | | ||
Non current assets | | | | | | | | |
Prepaid expenses | | | | | | | ||
Equipment, net | | | | | | | ||
Intangible assets, net | | | | | | | ||
Goodwill | | | | | | | ||
Total non current assets | | | | | | | ||
TOTAL ASSETS | | $ | | | $ | | ||
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LIABILITIES | | | | | | | | |
Current liabilities | | | | | | | | |
Trade payables | | $ | | | $ | | ||
Accrued liabilities | | | | | | | ||
Deferred revenue | | | | | | | ||
Contingent consideration payable | | | | | | | ||
Total current liabilities | | | | | | | ||
Non current liabilities | | | | | | | | |
Deferred revenue | | | | | | | ||
TOTAL LIABILITIES | | $ | | | $ | | ||
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COMMITMENTS AND CONTINGENCIES (Note 11) | | | | | | | | |
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SHAREHOLDERS’ EQUITY (DEFICIT) | | | | | | | | |
Preferred shares, $ par value: shares authorized; issued and outstanding at March 31, 2026 and December 31, 2025 | | | | | | | ||
Common shares, $ par value: shares authorized; and issued and outstanding at March 31, 2026 and December 31, 2025, respectively | | | | | | | ||
Additional paid-in capital | | | | | | | ||
Accumulated deficit | | | ( | ) | | | ( | ) |
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | | | | | | | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | | | $ | | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE three months ended March 31, 2026 and 2025
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
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Three Months Ended |
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March 31, |
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2025 |
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REVENUE |
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COST OF GOODS SOLD |
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GROSS PROFIT |
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OPERATING EXPENSES: |
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Research and development expenses |
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Selling and marketing expenses |
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General and administration expenses |
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TOTAL OPERATING EXPENSES |
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OPERATING LOSS |
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OTHER INCOME (EXPENSE) |
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Interest and bank fees |
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Interest income |
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Unrealized gain (loss) on foreign exchange |
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Change in derivative fair value |
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Loss on settlement |
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Other income (expense), net |
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TOTAL OTHER INCOME (EXPENSE) |
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LOSS BEFORE INCOME TAX |
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Income tax provision |
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NET LOSS AND COMPREHENSIVE LOSS |
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Deemed dividend on warrant inducement |
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NET LOSS AND COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS |
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BASIC AND DILUTED LOSS PER SHARE |
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WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
March 31, 2026 and 2025
(IN THOUSANDS, EXCEPT SHARE DATA)
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Common stock |
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Total |
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Number of |
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Additional |
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Shareholder’s |
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Number of |
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shares to |
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paid-in |
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Accumulated |
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equity |
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shares |
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be issued |
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Amount |
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capital |
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deficit |
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(deficit) |
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BALANCE AT DECEMBER 31, 2025 |
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Private placement, net of issuance costs |
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Shares issued - warrants exercised |
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Shares issued for conversion of Convertible Promissory Note |
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Shares issues for consulting services |
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Share-based compensation expense |
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Deemed dividend on warrant inducement |
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Net loss |
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BALANCE AT MARCH 31, 2026 |
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BALANCE AT DECEMBER 31, 2024 |
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Private placement, net of issuance costs |
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Shares issued - warrants exercised |
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Shares issued for conversion of Convertible Promissory Note |
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Shares issues for consulting services |
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Share-based compensation expense |
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Deemed dividend on warrant inducement |
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Net loss |
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BALANCE AT MARCH 31, 2025 |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE three months ended March 31, 2026 and 2025
(IN THOUSANDS)
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Three Months Ended |
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March 31, |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Depreciation and amortization |
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Share-based compensation expense |
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Accretion expense on convertible promissory note |
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Change in derivative fair value |
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Loss on settlement of convertible promissory note |
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Drawdown in shares issued for prepaid services |
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Shares issued for consulting services |
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Changes in operating assets and liabilities: |
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Change in receivables |
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Change in prepaid expenses |
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Change in inventory |
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Change in trade payables |
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Change in accrued liabilities |
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Change in deferred revenue |
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Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of equipment |
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Net cash used in investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from sale of shares, net of issuance costs |
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Proceeds from exercise of warrants |
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Net cash provided by financing activities |
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INCREASE IN CASH |
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BALANCE OF CASH AT THE BEGINNING OF PERIOD |
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BALANCE OF CASH AT THE END OF PERIOD |
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Non-cash investing and financing activities |
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Shares issued for conversion of the convertible promissory note |
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Deemed dividend on warrant inducement |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
NOTE 1: BUSINESS DESCRIPTION
Overview
Firefly Neuroscience, Inc., a Delaware corporation, and its wholly owned subsidiaries Evoke Neuroscience, Inc., a Delaware corporation, Firefly Neuroscience 2023, Inc., a Delaware corporation, Firefly Neuroscience Ltd., an Israeli corporation, Elminda 2022 Inc., a Delaware corporation, Firefly Neurosciences Canada Inc., a Canadian corporation, and Elminda Canada Inc., a Canadian corporation (collectively, the “Company”), are engaged in the development, marketing and distribution of medical devices and technology allowing high resolution visualization and evaluation of the complex neuro-physiological interconnections of the human brain.
The combined entity operates under the name Firefly Neuroscience, Inc., and on August 13, 2024, the Company began trading on the Nasdaq Capital Market (NASDAQ Ticker Symbol: AIFF).
NOTE 2: GOING CONCERN
As of March 31, 2026, the Company had an accumulated deficit of $
Management of the Company has a reasonable expectation that the Company can continue raising additional capital to continue in operational existence for the foreseeable future. During the three months ended March 31, 2026, the Company raised $
5
NOTE 3: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire period. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2025, and the notes thereto included in the Company’s Form 10-K filed with the SEC on March 31, 2026. Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying unaudited condensed consolidated financial statements. All amounts are disclosed in thousands, except share and per share amounts. The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its consolidated financial position, results of operations, and cash flows of the Company for all periods presented.
Principles of consolidation
These unaudited consolidated financial statements include the financial information of the Company and its subsidiaries. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities (“VIE”). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model. The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. All intercompany balances and transactions were eliminated on consolidation.
Use of estimates in the preparation of consolidated financial statements
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates and assumptions, and such differences could be material to the Company’s financial position and results of operations.
6
Significant accounting policies
There have been no new or material changes to the significant accounting policies discussed in the Company’s audited consolidated financial statements since the year ended December 31, 2025.
Impact of recently issued accounting standards
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," which requires public business entities to disclose, in the notes to the financial statements, specified components of certain income statement expense line items presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and amortization of intangible assets, on both an annual and interim basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its disclosures in the consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) (“ASU 2025-05”) to introduce a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This expedient can only be applied to current accounts receivable and current contract assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively. The adoption of this amendment did not have a material impact on the Company's consolidated financial statements.
In September 2025, the FASB issued Account Standards Update, or ASU, 2025-06 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 40): Targeted Improvements to the Accounting for Internal-Use Software”, to modernize the accounting for internal-use software costs. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods. Under the new guidance, entities will start capitalizing eligible costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The new guidance will be effective for the Company for interim and annual periods beginning January 1, 2028. The Company has not adopted this standard early and is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements.
NOTE 4: BUSINESS COMBINATION
Evoke Neuroscience, Inc.
On April 30, 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Evoke Neuroscience, Inc. (“Evoke”) and stockholders of Evoke (the “Sellers”) to increase Firefly Neuroscience, Inc.’s capacity and expand its customer base. The Sellers sold and the Company purchased all of the issued and outstanding shares of Evoke, for a total purchase price consisting of: (i) $
The contingent consideration associated with the Earn-Out Shares of $
This contingent consideration of liability will be remeasured at fair value for each reporting period until the contingency is resolved, with changes in fair value recognized in operating expenses. During the three months ended March 31, 2026, the Company did not recognize a change in fair value of contingent consideration. Significant assumptions included a discount rate of
7
The condensed consolidated financial statements of the Company include the results of operations of Evoke from April 30, 2025 to March 31, 2026 and do not include results of operations for periods prior to April 30, 2025.
The following table presents the unaudited pro forma condensed consolidated results of operations for the three months ended March 31, 2026 and 2025 as if the acquisition of Evoke occurred at the beginning of fiscal year 2025. The pro forma information provided below is compiled from the preacquisition financial information of Evoke and includes pro forma adjustments to give effect to (i) amortization expense associated with the acquired intangible assets. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2025 or (ii) future results of operations. The results of operations of Evoke from January 1, 2025 to March 31, 2025 included revenues of $
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Three Months Ended |
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March 31, |
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2026 |
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2025 |
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Revenues |
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Net loss |
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NOTE 5: ACCOUNTS AND OTHER RECEIVABLES
Details of accounts and other receivables balance is as follows:
| | March 31, | | | December 31, | | ||
| | 2026 | | | 2025 | | ||
Accounts receivable | | $ | | | $ | | ||
Allowance for expected credit losses | | | ( | ) | | | ( | ) |
Other receivables | | | | | | | ||
Total | | $ | | | $ | | ||
| | March 31, | | | December 31, | | ||
| | 2026 | | | 2025 | | ||
Allowance for credit losses at beginning of period | | $ | | | $ | | ||
Provision for bad debt | | | | | | | ||
Accounts written off | | | | | | ( | ) | |
Total | | $ | | | $ | | ||
8
NOTE 6: PREPAID EXPENSES
Details of prepaid expenses balance is as follows:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Shares issued for prepaid services |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Total (current) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
Shares issued for prepaid services |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Total (non-current) |
|
$ |
|
|
$ |
|
||
NOTE 7: INVENTORY
Details of inventory balance is as follows:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Raw Materials |
|
$ |
|
|
$ |
|
||
Work In Process |
|
|
|
|
|
|
||
Finished Goods |
|
|
|
|
|
|
||
Total (current) |
|
$ |
|
|
$ |
|
||
NOTE 8: EQUIPMENT
Equipment balance is as follows:
| | March 31, | | | December 31, | | ||
| | 2026 | | | 2025 | | ||
Medical equipment, cost | | $ | | | $ | | ||
Medical equipment subject to operating leases, cost | | | | | | | ||
Office Equipment | | | | | | | ||
Less – accumulated depreciation | | | ) | | | ( | ) | |
Less - Impairment | | | ) | | | ( | ) | |
Equipment, net | | $ | | | $ | | ||
Depreciation expenses were $
Medical equipment subject to operating leases includes hardware leased to customers as part of the Company’s products and services offerings.
9
NOTE 9: LEASES
The Company enters into subscription agreements with customers under which it leases EEG equipment and provides services related to EEG testing. The lease terms range from
Future undiscounted cash flows from the Company’s operating leases are as follows:
Year | | | | |
2026 | | $ | | |
2027 | | | | |
2028 | | | | |
2029 | | | | |
2030 | | | | |
Thereafter | | | | |
Total | | $ | |
NOTE 10: INTANGIBLE ASSETS, NET AND GOODWILL
The following tables summarize the composition of intangible assets as of March 31, 2026 and December 31, 2025:
|
|
March 31, 2026 |
|
|||||||||||||||||
|
|
Gross |
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
||
|
|
Carrying |
|
|
Accumulated |
|
|
Accumulated |
|
|
Carrying |
|
|
Weighted |
|
|||||
|
|
Amount |
|
|
Amortization |
|
|
Impairment |
|
|
Amount |
|
|
Average Life |
|
|||||
Finite lived intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Non-compete agreements |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Total intangible assets |
|
$ |
|
|
$ | ( |
) |
|
$ |
|
|
$ |
|
|
|
|
||||
|
|
December 31, 2025 |
|
|||||||||||||||||
|
|
Gross |
|
|
|
|
|
|
|
|
|
|
Net |
|
|
|
|
|
||
|
|
Carrying |
|
|
Accumulated |
|
|
Accumulated |
|
|
Carrying |
|
|
Weighted |
|
|||||
|
|
Amount |
|
|
Amortization |
|
|
Impairment |
|
|
Amount |
|
|
Average Life |
|
|||||
Finite lived intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNA software |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
- |
|
||
Developed technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Non-compete agreements |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
6.93 |
|
||
Amortization expense was $
The estimated aggregate future amortization expense for intangible assets subject to amortization as of March 31, 2026, is summarized below:
|
|
Estimated |
|
|
|
|
Future |
|
|
|
|
Amortization |
|
|
|
|
Expense |
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 and therafter |
|
|
|
|
Total |
|
$ |
|
|
10
NOTE 11: LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT
Israeli labor law requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain circumstances. Pursuant to Section 14 of the Israeli Severance Pay Law, 1963, all of the Company’s employees are entitled to monthly deposits, at a rate of
NOTE 12: COMMITMENTS AND CONTINGENCIES
a. Royalty Commitment - Israeli Innovation Authority (“IIA”)
The Company is committed to pay royalties to the State of Israel, through the Israel Innovation Authority (“IIA”), on proceeds from sales of products in which the IIA participated by way of grants for research and development.
Sale of the technology developed utilizing the grants from IIA is restricted and is subject to IIA’s approval.
b. Legal Proceedings
The Company is subject to various claims, complaints, and legal actions in the normal course of business from time to time. After consulting with counsel, the Company is not aware of any currently pending litigation for which it believes the outcome could have a material adverse effect on its operations or financial position.
11
NOTE 13: EQUITY
a. Shares
On February 3, 2026, the Company filed a Prospectus Supplement to amend a registration statement with the Securities and Exchange Commission for an at-the-market ("ATM") offering program pursuant to which the Company may, from time to time, offer and sell shares of its common stock having an aggregate offering price of up to $
On March 8, 2026, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain accredited investors (the "Investors") for a private placement of units ("Units") at a purchase price of $
Each Unit consists of: (i) share of common stock (par value $
The Investors have the right, but not the obligation, to purchase up to an additional $
The offering was conducted as a private placement under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506(b) of Regulation D, and was structured to comply with Nasdaq Listing Rule 5635(d) without requiring stockholder approval.
The Company has agreed to file a registration statement covering the resale of the shares and warrant shares on or before May 21, 2026.
In connection with the Purchase Agreement, each Investor entered into a Lock-Up Agreement restricting transfers of all securities issued under the Purchase Agreement for six months following the Initial Closing (through September 12, 2026), followed by a six-month graduated release of one-sixth of restricted securities per month through March 12, 2027. The lock-ups were subsequently amended to have the lock-up period end May 16, 2026.
b. Warrants
The following table summarizes the Company’s warrant activity for the three months ended March 31, 2026:
|
|
|
|
|
| Weighted |
|
| Weighted |
| ||
|
|
|
|
|
| Average |
|
| Average |
| ||
|
| Number of |
|
| Exercise |
|
| Remaining |
| |||
|
| Warrants |
|
| Price |
|
| Life (Years) |
| |||
Outstanding warrants, December 31, 2025 |
|
|
|
| $ |
|
|
|
| |||
PIPE 2026 warrants |
|
|
|
|
|
|
|
| - |
| ||
Exercised |
|
|
|
|
|
|
|
| - |
| ||
Warrants Expired |
|
|
|
|
|
|
|
| - |
| ||
Outstanding warrants, March 31, 2026 |
|
|
|
| $ |
|
|
|
| |||
12
c. Warrants exercisable for little or no consideration
Warrants exercisable for little or no consideration are fully vested warrants that allow the holders to acquire a specified number of the issuer’s shares at a nominal exercise price. The following table summarizes the Company’s penny warrant activity for the three months ended March 31, 2026:
|
|
|
|
|
| Weighted |
| |
|
|
|
|
|
| Average |
| |
|
| Number of |
|
| Remaining |
| ||
|
| Warrants |
|
| Life (Years) |
| ||
Outstanding warrants, December 31, 2025 |
|
|
|
|
| - |
| |
Pre-Funded Warrants (Note 13.a) |
|
|
|
|
|
| ||
Exercised |
|
| - |
|
|
| - |
|
Expired |
|
| - |
|
|
| - |
|
Outstanding warrants, March 31, 2026 |
|
|
|
|
|
| ||
d. Employees stock option plan
A summary of option activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period then ended is presented below.
| | | | | | | | | | Weighted | | | | | | |
| | | | | | Weighted | | | Average | | | | | | ||
| | Number of | | | Average | | | Remaining | | | Aggregate | | ||||
| | Stock | | | Exercise | | | Contractual | | | Intrinsic | | ||||
| | Options | | | Price | | | Term (Years) | | | Value | | ||||
Outstanding Options, December 31, 2025 | | | | | $ | | | | | | $ | | ||||
Options granted | | | | | | | | | - | | | | - | | ||
Options forfeited | | | ( | ) | | | | | | - | | | | - | | |
Outstanding Options, March 31, 2026 | | | | | $ | | | | | | $ | | ||||
13
The share-based compensation expense related to options for the three months ended March 31, 2026 was $
A summary of the Company’s nonvested options as of March 31, 2026, and changes during the three-month period ended, is presented below.
| | | | | | Weighted | | |
| | Number of | | | Average | | ||
| | Stock | | | Grant-Date | | ||
| | Options | | | Fair Value | | ||
Non-Vested Options, December 31, 2025 | | | | | $ | | ||
Options granted | | | | | | | ||
Options vested | | | ( | ) | | | | |
Options forfeited | | | ( | ) | | | | |
Non-Vested Options, March 31, 2026 | | | | | $ | | ||
As of March 31, 2026, there was $
e. Restricted share units (“RSUs”)
A summary of RSU activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period ended is presented below.
|
|
|
|
|
| Aggregate |
| |
|
| Number of |
|
| Intrinsic |
| ||
|
| Stock RSUs |
|
| Value |
| ||
Outstanding, December 31, 2025 |
|
|
|
| $ |
| ||
RSUs granted |
|
|
|
|
| - |
| |
RSUs exercised |
|
| ( | ) |
|
| - |
|
Outstanding, March 31, 2026 |
|
|
|
| $ |
| ||
14
The share-based compensation expense related to RSUs for the three months ended March 31, 2026 was $
The fair value of each RSU is estimated based on the grant-date fair value of the underlying share of common stock.
A summary of the Company’s nonvested RSUs as of March 31, 2026, and changes during the three-month period ended, is presented below.
|
|
|
|
|
| Weighted |
| |
|
|
|
|
|
| Average |
| |
|
| Number of |
|
| Grant-Date |
| ||
|
| Stock RSUs |
|
| Fair Value |
| ||
Non-vested RSUs, December 31, 2025 |
|
|
|
| $ |
| ||
RSUs granted |
|
|
|
|
|
| ||
RSUs vested |
|
| ( | ) |
|
|
| |
Non-vested RSUs, March 31, 2026 |
|
|
|
| $ |
| ||
As of March 31, 2026, there was $
f. Deferred stock units (“DSUs”)
A summary of DSU activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period ended, is presented below.
|
| Number of |
|
| Aggregate |
| ||
|
| Deferred |
|
| Intrinsic |
| ||
|
| Stock Units |
|
| Value |
| ||
Outstanding DSUs, December 31, 2025 |
|
|
|
| $ |
| ||
DSUs granted |
|
|
|
|
| - |
| |
Outstanding DSUs, March 31, 2026 |
|
|
|
| $ |
| ||
The share-based compensation expense related to DSUs for the three months ended March 31, 2026 was $
The fair value of each DSU is estimated based on the grant-date fair value of the underlying share of common stock.
15
A summary of the Company’s nonvested DSUs as of March 31, 2026, and changes during the three-month period ended, is presented below.
|
|
|
|
|
| Weighted |
| |
|
|
|
|
|
| Average |
| |
|
| Number of |
|
| Grant-Date |
| ||
|
| Stock DSUs |
|
| Fair Value |
| ||
Non-vested DSUs, December 31, 2025 |
|
|
|
| $ |
| ||
DSUs granted |
|
|
|
|
|
| ||
DSUs vested |
|
| ( | ) |
|
|
| |
Non-vested DSUs, March 31, 2026 |
|
|
|
| $ |
| ||
As of March 31, 2026, there was $
NOTE 14: BASIC AND DILUTED NET LOSS PER SHARE
Basic net loss per common share is computed by dividing net loss attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period. Weighted average number of shares of common stock outstanding during the period computation includes shares of common stock to be contractually issued as of the period end date and warrants exercisable for little or no consideration in relation to the share price. Shares of common stock that were issued and are subject to vesting conditions are not considered outstanding during the requisite service period.
Diluted net loss per common share is computed by giving effect to all potential dilutive shares of common stock that were outstanding during the period when the effect is dilutive. As of March 31, 2026, potential dilutive shares of common stock consist of shares issuable upon exercise of stock options, warrants, RSUs and DSUs. adjustments have been made to the weighted average outstanding shares of common stock figures for the three months ended March 31, 2026, or 2025, as the assumed conversion would be anti-dilutive.
The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net loss per share, as such shares would have had an anti-dilutive effect:
|
| 2026 |
|
| 2025 |
| ||
Warrants (Note 13.b) |
|
|
|
|
|
| ||
Stock options (Note 13.d) |
|
|
|
|
|
| ||
Unvested RSUs (Note 13.e) |
|
|
|
|
|
| ||
Unvested DSUs (Note 13.f) |
|
|
|
|
|
| ||
Shares issuable pursuant to Series C Preferred Stock |
|
|
|
|
|
| ||
Total |
|
|
|
|
|
| ||
For the purposes of the computation of basic and diluted net loss per share, an amount recognized as a deemed dividend reduced net loss available to common stockholders in a manner similar to the application of the two-class method. The net loss available to common stockholders for the three months ended March 31, 2025 was adjusted by the deemed dividend associated with the Inducement Agreement
16
NOTE 15: REVENUE
|
| Three Months Ended |
| |||||
|
| March 31, |
| |||||
|
| 2026 |
|
| 2025 |
| ||
Type of goods and services |
|
|
|
|
|
|
|
|
Service |
| $ |
|
| $ |
| ||
Rentals |
|
|
|
|
|
| ||
Product |
|
|
|
|
|
| ||
Subscriptions |
|
|
|
|
|
| ||
Other miscellaneous products |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Timing of recognition of revenue |
|
|
|
|
|
|
|
|
Point in time |
|
|
|
|
|
| ||
Over time |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
| | Three Months Ended | | |||||
| | March 31, | | |||||
| | 2026 | | | 2025 | | ||
Deferred revenue - beginning of period | | $ | | | $ | | ||
Increases due to consideration received from customers | | | | | | | ||
Revenue recognized | | | ( | ) | | | | |
Deferred revenue - end of period | | $ | | | $ | | ||
The deferred revenue balance at March 31, 2026 consists of $
NOTE 16: SEGMENT REPORTING
The Company has reportable segment managed on a consolidated basis: Firefly Products. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in our customer arrangements is based on a single software platform that is deployed to and implemented by customers in a similar manner. The service term for the software arrangements is variable. The Company does not have intra-entity sales or transfers.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who reviews financial information presented on a consolidated basis to allocate resources, evaluate financial performance and make overall operating decisions. The measure of segment profit or loss that is most consistent with the consolidated financial statements is consolidated net loss. The accounting policies of our single reportable segment are the same as those for the consolidated financial statements. The level of disaggregation and amounts of significant segment expenses that are regularly provided to the CODM are the same as those presented in the consolidated statements of operations. Likewise, the measure of segment assets is reported on the consolidated balance sheets as total assets.
NOTE 17. SUBSEQUENT EVENTS
On April 16, 2026, the Company consummated an additional closing (the “Additional Closing”) under the Securities Purchase Agreement dated March 8, 2026 (the “Purchase Agreement”), pursuant to which the Company issued
On May 6, 2026, the Company entered into a securities purchase agreement (the “May 2026 Purchase Agreement”) with an accredited investor (the “May 2026 Investor”), pursuant to which the Company agreed to issue and sell to the May 2026 Investor up to
Pursuant to the May 2026 Purchase Agreement, the Company agreed to file a registration statement with the SEC covering the resale of the May 2026 Shares and the May 2026 Warrant Shares as soon as practicable and, in any event, on or before May 21, 2026. The closing of the offering is conditioned on the effectiveness of such registration statement and receipt of Shareholder Approval.
The securities were offered and sold in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. As of the date of this Quarterly Report on Form 10-Q, the closing of this offering had not yet occurred.
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The information set forth below should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in the Form 10-Q as well as the audited consolidated financial statements and the notes thereto contained in our Annual Report on 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026. Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Firefly Neuroscience, Inc., a Delaware corporation and its subsidiaries. All amounts are disclosed in thousands, except share and per share amounts and price.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Form 10-Q may constitute “forward-looking statements” for purposes of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements that look to future events and include, but are not limited to, statements regarding our business strategy, plans and objectives; anticipated future operating results and operating expenses, cash flows, capital resources, and liquidity; trends, opportunities and risks affecting our business, industry and financial results; the expected benefits of use of our solutions; future expansion or growth plans and potential for future growth; our business prospects; our systems and technology, future profitability; the sufficiency of our existing cash and cash equivalents to meet our working capital and capital expenditure needs over the next twelve months; acquisitions; and our expectations or beliefs concerning future events. In addition, the words “anticipates,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are neither historical facts nor assurances of future performance, and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, and many of which are outside of our control. Therefore, you should not place undue reliance on these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
|
● |
fluctuation and volatility in market price of our common stock due to market and industry factors, as well as general economic, political and market conditions; |
|
● |
our ability to continue as a going concern; |
|
● |
the impact of dilution on our stockholders, including through the issuance of additional equity securities in the future; |
|
● |
our ability to realize the intended benefits of the Merger; |
|
|
|
|
● |
our ability to realize the intended benefits of the Acquisition; |
|
● |
the impact of our ability to realize the anticipated tax impact of the Merger; |
|
● |
the outcome of litigation or other proceedings may become subject to in the future; |
|
● |
delisting of our common stock from the Nasdaq Capital Market (“Nasdaq”) or the failure for an active trading market to develop; |
|
● |
the failure of our altered business operations, strategies and focus to result in an improvement for the value of our common stock; |
|
● |
the availability of and our ability to continue to obtain sufficient funding to conduct planned operations and realize potential profits; |
|
● |
our limited operating history; |
|
● |
the impact of the complexity of the regulatory landscape on our ability to seek and obtain regulatory approval for our products, both within and outside of the U.S.; |
|
● |
challenges that we may face with maintaining regulatory approval; |
|
● |
the impact of the concentration of capital stock ownership with our insiders on stockholders’ ability to influence corporate matters. |
|
● |
the impacts of future acquisitions of businesses or products and the potential to fail to realize intended benefits of such acquisition; |
|
● |
the potential impact of changes in the legal and regulatory landscape, both within and outside of the U.S.; |
|
● |
our dependence on third parties; |
|
● |
challenges we may face with respect to our products achieving market acceptance; |
|
● |
the impact of pricing of our products; |
|
● |
our ability to obtain, maintain and protect its trade secrets or other proprietary rights, operate without infringing upon the proprietary rights of others and prevent others from infringing on its proprietary rights; |
|
● |
our ability to maintain adequate cyber security and information systems; |
|
● |
our ability to generate sufficient revenue to achieve and sustain profitability; |
|
● |
the risk that our significant increased expenses and administrative burdens as a public company could have an adverse effect on our business, financial condition and results of operations; and |
|
● |
the other factors set forth in the “Risk Factors” section of this Form 10-Q and our other documents filed with the SEC under the heading “Risk Factors.” |
These forward-looking statements are based on information available as of the date of this Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026 (the “2025 Annual Report”). If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or information as of the date on which the statements are made in this Quarterly Report on Form 10-Q. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
Overview
Firefly Neuroscience, Inc. is an artificial intelligence company advancing precision neuroscience, applying AI and large-scale electrophysiological data to give clinicians a more complete, objective picture of how an individual patient's brain is functioning.
Firefly Neuroscience, Inc. is rebuilding the foundation of how electrophysiological data flows into clinical decision-making for brain health. We believe the brain is the most under-measured organ in medicine, and that the tools to change this have, until now, been inaccessible to the clinicians who need them most.
We have built the Firefly Platform: a vertically integrated hardware, software, and data infrastructure that captures standardized electroencephalographic (EEG) and event-related potential (ERP) assessments at the point of care, analyzes that data through our proprietary analytics engine, and delivers structured, clinician-ready reports back to the provider, all within a single seamless workflow. Every scan expands and enriches our database. Every clinic that joins our network increases the depth and diversity of our data. We describe this compounding relationship between clinical deployment, data acquisition, and report quality as the Firefly Flywheel.
Our FDA-510(k) cleared Evoke System, commercially deployed as the Evoke System, is in active use across more than 85 clinical sites in the United States as of March 31, 2026. Clinicians use the system to perform EEG and ERP assessments, which are analyzed by our cloud-based platform and returned as structured reports designed to support clinical decision-making. Our subscription-based commercial model creates a recurring revenue stream that scales in lockstep with clinical utilization, meaning that the more deeply clinicians integrate electrophysiological assessment into their practice, the more revenue we generate and the more our database grows.
Recent Developments
At the Market Offering Agreement
On February 3, 2026, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Konik Capital Partners, LLC, a division of T.R. Winston and Company, LLC (“Konik”), pursuant to which we may, from time to time, offer and sell shares of our Common Stock, par value $0.0001 per share, having an aggregate sales price of up to $7,434,266 (the “ATM Shares”) through Konik as principal or agent. Sales of the ATM Shares through Konik, if any, will be made by any method permitted by law deemed to be an “at the market offering” (the “ATM”), as defined in Rule 415(a)(4) under the Securities Act. Konik will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell the ATM Shares from time to time, based on instructions from the Company.
The offer and sale of shares of Common Stock is being made pursuant to the Company’s shelf registration statement on Form S-3, which was filed with the SEC on December 3, 2025 (File No. 333-282931) (the “Shelf Registration Statement”), and a related prospectus, as supplemented by prospectus supplements pursuant to Rule 424(b) under the Securities Act. The Shelf Registration Statement was declared effective by the SEC on December 5, 2025.
We have no obligation to sell, and Konik is not obligated to buy or sell, any of the ATM Shares under the ATM Agreement and may at any time suspend offers under the ATM Agreement or terminate the ATM Agreement as provided for in the ATM Agreement. The offering of the ATM Shares will terminate upon the earlier of (i) the sale, pursuant to the ATM Agreement, of ATM Shares having an aggregate offering price of $7,434,266, and (ii) the termination by the Company or Konik of the ATM Agreement pursuant to its terms.
We will pay Konik a commission equal to 2.0% of the aggregate gross proceeds from the sales of ATM Shares sold through Konik under the ATM Agreement and will also reimburse Konik for the fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated by the ATM Agreement in an amount not to exceed $50,000 in the aggregate, and up to an additional $5,000 per due diligence update session (and in no event more than $20,000 per fiscal year) for diligence and maintenance of the ATM Agreement. The ATM Agreement contains certain covenants, representations and warranties customary for an agreement of this type. We agreed to provide indemnification and contribution to the Sales Agent against certain liabilities, including liabilities under the Securities Act.
As of May 8, 2026 we had not sold any shares under the ATM Agreement.
March 2026 Units Offering
On March 8, 2026, we entered into a securities purchase agreement (the “March 2026 Purchase Agreement”) with certain accredited investors (each a “March 2026 Investor” and, collectively, the “March 2026 Investors”), pursuant to which we agreed to issue and sell up to 13,500,000 units (each a “March 2026 Unit” and, collectively, the “March 2026 Units”), at a purchase price of $1.50 per March 2026 Unit. Pursuant to the March 2026 Purchase Agreement, (i) the March 2026 Investors agreed to purchase March 2026 Units for an aggregate purchase price of $2,250,000 (the “Initial Investment”) at an initial closing (the “Initial Closing”), and (ii) the March 2026 Investors had the right, but not the obligation, to purchase in the aggregate up to $18,000,000 of March 2026 Units (the “Additional Investment”) in one or more subsequent closings (each, an “Additional Closing” and, together with the Initial Closing, each a “Closing”) in respect of one or more Additional Investments, within 30 days following the Initial Closing.
Each March 2026 Unit consists of (i) either (A) one share of Common Stock, or (B) a prefunded warrant to purchase one share of Common Stock (each a “March 2026 Pre-Funded Warrant” and, collectively, the “March 2026 Pre-Funded Warrants”) at a nominal exercise price of $0.0001 per share, to the extent that acquiring the shares of Common Stock instead of the March 2026 Pre-Funded Warrants would have caused the March 2026 Investors to own in excess of 4.99% or 9.99%, as applicable to each such March 2026 Investor, of the outstanding Common Stock on a post-issuance basis; (ii) one common stock purchase warrant (each a “150% Warrant” and, collectively, the “150% Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $1.88 per share; (iii) one common stock purchase warrant (the “200% Warrant”, together with the March 2026 Pre-Funded Warrants and 150% Warrants, the “March 2026 Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $2.50 per share; and (iv) the issuance of the Common Stock upon the exercise of the March 2026 Warrants (collectively, the “March 2026 Warrant Shares”). The March 2026 Warrants include a beneficial ownership limitation, which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise any portion of the March 2026 Warrants, to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates) would beneficially own more than 4.99% or 9.99%, as applicable to each such March 2026 Investor, of the outstanding shares of Common Stock immediately after the issuance of the Common Stock issuable upon exercise.
On March 12, 2026, the Initial Closing under the March 2026 Purchase Agreement occurred, and the Company issued 1,500,000 March 2026 Units to the March 2026 Investors at a total purchase price of $2,250,000.
The offering was conducted as a private placement under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506(b) of Regulation D, and was structured to comply with Nasdaq Listing Rule 5635(d) without requiring stockholder approval.
On April 16, 2026, we consummated an Additional Closing under the March 2026 Purchase Agreement pursuant to which we issued 5,333,333 units at a purchase price of $1.50 per unit for aggregate gross proceeds of $8,000,000. Each unit consisted of either one share of Common Stock or one pre-funded warrant exercisable at $0.0001 per share, together with (i) one five-year Common Stock purchase warrant to purchase one share of Common Stock at an exercise price of $1.88 per share and (ii) one five-year Common Stock purchase warrant to purchase one share of common stock at an exercise price of $2.50 per share. See Note 17 — Subsequent Event for additional details.
May 2026 Units Offering
On May 6, 2026, we entered into a securities purchase agreement (the “May 2026 Purchase Agreement”) with an accredited investor (the “May 2026 Investor”), pursuant to which we agreed to issue and sell to the May 2026 Investor up to 666,667 units (each a “May 2026 Unit” and, collectively, the “May 2026 Units”), at a purchase price of $1.50 per May 2026 Unit, for aggregate gross proceeds of up to $1,000,000. Each May 2026 Unit consists of (i) one share of Common Stock, par value $0.0001 per share (each a “May 2026 Share” and, collectively, the “May 2026 Shares”); (ii) one common stock purchase warrant (each a “May 150% Warrant” and, collectively, the “May 150% Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $1.88 per share; (iii) one common stock purchase warrant (the “May 200% Warrant”, together with the May 150% Warrants, the “May 2026 Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $2.50 per share; and (iv) the issuance of the Common Stock upon the exercise of the May 2026 Warrants (collectively, the “May 2026 Warrant Shares”). The May 2026 Warrants include a beneficial ownership limitation, which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise any portion of the May 2026 Warrants, to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates) would beneficially own more than 4.99% or 9.99%, as applicable to the May 2026 Investor, of the outstanding shares of Common Stock immediately after the issuance of the Common Stock issuable upon such exercise. The May 2026 Warrants are not exercisable until the Company has obtained approval from its stockholders (“Shareholder Approval”) for the issuance of the Common Stock. The Company is required to use commercially reasonable efforts to obtain Shareholder Approval within ninety (90) days following the date of the May 2026 Purchase Agreement.
Pursuant to the May 2026 Purchase Agreement, we agreed to file a registration statement with the SEC covering the resale of the May 2026 Shares and the May 2026 Warrant Shares as soon as practicable and, in any event, on or before May 21, 2026. The closing of the offering is conditioned on the effectiveness of such registration statement and receipt of Shareholder Approval.
The securities were offered and sold in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. As of the date of this Quarterly Report on Form 10-Q, the closing of this offering had not yet occurred.
Financial Operations Overview
Revenue
Revenue consists of subscriptions with associated equipment, per-use fees, equipment sales, equipment rentals, and the undertaking of projects and/or clinical studies and other related services. In the future, we plan to generate revenue through two commercial channels: through the use of our products by healthcare professionals in the United States and through collaborations with pharmaceutical companies in support of neuroscience drug development.
Operating Expense
Costs of goods sold
Cost of goods sold consists of product manufacturing expenses related to the Evoke and Versus products acquired in the Evoke transaction, customer support costs and depreciation of Firefly provided customer equipment.
Research and Development Expense
Research and development expenses represent costs incurred to conduct research and development, such as the development/enhancements of the Evoke Platform and BNA technology. We recognize all research and development costs as they are incurred. Research and development expenses consist primarily of the following:
|
● |
salaries and benefits; |
|
● |
consulting arrangements; and |
|
● |
other expenses incurred to advance our research and development activities. |
We expect research and development expenses to continue to increase in the future as we further refine and optimize our products and invest in their evolution. It is likely that we will continue to evaluate opportunities and strategic partnerships to acquire or license other products and technologies, which may result in higher research and development expenses due to licensing fees and/or integrations.
Selling and Marketing Expenses
Selling and marketing expenses consist of employee-related expenses, including salaries, benefits, travel, clinical fees and other marketing functions such as conferences, as well as fees paid for consulting services.
General and Administrative Expenses
General and administrative expenses consist of employee-related expenses, including salaries, benefits, travel and noncash stock-based compensation, and other administrative functions, as well as fees paid for legal, and accounting services, consulting fees and facilities costs not otherwise included in research and development expense. Legal costs include general corporate legal fees and patent costs. We expect to incur additional expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance, investor relations and other administrative expenses and professional services.
Other (Income) Expense
Other (income) expense, consists, primarily of interest bank fees and loan fees, foreign exchange gain or loss, changes in derivative fair value, impairments and penalties.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table sets forth amounts from our condensed consolidated statements of operations for the three months ended March 31, 2026, and 2025:
|
|
Three Months Ended |
|
|
|
|
|
|||||
|
|
March 31, |
|
|
|
|
|
|||||
|
|
$US, in thousands |
|
|
|
|
|
|||||
|
|
2026 |
|
|
2025 |
|
|
Change ($) |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE |
|
$ |
485 |
|
|
$ |
43 |
|
|
$ |
442 |
|
COST OF GOODS SOLD |
|
|
264 |
|
|
|
- |
|
|
|
264 |
|
GROSS PROFIT |
|
|
221 |
|
|
|
43 |
|
|
|
178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
|
424 |
|
|
|
312 |
|
|
|
112 |
|
Selling and marketing expenses |
|
|
141 |
|
|
|
208 |
|
|
|
(67 |
) |
General and administration expenses |
|
|
1,666 |
|
|
|
1,588 |
|
|
|
78 |
|
TOTAL OPERATING EXPENSES |
|
|
2,231 |
|
|
|
2,108 |
|
|
|
123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS |
|
|
(2,010 |
) |
|
|
(2,065 |
) |
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and bank fees |
|
|
(7 |
) |
|
|
(128 |
) |
|
|
121 |
|
Interest income |
|
|
14 |
|
|
|
- |
|
|
|
14 |
|
Foreign exchange gain (loss) |
|
|
(1 |
) |
|
|
3 |
|
|
|
(4 |
) |
Change in derivative fair value |
|
|
- |
|
|
|
(9,369 |
) |
|
|
9,369 |
|
Loss on settlement |
|
|
- |
|
|
|
(1,353 |
) |
|
|
1,353 |
|
Other income (expenses) |
|
|
- |
|
|
|
(18 |
) |
|
|
18 |
|
TOTAL OTHER INCOME (EXPENSES) |
|
|
6 |
|
|
|
(10,865 |
) |
|
|
10,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAX |
|
|
(2,004 |
) |
|
|
(12,930 |
) |
|
|
10,926 |
|
Provision for income tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
NET LOSS |
|
$ |
(2,004 |
) |
|
$ |
(12,930 |
) |
|
|
10,926 |
|
Revenue
Revenue for the three months ended March 31, 2026, was $485, as compared to $43, in the three months ended March 31, 2025, representing an increase of $442, or 1028%. The increase is primarily due to revenue from the acquisition of Evoke Neuroscience.
Cost of Goods Sold
Cost of goods sold for the three months ended March 31, 2026, was $264, up from $nil in the same period of 2025, reflecting Evoke material costs representing 38% of the increase and people costs representing another 47%.
Operating Expenses
Research and Development Expenses
Research and development expenses for the three months ended March 31, 2026, were $424, as compared to $312, for the three months ended March 31, 2025, representing a increase of $112, or 36%. The increase was primarily due to an increase in spending on product development.
Selling and Marketing Expenses
Selling and marketing expenses for the three months ended March 31, 2026, were $141, as compared to $208, for the three months ended March 31, 2025, representing a decrease of $67, or 32%. The decrease was primarily due to headcount reduction representing 41% of the decrease and a reduction in outside consultants representing another 42%.
General and Administration Expenses
General and administration expenses for the three months ended March 31, 2026, were $1,666 as compared to $1,588, for the three months ended March 31, 2025, representing an increase of $78, or 5%. The increase was primarily due to the regular business operating expenses.
Other Income (Expense)
Other Income (Expense) for the three months ended March 31, 2026, was $6, as compared to $10,865, for the three months ended March 31, 2025, representing a decrease in income of $10,871 or 100%. The primary reason for the decrease is a result of the settlement of the Convertible Promissory Note in Q1 2025 which resulted in an expense of $10,722.
Liquidity and Capital Resources
The following discussion provides an analysis of our liquidity and capital resources and should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included in this Quarterly Report on Form 10-Q. Management evaluates liquidity and capital resources by reviewing cash flows from operating, investing, and financing activities and assessing whether existing cash balances and anticipated cash flows are sufficient to meet current and anticipated operating requirements, working-capital needs, and planned capital expenditures.
As of March 31, 2026, we had cash of $3,127, compared to $2,747 as of December 31, 2025, an increase of $380 during the three months ended March 31, 2026. The increase reflects net proceeds from the Initial Closing of our March 2026 private placement, partially offset by cash used in operating and investing activities during the period. Subsequent to March 31, 2026, on April 16, 2026, we raised an additional $8,000 in gross proceeds through the Additional Closing of the same private placement with an accredited investor. Total aggregate gross proceeds raised under the Securities Purchase Agreement dated March 8, 2026, including both closings, were $10,250. Additionally, on May 6, 2026, we entered into a new securities purchase agreement for aggregate gross proceeds of up to $1,000, which has not yet closed. See Recent Financings below and Note 17 — Subsequent Event.
For the next 12 months, we expect to continue to incur negative cash flows from operations as we integrate the Evoke and BNA products and continue to invest in the expansion of our sales organization. The acquisition has expanded our product portfolio and introduced recurring revenue from Evoke product sales; however, we do not expect revenue to be sufficient to cover operating expenses in the near term.
Beyond the next 12 months, our ability to achieve profitability will depend on the successful commercialization of our combined Evoke and BNA product portfolio. We expect to incur significant costs associated with continued product development, commercialization, and distribution activities. As a result, we will require substantial additional capital to fund ongoing operations and to implement our business strategy prior to achieving positive cash flows from operating activities.
Until we generate sufficient revenues from product sales to cover operating expenses, working-capital requirements, and capital expenditures, we expect to finance our operations through the issuance of equity, debt financing, or other sources of capital. There can be no assurance that such financing will be available to us on commercially reasonable terms, or at all. If we are unable to obtain additional financing as needed, we may be required to delay, reduce, or discontinue portions of our business plan, which could adversely affect our ability to continue operations.
There is substantial doubt about our ability to continue as a going concern, as evidenced by our accumulated deficit of $113,619 and negative cash flows from operating activities of $1,948 for the three months ended March 31, 2026. The report of our independent registered public accounting firm for the year ended December 31, 2025 also expressed substantial doubt about our ability to continue as a going concern.
Management's plan to address the conditions giving rise to substantial doubt includes: (i) disciplined operating expense management and integration synergies from the Evoke acquisition; (ii) targeted commercial expansion to drive recurring revenue from the combined Evoke and BNA product portfolio; (iii) continued access to capital markets through equity financings including our at-the-market offering program with up to $7.4 million in available capacity. During the three months ended March 31, 2026, the Company raised $2,386 in gross proceeds through the Initial Closing of a private placement of units and the exercise of warrants (see Note 13 - Equity). Subsequent to March 31, 2026, the Company raised an additional $8,000 in gross proceeds through the April 2026 Additional Closing and entered into the May 2026 Purchase Agreement for up to $1,000 of additional proceeds (see Note 17 - Subsequent Event). These plans involve assumptions about capital markets and customer demand that may not occur as expected, and there can be no assurance that the Company will be able to obtain additional funding on satisfactory terms or at all.
Our expectations regarding the sufficiency of our capital resources in the near term and our ability to obtain additional capital in the long term are based on estimates and assumptions that may prove to be inaccurate. As a result, we could exhaust our available capital resources sooner than anticipated and may not be able to obtain additional funding on favorable terms, or at all.
We have no material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that would be material to investors.
Cash flows
The following table sets forth the significant sources and uses of cash for the periods noted below:
|
|
Three Months Ended |
|
|||||||||
|
|
March 31, |
|
|||||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
Net cash (used in) provided by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
(1,948 |
) |
|
$ |
(2,511 |
) |
|
$ |
563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
$ |
(58 |
) |
|
$ |
(7 |
) |
|
$ |
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
$ |
2,386 |
|
|
$ |
10,253 |
|
|
$ |
(7,867 |
) |
Operating Activities
For the three months ended March 31, 2026, net cash used in operating activities was $1,948 as compared to $2,511, for the three months ended March 31, 2025, representing a decrease of $563, or 22%. This decrease in net cash used in operating activities is primarily due to an a reduction in debt carried out in Q1 of 2025.
Investing Activities
For the three months ended March 31, 2026, net cash used in investing activities was $58, as compared to $7, cash used in investing activities for the three months ended March 31, 2025, representing an increase of $51, or 729%. The increase in cash used in investing activities is primarily attributed to the acquisition of equipment to build additional Evoke Systems.
Financing Activities
For the three months ended March 31, 2026, net cash provided from financing activities was $2,386, as compared to $10,253, for the three months ended March 31, 2025, representing a decrease of $7,867, or 77%. The decrease was primarily due to warrant exercises in Q1 of 2025.
Recent Financings
At the Market Offering Agreement
On February 3, 2026, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Konik Capital Partners, LLC, a division of T.R. Winston and Company, LLC (“Konik”), pursuant to which we may, from time to time, offer and sell shares of our Common Stock, par value $0.0001 per share, having an aggregate sales price of up to $7,434,266 (the “ATM Shares”) through Konik as principal or agent. Sales of the ATM Shares through Konik, if any, will be made by any method permitted by law deemed to be an “at the market offering” (the “ATM”), as defined in Rule 415(a)(4) under the Securities Act. Konik will use commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell the ATM Shares from time to time, based on instructions from the Company.
The offer and sale of shares of Common Stock is being made pursuant to the Company’s shelf registration statement on Form S-3, which was filed with the SEC on December 3, 2025 (File No. 333-282931) (the “Shelf Registration Statement”), and a related prospectus, as supplemented by prospectus supplements pursuant to Rule 424(b) under the Securities Act. The Shelf Registration Statement was declared effective by the SEC on December 5, 2025.
We have no obligation to sell, and Konik is not obligated to buy or sell, any of the ATM Shares under the ATM Agreement and may at any time suspend offers under the ATM Agreement or terminate the ATM Agreement as provided for in the ATM Agreement. The offering of the ATM Shares will terminate upon the earlier of (i) the sale, pursuant to the ATM Agreement, of ATM Shares having an aggregate offering price of $7,434,266, and (ii) the termination by the Company or Konik of the ATM Agreement pursuant to its terms.
We will pay Konik a commission equal to 2.0% of the aggregate gross proceeds from the sales of ATM Shares sold through Konik under the ATM Agreement and will also reimburse Konik for the fees and costs of its legal counsel reasonably incurred in connection with entering into the transactions contemplated by the ATM Agreement in an amount not to exceed $50,000 in the aggregate, and up to an additional $5,000 per due diligence update session (and in no event more than $20,000 per fiscal year) for diligence and maintenance of the ATM Agreement. The ATM Agreement contains certain covenants, representations and warranties customary for an agreement of this type. We agreed to provide indemnification and contribution to the Sales Agent against certain liabilities, including liabilities under the Securities Act.
As of May 8, 2026, we had not sold any shares under the ATM Agreement.
March 2026 Units Offering
On March 8, 2026, we entered into a securities purchase agreement (the “March 2026 Purchase Agreement”) with certain accredited investors (each a “March 2026 Investor” and, collectively, the “March 2026 Investors”), pursuant to which we agreed to issue and sell up to 13,500,000 units (each a “March 2026 Unit” and, collectively, the “March 2026 Units”), at a purchase price of $1.50 per March 2026 Unit. Pursuant to the March 2026 Purchase Agreement, (i) the March 2026 Investors agreed to purchase March 2026 Units for an aggregate purchase price of $2,250,000 (the “Initial Investment”) at an initial closing (the “Initial Closing”), and (ii) the March 2026 Investors had the right, but not the obligation, to purchase in the aggregate up to $18,000,000 of March 2026 Units (the “Additional Investment”) in one or more subsequent closings (each, an “Additional Closing” and, together with the Initial Closing, each a “Closing”) in respect of one or more Additional Investments, within 30 days following the Initial Closing.
Each March 2026 Unit consists of (i) either (A) one share of Common Stock, or (B) a prefunded warrant to purchase one share of Common Stock (each a "March 2026 Pre-Funded Warrant" and, collectively, the "March 2026 Pre-Funded Warrants”) at a nominal exercise price of $0.0001 per share, to the extent that acquiring the shares of Common Stock instead of the March 2026 Pre-Funded Warrants would have caused the March 2026 Investors to own in excess of 4.99% or 9.99%, as applicable to each such March 2026 Investor, of the outstanding Common Stock on a post-issuance basis; (ii) one common stock purchase warrant (each a “150% Warrant” and, collectively, the “"150% Warrants”“) to purchase one share of Common Stock over five (5) years at an exercise price of $1.88 per share; (iii) one common stock purchase warrant (the “200% Warrant”, together with the March 2026 Pre-Funded Warrants and 150% Warrants, the “March 2026 Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $2.50 per share; and (iv) the issuance of the Common Stock upon the exercise of the March 2026 Warrants (collectively, the “March 2026 Warrant Shares”). The March 2026 Warrants include a beneficial ownership limitation, which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise any portion of the March 2026 Warrants, to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates) would beneficially own more than 4.99% or 9.99%, as applicable to each such March 2026 Investor, of the outstanding shares of Common Stock immediately after the issuance of the Common Stock issuable upon exercise.
On March 12, 2026, the Initial Closing under the March 2026 Purchase Agreement occurred, and the Company issued 1,500,000 March 2026 Units to the March 2026 Investors at a total purchase price of $2,250,000.
The offering was conducted as a private placement under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506(b) of Regulation D, and was structured to comply with Nasdaq Listing Rule 5635(d) without requiring stockholder approval.
On April 16, 2026, we consummated an additional closing under the March 2026 Purchase Agreement pursuant to which we issued 5,333,333 units at a purchase price of $1.50 per unit for aggregate gross proceeds of $8,000,000. Each unit consisted of either one share of common stock or one pre-funded warrant exercisable at $0.0001 per share, together with (i) one five-year common stock purchase warrant to purchase one share of common stock at an exercise price of $1.88 per share and (ii) one five-year common stock purchase warrant to purchase one share of common stock at an exercise price of $2.50 per share. See Note 17 — Subsequent Event for additional details.
May 2026 Units Offering
On May 6, 2026, we entered into a securities purchase agreement (the “May 2026 Purchase Agreement”) with an accredited investor (the “May 2026 Investor”), pursuant to which we agreed to issue and sell to the May 2026 Investor up to 666,667 units (each a “May 2026 Unit” and, collectively, the “May 2026 Units”), at a purchase price of $1.50 per May 2026 Unit, for aggregate gross proceeds of up to $1,000,000. Each May 2026 Unit consists of (i) one share of Common Stock, par value $0.0001 per share (each a “May 2026 Share” and, collectively, the “May 2026 Shares”); (ii) one common stock purchase warrant (each a “May 150% Warrant” and, collectively, the “May 150% Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $1.88 per share; (iii) one common stock purchase warrant (the “May 200% Warrant”, together with the May 150% Warrants, the “May 2026 Warrants”) to purchase one share of Common Stock over five (5) years at an exercise price of $2.50 per share; and (iv) the issuance of the Common Stock upon the exercise of the May 2026 Warrants (collectively, the “May 2026 Warrant Shares”). The May 2026 Warrants include a beneficial ownership limitation, which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise any portion of the May 2026 Warrants, to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates) would beneficially own more than 4.99% or 9.99%, as applicable to the May 2026 Investor, of the outstanding shares of Common Stock immediately after the issuance of the Common Stock issuable upon such exercise. The May 2026 Warrants are not exercisable until the Company has obtained approval from its stockholders (“Shareholder Approval”) for the issuance of the Common Stock. The Company is required to use commercially reasonable efforts to obtain Shareholder Approval within ninety (90) days following the date of the May 2026 Purchase Agreement.
Pursuant to the May 2026 Purchase Agreement, we agreed to file a registration statement with the SEC covering the resale of the May 2026 Shares and the May 2026 Warrant Shares as soon as practicable and, in any event, on or before May 21, 2026. The closing of the offering is conditioned on the effectiveness of such registration statement and receipt of Shareholder Approval.
The securities were offered and sold in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. As of the date of this Quarterly Report on Form 10-Q, the closing of this offering had not yet occurred.
Known Trends, Events, and Uncertainties
We are increasingly reliant on machine learning models for EEG/ERP interpretation. Model performance depends on training data diversity and ongoing monitoring to ensure generalizability. Evolving regulatory guidance (including the FDA’s approach to AI/ML-enabled medical devices) and payer expectations could impact timelines and costs. Additionally, our handling of PHI and clinical data requires robust cybersecurity, vendor oversight, and compliance with HIPAA and CFR Part 11. A significant data reach, integrity failure, or model drift could adversely affect adoption, revenues, and our reputation.
As with other companies that are in our industry, we will need to successfully manage normal business and scientific risks. Research and development of new technologies is, by its nature, unpredictable. We cannot assure you that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable. In addition, the emergence and effects of public health crises, such as endemics and epidemics are difficult to predict, changes in Economic and trade policies could have a material and significant impact and the consequences of the ongoing war between Israel and Hamas, including related sanctions and countermeasures and the effects of such war on our employees in Israel, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Furthermore, other than as discussed in this Form 10-Q, we have no committed source of financing and may not be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.
Other than as discussed above and elsewhere in this Form 10-Q, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.
As required by Rule 13a-15(b) of the Exchange Act, an evaluation as of March 31, 2026, was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of March 31, 2026 were not effective for the reasons stated below.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets: (ii) provide reasonable assurance (a) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting policies (b) our receipts and expenditures are being made only in accordance with authorizations of our management and directors: and (c) regarding the prevention or timely detection of the unauthorized acquisition use or disposition of assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
As of March 31, 2026, our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on this evaluation, our management concluded that, as of March 31, 2026, our internal control over financial reporting was not effective for the reasons stated in the following paragraph.
During our evaluations of internal controls, we concluded that material weaknesses exist in our internal controls over financial reporting as outlined below. These material weaknesses did not result in any identified misstatements, and there were no changes to previously reported financial results.
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(i) |
The Company does not have adequate Information Technology General Controls (“ITGCs”) or related Information Produced by Entity (IPE) Controls resulting in transactional risk and subsequent downstream reporting risks; |
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The Company does not have a segregation of duties to ensure information is consistently reviewed and approved by someone other than the preparer; |
This Quarterly Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only managements report in this Quarterly Report.
Remediation Plan for the Material Weaknesses
Management commenced the design and identification of controls in Q4 2025 and is in the process of implementing remediation measures throughout 2026. We expect to complete the design and implementation of the related controls during 2026 and, after the controls have operated for a sufficient period and have been tested, determine whether the material weaknesses have been remediated. The timing of completion is subject to the results of ongoing evaluation and testing.
Remediation efforts include but are not limited to (a) developing, documenting and enhancing processes surrounding ITGCs, and (b) hiring / contracting additional resources to support the financial reporting process. Management will test and evaluate the implementation of internal controls and revised processes to ascertain whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in our financial statements. Management is committed to the remediation of the material weakness described above which began in Q4 2025 and into the remainder of 2026. Management has implemented and will continue to implement measures designed to ensure that the control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively during the remainder of the year with projected remediation date of Q2 2026.
Management will test and evaluate the implementation of internal controls and revised processes to ascertain whether they are designed and operating effectively to provide reasonable assurance that they will prevent or detect a material error in our financial statements.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results.
There are no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 31, 2026.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
During the three months ended March 31, 2026, we did not sell any equity securities that were not subsequently registered under the Securities Act and that were not previously disclosed in a Current Report on Form 8-K.
Purchases of Equity Securities
No repurchases of our common stock were made during the three months ended March 31, 2026,
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
information was required to be disclosed in a Current Report on Form 8-K during the three months ended March 31, 2026, but was not reported.
None of our directors or “officers,” as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a Rule 10b5-1 trading plan or arrangement or a non-Rule 10b5-1 trading plan or arrangement, as defined in Item 408(c) of Regulation S-K, during the fiscal quarter ended March 31, 2026.
31
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32.1** |
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32.2** |
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101.INS* |
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Inline XBRL Instance Document. |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema Document. |
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101.CAL* |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document. |
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101.LAB* |
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Inline XBRL Taxonomy Extension Label Linkbase Document. |
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101.PRE* |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
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104* |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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Filed herewith |
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Furnished herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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FIREFLY NEUROSCIENCE, INC. |
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Date: May 13, 2026 |
By: |
/s/ Greg Lipschitz |
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Greg Lipschitz |
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Chief Executive Officer |
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(Principal Executive Officer) |
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By: |
/s/ Paul Krzywicki |
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Paul Krzywicki |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
33
Exhibit 31.1
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Greg Lipschitz, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Firefly Neuroscience, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2026 | /s/ Greg Lipschitz |
| Greg Lipschitz |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Paul Krzywicki, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Firefly Neuroscience, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 13, 2026 | /s/ Paul Krzywicki |
| Paul Krzywicki |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U. S. C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Firefly Neuroscience, Inc. (“Company”) for the period ended March 31, 2026 (the “Report”), I, Greg Lipschitz, Chief Executive Officer (Principal Executive Officer) of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
IN WITNESS WHEREOF, the undersigned has executed this statement on May 13, 2026.
Date: May 13, 2026 | /s/ Greg Lipschitz |
| Greg Lipschitz |
| Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION
PURSUANT TO 18 U. S. C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Firefly Neuroscience, Inc. (“Company”) for the period ended March 31, 2026 (the “Report”), I, Paul Krzywicki, Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
IN WITNESS WHEREOF, the undersigned has executed this statement on May 13, 2026.
Date: May 13, 2026 | /s/ Paul Krzywicki |
| Paul Krzywicki |
| Chief Financial Officer |
| (Principal Financial and Accounting Officer) |
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares |
Mar. 31, 2026 |
Dec. 31, 2025 |
|---|---|---|
| Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
| Preferred stock, issued (in shares) | 0 | 0 |
| Preferred stock, outstanding (in shares) | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
| Common stock, authorized (in shares) | 5,000,000,000 | 5,000,000,000 |
| Common stock, issued (in shares) | 14,865,356 | 13,964,367 |
| Common stock, outstanding (in shares) | 14,865,356 | 13,964,367 |
Note 1 - Business Description |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Business Description and Basis of Presentation [Text Block] |
NOTE 1: BUSINESS DESCRIPTION
Overview
Firefly Neuroscience, Inc., a Delaware corporation, and its wholly owned subsidiaries Evoke Neuroscience, Inc., a Delaware corporation, Firefly Neuroscience 2023, Inc., a Delaware corporation, Firefly Neuroscience Ltd., an Israeli corporation, Elminda 2022 Inc., a Delaware corporation, Firefly Neurosciences Canada Inc., a Canadian corporation, and Elminda Canada Inc., a Canadian corporation (collectively, the “Company”), are engaged in the development, marketing and distribution of medical devices and technology allowing high resolution visualization and evaluation of the complex neuro-physiological interconnections of the human brain.
The combined entity operates under the name Firefly Neuroscience, Inc., and on August 13, 2024, the Company began trading on the Nasdaq Capital Market (NASDAQ Ticker Symbol: AIFF).
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Note 2 - Going Concern |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Substantial Doubt about Going Concern [Text Block] |
NOTE 2: GOING CONCERN
As of March 31, 2026, the Company had an accumulated deficit of $113,619 and negative cash flow from operating activities for the three months ended March 31, 2026, of $1,948. Further, the Company has recurring losses with insufficient revenue from operations and expects to continue generating losses and using cash for operations. The Company's cash requirements have been met through the sales of common stock, issuance of debt and warrant exercises. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Therefore, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.
Management of the Company has a reasonable expectation that the Company can continue raising additional capital to continue in operational existence for the foreseeable future. During the three months ended March 31, 2026, the Company raised $2,386 in gross proceeds through the initial closing of a private placement of units and the exercise of warrants (see Note 13 - Equity). Subsequent to March 31, 2026, the Company raised an additional $8,000 in gross proceeds through an additional closing of the same private placement and, on May 6, 2026, entered into a new securities purchase agreement for aggregate gross proceeds of up to $1,000, in each case as described in Note 17 - Subsequent Events. The Company's ability to raise additional funds will depend on, among other factors, financial, economic and market conditions, many of which are outside of our control and there can be no assurance that the Company will be able to obtain additional funding on satisfactory terms or at all.
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Note 3 - Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Basis of Presentation and Significant Accounting Policies [Text Block] |
NOTE 3: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire period. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2025, and the notes thereto included in the Company’s Form 10-K filed with the SEC on March 31, 2026. Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying unaudited condensed consolidated financial statements. All amounts are disclosed in thousands, except share and per share amounts. The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its consolidated financial position, results of operations, and cash flows of the Company for all periods presented.
Principles of consolidation
These unaudited consolidated financial statements include the financial information of the Company and its subsidiaries. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities (“VIE”). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model. The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. All intercompany balances and transactions were eliminated on consolidation.
Use of estimates in the preparation of consolidated financial statements
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates and assumptions, and such differences could be material to the Company’s financial position and results of operations.
Significant accounting policies
There have been no new or material changes to the significant accounting policies discussed in the Company’s audited consolidated financial statements since the year ended December 31, 2025.
Impact of recently issued accounting standards
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," which requires public business entities to disclose, in the notes to the financial statements, specified components of certain income statement expense line items presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and amortization of intangible assets, on both an annual and interim basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its disclosures in the consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) (“ASU 2025-05”) to introduce a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This expedient can only be applied to current accounts receivable and current contract assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively. The adoption of this amendment did not have a material impact on the Company's consolidated financial statements.
In September 2025, the FASB issued Account Standards Update, or ASU, 2025-06 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 40): Targeted Improvements to the Accounting for Internal-Use Software”, to modernize the accounting for internal-use software costs. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods. Under the new guidance, entities will start capitalizing eligible costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The new guidance will be effective for the Company for interim and annual periods beginning January 1, 2028. The Company has not adopted this standard early and is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements.
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Note 4 - Business Combination |
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NOTE 4: BUSINESS COMBINATION
Evoke Neuroscience, Inc.
On April 30, 2025, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Evoke Neuroscience, Inc. (“Evoke”) and stockholders of Evoke (the “Sellers”) to increase Firefly Neuroscience, Inc.’s capacity and expand its customer base. The Sellers sold and the Company purchased all of the issued and outstanding shares of Evoke, for a total purchase price consisting of: (i) $3,000 in cash (the “Cash Purchase Price”); (ii) shares of the Company’s common stock having an aggregate value of $3,000 priced at $3.50 per share (the “Shares”); and (iii) an earn-out payment in the form of additional shares of the Company’s common stock with an aggregate value of $500, contingent upon the achievement of specified revenue targets during a thirty-six (36) month earn-out period, all as further described in the Securities Purchase Agreement (the “Earn-Out Shares,” and collectively with the Cash Purchase Price and Share Consideration, the “Purchase Price”).
The contingent consideration associated with the Earn-Out Shares of $478 reflects the estimated fair value, at the acquisition date, of contingent future cash payments of up to $500 to the Sellers under an “earn-out” provision of the Securities Purchase Agreement. The Company determined the estimated acquisition date of fair value of the contingent consideration using a Monte Carlo simulation. Significant assumptions included a discount rate of 3.5% and an assumed income tax rate of 26.5% as well as projected net sales derived from internal forecasts and a three-month revenue volatility rate of 1.6%.
This contingent consideration of liability will be remeasured at fair value for each reporting period until the contingency is resolved, with changes in fair value recognized in operating expenses. During the three months ended March 31, 2026, the Company did not recognize a change in fair value of contingent consideration. Significant assumptions included a discount rate of 3.6% and an assumed income tax rate of 26.5% as well as projected net sales derived from internal forecasts and a three-month revenue volatility rate of 2.4%.
The condensed consolidated financial statements of the Company include the results of operations of Evoke from April 30, 2025 to March 31, 2026 and do not include results of operations for periods prior to April 30, 2025.
The following table presents the unaudited pro forma condensed consolidated results of operations for the three months ended March 31, 2026 and 2025 as if the acquisition of Evoke occurred at the beginning of fiscal year 2025. The pro forma information provided below is compiled from the preacquisition financial information of Evoke and includes pro forma adjustments to give effect to (i) amortization expense associated with the acquired intangible assets. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2025 or (ii) future results of operations. The results of operations of Evoke from January 1, 2025 to March 31, 2025 included revenues of $374 and a net loss of $131.
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Note 5 - Accounts and Other Receivables |
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NOTE 5: ACCOUNTS AND OTHER RECEIVABLES
Details of accounts and other receivables balance is as follows:
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Note 6 - Prepaid Expenses |
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NOTE 6: PREPAID EXPENSES
Details of prepaid expenses balance is as follows:
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Note 7 - Inventory |
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NOTE 7: INVENTORY
Details of inventory balance is as follows:
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Note 8 - Equipment |
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NOTE 8: EQUIPMENT
Equipment balance is as follows:
Depreciation expenses were $7 and $9 for the three months ended March 31, 2026, and 2025, respectively.
Medical equipment subject to operating leases includes hardware leased to customers as part of the Company’s products and services offerings.
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Note 9 - Leases |
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NOTE 9: LEASES
The Company enters into subscription agreements with customers under which it leases EEG equipment and provides services related to EEG testing. The lease terms range from 1 to 2 years. The subscription arrangements are classified as an operating lease. The leases do not transfer ownership of the underlying assets to the customer, do not provide the customer with a purchase option that is reasonably certain to be exercised, and the lease terms do not represent a major part of the remaining economic life of the underlying assets. The underlying assets subject to operating leases consist of EEG equipment. These assets remain on the Company’s balance sheet and are depreciated over their estimated useful lives.
Future undiscounted cash flows from the Company’s operating leases are as follows:
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Note 10 - Intangible Assets, Net and Goodwill |
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NOTE 10: INTANGIBLE ASSETS, NET AND GOODWILL
The following tables summarize the composition of intangible assets as of March 31, 2026 and December 31, 2025:
Amortization expense was $38 and $10 for the three months ended March 31, 2026, and 2025, respectively.
The estimated aggregate future amortization expense for intangible assets subject to amortization as of March 31, 2026, is summarized below:
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Note 11 - Liability for Employee Rights Upon Retirement |
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NOTE 11: LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT
Israeli labor law requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain circumstances. Pursuant to Section 14 of the Israeli Severance Pay Law, 1963, all of the Company’s employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, made in their name with insurance companies. Payments made in accordance with Section 14 relieve the Company from any future severance payments with respect to those employees. In accordance with the Israeli Severance Pay Law, 1963, severance payments, which are included in salary and employee benefits, were $10 and $11 for the three months ended March 31, 2026, and 2025, respectively. |
Note 12 - Commitments and Contingencies |
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NOTE 12: COMMITMENTS AND CONTINGENCIES
a. Royalty Commitment - Israeli Innovation Authority (“IIA”)
The Company is committed to pay royalties to the State of Israel, through the Israel Innovation Authority (“IIA”), on proceeds from sales of products in which the IIA participated by way of grants for research and development. No grants were received in the period beginning January 1, 2024 through March 31, 2026. Under the terms of the prior IIA grant agreements, the principal value of financial assistance received along with annual interest based on London Inter-Bank Offered Rate (“LIBOR”) is repayable in form of royalties at 3.0% of BNA™ sales. Since the elimination of LIBOR, the Secured Overnight Financing Rate (“SOFR”) subsequently replaced LIBOR as a reference rate of interest for IIA grant agreements. In the case of lack of commercial feasibility of the project that was financed using the grant, the Company is not obligated to pay any royalty. The Company cannot reasonably determine the outcome of the commercialization of the underlying technology and considers the liability to be contingent upon generation of sales utilizing said underlying technology, hence no liability has been recognized as of March 31, 2026, and December 31, 2025. The contingent liability amounts to $5,861 and $5,835 for March 31, 2026, and December 31, 2025 respectively.
Sale of the technology developed utilizing the grants from IIA is restricted and is subject to IIA’s approval.
b. Legal Proceedings
The Company is subject to various claims, complaints, and legal actions in the normal course of business from time to time. After consulting with counsel, the Company is not aware of any currently pending litigation for which it believes the outcome could have a material adverse effect on its operations or financial position.
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Note 13 - Equity |
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NOTE 13: EQUITY
a. Shares
On February 3, 2026, the Company filed a Prospectus Supplement to amend a registration statement with the Securities and Exchange Commission for an at-the-market ("ATM") offering program pursuant to which the Company may, from time to time, offer and sell shares of its common stock having an aggregate offering price of up to $7,434. The registration statement became effective on February 3, 2026. As of March 31, 2026 the Company had sold any shares under the ATM program.
On March 8, 2026, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with certain accredited investors (the "Investors") for a private placement of units ("Units") at a purchase price of $1.50 per Unit. On March 12, 2026 (the "Initial Closing"), the Company issued 1,500,000 Units for aggregate gross proceeds of $2,250.
Each Unit consists of: (i) share of common stock (par value $0.0001), or a pre-funded warrant to purchase share of common stock at $0.0001 per share for investors subject to beneficial ownership limitations of 4.99% or (ii) warrant to purchase share of common stock at $1.88 per share exercisable over years; and (iii) warrant to purchase share of common stock at $2.50 per share exercisable over years.
The Investors have the right, but not the obligation, to purchase up to an additional $18,000 of Units in one or more subsequent closings within 30 days of the Initial Closing Date. On April 16, 2026, the Company consummated an additional closing. (see Note 17 - Subsequent Events)
The offering was conducted as a private placement under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506(b) of Regulation D, and was structured to comply with Nasdaq Listing Rule 5635(d) without requiring stockholder approval.
The Company has agreed to file a registration statement covering the resale of the shares and warrant shares on or before May 21, 2026.
In connection with the Purchase Agreement, each Investor entered into a Lock-Up Agreement restricting transfers of all securities issued under the Purchase Agreement for six months following the Initial Closing (through September 12, 2026), followed by a six-month graduated release of one-sixth of restricted securities per month through March 12, 2027. The lock-ups were subsequently amended to have the lock-up period end May 16, 2026.
b. Warrants
The following table summarizes the Company’s warrant activity for the three months ended March 31, 2026:
c. Warrants exercisable for little or no consideration
Warrants exercisable for little or no consideration are fully vested warrants that allow the holders to acquire a specified number of the issuer’s shares at a nominal exercise price. The following table summarizes the Company’s penny warrant activity for the three months ended March 31, 2026:
d. Employees stock option plan
A summary of option activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period then ended is presented below.
The share-based compensation expense related to options for the three months ended March 31, 2026 was $9 and $86 three months ended March 31, 2025, respectively. The fair value of options granted for the three months ended March 31, 2026 and 2025, was and $34, respectively. The intrinsic value of the options outstanding as of March 31, 2026 is ( December 31, 2025: ).
A summary of the Company’s nonvested options as of March 31, 2026, and changes during the three-month period ended, is presented below.
As of March 31, 2026, there was $34 of total unrecognized compensation cost related to nonvested options granted to be recognized over the next 2.5 years.
e. Restricted share units (“RSUs”)
A summary of RSU activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period ended is presented below.
The share-based compensation expense related to RSUs for the three months ended March 31, 2026 was $332 and $1 for the three months ended March 31, 2025, respectively. The fair value of RSUs granted for the three months ended March 31, 2026, and 2025, was $1,478 and $31, respectively.
The fair value of each RSU is estimated based on the grant-date fair value of the underlying share of common stock.
A summary of the Company’s nonvested RSUs as of March 31, 2026, and changes during the three-month period ended, is presented below.
As of March 31, 2026, there was $1,009 of total unrecognized compensation cost related to nonvested RSUs granted. That cost is expected to be recognized over a weighted average period of 2.14 years.
f. Deferred stock units (“DSUs”)
A summary of DSU activity under the Company’s equity incentive plan as of March 31, 2026, and changes during the period ended, is presented below.
The share-based compensation expense related to DSUs for the three months ended March 31, 2026 was $82 and for the three months ended March 31, 2025, respectively. The fair value of DSUs granted for the three months ended March 31, 2026, and 2025, was respectively.
The fair value of each DSU is estimated based on the grant-date fair value of the underlying share of common stock.
A summary of the Company’s nonvested DSUs as of March 31, 2026, and changes during the three-month period ended, is presented below.
As of March 31, 2026, there was $191 of total unrecognized compensation cost related to nonvested DSUs granted. That cost is expected to be recognized over a weighted average period of 7 months. |
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Note 14 - Basic and Diluted Net Loss Per Share |
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| Earnings Per Share [Text Block] |
NOTE 14: BASIC AND DILUTED NET LOSS PER SHARE
Basic net loss per common share is computed by dividing net loss attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period. Weighted average number of shares of common stock outstanding during the period computation includes shares of common stock to be contractually issued as of the period end date and warrants exercisable for little or no consideration in relation to the share price. Shares of common stock that were issued and are subject to vesting conditions are not considered outstanding during the requisite service period.
Diluted net loss per common share is computed by giving effect to all potential dilutive shares of common stock that were outstanding during the period when the effect is dilutive. As of March 31, 2026, potential dilutive shares of common stock consist of shares issuable upon exercise of stock options, warrants, RSUs and DSUs. adjustments have been made to the weighted average outstanding shares of common stock figures for the three months ended March 31, 2026, or 2025, as the assumed conversion would be anti-dilutive.
The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net loss per share, as such shares would have had an anti-dilutive effect:
For the purposes of the computation of basic and diluted net loss per share, an amount recognized as a deemed dividend reduced net loss available to common stockholders in a manner similar to the application of the two-class method. The net loss available to common stockholders for the three months ended March 31, 2025 was adjusted by the deemed dividend associated with the Inducement Agreement
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Note 15 - Revenue, Net |
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| Revenue from Contract with Customer [Text Block] |
NOTE 15: REVENUE
The deferred revenue balance at March 31, 2026 consists of $194 classified as current and $14 classified as non-current on the condensed consolidated balance sheet. |
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Note 16 - Segment Reporting |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Segment Reporting [Text Block] |
NOTE 16: SEGMENT REPORTING
The Company has reportable segment managed on a consolidated basis: Firefly Products. The Company derives revenue primarily in North America and manages the business activities on a consolidated basis. The technology used in our customer arrangements is based on a single software platform that is deployed to and implemented by customers in a similar manner. The service term for the software arrangements is variable. The Company does not have intra-entity sales or transfers.
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who reviews financial information presented on a consolidated basis to allocate resources, evaluate financial performance and make overall operating decisions. The measure of segment profit or loss that is most consistent with the consolidated financial statements is consolidated net loss. The accounting policies of our single reportable segment are the same as those for the consolidated financial statements. The level of disaggregation and amounts of significant segment expenses that are regularly provided to the CODM are the same as those presented in the consolidated statements of operations. Likewise, the measure of segment assets is reported on the consolidated balance sheets as total assets.
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Note 17 - Subsequent Event |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Subsequent Events [Text Block] |
NOTE 17. SUBSEQUENT EVENTS
On April 16, 2026, the Company consummated an additional closing (the “Additional Closing”) under the Securities Purchase Agreement dated March 8, 2026 (the “Purchase Agreement”), pursuant to which the Company issued 5,333,333 units at a purchase price of $1.50 per unit for aggregate gross proceeds of $8,000. Each unit consisted of either share of common stock or pre-funded warrant exercisable at $0.0001 per share, together with (i) -year common stock purchase warrant to purchase share of common stock at an exercise price of $1.88 per share (the “150% Warrants”) and (ii) -year common stock purchase warrant to purchase share of common stock at an exercise price of $2.50 per share (the “200% Warrants”). In connection with the Additional Closing, the Company issued 762,208 shares of common stock, a pre-funded warrant to purchase 4,571,125 shares of common stock, 150% Warrants to purchase 5,333,333 shares of common stock, and 200% Warrants to purchase 5,333,333 shares of common stock, all warrants expiring April 16, 2031. The exercise of all warrants is subject to a 4.99% beneficial ownership limitation. The securities were issued in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder. In connection with the Additional Closing, the Company and the investor entered into an amended and restated lock-up agreement restricting transfers of the securities for a 30-day period ending May 16, 2026. The Company has agreed to file a registration statement covering the resale of the shares and warrant shares by May 21, 2026.
On May 6, 2026, the Company entered into a securities purchase agreement (the “May 2026 Purchase Agreement”) with an accredited investor (the “May 2026 Investor”), pursuant to which the Company agreed to issue and sell to the May 2026 Investor up to 666,667 units (each a “May 2026 Unit” and, collectively, the “May 2026 Units”), at a purchase price of $1.50 per May 2026 Unit, for aggregate gross proceeds of up to $1,000. Each May 2026 Unit consists of (i) share of Common Stock, par value $0.0001 per share (each a “May 2026 Share” and, collectively, the “May 2026 Shares”); (ii) common stock purchase warrant (each a “May 150% Warrant” and, collectively, the “May 150% Warrants”) to purchase share of Common Stock over five (5) years at an exercise price of $1.88 per share; (iii) common stock purchase warrant (the “May 200% Warrant”, together with the May 150% Warrants, the “May 2026 Warrants”) to purchase share of Common Stock over five (5) years at an exercise price of $2.50 per share; and (iv) the issuance of the Common Stock upon the exercise of the May 2026 Warrants (collectively, the “May 2026 Warrant Shares”). The May 2026 Warrants include a beneficial ownership limitation, which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise any portion of the May 2026 Warrants, to the extent that, after giving effect to such exercise, the holder (together with the holder’s affiliates) would beneficially own more than 4.99% or 9.99%, as applicable to the May 2026 Investor, of the outstanding shares of Common Stock immediately after the issuance of the Common Stock issuable upon such exercise. The May 2026 Warrants are not exercisable until the Company has obtained approval from its stockholders (“Shareholder Approval”) for the issuance of the Common Stock. The Company is required to use commercially reasonable efforts to obtain Shareholder Approval within ninety (90) days following the date of the May 2026 Purchase Agreement.
Pursuant to the May 2026 Purchase Agreement, the Company agreed to file a registration statement with the SEC covering the resale of the May 2026 Shares and the May 2026 Warrant Shares as soon as practicable and, in any event, on or before May 21, 2026. The closing of the offering is conditioned on the effectiveness of such registration statement and receipt of Shareholder Approval.
The securities were offered and sold in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. As of the date of this Quarterly Report on Form 10-Q, the closing of this offering had not yet occurred.
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Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2026 | |
| Trading Arrangements, by Individual [Table] | |
| Material Terms of Trading Arrangement [Text Block] |
information was required to be disclosed in a Current Report on Form 8-K during the three months ended March 31, 2026, but was not reported.
None of our directors or “officers,” as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a Rule 10b5-1 trading plan or arrangement or a non-Rule 10b5-1 trading plan or arrangement, as defined in Item 408(c) of Regulation S-K, during the fiscal quarter ended March 31, 2026.
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| Rule 10b5-1 Arrangement Adopted [Flag] | false |
| Rule 10b5-1 Arrangement Terminated [Flag] | false |
| Non-Rule 10b5-1 Arrangement Adopted [Flag] | false |
| Non-Rule 10b5-1 Arrangement Terminated [Flag] | false |
Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2026 | |
| Accounting Policies [Abstract] | |
| Basis of Accounting, Policy [Policy Text Block] | Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire period. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2025, and the notes thereto included in the Company’s Form 10-K filed with the SEC on March 31, 2026. Certain information and footnote disclosures normally included in the audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in the accompanying unaudited condensed consolidated financial statements. All amounts are disclosed in thousands, except share and per share amounts. The accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its consolidated financial position, results of operations, and cash flows of the Company for all periods presented.
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| Consolidation, Policy [Policy Text Block] | Principles of consolidation
These unaudited consolidated financial statements include the financial information of the Company and its subsidiaries. The Company consolidates legal entities in which it holds a controlling financial interest. The Company has a two-tier consolidation model: one focused on voting rights (the voting interest model) and the second focused on a qualitative analysis of power over significant activities and exposure to potentially significant losses or benefits (the variable interest model). All entities are first evaluated to determine whether they are variable interest entities (“VIE”). If an entity is determined not to be a VIE, it is assessed on the basis of voting and other decision-making rights under the voting interest model. The accounts of the subsidiaries are prepared for the same reporting period using consistent accounting policies. All intercompany balances and transactions were eliminated on consolidation.
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| Use of Estimates, Policy [Policy Text Block] | Use of estimates in the preparation of consolidated financial statements
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates and assumptions, and such differences could be material to the Company’s financial position and results of operations.
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| New Accounting Pronouncements, Policy [Policy Text Block] | Impact of recently issued accounting standards
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," which requires public business entities to disclose, in the notes to the financial statements, specified components of certain income statement expense line items presented on the face of the income statement, including purchases of inventory, employee compensation, depreciation, and amortization of intangible assets, on both an annual and interim basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its disclosures in the consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326) (“ASU 2025-05”) to introduce a practical expedient to calculating current expected credit loss by assuming that the current conditions as of the balance sheet date will not change for the remaining life of the asset. This expedient can only be applied to current accounts receivable and current contract assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual periods, and this update is applied prospectively. The adoption of this amendment did not have a material impact on the Company's consolidated financial statements.
In September 2025, the FASB issued Account Standards Update, or ASU, 2025-06 “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350 40): Targeted Improvements to the Accounting for Internal-Use Software”, to modernize the accounting for internal-use software costs. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods. Under the new guidance, entities will start capitalizing eligible costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. The new guidance will be effective for the Company for interim and annual periods beginning January 1, 2028. The Company has not adopted this standard early and is currently evaluating the potential effect that the updated standard will have on its consolidated financial statements.
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Note 4 - Business Combination (Tables) |
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Note 5 - Accounts and Other Receivables (Tables) |
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Note 6 - Prepaid Expenses (Tables) |
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Note 7 - Inventory (Tables) |
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Note 8 - Equipment (Tables) |
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Note 9 - Leases (Tables) |
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Note 10 - Intangible Assets, Net and Goodwill (Tables) |
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Note 13 - Equity (Tables) |
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] |
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| Share-Based Payment Arrangement, Option, Activity [Table Text Block] |
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| Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block] |
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| Share-Based Payment Arrangement, Deferred Stock Unit, Activity [Table Text Block] |
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Note 14 - Basic and Diluted Net Loss Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] |
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Note 15 - Revenue, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregation of Revenue [Table Text Block] |
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| Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] |
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Note 2 - Going Concern (Details Textual) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |||
|---|---|---|---|---|---|
May 12, 2026 |
Mar. 31, 2026 |
Mar. 31, 2025 |
May 06, 2026 |
Dec. 31, 2025 |
|
| Retained Earnings (Accumulated Deficit) | $ (113,619) | $ (111,615) | |||
| Cash Provided by (Used in) Operating Activity, Including Discontinued Operation | (1,948) | $ (2,511) | |||
| Private Placement [Member] | |||||
| Proceeds from Issuance or Sale of Equity | $ 2,386 | ||||
| Private Placement [Member] | Subsequent Event [Member] | |||||
| Proceeds from Issuance or Sale of Equity | $ 8,000 | ||||
| May 2026 Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||
| Equity Offering, Maximum Amount | $ 1,000 | ||||
Note 4 - Business Combination - Pro Forma Results (Details) - Evoke Neuroscience, Inc. [Member] - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Revenues | $ 485 | $ 417 |
| Net loss | $ (2,004) | $ (13,061) |
Note 5 - Accounts and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Mar. 31, 2026 |
Dec. 31, 2025 |
Dec. 31, 2024 |
|---|---|---|---|
| Accounts receivable | $ 129 | $ 124 | |
| Allowance for expected credit losses | (10) | (10) | $ (112) |
| Other receivables | 70 | 80 | |
| Total | $ 189 | $ 194 |
Note 5 - Accounts and Other Receivables - Schedule of Allowance for Credit Loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2026 |
Dec. 31, 2025 |
|
| Balance | $ 10 | $ 112 |
| Provision for bad debt | 0 | 10 |
| Accounts written off | 0 | (112) |
| Balance | $ 10 | $ 10 |
Note 6 - Prepaid Expenses - Detail of Prepaid Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2026 |
Dec. 31, 2025 |
|---|---|---|
| Shares issued for prepaid services | $ 623 | $ 780 |
| Prepaid expenses | 415 | 198 |
| Total (current) | 1,038 | 978 |
| Shares issued for prepaid services | 0 | 0 |
| Prepaid expenses | 254 | 268 |
| Total (non-current) | $ 254 | $ 268 |
Note 7 - Inventory - Prepaid Expenses Balance (Details) - USD ($) $ in Thousands |
Mar. 31, 2026 |
Dec. 31, 2025 |
|---|---|---|
| Raw Materials | $ 103 | $ 108 |
| Work In Process | 0 | 0 |
| Finished Goods | 0 | 0 |
| Total (current) | $ 103 | $ 108 |
Note 8 - Equipment (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Depreciation | $ 7 | $ 9 |
Note 8 - Equipment - Equipment Balance (Details) - USD ($) $ in Thousands |
Mar. 31, 2026 |
Dec. 31, 2025 |
|---|---|---|
| Less – accumulated depreciation | $ (65) | $ (58) |
| Less - Impairment | (99) | (99) |
| Equipment, net | 197 | 146 |
| Medical Equipment [Member] | ||
| Equipment, cost | 148 | 148 |
| Medical Equipment Subject to Operating Leases [Member] | ||
| Equipment, cost | 177 | 123 |
| Office Equipment [Member] | ||
| Equipment, cost | $ 36 | $ 32 |
Note 9 - Leases (Details Textual) |
Mar. 31, 2026 |
|---|---|
| Minimum [Member] | |
| Lessee, Operating Lease, Term of Contract (Year) | 1 year |
| Maximum [Member] | |
| Lessee, Operating Lease, Term of Contract (Year) | 2 years |
Note 9 - Leases - Future Undiscounted Cash Flows (Details) $ in Thousands |
Mar. 31, 2026
USD ($)
|
|---|---|
| 2026 | $ 610 |
| 2027 | 225 |
| 2028 | 3 |
| 2029 | 0 |
| 2030 | 0 |
| Thereafter | 0 |
| Total | $ 838 |
Note 10 - Intangible Assets, Net and Goodwill (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Amortization | $ 38 | $ 10 |
Note 10 - Intangible Assets, Net and Goodwill - Amortization Expense (Details) $ in Thousands |
Mar. 31, 2026
USD ($)
|
|---|---|
| 2026 | $ 112 |
| 2027 | 150 |
| 2028 | 116 |
| 2029 | 100 |
| 2030 and therafter | 345 |
| Total | $ 823 |
Note 11 - Liability for Employee Rights Upon Retirement (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Monthly Deposit Rate, Percent of Salary | 8.33% | |
| Employee Benefits and Share-Based Compensation | $ 10 | $ 11 |
Note 12 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 27 Months Ended | |||
|---|---|---|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
Mar. 31, 2026 |
Dec. 31, 2025 |
Dec. 31, 2024 |
|
| Revenue from Contract with Customer, Including Assessed Tax | $ 485 | $ 43 | |||
| Contract with Customer, Liability | $ 208 | $ 13 | $ 208 | $ 249 | $ 13 |
| Israeli Innovation Authority (“IIA”) [Member] | Grant [Member] | |||||
| Revenue from Contract with Customer, Including Assessed Tax | $ 0 | ||||
| Israeli Innovation Authority (“IIA”) [Member] | Royalty [Member] | |||||
| Research Agreement, Royalty Percentage | 3.00% | 3.00% | |||
| Contract with Customer, Liability | $ 0 | $ 0 | 0 | ||
| Contract With Customer, Contingent Liability | $ 5,861 | $ 5,861 | $ 5,835 | ||
Note 13 - Equity - Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Jan. 01, 2026 |
|
| Outstanding, beginning balance (in shares) | 357,870 | |
| Outstanding units, aggregate intrinsic value | $ 695 | $ 315 |
| Units granted, shares (in shares) | 110,860 | |
| Units exercised, shares (in shares) | (150,022) | |
| Outstanding, ending balance (in shares) | 318,708 | |
| Non-Vested units, shares (in shares) | 357,870 | |
| Non-Vested units, weighted average grant-date fair value (in dollars per share) | $ 3.19 | |
| Units granted, shares (in shares) | 110,860 | |
| Units granted, weighted average grant-date fair value (in dollars per share) | $ 1.89 | |
| Units vested, shares (in shares) | (150,022) | |
| Units vested, weighted average grant-date fair value (in dollars per share) | $ 2.23 | |
| Non-Vested Units, shares (in shares) | 318,708 | |
| Non-Vested Units, weighted average grant-date fair value (in dollars per share) | $ 3.19 |
Note 13 - Equity - Schedule of Deferred Stock Units (Details) - Deferred Stock Units (DSUS) [Member] - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Dec. 31, 2025 |
|
| Outstanding, beginning balance (in shares) | 239,084 | |
| Outstanding units, aggregate intrinsic value | $ 521 | $ 152 |
| Units granted, shares (in shares) | 0 | |
| Outstanding, ending balance (in shares) | 239,084 | |
| Non-Vested units, shares (in shares) | 172,416 | |
| Non-Vested units, weighted average grant-date fair value (in dollars per share) | $ 1.92 | |
| DSUs granted, shares (in shares) | 0 | |
| DSUs granted, weighted average grant-date fair (in dollars per share) | $ 0 | |
| DSUs vested, shares (in shares) | (43,103) | |
| DSUs vested, weighted average grant-date fair (in dollars per share) | $ 0 | |
| Non-Vested Units, shares (in shares) | 129,313 | |
| Non-Vested Units, weighted average grant-date fair value (in dollars per share) | $ 1.92 |
Note 14 - Basic and Diluted Net Loss Per Share (Details Textual) - shares shares in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Weighted Average Number of Shares Outstanding, Diluted, Adjustment (in shares) | 0 | |
| Warrant [Member] | ||
| Weighted Average Number of Shares Outstanding, Diluted, Adjustment (in shares) | 0 | |
Note 14 - Basic and Diluted Net Loss Per Share - Anti-dilutive Securities (Details) - shares |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Anti-dilutive securities (in shares) | 4,680,768 | 1,781,454 |
| Warrant [Member] | ||
| Anti-dilutive securities (in shares) | 3,900,738 | 921,381 |
| Share-Based Payment Arrangement, Option [Member] | ||
| Anti-dilutive securities (in shares) | 332,009 | 476,741 |
| Restricted Stock Units (RSUs) [Member] | ||
| Anti-dilutive securities (in shares) | 318,708 | 10,000 |
| Deferred Stock Units [Member] | ||
| Anti-dilutive securities (in shares) | 129,313 | 33,332 |
| Stock Issuable Pursuant to Series C Preferred Stock [Member] | ||
| Anti-dilutive securities (in shares) | 0 | 340,000 |
Note 15 - Revenue, Net (Details Textual) - USD ($) $ in Thousands |
Mar. 31, 2026 |
Dec. 31, 2025 |
|---|---|---|
| Contract with Customer, Liability, Current | $ 194 | $ 228 |
| Contract with Customer, Liability, Noncurrent | $ 14 |
Note 15 - Revenue, Net - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Revenue | $ 485 | $ 43 |
| Transferred at Point in Time [Member] | ||
| Revenue | 280 | 9 |
| Transferred over Time [Member] | ||
| Revenue | 205 | 34 |
| Service [Member] | ||
| Revenue | 216 | 9 |
| Rentals [Member] | ||
| Revenue | 15 | 34 |
| Product [Member] | ||
| Revenue | 87 | 0 |
| Subscription and Circulation [Member] | ||
| Revenue | 161 | 0 |
| Product and Service, Other [Member] | ||
| Revenue | $ 6 | $ 0 |
Note 15 - Revenue, Net - Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2026 |
Mar. 31, 2025 |
|
| Deferred revenue | $ 249 | $ 13 |
| Increases due to consideration received from customers | 251 | 0 |
| Revenue recognized | (292) | 0 |
| Deferred revenue | $ 208 | $ 13 |
Note 16 - Segment Reporting (Details Textual) |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Number of Reportable Segments | 1 |