GTHP 10-K
Guided Therapeutics Inc (GTHP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the fiscal year ended
Commission File No.
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The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold on June 30, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter), was: $
As of March 27, 2026, the registrant had
GUIDED THERAPEUTICS, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
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When we use the terms “Guided,” “Guided Therapeutics, “we,” “us,” or “our,” we are referring to Guided Therapeutics, Inc. and its subsidiaries, unless the context otherwise requires.
Cautionary Statement Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes certain statements that are not historical facts that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the United States Private Securities Litigation Reform Act of 1995. We use words such as “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “will,” “projection,” “should,” “believe,” “potential,” “could,” or similar words suggesting future outcomes (including negative and grammatical variations) to identify forward-looking statements. These statements include statements regarding the following, among other things:
| · | access to sufficient debt or equity capital to meet our operating and financial needs; |
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| · | the extent of dilution of the holdings of our existing stockholders upon the issuance, conversion or exercise of securities issued as part of our capital raising efforts; |
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| · | the extent to which certain debt holders may call the notes to be paid; |
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| · | the effectiveness and ultimate market acceptance of our products and our ability to generate sufficient sales revenues to sustain our growth and strategy plans; |
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| · | whether our products in development will prove safe, feasible and effective; |
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| · | whether and when we or any potential strategic partners will obtain required regulatory approvals in the markets in which we plan to operate; |
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| · | our need to achieve manufacturing scale-up in a timely manner, and our need to provide for the efficient manufacturing of sufficient quantities of our products; |
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| · | the lack of immediate alternate sources of supply for some critical components of our products; |
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| · | our ability to establish and protect the proprietary information on which we base our products, including our patent and intellectual property position; |
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| · | the impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations; |
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| · | the need to fully develop the marketing, distribution, customer service and technical support and other functions critical to the success of our product lines; |
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| · | the dependence on potential strategic partners or outside investors for funding, development assistance, clinical trials, distribution and marketing of some of our products; and |
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| · | other risks and uncertainties described from time to time in our reports filed with the SEC. |
These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this filing and are subject to risks and uncertainties. We discuss many of these risks in greater detail under “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
Forward-looking statements speak only as of the date the statements are made. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect thereto or with respect to other forward-looking statements.
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PART I
Item 1. Business
Overview
We are a medical technology company focused on developing innovative medical devices that have the potential to improve healthcare. Our primary focus is the sales and marketing of our LuViva® Advanced Cervical Scan non-invasive cervical cancer detection device. The underlying technology of LuViva primarily relates to the use of biophotonics for the non-invasive detection of cancers. LuViva is designed to identify cervical cancers and precancers painlessly, non-invasively and at the point of care by scanning the cervix with light, then analyzing the reflected and fluorescent light.
LuViva is designed to provide a less invasive and painless alternative to conventional tests for cervical cancer screening and detection. Additionally, LuViva is designed to improve patient well-being not only because it eliminates pain, but also because it is convenient to use and provides rapid results at the point of care. We focus on two primary applications for LuViva: first, as a cancer screening tool in the developing world, where infrastructure to support traditional cancer-screening methods is limited or non-existent, and second, as a triage following traditional screening in the developed world, where a high number of false positive results cause a high rate of unnecessary and ultimately costly follow-up tests.
Screening for cervical cancer represents one of the most significant demands on the practice of diagnostic medicine. As cervical cancer is linked to a sexually transmitted disease—the human papillomavirus (HPV)—every woman essentially becomes “at risk” for cervical cancer simply after becoming sexually active. In the developing world, there are approximately 2.0 billion women aged 15 and older who are potentially eligible for screening with LuViva. Guidelines for screening intervals vary across the world, but U.S. guidelines call for screening every three years. Traditionally, the Pap smear screening test, or Pap test, is the primary cervical cancer screening methodology in the developed world. However, in developing countries, cancer screening using Pap tests is expensive and requires infrastructure and skill not currently existing, and not likely to be developed in the near future, in these countries.
We believe LuViva is the answer to the developing world’s cervical cancer screening needs. Screening for cervical cancer in the developing world often requires working directly with foreign governments or non-governmental agencies (NGOs). By partnering with governments or NGOs, we can provide immediate access to cervical cancer detection to large segments of a nation’s population as part of national or regional governmental healthcare programs, eliminating the need to develop expensive and resource-intensive infrastructures.
In the developed world, we believe LuViva offers a more accurate and ultimately cost-effective triage medical device, to be used once a traditional Pap test or HPV test indicates the possibility of cervical cancer. Due to the high number of false positive results from Pap tests, traditional follow-on tests entail increased medical treatment costs. We believe these costs can be minimized by utilizing LuViva as a triage to determine whether and to what degree follow-on tests are warranted.
We believe our non-invasive cervical cancer detection technology can be applied to the early detection of other cancers as well. For example, we have developed prototypes and conducted limited clinical studies using our biophotonic technology for the detection of esophageal cancer. We believe that skin cancer detection is also a promising target for our biophotonic technology, but currently we are focused primarily on the large-scale commercialization of LuViva.
Corporate History
We are a Delaware corporation, originally incorporated in 1992 under the name “SpectRx, Inc.” On February 22, 2008, we changed our name to Guided Therapeutics, Inc. At the same time, we renamed our wholly-owned subsidiary, InterScan, which originally had been incorporated as “Guided Therapeutics, Inc.”
Our principal executive and operations facility is located at 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092, and our telephone number is (770) 242-8723.
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Our Potential Market
The Developing World
According to the most recent data published by the World Health Organization (“WHO”), cervical cancer is the fourth most frequent cancer in women worldwide, with an estimated 660,000 new cases in 2022, an increase of 56,000 cases from 2020. For women living in less developed regions, however, cervical cancer is the second most common cancer, and 9 out of 10 women who die from cervical cancer reside in low- and middle-income countries. In 2022, GLOBOCAN, the international cancer tracking agency, estimated that approximately 349,000 women died from cervical cancer, with the majority of these deaths occurring in low- and middle-income countries. Moreover, GLOBOCAN projects the global deaths to rise significantly to over 411,000 deaths annually by 2030 if current trends in prevention and screening are not accelerated.
As noted by the WHO, in developed countries, programs are in place that enable women to get screened, making most pre-cancerous lesions identifiable at stages when they can easily be treated. Early treatment prevents up to 80% of cervical cancers in these countries. In developing countries, however, limited access to effective screening means that the disease is often not identified until it is further advanced and symptoms develop. In addition, prospects for treatment of such late-stage disease may be poor, resulting in a higher rate of death from cervical cancer in these countries.
We believe that the greatest need and market opportunity for LuViva lies in screening for cervical cancer in developing countries where the infrastructure for traditional screening may be limited or non-existent.
In addition to private care markets, we are actively working with distributors in the following countries to implement government-sponsored screening programs: Turkey, Indonesia and several countries in Central and Eastern Europe. The number of screening candidates in those countries is approximately 155 million.
The Developed World
The Pap test, which involves a sample of cervical tissue being placed on a slide and observed in a laboratory, is currently the most common form of cervical cancer screening. Since the introduction of screening and diagnostic methods, the number of cervical cancer deaths in the developed world has declined dramatically, due mainly to the increased use of the Pap test. However, the Pap test has a wide variation in sensitivity, which is the ability to detect the disease, and specificity, which is the ability to exclude false positives. Currently, about 50-60 million Pap tests are given annually in the United States and, combined with a pelvic exam as the standard of care, have an average price in the range of approximately $125 - $450 per exam.
After a Pap test returns a positive result for cervical cancer, accepted protocol calls for a visual examination of the cervix using a colposcope, usually followed by a biopsy, or tissue sampling, at one or more locations on the cervix. This method looks for visual changes attributable to cancer. There are about two million colposcope examinations annually in the United States and Europe. According to MD Save, a leading online medical service provider, the average cost of a colposcopy examination with biopsy in the United States is currently $3,300.
The American Society for Colposcopy and Cervical Pathology published cervical cancer management guidelines in 2019, which remain the current standard of care. The guidelines resulted in a complex algorithm that indicates whether woman has at least a 4% chance of developing a precancerous or cancerous condition of the cervix within a 2-year period. If so, she is referred to colposcopy and biopsy. This more conservative management approach may result in more women being referred to colposcopy and biopsy.
Given this landscape, we believe that there is a material need and market opportunity for LuViva as a triage device in the developed world where LuViva represents a more cost-effective method of verifying a positive Pap test than the alternatives.
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The LuViva Advanced Cervical Scan
LuViva is designed to identify cervical cancers and precancers painlessly, non-invasively and at the point of care by scanning the cervix with light, then analyzing the light reflected from the cervix. The information presented by the light would be used to indicate the likelihood of cervical cancer or precancers. Our product, in addition to detecting the structural changes attributed to cervical cancer, is also designed to detect the biochemical changes that precede the development of visual lesions. In this way, cervical cancer may be detected earlier in its development, which should increase the chances of effective treatment. In addition to the device itself, operation of LuViva requires employment of our single-use, disposable calibration and alignment cervical guide.
To date, thousands of women in multiple international clinical settings have been tested with LuViva. Results from these studies have been reported in more than 25 peer-reviewed publications and scientific presentations evaluating the device’s clinical performance in cervical cancer screening.
Internationally, we contract with country-specific or regional distributors. We believe that the international market will be significantly larger than the U.S. market due to the international demand for cervical cancer screening. We have executed formal distribution agreements covering over 40 countries, some of which have expired. We still have active contracts in place for countries including China and Southeast Asia (including Indonesia), Central & Eastern Europe and Russia. In addition to the US, China and Eastern/Central Europe we intend to focus on other markets where we have or previously had regulatory approvals, such as those in the European Union, India and certain Persian Gulf countries, such as Saudi Arabia.
We have previously obtained regulatory approval to sell LuViva in Europe under our Edition 3 CE Mark. Additionally, LuViva has also previously obtained marketing approval from Health Canada, COFEPRIS in Mexico, Ministry of Health in Kenya, which have all expired. In addition, in 2018, we were approved for sales and marketing in India. We currently are seeking regulatory approval to market LuViva in the United States but have not yet received approval from the U.S. Food and Drug Administration (FDA). As of December 31, 2025, we have sold 158 LuViva devices and approximately 78,950 single-use-disposable cervical guides to international distributors. In order to effect these sales, we have a sales team of three people and work through country and region specific medical device distributors.
Our Strengths
Currently, we are the only commercial stage company with a biophotonic technology that potentially addresses a large primary screening market and a potential R&D pipeline that could improve the early detection of numerous cancers that afflict men and women. Key strengths include:
| · | The engineering and production risks have been largely addressed as we have sold 158 working systems worldwide. |
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| · | Regulatory approvals have been granted covering over 40 countries. |
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| · | We believe we have legitimate pathways for securing marketing approvals in the two largest medical markets – the US and China, within the next 9 – 12 months. |
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| · | The clinical results of our technology have been published in leading peer-reviewed journals by world famous, thought-leading physicians. |
Our Business Strategy
Our near-term objectives for the next year include the following:
| · | Seeking US FDA approval based on our recently completed U.S. clinical study. |
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| · | Subject to FDA approval, pursuing potential distribution partnerships with larger U.S.-based companies while building a small sales force located near major metropolitan areas and focused on large centralized OB-GYN practices. |
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| · | Seeking approval from the Chinese National Medical Product Administration (“NMPA”) and initiating sales in China through collaborations with Shandong Medical Instrumentation Co. Ltd (“SMI”), Hangzhou Dongyue Medical Technology Co, (“HDMT”) and Jiangsu Yuanshuo Medical Instruments Corporation (“YMIC”), which are assisting with the regulatory process and potential provincial market launches. |
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Work with the Turkish Ministry of Health (MOH) to conduct a primary screening study and develop a plan for LuViva to service as the primary cervical cancer screening took in Turkey.
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| · | Supporting Newmars Technology, Inc. “(NTI”), our partner in Central and Eastern Europe, in the initial commercialization of LuViva in Russia following regulatory approval granted in 2025. |
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| · | Continuing to pursue sales through our distributors in other large countries, such as Indonesia. |
Although LuViva received regulatory approval in Russia in 2025, the ongoing conflict in Ukraine may limit NTI’s ability to commercialize the product in that market
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Manufacturing, Sales and Distribution
Over the past few years, we have manufactured the key subsystems of LuViva at our Georgia facility and final manufacturing was performed at our contract manufacturing site in Hungary by NTI. Many of the specialized parts for LuViva continue to be custom manufactured for us by third-party manufacturers. We and our partners adhere to ISO 13485:2016 quality standards in our manufacturing processes, as well as local regulations regarding the safety and efficacy of medical devices. Our single-use cervical guides are manufactured by a vendor that specializes in injection molding of plastic medical products. As we anticipate approvals in the two largest markets within the next 12 months, namely the U.S. and China, our manufacturing strategy may shift to meet these new opportunities. For the U.S. and other markets that do not benefit from local participation in the manufacturing process, we anticipate that the primary manufacturing site will be our headquarters in Norcross, Georgia, USA. Final LuViva devices for the U.S. and other secondary markets will be manufactured there. For certain markets where local participation in the manufacturing process is either required or highly beneficial, such as China, Indonesia, and possibly Turkey, we will continue to manufacture the key subsystems of LuViva at our Georgia facility and ship these subsystems to our partners overseas for final manufacturing and distribution. For Russia and possibly certain European markets, we will continue to utilize NTI as the final manufacturer and distributor. Additionally, it also may be advantageous to manufacture our single-use cervical guides overseas to reduce cost and increase profit margins.
On January 22, 2017, we entered into a license agreement with Shandong Yaohua Medical Instrument Corporation (“SMI”), as amended on March 28, 2017, pursuant to which we granted SMI an exclusive global license to manufacture the LuViva device and related disposables (subject to a carve-out for manufacturing in Turkey). On December 18, 2018, we entered into a co-development agreement with Newmars Technologies, Inc. (“NTI”), whereby NTI performs final assembly of the LuViva device for its contracted distribution countries in Eastern Europe and Russia at its ISO 13485 facility in Hungary. This additional carve-out was agreed to by SMI.
The Company then entered into several amendments to the SMI agreement, the most recent of which was executed on May 8, 2025. Following this agreement, we entered into a purchase agreement with HDMT for 35 LuViva devices (without rolling carts) totaling $700,000. As of February 28, 2026, seven devices have been paid for and shipped, and four additional units have been manufactured and are undergoing testing. Additionally, on November 11, 2025, we entered into a purchase agreement with YMIC for $200,000 of LuViva parts and components used in our single-use cervical guides. As of February 28, 2026, this order remains in process.
SMI was unable to fulfill certain obligations under its agreement and consequently lost its rights to manufacture and distribute LuViva in China. Although SMI continues to work with partners in China to pursue NMPA approval, we are no longer obligated to work with SMI and have instead increased our engagement with HDMT and YMIC.
In general, we rely on distributors to sell our products. Distributors may be exclusive to a single country or responsible for multiple countries within a region. We manage these distributors under contract, providing marketing materials and training them to demonstrate and operate LuViva. We seek distributors with experience in gynecology and in introducing new technologies within their territories. into their assigned territories. An exception is Turkey, where we are working directly with the Ministry of Health (“MOH”) at its recommendation. This relationship will require the establishment of a local office but allows us to sell products directly to the MOH without the additional mark-up typically associated with a local distributor.
We have only limited experience in the production planning, quality system management, facility development, and production scaling that will be needed to bring production to increased sustained commercial levels. We will likely need to develop additional expertise to successfully manufacture, market, and distribute future products or applications of our technology for other cancers.
Research, Development and Engineering
We have been engaged primarily in the research, development and testing of our LuViva non-invasive cervical cancer detection product and our core biophotonic technology. Since 2013, we have incurred approximately $9.4 million in research and development expenses, net of about $1.0 million reimbursed through collaborative arrangements and government grants. Research and development costs were approximately $0.5 million in the years ended December 31, 2025 and 2024.
Since 2013, we have focused our research and development and our engineering resources almost exclusively on development of our biophotonic technology, with only limited support of other programs funded through government contracts or third-party funding. Because our research and clinical development programs for other cancers are at a very early stage, substantial additional research and development and clinical trials will be necessary before we can produce commercial prototypes of other cancer detection products.
Several of the components used in LuViva currently are available from only one supplier, and substitutes for these components could not be obtained easily or would require substantial modifications to our products.
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Patents
We have pursued the development and acquisition of patents and patent rights, as well as licensing technology. Our success depends in large part on our ability to protect the proprietary nature of our technology through patents and to license patents or patent applications from third parties as needed to develop our products. As of December 31, 2025, we held six active patents. Currently, we do not own third party patents, nor do we make any outside payments for patents.
Patents can be extended up to an additional five (5) years. However, patent term extension under the Hatch-Waxman Act does not occur automatically and the patent owner must file an application with the USPTO requesting term extension within 60 days of obtaining FDA marketing approval.
Patent No. | Title | Country | Grant Date | Expiration Date |
8,644,912 | System and Method For Determining Tissue Characteristics | US | 2/4/2014 | 8/22/2031 |
8,781,560 | Method and Apparatus For Rapid Detection and Diagnosis of Tissue Abnormalities | US | 7/15/2014 | 7/14/2031 |
9,561,003 | Method and Apparatus For Rapid Detection and Diagnosis of Tissue Abnormalities | US | 2/7/2017 | 3/5/2034 |
D714453 | Hand Held Unit for Diagnostics or Measurement | US | 9/30/2014 | 9/30/2028 |
D724199 | Medical Diagnostic Stand Off Tube | US | 3/10/2015 | 3/10/2029 |
D746475 | Mobile Cart and Hand Held Unit for Diagnostics or Measurement | US | 12/29/2015 | 12/29/2029 |
The Company has applied for one additional US patent, although there is no assurance that the patent will be granted. The Company’s strategy is to continue improving its products and filing new patents to protect those improvements.
In the United States, additional years of patent protection may be added (on a case-by-case basis) beyond the standard patent terms under the 1984 Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act. The Hatch-Waxman act includes Section 156, which provides for the extension of the term of a granted patent (PTE) under certain circumstances. The intent behind Section 156 is to extend patent life to compensate patent holders for patent term lost while developing their product and awaiting FDA approval. The Company’s patents qualify under Section 156 because LuViva has not yet been commercialized in the United States and it is being regulated by FDA as a Class III Medical Device.
Employees and Consultants
As of December 31, 2025, we had three regular employees and five consultants to provide services to us on a full- or part-time basis. No employees are covered by collective bargaining agreements, and we believe we maintain good relations with our employees.
Our ability to operate successfully and manage our potential future growth depends in significant part upon the continued service of key scientific, technical, managerial and finance personnel, and our ability to attract and retain additional highly qualified personnel in these fields. In addition, if we are able to successfully develop and commercialize our products, we likely will need to hire additional scientific, technical, marketing, managerial and finance personnel. We face intense competition for qualified personnel in these areas, many of whom are often subject to competing employment offers. The loss of key personnel or our inability to hire and retain additional qualified personnel in the future could have a material adverse effect on our business, financial condition and results of operations.
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Competition
The medical device industry in general and the markets for cervical cancer detection in particular, are intensely competitive. If successful in our product development, we will compete with other providers of cervical cancer detection and prevention products.
Current cervical cancer screening and diagnostic tests, primarily the Pap test, HPV test, and colposcopy, are well established and pervasive. Improvements and new technologies for cervical cancer detection and prevention, such as Thin-Prep from Hologic and HPV testing from Qiagen, have led to other new competitors. In addition, there are other companies attempting to develop products using forms of biophotonic technologies in cervical cancer detection, such as Spectrascience, which has a very limited U.S. FDA approval to market its device for detection of cervical cancers but has not yet entered the market. The approval limits use of the Spectrascience device only after a colposcopy, as an adjunct. In addition to the Spectrascience device, there are other technologies that are seeking to enter the market as adjuncts to colposcopy, including devices from Dysis and Zedco. While these technologies are not direct competitors to LuViva, modifications to them or other new technologies will require us to develop devices that are more accurate, easier to use or less costly to administer so that our products have a competitive advantage.
In April 2014, the U.S. FDA approved the use of the Roche cobas HPV test as a primary screener for cervical cancer. Using a sample of cervical cells, the cobas HPV test detects DNA from 14 high-risk HPV types. The test specifically identifies HPV 16 and HPV 18, while concurrently detecting 12 other types of high-risk HPVs. This could make HPV testing a competitor to the Pap test. However, due to its lower specificity, we believe that screening with HPV will increase the number of false positive results if widely adopted.
In June 2006, the U.S. FDA approved the HPV vaccine Gardasil from drug maker Merck. Gardasil is a prophylactic HPV vaccine, meaning that it is designed to prevent the initial establishment of HPV infections. For maximum efficacy, it is recommended that girls receive the vaccine prior to becoming sexually active. Since Gardasil will not block infection with all of the HPV types that can cause cervical cancer, the vaccine should not be considered a substitute for routine Pap tests. On October 16, 2009, GlaxoSmithKline PLC was granted approval in the United States for a similar preventive HPV vaccine, known as Cervarix. Due to the lack of 100% protection against all potentially cancer-causing strains of HPV, we believe that the vaccines will have a limited impact on the cervical cancer screening and diagnostic market for many years.
Government Regulation
The medical devices that we manufacture are subject to regulation by numerous regulatory bodies, including the Chinese National Medical Product Administration (“NMPA”), the U.S. FDA, and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and regulations governing the development, testing, manufacturing, labeling, marketing and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical evaluation program be conducted before a device receives approval for commercial distribution.
In the European Union, medical devices are required to comply with the Medical Devices Directive and obtain CE Mark certification to market medical devices. The CE Mark certification granted following approval from an independent “Notified Body,” is an international symbol of adherence to quality assurance standards and compliance with applicable European Medical Devices Directives. From 2017 through 2019, we were unable to pay the annual registration fees to maintain our ISO 13485:2003 certification and our CE Mark. On December 21, 2018 we executed agreement with Newmars, described above, for final assembly of LuViva at their ISO 13485:2016 accredited facility. This allowed LuViva to be granted a CE Mark through the facility at Newmars, which was achieved in 2021. To maintain the CE Mark, evolving regulatory standards must continue to be met. Depending on our success with Newmars in Europe, maintaining the CE Mark may become a secondary priority. As discussed above, we intend to move primary manufacturing back to our facility in the United States, and regulatory approval to sell LuViva in the United States, China, Indonesia, Russia and Turkey through the MOH does not require the CE Mark.
China has a regulatory system similar to that of the European Union, but due to interaction with the U.S. FDA, the NMPA also shares some similarities with its U.S. counterpart. Devices are classified by the NMPA’s Center for Medical Device Evaluation (CMDE) into three categories based on medical risk, with the level of regulatory oversight determined by degree of risk and invasiveness. CMDE’s device classifications and definitions are as follows:
| · | Class I device: The safety and effectiveness of the device can be ensured through routine administration. |
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| · | Class II device: Further control is required to ensure the safety and effectiveness of the device. |
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| · | Class III device: The device is implanted into the human body; used for life support or sustenance; or poses potential risk to the human body, and thus must be strictly controlled in respect to safety and effectiveness. |
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Based on the above definitions and several discussions with regulatory consultants and potential partners, we believe that LuViva is most likely to be classified as a Class II device, however, this is not certain and the NMPA may determine that LuViva requires a Class III registration. Class III registrations are granted by the national NMPA office while Class I and II registrations occur at the provincial level. Typically, registration granted at the provincial level allows a medical device to be marketed in all of China’s provinces.
While Class I devices usually do not require clinical trial data from Chinese patients and Class III devices almost always do, Class II medical devices sometimes do and sometimes do not require Chinese clinical trials, and this determination may depend on the claim for the device and quality of clinical trials conducted outside of China. If clinical trials conducted in China are required, they usually are less burdensome for Class II devices than Class III devices.
NMPA labs also conduct electrical, mechanical and electromagnetic emission safety testing for medical devices similar to those required for the CE Mark. As is the case with the U.S. FDA, manufacturers in China undergo periodic inspections and must comply with international quality standards such as ISO 13485 for medical devices.
In the United States, permission to distribute a new device generally can be met in one of two ways. The first process requires that a pre-market notification (510(k) Submission) be made to the U.S. FDA to demonstrate that the device is as safe and effective as, or substantially equivalent to, a legally marketed device that is not subject to premarket approval (PMA). A legally marketed device is a device that (1) was legally marketed prior to May 28, 1976, (2) has been reclassified from Class III to Class II or I, or (3) has been found to be substantially equivalent to another legally marketed device following a 510(k) Submission. The legally marketed device to which equivalence is drawn is known as the “predicate” device. Applicants must submit descriptive data and, when necessary, performance data to establish that the device is substantially equivalent to a predicate device. In some instances, data from human clinical studies must also be submitted in support of a 510(k) Submission. If so, the data must be collected in a manner that conforms with specific requirements in accordance with federal regulations. The U.S. FDA must issue an order finding substantial equivalence before commercial distribution can occur. Changes to existing devices covered by a 510(k) Submission which do not significantly affect safety or effectiveness can generally be made by us without additional 510(k) Submissions.
The second process requires that an application for premarket approval (PMA) be made to the U.S. FDA to demonstrate that the device is safe and effective for its intended use as manufactured. This approval process applies to most Class III devices, including LuViva. In this case, two steps of U.S. FDA approval are generally required before marketing in the United States can begin. First, investigational device exemption (IDE) regulations must be complied with in connection with any human clinical investigation of the device in the United States. Second, the U.S. FDA must review the PMA application, which contains, among other things, clinical information acquired under the IDE. The U.S. FDA will approve the PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose.
We completed enrollment in our U.S. FDA pivotal trial of LuViva in 2008. Following the FDA’s request for two-years of follow-up data, we submitted a Premarket Approval (“PMA”) application, which was accepted for substantive review in November 2010. The FDA conducted site inspections and audited our clinical trial database in 2011 and identified no formal compliance issues. Between 2012 and 2015, we received “not-approvable” determinations and subsequently submitted amendments, additional responses, and engaged in meetings with the FDA to determine a path forward.
Following a November 2015 meeting with the FDA, we agreed to develop a new clinical protocol to support additional studies. After further discussions and a pre-submission filing in 2020, we reached an agreement with the FDA in the second quarter of 2021 on a study protocol requiring approximately 400 women. The Covid 19 pandemic delayed start of the study and additional FDA clarification requests made in 2022 were then resolved, enabling the study to begin in 2023.
The study was completed with approximately 480 patients enrolled, of whom 430 were evaluable for efficacy. Both totals meet the prospective enrollment criteria of the study protocol. The clinical study data and results are expected to be filed with FDA in the second quarter of 2026. We originally planned on filing the clinical study results with FDA in the first quarter of 2026, but a short delay in filing occurred when one of the reference pathologists involved in the study took a new position and her replacement was delayed in completing their independent diagnoses of biopsy samples, as required by FDA as part of the study protocol. This has been resolved and as of March 25, 2026, all pathology samples have been diagnosed by two independent expert pathologists as set forth in the study protocol. This allows the key performance metrics of sensitivity and specificity of the LuViva test to be determined and filed with FDA. As we reported in December 2025, clinical site pathology findings indicated that 25% of significant cervical disease was missed by the current standard of care of colposcopy followed by biopsy for women at risk for cervical cancer due to an abnormal Pap and/or HPV test. Preliminary analyses of the independent expert pathology diagnoses indicate that an even greater percentage of disease is being missed by the standard of care and that LuViva was able to detect the majority of these missed cases, thus providing support for successfully meeting the primary endpoint of the study
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We remain committed to obtaining U.S. FDA approval as a priority. At the same time, we have narrowed our international focus to concentrate on markets with large screening populations, and where we currently have or are actively seeking regulatory approvals, such as China, the European Union and Indonesia. We believe the commercial opportunities are large and the clinical need is significant in these select international markets.
The process of obtaining clearance to market products is costly and time-consuming in virtually all of the major markets in which we sell, or expect to sell, our products and may delay the marketing and sale of our products. Countries around the world have recently adopted more stringent regulatory requirements, which are expected to add to the delays and uncertainties associated with new product releases, as well as the clinical and regulatory costs of supporting those releases. No assurance can be given that our products will be approved on a timely basis in any particular jurisdiction, if at all. In addition, regulations regarding the development, manufacture and sale of medical devices are subject to future change. We cannot predict what impact, if any, those changes might have on our business. Failure to comply with regulatory requirements could have a material adverse effect on our business, financial condition and results of operations.
Noncompliance with applicable requirements can result in import detentions, fines, civil penalties, injunctions, suspensions or losses of regulatory approvals or clearances, recall or seizure of products, operating restrictions, denial of export applications, governmental prohibitions on entering into supply contracts, and criminal prosecution. Failure to obtain regulatory approvals or the restriction, suspension or revocation of regulatory approvals or clearances, as well as any other failure to comply with regulatory requirements, would have a material adverse effect on our business, financial condition and results of operations.
Regulatory approvals and clearances, if granted, may include significant labeling limitations and limitations on the indicated uses for which the product may be marketed. In addition, to obtain regulatory approvals and clearances, the U.S. FDA and some foreign regulatory authorities impose numerous other requirements with which medical device manufacturers must comply. U.S. FDA enforcement policy strictly prohibits the marketing of approved medical devices for unapproved uses. Any products we manufacture or distribute under U.S. FDA clearances or approvals are subject to pervasive and continuing regulation by the U.S. FDA. The U.S. FDA also requires us to provide it with information on death and serious injuries alleged to have been associated with the use of our products, as well as any malfunctions that would likely cause or contribute to death or serious injury.
The U.S. FDA requires us to register as a medical device manufacturer and list our products. We are also subject to inspections by the U.S. FDA and state agencies acting under contract with the U.S. FDA to confirm compliance with good manufacturing practice. These regulations require that we manufacture our products and maintain documents in a prescribed manner with respect to manufacturing, testing, quality assurance and quality control activities. The U.S. FDA also has promulgated final regulatory changes to these regulations that require, among other things, design controls and maintenance of service records. These changes will increase the cost of complying with good manufacturing practice requirements.
Distributors of medical devices may also be required to comply with other foreign regulatory agencies, and we or our distributors have in the past received marketing approval for LuViva from Health Canada, COFEPRIS in Mexico, the Ministry of Health in Kenya, and the Singapore Health Sciences Authority. However, most of these approvals have expired and would need to be updated in order sell LuViva in those countries. The time required to obtain these foreign approvals to market our products may be longer or shorter than that required in China or the United States, and requirements for those approvals may differ from those required by the NMPA or the U.S. FDA.
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We are also subject to a variety of other controls that affect our business. Labeling and promotional activities are subject to scrutiny by the U.S. FDA and, in some instances, by the U.S. Federal Trade Commission. The U.S. FDA actively enforces regulations prohibiting marketing of products for unapproved users. We are also subject, as are our products, to a variety of state and local laws and regulations in those states and localities where our products are or will be marketed. Any applicable state or local regulations may hinder our ability to market our products in those regions. Manufacturers are also subject to numerous federal, state and local laws relating to matters such as safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances. We may be required to incur significant costs to comply with these laws and regulations now or in the future. These laws or regulations may have a material adverse effect on our ability to do business.
Although our marketing and distribution partners around the world assist in the regulatory approval process, ultimately, we are responsible for obtaining and maintaining regulatory approvals for our products. The inability or failure to comply with the varying regulations or the imposition of new regulations would materially adversely affect our business, financial condition and results of operations.
Item 1A. RISK FACTORS
A purchase of our securities involves a high degree of risk. Our business or operating or financial condition could be harmed due to any of the following risks. Accordingly, investors should carefully consider these risks in making a decision as to whether to purchase, sell or hold our securities. In addition, investors should note that the risks described below are not the only risks facing us. Additional risks not presently known to us, or risks that do not seem significant today, may impair our business operations in the future. You should carefully consider the risks described below, as well as the other information contained in this Annual Report on Form 10-K and the documents incorporated by reference herein, before making a decision to invest in our securities.
We will be required to raise additional funds. There is no assurance that such funds can be raised on terms that we would find acceptable, on a timely basis, or at all.
Additional debt or equity financing will be required for us to continue as a going concern. We may seek to obtain additional funds for the financing of our cervical cancer detection business through additional debt or equity financings and/or new collaborative arrangements. Management believes that additional financing, if obtainable, will be sufficient to support planned operations only for a limited period. Management has implemented operating actions to reduce cash requirements. Any additional funding required may not be available on terms attractive to us, on a timely basis, or at all. We currently hold $1.13 million of senior unsecured convertible debentures that are in default, which may further hinder our ability to obtain additional debt funding. If we cannot obtain additional funds or achieve profitability, we may not be able to continue as a going concern.
Because we must obtain additional funds through financing transactions or through new collaborative arrangements in order to grow the revenues of our cervical cancer detection product line, there exists substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to raise the funds necessary to fund our operations. If we do not secure additional funding when needed, we will be unable to conduct all of our product development efforts as planned, which may cause us to alter our business plan in relation to the development of our products. Even if we obtain additional funding, we will need to achieve profitability thereafter.
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Our independent registered public accountants’ report on our consolidated financial statements as of and for the year ended December 31, 2025, indicates that there is substantial doubt about our ability to continue as a going concern, because we have suffered recurring losses from operations and had an accumulated deficit of $157.1 million at December 31, 2025.
Our management has implemented reductions in operating expenditures and reductions in some development activities. We have determined to make cervical cancer detection the focus of our business. We are managing the development of our other programs only when funds are made available to us via grants or contracts with government entities or strategic partners. However, there can be no assurance that we will be able to successfully implement or continue these plans.
If we cannot obtain additional funds when needed, we will not be able to implement our business plan.
We require substantial additional capital to develop our products, including completing product testing and clinical trials, obtaining all required regulatory approvals and clearances, beginning and scaling up manufacturing, and marketing our products. We have historically financed our operations though the public and private sale of debt and equity, funding from collaborative arrangements, and grants. Any failure to achieve adequate funding in a timely fashion would delay our development programs and could lead to abandonment of our business plan. To the extent we cannot obtain additional funding, our ability to continue to manufacture and sell our current products, or develop and introduce new products to market, will be limited. Further, financing our operations through the public or private sale of debt or equity may involve restrictive covenants or other provisions that could limit how we conduct our business or finance our operations. Financing our operations through collaborative arrangements generally means that the obligations of the collaborative partner to fund our expenditures are largely discretionary and depend on a number of factors, including our ability to meet specified milestones in the development and testing of the relevant product. We may not be able to obtain an acceptable collaboration partner, and even if we do, we may not be able to meet these milestones, or the collaborative partner may not continue to fund our expenditures.
We have a history of losses, and we expect losses to continue.
We have never been profitable and we have had operating losses since our inception. We expect our operating losses to continue as we continue to expend substantial resources to complete commercialization of our products, obtain regulatory clearances or approvals; build our marketing, sales, manufacturing and finance capabilities, and conduct further research and development. The further development and commercialization of our products will require substantial development, regulatory, sales and marketing, manufacturing and other expenditures. We have only generated limited revenues from product sales. As of December 31, 2025 and 2024, our accumulated deficit was approximately $157.1 million and $153.7 million, respectively.
Our ability to sell our products is controlled by government regulations, and we may not be able to obtain any necessary clearances or approvals.
The design, manufacturing, labeling, distribution and marketing of medical device products are subject to extensive and rigorous government regulation in most of the markets in which we sell, or plan to sell, our products, which can be expensive and uncertain and can cause lengthy delays before we can begin selling our products in those markets.
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In foreign countries, including European countries, we are subject to government regulation, which could delay or prevent our ability to sell our products in those jurisdictions.
For us to market our products in Europe and some other international jurisdictions, we and our distributors and agents must obtain required regulatory registrations or approvals. We must also comply with extensive regulations regarding safety, efficacy and quality in those jurisdictions. We may not be able to obtain the required regulatory registrations or approvals, or we may be required to incur significant costs in obtaining or maintaining any regulatory registrations or approvals we receive. Delays in obtaining any registrations or approvals required for marketing our products, failure to receive these registrations or approvals, or future loss of previously obtained registrations or approvals would limit our ability to sell our products internationally. For example, international regulatory bodies have adopted various regulations governing product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements. These regulations vary from country to country. In order to sell our products in Europe, in 2018 we had to undergo an inspection and re-file for ISO 13485:2016 and the CE Mark, which is an international symbol of quality and compliance with applicable European medical device directives. Failure to maintain ISO 13485:2016 certification or CE mark certification or other international regulatory approvals would prevent us from selling in some countries in the European Union.
As of December 31, 2025, our products have achieved and maintained both ISO 13485:2016 certification and the CE Mark through our contract manufacturer, Newmars Technologies. However, because of our focus on countries that do not require the CE Mark, it is uncertain whether we will maintain the CE Mark for the short term, as standards are continually evolving.
For our products to be marketed and sold in the People’s Republic of China, they must gain approval from the NMPA. We have been working with SMI to obtain NMPA approval. In 2022, device safety compliance testing was completed, and in late 2023 enrollment in the pivotal clinical trial at four hospitals was completed. SMI filed the NMPA approval application on October 16, 2024. On January 6, 2025, SMI notified us that the NMPA had accepted the application as completed and commenced its review.
Although SMI no longer holds rights to LuViva in China, SMI and its partners HDMT and YMIC have indicated their willingness to continue assisting with the NMPA approval process. We are not obligated to grant long-term distribution or manufacturing rights in China to any of these parties. Both HDMT and YMIC continue to place product orders with us, as described above.
NMPA approval requires a successful manufacturing inspection. Current indications suggest that YMIC may be the entity to achieve this, as they are approved by the Chinese government to manufacture Class III medical devices. Based on current expectations, a manufacturing inspection could occur in May 2026, with potential approval in the third quarter of 2026, although there is no assurance that this timeline will be met or that NMPA approval of LuViva will be obtained.
Our business is subject to the risks of international operations.
Our business and financial results could be adversely affected due to a variety of factors, including:
| · | changes in a specific country or region’s political and cultural climate or economic condition, including change in governmental regime; |
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| · | unexpected or unfavorable changes in foreign laws, regulatory requirements and related interpretations; |
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| · | difficulty of effective enforcement of contractual provisions in local jurisdictions; |
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| · | inadequate intellectual property protection in foreign countries; |
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| · | trade protection measures, import or export licensing requirements such as Export Administration Regulations promulgated by the U.S. Department of Commerce and fines, penalties or suspension or revocation of export privileges; |
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| · | trade sanctions imposed by the United States or other governments with jurisdictional authority over our business operations; |
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| · | the effects of applicable and potentially adverse foreign tax law changes; |
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| · | significant adverse changes in foreign currency exchange rates; |
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| · | longer accounts receivable cycles; |
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| · | managing a geographically dispersed workforce; and |
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| · | compliance with the U.S. Foreign Corrupt Practices Act, or FCPA, and the Office of Foreign Assets Control regulations, particularly in emerging markets. |
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| · | whether and when we or any potential strategic partners will obtain required regulatory approvals in the markets in which we plan to operate; and |
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| · | the impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations. |
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In foreign countries, particularly in those with developing economies, certain business practices may exist that are prohibited by laws and regulations applicable to us, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws. Although our policies and procedures require compliance with these laws and are designed to facilitate compliance with these laws, our employees, contractors and agents may take actions in violation of applicable laws or our policies. Any such violation, even if prohibited by our policies, could have a material adverse effect on our business and reputation.
Our international businesses must comply with applicable laws such as the U.S. Foreign Corrupt Practices Act. Failure to maintain compliance with or adapt to changes in any of the aforementioned requirements could result in fines, penalties or regulatory actions that could have an adverse impact on our business, results of operations and financial condition.
Russia’s invasion of Ukraine, and sanctions brought by the United States and other countries against Russia, have caused disruptions in many business sectors outside of the medical sector and have resulted in significant market disruptions and increased volatility in the price of certain commodities, including oil and natural gas.
On February 24, 2022, Russia launched a large-scale invasion of Ukraine. The extent and duration of the military action, resulting sanctions and future market disruptions in the region are impossible to predict, but could be significant and may have a severe adverse effect on the region. Among other things, the conflict has resulted in increased volatility in the markets for certain securities and commodities, including oil and natural gas, and other sectors.
The United States and other countries and certain international organizations have imposed broad-ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to Russia’s invasion of Ukraine. Actual and threatened responses to Russia’s invasion, as well as a rapid peaceful resolution to the conflict, may impact the markets for certain commodities, such as oil and natural gas, and may have collateral impacts, including increased volatility, and cause disruptions to availability of certain commodities, commodity and futures prices and the supply chain globally. At this time, the situation is rapidly evolving and may evolve in a way that could have a negative impact on our operations and financial position in the future.
Escalation of geopolitical conflicts in the Middle East could adversely affect our business, financial condition, and results of operations.
Recent conflicts and heightened tensions in the Middle East have increased geopolitical uncertainty and contributed to volatility in global financial markets and commodity prices, particularly oil and natural gas. The extent and duration of these conflicts, including the potential for broader regional escalation, remain uncertain. Any escalation or expansion of these conflicts could result in disruptions to global trade routes, additional economic sanctions, or other geopolitical responses by the United States and other countries. These developments may adversely affect global supply chains, increase transportation and energy costs, and contribute to inflationary pressures.
Such conditions could increase our operating costs and disrupt the availability of materials, components, or services necessary to manufacture and distribute our products. As a result, continued instability in the region could have a material adverse effect on our business, financial condition, and results of operations.
Risks related to tariffs and international trade policies could adversely affect our business, financial condition, and results of operations.
Tariffs imposed and/or publicly contemplated by the U.S. government, particularly as to China, create significant uncertainty with respect to future tax and trade regulations and the potential competitive effects of such actions. The countries in which our products will be manufactured or imported may from time to time impose additional quotas, duties, tariffs or other restrictions on our imports or adversely modify existing restrictions. It is unclear what the U.S. administration or foreign governments specifically will or will not do with respect to tariffs, tax policies, or other international trade agreements, regulations and policies. A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we manufacture and sell products or any resulting negative sentiments towards the United States could materially adversely affect the Company’s business, financial condition, operating results and cash flows.
In the United States, our products would be subject to regulation by the U.S. FDA, which could prevent us from selling our products domestically.
In order for us to market our products in the United States, we must obtain clearance or approval from the U.S. Food and Drug Administration, or U.S. FDA. We cannot be sure that:
| · | we, or any collaborative partner, will make timely filings with the U.S. FDA; |
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| · | the U.S. FDA will act favorably or quickly on these submissions; |
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| · | we will not be required to submit additional information or perform additional clinical studies; or |
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| · | we will not face other significant difficulties and costs necessary to obtain U.S. FDA clearance or approval. |
It can take several years from initial filing of a PMA application and require the submission of extensive supporting data and clinical information. The U.S. FDA may impose strict labeling or other requirements as a condition of its clearance or approval, any of which could limit our ability to market our products domestically. Further, if we wish to modify a product after U.S. FDA approval of a PMA application, including changes in indications or other modifications that could affect safety and efficacy, additional clearances or approvals will be required from the U.S. FDA. Any request by the U.S. FDA for additional data, or any requirement by the U.S. FDA that we conduct additional clinical studies, could result in a significant delay in bringing our products to market domestically and require substantial additional research and other expenditures. Similarly, any labeling or other conditions or restrictions imposed by the U.S. FDA could hinder our ability to effectively market our products domestically. Further, there may be new U.S. FDA policies or changes in U.S. FDA policies that could be adverse to us.
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We have not yet obtained clearance or approval from the U.S. FDA. However, we have completed patient enrollment in the clinical trial required to support an application for FDA approval to market and sell LuViva in the United States. As of March 25, 2026, the status of the FDA application is as follows:
| · | Approximately 480 patients were enrolled, of whom 430 were evaluable for efficacy analysis. Both totals satisfy the a priori criteria as set forth in the study protocol. |
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| · | No adverse events related to the use of LuViva have been reported. |
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| · | All four clinical study sites adhered to the study protocol and completed required case report forms in accordance with FDA standards. |
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| · | Close-out activities have been completed at all sites, and all LuViva devices have been retrieved in good working order. |
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| · | All pathology samples have been diagnosed by at least two independent expert pathologists, as set forth in the study protocol. Preliminary analyses of both clinical site pathology diagnoses and the independent expert pathology diagnoses confirm that a significant percentage of disease, i.e., at least 25%, is being missed by the standard of care and that LuViva is able to detect the majority of these missed disease cases, thus providing support for successfully meeting the primary endpoint of the study and by doing so, addressing an important unmet clinical need. |
Most sections of the application have been prepared. A short delay (approximately four to six weeks) has resulted from the loss of one of the study’s outside pathologists, who has since been replaced. We currently expect to submit the application to the FDA in the second quarter of 2026. However, there can be no assurance that the analysis and submission will be completed within the expected timeframe or that the results will support regulatory clearance or approval.
Even if we obtain clearance or approval to sell our products, we are subject to ongoing requirements and inspections that could lead to the restriction, suspension or revocation of our clearance.
We, as well as any potential collaborative partners, will be required to adhere to applicable regulations in the markets in which we operate and sell our products, regarding good manufacturing practice, which include testing, control, and documentation requirements. Ongoing compliance with good manufacturing practice and other applicable regulatory requirements will be strictly enforced applicable regulatory agencies. Failure to comply with these regulatory requirements could result in, among other things, warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure to obtain premarket clearance or premarket approval for devices, withdrawal of approvals previously obtained, and criminal prosecution. The restriction, suspension or revocation of regulatory approvals or any other failure to comply with regulatory requirements would limit our ability to operate and could increase our costs.
We depend on a limited number of distributors and any reduction, delay or cancellation of an order from these distributors or the loss of any of these distributors could cause our revenue to decline.
Each year we have had one or a few distributors that have accounted for substantially all of our limited revenues. As a result, the termination of a purchase order with any one of these distributors may result in the loss of substantially all of our revenues. We are constantly working to develop new relationships with existing or new distributors, but despite these efforts we may not be successful at generating new orders to maintain similar revenues as current purchase orders are filled. In addition, since a significant portion of our revenues is derived from a relatively few distributors, any financial difficulties experienced by any one of these distributors, or any delay in receiving payments from any one of these distributors, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
To successfully market and sell our products internationally, we must address many issues with which we have limited experience.
All of our sales of LuViva to date have been to distributors outside of the United States. We expect that substantially all of our business will continue to come from sales in foreign markets, through increased penetration in countries where we currently sell LuViva, combined with expansion into new international markets. However, international sales are subject to a number of risks, including:
| · | difficulties in staffing and managing international operations; |
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| · | difficulties in penetrating markets in which our competitors’ products may be more established; |
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| · | reduced or no protection for intellectual property rights in some countries; |
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| · | export restrictions, trade regulations and foreign tax laws; |
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| · | fluctuating foreign currency exchange rates; |
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| · | foreign certification and regulatory clearance or approval requirements; |
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| · | difficulties in developing effective marketing campaigns for unfamiliar, foreign countries; |
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| · | customs clearance and shipping delays; |
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| · | political and economic instability; and |
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| · | preference for locally produced products. |
If one or more of these risks were realized, it could require us to dedicate significant resources to remedy the situation, and even if we are able to find a solution, our revenues may still decline.
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To market and sell LuViva internationally, we depend on distributors and they may not be successful.
We currently depend almost exclusively on third-party distributors to sell and service LuViva internationally and to train our international distributors, and if these distributors terminate their relationships with us or under-perform, we may be unable to maintain or increase our level of international revenue. We will also need to engage additional international distributors to grow our business and expand the territories in which we sell LuViva. Distributors may not commit the necessary resources to market, sell and service LuViva to the level of our expectations. If current or future distributors do not perform adequately, or if we are unable to engage distributors in particular geographic areas, our revenue from international operations will be adversely affected.
Our success largely depends on our ability to maintain and protect the proprietary information on which we base our products.
Our success depends in large part upon our ability to maintain and protect the proprietary nature of our technology through the patent process, as well as our ability to license from others patents and patent applications necessary to develop our products. If any of our patents are successfully challenged, invalidated or circumvented, or our right or ability to manufacture our products was to be limited, our ability to continue to manufacture and market our products could be adversely affected. In addition to patents, we rely on trade secrets and proprietary know-how, which we seek to protect, in part, through confidentiality and proprietary information agreements. The other parties to these agreements may breach these provisions, and we may not have adequate remedies for any breach. Additionally, our trade secrets could otherwise become known to or be independently developed by competitors.
Currently, we hold six active U.S. patents. In addition, we have filed for, or have rights to, one U.S. patent (including those under license) that is still pending. There are additional international patents and pending applications. One or more of the patents we hold directly or license from third parties, including those for our cervical cancer detection products, may be successfully challenged, invalidated or circumvented, or we may otherwise be unable to rely on these patents. These risks are also present for the process we use or will use for manufacturing our products. In addition, our competitors, many of whom have substantial resources and have made substantial investments in competing technologies, may apply for and obtain patents that prevent, limit or interfere with our ability to make, use and sell our products, either in the United States or in international markets.
The medical device industry has been characterized by extensive litigation regarding patents and other intellectual property rights. In addition, the U.S. Patent and Trademark Office, or USPTO, may institute interference proceedings. The defense and prosecution of intellectual property suits, USPTO proceedings and related legal and administrative proceedings are both costly and time consuming. Moreover, we may need to litigate to enforce our patents, to protect our trade secrets or know-how, or to determine the enforceability, scope and validity of the proprietary rights of others. Any litigation or interference proceedings involving us may require us to incur substantial legal and other fees and expenses and may require some of our employees to devote all or a substantial portion of their time to the proceedings. An adverse determination in the proceedings could subject us to significant liabilities to third parties, require us to seek licenses from third parties or prevent us from selling our products in some or all markets. We may not be able to reach a satisfactory settlement of any dispute by licensing necessary patents or other intellectual property. Even if we reached a settlement, the settlement process may be expensive and time consuming, and the terms of the settlement may require us to pay substantial royalties. An adverse determination in a judicial or administrative proceeding or the failure to obtain a necessary license could prevent us from manufacturing and selling our products.
We may not be able to generate sufficient sales revenues to sustain our growth and strategy plans.
Our cervical cancer diagnostic activities have been financed to date through a combination of government grants, strategic partners and direct investment. Growing revenues for this product is the main focus of our business. In order to effectively market the cervical cancer detection product, additional capital will be needed.
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Additional product lines involve the modification of the cervical cancer detection technology for use in other cancers. These product lines are only in the earliest stages of research and development and are currently not projected to reach market for several years. Our goal is to receive enough funding from government grants and contracts, as well as payments from strategic partners, to fund development of these product lines without diverting funds or other necessary resources from the cervical cancer program.
Because our products, which use different technology or apply technology in different ways than other medical devices, are or will be new to the market, we may not be successful in launching our products and our operations and growth would be adversely affected.
Our products are based on new methods of cancer detection. If our products do not achieve significant market acceptance, our sales will be limited and our financial condition may suffer. Physicians and individuals may not recommend or use our products unless they determine that these products are an attractive alternative to current tests that have a long history of safe and effective use. To date, our products have been used by only a limited number of people, and few independent studies regarding our products have been published. The lack of independent studies limits the ability of doctors or consumers to compare our products to conventional products.
If we are unable to compete effectively in the highly competitive medical device industry, our future growth and operating results will suffer.
The medical device industry in general and the markets in which we expect to offer products in particular, are intensely competitive. Many of our competitors have substantially greater financial, research, technical, manufacturing, marketing and distribution resources than we do and have greater name recognition and lengthier operating histories in the health care industry. We may not be able to effectively compete against these and other competitors. A number of competitors are currently marketing traditional laboratory-based tests for cervical cancer screening and diagnosis. These tests are widely accepted in the health care industry and have a long history of accurate and effective use. Further, if our products are not available at competitive prices, health care administrators who are subject to increasing pressures to reduce costs may not elect to purchase them. Also, a number of companies have announced that they are developing, or have introduced, products that permit non-invasive and less invasive cancer detection. Accordingly, competition in this area is expected to increase.
Furthermore, our competitors may succeed in developing, either before or after the development and commercialization of our products, devices and technologies that permit more efficient, less expensive non-invasive and less invasive cancer detection. It is also possible that one or more pharmaceutical or other health care companies will develop therapeutic drugs, treatments or other products that will substantially reduce the prevalence of cancers or otherwise render our products obsolete.
We have limited manufacturing experience, which could limit our growth.
We do not have manufacturing experience that would enable us to make products in the volumes that would be necessary for us to achieve significant commercial sales, and we rely upon our suppliers. In addition, we may not be able to establish and maintain reliable, efficient, full-scale manufacturing at commercially reasonable costs in a timely fashion. Difficulties we encounter in manufacturing scale-up, or our failure to implement and maintain our manufacturing facilities in accordance with good manufacturing practice regulations, international quality standards or other regulatory requirements, could result in a delay or termination of production. In the past, we have had substantial difficulties in establishing and maintaining manufacturing for our products and those difficulties impacted our ability to increase sales. Companies often encounter difficulties in scaling up production, including problems involving production yield, quality control and assurance, and shortages of qualified personnel.
Since we rely on sole source suppliers for several of the components used in our products, any failure of those suppliers to perform would hurt our operations.
Several of the components used in our products are available from only one supplier, and substitutes for these components could not be obtained easily or would require substantial modifications to our products. Any significant problem experienced by one of our sole source suppliers may result in a delay or interruption in the supply of components to us until that supplier cures the problem or an alternative source of the component is located and qualified. Any delay or interruption would likely lead to a delay or interruption in our manufacturing operations. For our products that require premarket approval, the inclusion of substitute components could require us to qualify the new supplier with the appropriate government regulatory authorities. Alternatively, for our products that qualify for premarket notification, the substitute components must meet our product specifications.
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Because we operate in an industry with significant product liability risk, and we have not specifically insured against this risk, we may be subject to substantial claims against our products.
The development, manufacture and sale of medical products entail significant risks of product liability claims. We currently have no product liability insurance coverage beyond that provided by our general liability insurance. Accordingly, we may not be adequately protected from any liabilities, including any adverse judgments or settlements, we might incur in connection with the development, clinical testing, manufacture and sale of our products. A successful product liability claim or series of claims brought against us that result in an adverse judgment against or settlement by us in excess of any insurance coverage could seriously harm our financial condition or reputation. In addition, product liability insurance is expensive and may not be available to us on acceptable terms, if at all.
The availability of third-party reimbursement for our products is uncertain, which may limit consumer use and the market for our products.
In the United States and elsewhere, sales of medical products are dependent, in part, on the ability of consumers of these products to obtain reimbursement for all or a portion of their cost from third-party payors, such as government and private insurance plans. Any inability of patients, hospitals, physicians and other users of our products to obtain sufficient reimbursement from third-party payors for our products, or adverse changes in relevant governmental policies or the policies of private third-party payors regarding reimbursement for these products, could limit our ability to sell our products on a competitive basis. We are unable to predict what changes will be made in the reimbursement methods used by third-party health care payors. Moreover, third-party payors are increasingly challenging the prices charged for medical products and services, and some health care providers are gradually adopting a managed care system in which the providers contract to provide comprehensive health care services for a fixed cost per person. Patients, hospitals and physicians may not be able to justify the use of our products by the attendant cost savings and clinical benefits that we believe will be derived from the use of our products, and therefore may not be able to obtain third-party reimbursement.
Reimbursement and health care payment systems in international markets vary significantly by country and include both government-sponsored health care and private insurance. We may not be able to obtain approvals for reimbursement from these international third-party payors in a timely manner, if at all. Any failure to receive international reimbursement approvals could have an adverse effect on market acceptance of our products in the international markets in which approvals are sought.
We have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business.
Our outstanding indebtedness, which includes all of our liabilities, was $7.3 million at December 31, 2025. The terms of our indebtedness could have negative consequences to us, such as:
| · | we may be unable to obtain additional financing to fund working capital, operating losses, capital expenditures or acquisitions on terms acceptable to us, or at all; |
|
|
|
| · | the amount of our interest expense may increase if we are unable to make payments when due; |
|
|
|
| · | our vendors or employees may, and some have, instituted proceedings to collect on amounts owed them; |
|
|
|
| · | we have to use a substantial portion of our cash flows from operations to repay our indebtedness, including ordinary course accounts payable and accrued payroll liabilities, which reduces the amount of money we have for future operations, working capital, inventory, expansion, or general corporate or other business activities; and |
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|
|
| · | we may be unable to refinance our indebtedness on terms acceptable to us, or at all. |
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Our ability to meet our expenses and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors. We will be unable to control many of these factors, such as economic conditions. We cannot be certain that our earnings will be sufficient to allow us to pay the principal and interest on our debt and meet any other obligations. If we do not have enough money to service our debt, we may be required, but unable, to refinance all or part of our existing debt, sell assets, borrow money or raise equity on terms acceptable to us, if at all.
Our success depends on our ability to attract and retain scientific, technical, managerial and finance personnel.
Our ability to operate successfully and manage our future growth depends in significant part upon the continued service of key scientific, technical, managerial and finance personnel, as well as our ability to attract and retain additional highly qualified personnel in these fields. We may not be able to attract and retain key employees when necessary, which would limit our operations and growth. In addition, if we are able to successfully develop and commercialize our products, we will need to hire additional scientific, technical, marketing, managerial and finance personnel. We face intense competition for qualified personnel in these areas, many of whom are often subject to competing employment offers.
Certain provisions of our certificate of incorporation that authorize the issuance of additional shares of preferred stock may make it more difficult for a third party to effect a change in control.
Our certificate of incorporation authorizes our board of directors to issue up to 5.0 million shares of preferred stock of which 2,185.25 were outstanding as of December 31, 2025. Our undesignated shares of preferred stock may be issued in one or more series, the terms of which may be determined by the board without further stockholder action. These terms may include, among other terms, voting rights, including the right to vote as a series on particular matters, preferences as to liquidation and dividends, repurchase rights, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of our common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with or sell assets to a third party. The ability of our board to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change in control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.
Risks Related to Our Securities
The market prices for our common stock are volatile and will fluctuate.
The market price for our common stock may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control, including the following: (i) actual or anticipated fluctuations in our quarterly financial results; (ii) recommendations by securities research analysts; (iii) changes in the economic performance or market valuations of other issuers that investors deem comparable to ours; (iv) addition or departure of our executive officers or members of our Board and other key personnel; (v) release or expiration of lock-up or other transfer restrictions on outstanding common stock; (vi) sales or perceived sales of additional common stock; (vii) liquidity of the common stock; (viii) significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; and (ix) news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in our industry or target markets. Financial markets often experience significant price and volume fluctuations that affect the market prices of equity securities of public entities and that are, in many cases, unrelated to the operating performance, underlying asset values or prospects of such entities. Accordingly, the market price of our common stock may decline even if our operating results, underlying asset values or prospects have not changed. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. As well, certain institutional investors may base their investment decisions on consideration of our environmental, governance and social practices and performance against such institutions’ respective investment guidelines and criteria, and failure to meet such criteria may result in limited or no investment in our common stock by those institutions, which could materially adversely affect the trading price of our common stock. There can be no assurance that continuing fluctuations in price and volume will not occur. If such increased levels of volatility and market turmoil continue for a protracted period of time, our operations could be materially adversely impacted and the trading price of our common stock may be materially adversely affected.
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There is a limited market for our securities.
Our common stock is listed on the OTC Markets. There can be no assurance that an active and liquid market for the common stock will develop or be maintained on the applicable stock exchanges, and an investor may find it difficult to resell any of our securities.
Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies.
We may seek additional capital through a combination of private and public equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests will be diluted and the terms of such financings may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financings may be coupled with an equity component, such as warrants to purchase shares, which could also result in dilution of our existing stockholders’ ownership. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property. If we were to default on such indebtedness, we could lose such assets and intellectual property. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or grant licenses on terms that are not favorable to us.
Future offerings of debt or equity securities may rank senior to common stock.
If we decide to issue debt or equity securities in the future ranking senior to our common stock or otherwise incur additional indebtedness, it is possible that these securities or indebtedness will be governed by an indenture or other instrument containing covenants restricting our operating flexibility and limiting our ability to pay dividends to stockholders. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges, including with respect to dividends, more favorable than those of common stock and may result in dilution to stockholders. Because our decision to issue debt or equity securities in any future offering or otherwise incur indebtedness will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or financings, any of which could reduce the market price of our common stock and dilute their value.
Common stockholders are subordinated to our lenders.
In the event of bankruptcy, liquidation or reorganization, any holders of our debt and our trade creditors will generally be entitled to payment of their claims from our assets before any assets are made available for distribution to us or our stockholders. The common stock is effectively subordinated to our debt and other obligations.
Future sales of common stock by officers and directors may negatively impact the market price for our common stock.
Subject to compliance with applicable securities laws, our directors and officers and their affiliates may sell some or all of their common stock in the future. No prediction can be made as to the effect, if any, such future sales of common stock may have on the market price of the common stock prevailing from time to time. However, the future sale of a substantial number of common stock by our directors and officers and their affiliates, or the perception that such sales could occur, could adversely affect prevailing market prices for our common stock.
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We do not currently pay dividends on our common stock and have no intention to pay dividends on our common stock for the foreseeable future.
No dividends on our common stock have been paid by us to date. We do not intend to declare or pay any cash dividends in the foreseeable future. Payment of any future dividends will be at the discretion of our Board, after taking into account a multitude of factors appropriate in the circumstances, including our operating results, financial condition and current and anticipated cash needs. In addition, the terms of any future debt or credit facility may preclude us from paying any dividends unless certain consents are obtained, and certain conditions are met.
In connection with the audits of our financial statements as of and for the years ended December 31, 2025 and 2024, material weaknesses in our internal control over financial reporting were identified and we may identify additional material weaknesses in the future.
In connection with the preparation and audits of our financial statements as of and for the years ended December 31, 2025 and 2024, material weaknesses (as defined under the Exchange Act and by the auditing standards of the U.S. Public Company Accounting Oversight Board, or “PCAOB”) were identified in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual financial statements will not be prevented or detected on a timely basis. The material weaknesses identified arose from a lack of resources to properly research and account for complex transactions and a lack of oversight and approval by the Board of Directors and Audit Committee, including formally documented approval of significant transactions, including related party transactions.
There were no changes to the Company’s internal controls over financial reporting occurred during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
In light of the identified material weaknesses, it is possible that, had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting in accordance with PCAOB standards, additional control deficiencies may have been identified.
We have begun taking measures, and plan to continue to take measures, to remediate these material weaknesses. However, the implementation of these measures may not fully address these material weaknesses in our internal control over financial reporting, and, if so, we would not be able to conclude that they have been fully remedied. Our failure to correct these material weaknesses or our failure to discover and address any other control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and make related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our common stock, may be materially and adversely affected.
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Anti-takeover provisions in our Amended and Restated Certificate of Incorporation and By-laws may reduce the likelihood of a potential change of control, or make it more difficult for our stockholders to replace management.
Certain provisions of our Amended and Restated Certificate of Incorporation and By-laws could have the effect of making it more difficult for our stockholders to replace management at a time when a substantial number of stockholders might favor a change in management. These provisions include authorizing the board of directors to fill vacant directorships or increase the size of its board of directors.
Furthermore, our board of directors has the authority to issue up to 5.0 million shares of preferred stock in one or more series and to determine the rights and preferences of the shares of any such series without stockholder approval. Any series of preferred stock is likely to be senior to the common stock with respect to dividends, liquidation rights and, possibly, voting rights. The board’s ability to issue preferred stock may have the effect of discouraging unsolicited acquisition proposals, thus adversely affecting the market price of our common stock.
If securities or industry analysts publish inaccurate or unfavorable research about our business, our share price and trading volume may decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more analysts downgrade our shares or publish inaccurate or unfavorable research about our business, our shares price may decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our shares may decrease, which may cause our shares price and trading volume to decline.
The number of shares of our common stock issuable upon the conversion of our outstanding convertible debt and preferred stock or exercise of outstanding warrants and options is substantial.
As of December 31, 2025, our outstanding convertible debt and accrued interest were convertible into an aggregate of 2,754,246 shares of our common stock, our outstanding preferred stock was convertible into an aggregate of 6,592,500 shares of common stock, and deferred compensation arrangements were convertible into an aggregate of 1,890,006 shares of common stock. As of that date, we also had warrants outstanding exercisable for an aggregate of 45,165,649 shares of common stock and vested options outstanding to purchase 2,207,341 shares of common stock. The shares issuable upon conversion or exercise of these securities would represent approximately 68.0% of the total shares of common stock then issued and outstanding.
Further, under the terms of our convertible debt and preferred stock, as well as certain of our outstanding warrants, the conversion price or exercise price, as the case may be, could be adjusted downward, causing substantial dilution.
Adjustments to the conversion price of some of our convertible debt and preferred stock, and the exercise price for certain of our warrants, will dilute the ownership interests of our existing stockholders.
Under the terms of a portion of our convertible debt, the conversion price fluctuates with the market price of our common stock. Accordingly, if the market price of our common stock decreases, the number of shares of our common stock issuable upon conversion of the convertible debt will increase, and may result in the issuance of a significant number of additional shares of our common stock.
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Under the terms of some of our preferred stock and certain of our convertible notes and outstanding warrants, the conversion price or exercise price will be lowered if we issue common stock at a per share price below the then-conversion price or then-exercise price for those securities. Reductions in the conversion price or exercise price would result in the issuance of a significant number of additional shares of our common stock upon conversion or exercise, which would result in dilution in the value of the shares of our outstanding common stock and the voting power represented thereby.
Our need to raise additional capital in the near future or to use our equity securities for payments could have a dilutive effect on your investment.
In order to continue operations, we will need to raise additional capital. We may attempt to raise capital through the public or private sale of our common stock or securities convertible into or exercisable for our common stock. In addition, from time to time we have issued our common stock or warrants in lieu of cash payments. If we sell additional shares of our common stock or other equity securities, or issue such securities in respect of other claims or indebtedness, such sales or issuances will further dilute the percentage of our equity that you own. Depending upon the price per share of securities that we sell or issue in the future, if any, your interest in us could be further diluted by any adjustments to the number of shares and the applicable exercise price required pursuant to the terms of the agreements under which we previously issued convertible securities.
The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our common stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our common stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our common stock.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 1C. CYBERSECURITY
Cybersecurity is an area of increasing concern to management and our investors. There are two main areas involving personal data that we pay particular attention to: 1) Patient data of women enrolled in our clinical trials or commercially by overseas partners and 2) Company employee information,
By design, our device and software (LuViva) are not connected to the internet. Patient results cannot be saved to the device and must first be downloaded to a flash drive and then transferred to another computer or cloud-based system to be saved. The design of our product limits our exposure to the compliance requirements of NIST 800-171.
Regarding employee information, our Company generally keeps all employee personally identifiable information with our payroll service provider. The provider does not furnish a SOC report; however, it publishes privacy and data protection policies describing its data handling and security practices, including an annual privacy statement available on its website.
The board of directors, as a whole, has oversight responsibility for our strategic and operational risks, while we
Item 2. PROPERTIES
Our corporate offices, which also comprise our administrative, research and development, marketing and production facilities, are located at 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092, where we lease approximately 12,835 square feet under a lease that expires in July 2031.
Item 3. LEGAL PROCEEDINGS
Although we may, from time to time, be involved in various legal claims arising out of our operations in the normal course of business, we are not currently subject to any claims or actions that we believe would have a material adverse effect on our financial position or results of operations.
Item 4. MINE SAFETY DISCLOSURE
Not applicable.
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PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market for Common Stock; Holders
Our common stock is listed on the OTCQB under the ticker symbol “GTHP.” The number of record holders of our common stock at February 18, 2026 was 147.
The high and low common stock share prices for the first quarter of 2026 and calendar years 2025 and 2024, as reported by the OTCQB, were as set forth in the following table:
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| 2026 |
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| 2025 |
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| 2024 |
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| High |
|
| Low |
|
| High |
|
| Low |
|
| High |
|
| Low |
| ||||||
First Quarter* |
| $ | 0.54 |
|
| $ | 0.30 |
|
| $ | 0.16 |
|
| $ | 0.08 |
|
| $ | 0.19 |
|
| $ | 0.12 |
|
Second Quarter |
| $ | - |
|
| $ | - |
|
| $ | 0.28 |
|
| $ | 0.08 |
|
| $ | 0.16 |
|
| $ | 0.06 |
|
Third Quarter |
| $ | - |
|
| $ | - |
|
| $ | 0.30 |
|
| $ | 0.14 |
|
| $ | 0.19 |
|
| $ | 0.08 |
|
Fourth Quarter |
| $ | - |
|
| $ | - |
|
| $ | 0.54 |
|
| $ | 0.16 |
|
| $ | 0.20 |
|
| $ | 0.12 |
|
*Through February 17, 2026
Dividend Policy
We have not paid any dividends on our common stock since our inception and do not intend to pay any dividends in the foreseeable future.
Recent Sales of Unregistered Securities
During the year ended December 31, 2025, and through the date of this report, the Company issued the following securities that were not registered under the Securities Act of 1933, as amended:
Debt Conversions and Exchanges
The Company issued shares of its common stock in connection with conversions and exchanges of outstanding indebtedness:
· The Company issued 498,752 shares of common stock upon conversion of $75,000 of principal and $13,800 of accrued interest under a convertible promissory note issued to Flynn D. Case Living Trust at a conversion price of $0.18 per share.
· On August 21, 2025, the Company issued 152,108 shares of common stock and warrants to purchase 152,108 shares in exchange for $25,000 of principal and $2,379 of accrued interest owed to a member of the Board of Directors. The warrants have an exercise price of $0.25 per share and expire four years from issuance.
· On August 27, 2025, the Company issued 138,889 shares of common stock and warrants to purchase 138,889 shares in exchange for $25,000 of principal owed to the Company’s President and Chief Executive Officer. The warrants have an exercise price of $0.25 per share and expire four years from issuance.
· The Company issued an aggregate of 526,014 shares of common stock and warrants to purchase 526,014 shares in exchange for $50,000 of principal and $2,602 of accrued interest owed to members of the Board of Directors. The warrants have an exercise price of $0.13 per share and expire four years from issuance.
· The Company issued 664,266 shares of common stock upon conversion of $40,000 of principal and $6,499 of accrued interest under a contingently convertible promissory note issued to a director, at a conversion price of $0.07 per share.
· On November 21, 2025, the Company issued an aggregate of 743,511 units in exchange for $135,000 of principal and $6,267 of accrued interest (totaling $141,267) owed to certain noteholders, including Flynn D. Case Living Trust and another lender. Each unit consisted of one share of common stock, one warrant to purchase one share of common stock at an exercise price of $0.26 per share, and one warrant to purchase one share of common stock at an exercise price of $0.52 per share. The $0.26 warrants are exercisable immediately and expire three years from the date of issuance, and the $0.52 warrants are exercisable immediately and expire four years from the date of issuance.
· Subsequent to December 31, 2025, the Company issued 414,082 shares of common stock upon conversion of $75,000 of principal and $7,816 of accrued interest under a convertible promissory note at a conversion price of $0.20 per share. In connection with the exchange, the Company also issued warrants to purchase 300,000 shares of common stock, which have an exercise price of $0.30 per share and expire three years from issuance.
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Private Placements
The Company entered into multiple securities purchase agreements with accredited investors pursuant to which the Company issued shares of its common stock and warrants in private placement transactions.
· On March 18, 2025, the Company issued 2,045,009 units, each consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $0.13 per share. The warrants are immediately exercisable and expire four years from the date of issuance.
· August 29, 2025, the Company issued 305,557 units, each consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $0.25 per share. The warrants are immediately exercisable and expire four years from the date of issuance.
· On November 21, 2025, the Company issued 1,615,791 units, each consisting of one share of common stock, one warrant to purchase one share of common stock at an exercise price of $0.26 per share, and one warrant to purchase one share of common stock at an exercise price of $0.52 per share. The $0.26 warrants expire three years from issuance, and the $0.52 warrants expire four years from issuance.
Other Warrants
The Company issued warrants to purchase shares of its common stock in connection with financing transactions, including:
· 75,000 warrants issued on May 2, 2025, exercisable at $0.20 per share and expiring three years from issuance
· 10,000 warrants issued on May 22, 2025, exercisable at $0.20 per share and expiring three years from issuance
· 20,000 warrants issued on December 31, 2025, to GS Capital Partners, LLC, exercisable at $0.54 per share and expiring two years from issuance
· 30,000 warrants issued on February 6, 2026, in connection with the issuance of a $30,000 promissory note, exercisable at $0.40 per share and expiring three years from issuance
· 22,500 warrants issued on February 20, 2026, to a former employee, exercisable at a price equal to the 10-day volume-weighted average price of the Company’s common stock on the date of issuance and expiring three years from issuance
Shares Issued for Interest
The Company issued 813,916 shares of common stock in satisfaction of accrued interest on its 10% Senior Unsecured Convertible Debentures.
Preferred Stock Dividends
The Company issued shares of common stock in payment of dividends on its preferred stock, including:
· 836,018 shares issued on Series F preferred stock, of which 600,416 shares were unregistered
· 398,580 shares issued on Series F-2 preferred stock, of which 280,294 shares were unregistered
· 346,617 shares issued on Series E preferred stock, 297,949 all of which were unregistered
· 51,555 shares issued on Series D preferred stock, 24,710 of which were unregistered
Stock Options Issued Outside of Equity Incentive Plan
On June 3, 2025, the Company granted 550,000 stock options to certain executives and directors outside of the Company’s equity incentive plan. The options have an exercise price of $0.14 per share and expire on June 2, 2035.
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Conversions of Preferred Stock
The Company issued an aggregate of 16,524,690 shares of common stock upon conversion of its preferred stock, including Series C, C-1, C-2, D, E, F and F-2 preferred stock.
Of these shares:
· 13,868,690 shares were issued in unregistered transactions, and
· 2,656,000 shares were issued pursuant to effective registration statements, including shares issued upon conversion of Series D, Series E and Series F-2 preferred stock.
Warrant Exchange and Exercises
In February 2026, the Company completed a warrant exchange program pursuant to which holders of approximately 9,250,000 existing warrants exchanged such warrants for new warrants with exercise prices of $0.20 or $0.25 per share.
In connection with this exchange:
· Holders exercised approximately 4,825,000 warrants for aggregate cash proceeds of approximately $980,000
· The remaining approximately 4,425,000 warrants remain outstanding and expire on September 1, 2027
Exemption from Registration
The issuances described above were made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D, as transactions not involving a public offering. The recipients of the securities were accredited investors, directors, or existing security holders, and the Company did not engage in any general solicitation or advertising in connection with these issuances.
Purchases of Securities by the Issuer and Affiliated Purchasers
There were no purchases of securities by the Issuer and Affiliated Purchasers during the year ended December 31, 2025.
Securities Authorized for Issuance Under Equity Compensation Plans
All the securities we have provided our employees, directors and consultants have been issued under our stock option plans, which are approved by our stockholders. We have issued common stock to other individuals that are not employees or directors, in lieu of cash payments, that are not part of any plan approved by our stockholders.
Securities authorized for issuance under equity compensation plans as of December 31, 2025 are summarized below:
Plan Description |
| Number of securities to be issued upon exercise of outstanding options |
|
| Weighted-average exercise price of outstanding options |
|
| Number of securities available for future issuance under equity compensation plans |
| |||
2018 Equity Incentive Plan |
|
| 1,777,000 |
|
| $ | 0.37 |
|
|
| 723,000 |
|
Equity compensation not approved by security holders |
|
| 1,050,000 |
|
| $ | 0.13 |
|
|
| - |
|
TOTAL |
|
| 2,827,000 |
|
| $ | 0.28 |
|
|
| 723,000 |
|
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Item 6. [RESERVED]
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our financial statements and related notes in Part II, Item 8. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. You should review the “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” sections of this Annual Report for a discussion of the important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis.
Because such statements include risks and uncertainties, many of which are beyond our control, actual results may differ materially from those expressed or implied by such forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
Overview
We are a medical technology company focused on developing innovative medical devices that have the potential to improve healthcare. Our primary focus is the sales and marketing of our LuViva® Advanced Cervical Scan non-invasive cervical cancer detection device. The underlying technology of LuViva primarily relates to the use of biophotonics for the non-invasive detection of cancers. LuViva is designed to identify cervical cancers and precancers painlessly, non-invasively and at the point of care by scanning the cervix with light, then analyzing the reflected and fluorescent light.
LuViva provides a less invasive and painless alternative to conventional tests for cervical cancer screening and detection. Additionally, LuViva improves patient well-being not only because it eliminates pain, but also because it is convenient to use and provides rapid results at the point of care. We focus on two primary applications for LuViva: first, as a cancer screening tool in the developing world, where infrastructure to support traditional cancer-screening methods is limited or non-existent, and second, as a triage following traditional screening in the developed world, where a high number of false positive results cause a high rate of unnecessary and ultimately costly follow-up tests.
We are a Delaware corporation, originally incorporated in 1992 under the name “SpectRx, Inc.” and, on February 22, 2008, changed our name to Guided Therapeutics, Inc. At the same time, we renamed our wholly owned subsidiary, InterScan, which originally had been incorporated as “Guided Therapeutics.”
Since our inception, we have raised capital through the public and private sale of debt and equity, funding from collaborative arrangements, and grants.
Our prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. We have experienced operating losses since our inception and, as of December 31, 2025 we have an accumulated deficit of approximately $157.1 million. To date, we have engaged primarily in research and development efforts and the early stages of marketing our products. We do not have significant experience in manufacturing, marketing or selling our products. We may not be successful in growing sales for our products. Moreover, required regulatory clearances or approvals may not be obtained in a timely manner, or at all. Our products may not ever gain market acceptance and we may not ever generate significant revenues or achieve profitability. The development and commercialization of our products requires substantial development, regulatory, sales and marketing, manufacturing and other expenditures. We expect our operating losses to continue for the foreseeable future as we continue to expend substantial resources to complete commercialization of our products, obtain regulatory clearances or approvals, build our marketing, sales, manufacturing and finance capabilities, and conduct further research and development.
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Our product revenues to date have been limited. In 2025 and 2024, our revenues were from the sale of components of our LuViva devices and disposables. We expect that the majority of our revenue in 2026 will be derived from revenue from the sale of LuViva devices and disposables.
Current Demand for LuViva
Based on existing purchase orders and ongoing discussions with potential customers and partners, we expect potential sales of approximately $1.0 million within the next twelve months. We cannot be assured that we will generate all or any of these additional purchase orders, or that existing orders will not be canceled by the distributors or that parts to build product will be available to meet demand, such that existing orders will result in actual sales, in part because demand for LuViva is contingent upon Chinese regulatory approval which has not yet been achieved. Because we have a short history of sales of our products, we cannot confidently predict future sales of our products beyond this time frame and cannot be assured of any particular number of sales. Accordingly, we have not identified any particular trends with regard to sales of our products. In order to increase demand for LuViva, we are focused on three primary markets: the United States, China and Europe. In addition, we have recently received sales orders from Turkey and Indonesia, for which we have received the necessary regulatory approvals and are preparing to fulfill. These orders are expected to result in approximately $200,000 in revenue for 2026. When combined with sales to our Chinese partner, these constitute what we view as the current demand for our products.
We have not yet obtained clearance or approval from the U.S. FDA. However, we have completed patient enrollment in the clinical trial required to support an application for FDA approval to market and sell LuViva in the United States. As of February 2026, the status of the FDA application is as follows:
| · | Approximately 480 patients were enrolled, of whom 430 were evaluable for efficacy analysis. Both totals satisfy the a priori criteria as set forth in the study protocol. |
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| · | No adverse events related to the use of LuViva have been reported. |
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| · | All four clinical study sites adhered to the study protocol and completed required case report forms in accordance with FDA standards. |
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| · | Close-out activities have been completed at all sites, and all LuViva devices have been retrieved in good working order. |
Most sections of the application have been prepared. We are waiting for pathology results from outside pathology experts to complete the results section and submit the application. A short delay (approximately four to six weeks) has resulted from the loss of one of the study’s outside pathologist, who has since been replaced. We currently expect to submit the application to the FDA in the second quarter of 2026. However, there can be no assurance that the analysis and submission will be completed within the expected timeframe or that the results will support regulatory clearance or approval.
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For us to market our products in Europe and some other international jurisdictions, we and our distributors and agents must obtain required regulatory registrations or approvals. We must also comply with extensive regulations regarding safety, efficacy and quality in those jurisdictions. We may not be able to obtain the required regulatory registrations or approvals, or we may be required to incur significant costs in obtaining or maintaining any regulatory registrations or approvals we receive. Delays in obtaining any registrations or approvals required for marketing our products, failure to receive these registrations or approvals, or future loss of previously obtained registrations or approvals would limit our ability to sell our products internationally. For example, international regulatory bodies have adopted various regulations governing product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements. These regulations vary from country to country. In order to sell our products in Europe, in 2018 we had to undergo an inspection and re-file for ISO 13485:2016 and the CE Mark, which is an international symbol of quality and compliance with applicable European medical device directives. Failure to maintain ISO 13485:2016 certification or CE mark certification or other international regulatory approvals would prevent us from selling in some countries in the European Union.
As of December 31, 2025, our products have achieved and maintained both ISO 13485:2016 certification and the CE Mark through our contract manufacturer, Newmars Technologies. However, because of our focus on countries that do not require the CE Mark, it is uncertain whether we will maintain the CE Mark for the short term, as standards are continually evolving.
For our products to be marketed and sold in the People’s Republic of China, they must gain approval from the NMPA. We have been working with SMI to obtain NMPA approval. In 2022, device safety compliance testing was completed, and in late 2023 enrollment in the pivotal clinical trial at four hospitals was completed. SMI filed the NMPA approval application on October 16, 2024. On January 6, 2025, SMI notified us that the NMPA had accepted the application as completed and commenced its review.
Although SMI no longer holds rights to LuViva in China, SMI and its partners HDMT and YMIC have indicated their willing ness to continue assisting with the NMPA approval process. We are not obligated to grant long-term distribution or manufacturing rights in China to any of these parties. Both HDMT and YMIC continue to place product orders with us, as described above.
NMPA approval requires a successful manufacturing inspection. Current indications suggest that YMIC may be the entity to achieve this, as they are approved by the Chinese government to manufacture Class III medical devices. Based on current expectations, a manufacturing inspection could occur in May 2026, with potential approval in the third quarter of 2026, although there is no assurance that this timeline will be met or that NMPA approval of LuViva will be obtained.
Following regulatory approval of LuViva in Russia on August 11, 2025, the Company’s distribution partner, Newmars Medical Technologies (“Newmars”), has shifted its focus from smaller Eastern European markets to the Russian market.
In Turkey, we have been in contact with three different medical groups representing over 60 individual hospitals and clinics. We have entered contract discussions for supplying LuViva to the Turkish Ministry of Health (“MOH”). The current plan involves a collaboration with MOH to conduct a clinical study in Turkey to support the use of LuViva for primary screening of cervical cancer as a replacement for the Pap test under the public health system. The MOH has informed us that this could potentially involve significant annual testing volumes if implemented nationwide. The clinical study is expected to involve about 800 patients, take less than six months to complete and will be funded by the MOH. As of December 31, 2025, MOH had approved the study and budget, including paying for LuViva devices and single use cervical guides. Funds totaling $63,000 are expected to be released in 2026 and the study concluded in the first half of 2026.
In Indonesia, our contracted distributors are in discussions with the local government hospital system of Sulawesi, one of the nation’s most populous islands. During the fourth quarter of 2024, we received an order and full payment for four devices from Indonesia. We have delayed shipment pending final payment for shipping and additional services requested by the customer. We expect to ship these devices in the second quarter of 2026.
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Critical Accounting Policies
Our material accounting policies, which we believe are the most critical to investors’ understanding of our financial results and condition, are discussed below. Because we are still early in our enterprise development, the number of these policies requiring explanation is limited. As we begin to generate increased revenue from different sources, we expect that the number of applicable policies and complexity of the judgments required will increase.
Revenue Recognition: ASC 606, Revenue from Contracts with Customers establishes a single and comprehensive framework which sets out how much revenue is to be recognized, and when. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue is recognized when control over the goods or services is transferred to the customer. For the Company, revenue is primarily generated from the sale of medical devices and related components, and in certain circumstances may also include service, licensing, or distribution arrangements. The application of the core principle in ASC 606 is carried out in five steps:
Step 1 – Identify the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties that creates enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial substance and it is probable that the entity will collect the consideration to which it will be entitled. In the medical device industry, contracts may include sales agreements with hospitals, clinics, distributors, or international partners.
Step 2 – Identify the performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract. For the Company, performance obligations typically consist of the delivery of medical devices, related disposables or accessories, and in certain arrangements may include installation services, training, technical support, or other post-delivery obligations.
Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties. Transaction prices for the Company’s products include fixed prices stated in purchase orders or distribution agreements
Step 4 – Allocate the transaction price to the performance obligations: If a contract contains multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price of each promised good or service. Standalone selling prices are determined using observable market prices when available or estimated using appropriate pricing methods.
Step 5 – Recognize revenue when (or as) performance obligations are satisfied: Revenue is recognized when control of the promised goods or services transfers to the customer. For product sales, this generally occurs at a point in time when the device is shipped or delivered to the customer in accordance with the contractual shipping terms. Revenue related to services or other ongoing obligations, if any, is recognized over the period in which the services are performed.
Valuation of Equity Instruments Granted or Issued to Employees, Service Providers and Investors: On the date of issuance, the instruments are recorded at their fair value as determined using the Black-Scholes or binomial lattice valuation models.
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Inventory Valuation: All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. The Company periodically evaluates its inventory for excess, obsolete, or slow-moving items and records an inventory reserve, when necessary, to reduce inventory to its estimated net realizable value. Estimates of net realizable value are based on management’s assessment of forecasted demand, expected selling prices, remaining product life cycles, regulatory approvals, technological changes, and other factors that may affect the recoverability of inventory. As the Company is in the early stages of commercialization of its medical devices and certain products remain subject to regulatory approvals in various jurisdictions, actual demand and market conditions may differ from management’s estimates. Adjustments to inventory reserves are recorded in the period in which such estimates change.
RESULTS OF OPERATIONS
COMPARISON OF 2025 AND 2024
Sales Revenue, Cost of Goods Sold and Gross Profit from Devices and Disposables: Revenues from the sale of LuViva devices and disposables for the year ended December 31, 2025 were $766,948, compared to $6,940 for the year ended December 31, 2024. Cost of goods sold was $195,797 during the year ended December 31, 2025, compared to $4,574 during the year ended December 31, 2024. Revenue in the current period was attributed to the shipment of ten instrumentation packages and 49,031 RFID chips to our customers in China. In 2024, revenue was minimal and consisted primarily of sales of LuViva disposables.
The increase in revenue was primarily driven by the recognition of $488,766 of revenue in the fourth quarter of 2025 related to amounts previously recorded as deferred revenue under the Company’s arrangement with SMI. During the fourth quarter, SMI breached the agreement and no further performance obligations remained. Accordingly, consistent with ASC 606, the Company recognized the remaining deferred revenue in the current period.
Cost of goods sold consists primarily of direct materials, third-party manufacturing and assembly costs, and shipping and handling. Cost of goods sold for 2025 also included approximately $75,000 of inventory-related charges, consisting of physical inventory count adjustments and write-offs of obsolete inventory, which negatively impacted gross margin and may not be indicative of future results. Gross margin in 2025 reflects limited production volumes, reliance on third-party manufacturers, and the inventory-related charges noted above. While the Company expects its cost structure may improve as production scales, the timing and extent of any such improvement remain uncertain.
As of December 31, 2025, the Company had deferred revenue of $188,552 related to advance customer payments. Certain of these arrangements require additional payments or the satisfaction of contractual conditions, including the receipt of customer-provided components, prior to shipment. Accordingly, the timing of shipment and revenue recognition for these arrangements remains uncertain. The Company also has customer purchase orders for LuViva devices and disposables; however, the timing and fulfillment of these orders, and therefore revenue recognition, are dependent on various factors, including customer requirements, production timing, and regulatory considerations, including the status of approval by the NMPA.
While the Company believes that demand for its products may increase as regulatory approvals are obtained and commercial activities expand, there can be no assurance regarding the level or timing of revenue in 2026, or whether revenue will be greater than that reported for 2025.
Research and Development Expenses: Research and development expenses were $468,588 and $525,650 during the years ended December 31, 2025 and 2024, respectively. The decrease of $57,062, or 10.9%, was primarily due to a $62,083 decrease in research and development clinical costs and payroll-related expenses related to clinical trials.
Sales and Marketing Expenses: Sales and marketing expenses were $168,511 and $287,016 during the years ended December 31, 2025 and 2024, respectively. The decrease of $118,505, or 41.3%, was primarily due to reductions of $87,412 in salaries and benefits, $26,418 in rent and utilities (due to a decline in allocated rent expense and a decline in ancillary charges from the landlord) and $6,008 of travel costs. Sales and marketing expenses in 2026 are expected to remain limited as the Company continues to focus its efforts on obtaining regulatory approvals in the United States and China. As a result, the Company does not currently expect to incur significant sales and marketing expenses in those markets during 2026. Sales and marketing activities are expected to be primarily concentrated in Turkey, including personnel-related costs, which are currently expected to include approximately $90,000 related to a regional sales resource. The overall level of sales and marketing expense in 2026 will depend on the timing of regulatory approvals and the extent to which commercialization activities expand.
General and Administrative Expense: General and administrative expenses were $2,304,827 and $1,296,537 during the years ended December 31, 2025 and 2024, respectively. The increase of $1,008,290, or 77.8%, was primarily driven by an increase of $866,503 in salaries and benefits, including one-time non-cash charges of $270,389 for warrants and $548,102 for a conversion option, and a $40,000 increase in the Chief Executive Officer’s annual salary effective June 1, 2025, resulting in approximately $23,333 of additional expense in 2025. The increase also reflects higher consulting fees of $96,131, stock-based compensation of $26,419, allocated rent expense of $12,900, and an allowance for credit losses of $6,825.
Interest Expense: Interest expense during the years ended December 31, 2025 and 2024 was $617,205 and $380,717, respectively. The increase of $236,488 (or 62.1%), was primarily due to higher outstanding debt balances and increased amortization of debt discounts associated with convertible instruments.
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Change in Fair Value of Derivative Liability: The change in the fair value of our derivative liability resulted in a gain of $64,747 in the year ended December 31, 2025, versus a loss of $18,643 during the year ended December 31, 2024. The change in the fair value in the current period was attributed to changes in our forecasted stock price. In addition, a greater number of derivative liabilities were recorded in the current year due to additional bifurcated conversion features associated with new debt issuances.
Gain from Extinguishment of Debt: The gain from forgiveness of debt of $96,294 and $68,622 during the years ended December 31, 2025 and 2024, respectively, was due to forgiveness of debt from our creditors.
Loss from Extinguishment of Debt: The $532,864 loss on extinguishment of debt during the year ended December 31, 2025 was primarily attributable to debt-for-equity exchange transactions completed in connection with the Company’s March, August and November 2025 private placement offerings. In these transactions, the Company exchanged an aggregate of $246,246 of outstanding principal and accrued interest for units consisting of common stock and warrants. As a result, the Company recognized a total loss on extinguishment of debt of $532,864, reflecting the excess of the fair value of the equity instruments issued over the carrying value of the debt extinguished.
Other Income: Other income was $163,686 for the year ended December 31, 2025, compared to $17,102 in 2024. The increase was primarily driven by $183,525 recognized pursuant to an agreement with SMI, under which prior payments were applied toward reimbursement of certain expenses incurred by the Company in 2023 and 2024. These amounts were recognized in other income as they represent recoveries of previously incurred costs and do not relate to the transfer of goods or services under ASC 606.
Other income also included $52,400 related to refundable payroll tax credits received under the Employee Retention Credit program. These increases were partially offset by an $84,000 loss on the write-off of a long-term asset.
Preferred Stock Dividends: Expense related to preferred stock dividends was $149,790 and $173,724 for the years ended December 31, 2025 and 2024, respectively. The decrease was primarily attributable to the conversion of preferred shares into common stock during 2025, which reduced the number of outstanding preferred shares subject to dividend accrual.
Net Loss: Net loss attributable to common stockholders was $3,345,908 and $2,590,848 during the years ended December 31, 2025 and 2024, respectively. The reasons for the decrease are explained above.
There was no income tax benefit recorded for 2025 or 2024, due to recurring net operating losses and the full valuation allowance recognized against our deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
Going Concern Considerations
We have incurred significant losses since our inception. At December 31, 2025, the Company had negative working capital of approximately $6.0 million, accumulated deficit of $157.1 million, and incurred a net loss including preferred dividends of $3.35 million for the year then ended. Stockholders’ deficit totaled approximately $6.0 million at December 31, 2025, primarily due to recurring net losses from operations.
The Company will need to continue to raise capital in order to provide funding for its operations and FDA approval process. If sufficient capital cannot be raised, the Company will continue its plans of curtailing operations by reducing discretionary spending and staffing levels and attempting to operate by only pursuing activities for which it has external financial support. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection.
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Liquidity
Over the next 12 months we expect our burn rate to increase as we increase headcount, especially for meeting manufacturing demand. In addition, although we have significant inventory, we will need to order additional parts and services for production. Finally, we expect to spend another $250 thousand to complete and file our FDA. Thus, we estimate that approximately $2.3 million will be needed to fund the business over the next 12 months. However, other than completing and filing the US FDA study results, additional expenditures for manufacturing production will be needed only if significant product is ordered and paid for in advance by customers, which is our current policy.
Since our inception, we have raised capital through the public and private sale of debt and equity, funding from collaborative arrangements, and grants. As of December 31, 2025, we had cash of approximately $63 thousand and negative working capital of $6.0 million. Our outstanding debt obligations include a combination of short- and long-term promissory notes, insurance premium financing, and several convertible notes with varying maturities, interest rates, and terms.
In February 2026, the Company entered into warrant exchange agreements with certain holders of its outstanding warrants, pursuant to which approximately 9,250,000 warrants were exchanged for new warrants with lower exercise prices. In connection with these transactions, approximately 4,825,000 of the newly issued warrants were exercised, resulting in aggregate cash proceeds of approximately $980,000. The remaining approximately 4,425,000 warrants remain outstanding and expire in 2027.
Promissory Notes
As of December 31, 2025, the Company had outstanding promissory notes totaling approximately $105,000, compared to approximately $139,000 as of December 31, 2024. These balances primarily relate to insurance premium financing arrangements and a deferred compensation note. The decrease was primarily due to repayments during the year, including the full repayment of certain short-term promissory notes. The majority of these obligations are classified as current, with approximately $82,000 due within the next twelve months.
Convertible Debt
As of December 31, 2025, the Company had multiple outstanding convertible debt instruments, several of which are in default or contain embedded conversion features that may result in dilution.
The Company’s $1.13 million 10% Senior Unsecured Convertible Debenture, which matured on May 17, 2024, remains in default and continues to accrue interest at the default rate of 18%. Total accrued interest on the debenture was approximately $104,000 as of December 31, 2025, and the balance is classified as short-term debt in default.
The Company also has several convertible notes with institutional and third-party lenders, including notes with Diagonal Lending LLC, GS Capital Partners, LLC, and Labrys Fund II, L.P. These notes generally include original issue discounts, near-term repayment obligations through 2026, and embedded conversion features that have been bifurcated and accounted for as derivative liabilities.
As of December 31, 2025, total convertible promissory notes outstanding were approximately $447,000, or $347,000 net of discounts and issuance costs. During 2025, the Company entered into multiple exchange and conversion agreements with noteholders, including the full settlement of certain convertible notes, which reduced outstanding balances but resulted in losses on extinguishment of debt.
Related Party Debt
As of December 31, 2025, the Company had outstanding debt obligations to related parties totaling approximately $641,000, compared to approximately $534,000 as of December 31, 2024. These balances primarily consist of deferred compensation-related obligations and a contingently convertible promissory note issued in September 2025.
The Company issued a $160,000 contingently convertible promissory note to Dr. John Imhoff during 2025, of which $150,000 remained outstanding as of December 31, 2025. The note requires monthly payments and may be converted into common stock upon certain events, including payment default.
The Company also maintains outstanding deferred compensation-related obligations to executive officers, certain of which are past due, amended, or partially settled through equity issuances. During 2025, the Company entered into exchange agreements with related parties to settle portions of outstanding balances in common stock and warrants, resulting in losses on extinguishment of debt.
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Summary of our Cash Flows
Net cash used in operating activities was $1,068,000 for the year ended December 31, 2025, compared to $1,119,000 in the prior year, and remained relatively consistent year over year. The change reflects a higher net loss of $779,000 and a decrease in deferred revenue of $660,000, partially offset by favorable changes in accounts payable and accrued liabilities of $1,363,000 and inventory of $185,000. Non-cash adjustments increased year over year, including higher stock-based compensation of $377,000, loss on extinguishment of debt of $533,000, and amortization of debt discounts and issuance costs of $244,000. These increases were partially offset by a $65,000 gain from the change in fair value of derivative liabilities compared to an $18,000 loss in the prior year.
Net cash used in investing activities was $2,000 for the year ended December 31, 2025, compared to nil in the prior year, and consisted of purchases of property and equipment.
Net cash provided by financing activities was $745,000 for the year ended December 31, 2025, compared to $916,000 in the prior year. The decrease of $171,000 was primarily due to lower proceeds from the issuance of common stock and warrants in private placement offerings of $268,000, partially offset by higher net borrowings from notes payable and related party financing.
As a result, total cash decreased by $325,000 during the year ended December 31, 2025, compared to a decrease of $203,000 during the same period in 2024.
Contingencies
The conflict in Ukraine, which has already had an impact on financial markets, could result in additional repercussions in our operating business, including delays in obtaining regulatory approval to market our products in Russia. The future impact of the conflict is highly uncertain and cannot be predicted, and we cannot provide any assurance that the conflict will not have a material adverse impact on our operations or future results or filings with regulatory health authorities.
Recent conflicts and heightened geopolitical tensions in the Middle East have contributed to increased uncertainty in global financial markets and may result in volatility in commodity prices, including oil and natural gas, as well as disruptions to international trade routes. Any escalation or expansion of these conflicts could adversely affect global supply chains, increase transportation and energy costs, and create additional regulatory or economic uncertainty. While the Company does not currently have significant direct exposure to the region, the indirect effects of continued instability could adversely impact the Company’s operations, financial condition, and results of operations.
Tariffs imposed and/or publicly contemplated by the U.S. government, particularly as to China, create significant uncertainty with respect to future tax and trade regulations and the potential competitive effects of such actions. The countries in which our products will be manufactured or imported may from time to time impose additional quotas, duties, tariffs or other restrictions on our imports or adversely modify existing restrictions. It is unclear what the U.S. administration or foreign governments specifically will or will not do with respect to tariffs, tax policies, or other international trade agreements, regulations and policies. A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we manufacture and sell products or any resulting negative sentiments towards the United States could materially adversely affect the Company’s business, financial condition, operating results and cash flows.
Off-Balance Sheet Arrangements
We have no material off-balance sheet arrangements, no special purpose entities, and no activities that include non-exchange-traded contracts accounted for at fair value.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
GUIDED THERAPEUTICS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Guided Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Guided Therapeutics, Inc. and Subsidiary (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has recurring losses from operations, limited cash flow, and an accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risk of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Stock-Based Compensation
As described in Note 2 of the consolidated financial statements, the Company issues stock options and warrants which require fair value measurement. The fair value of these equity instruments is determined as of the grant date using the Black-Scholes option pricing model and is recorded as Stock-Based Compensation on the consolidated statements of stockholders’ deficit and within general and administrative expense on the consolidated statements of operations. The selection of the valuation methodology and assumptions utilized in the models are based, in part, upon assumptions for which management is required to use judgment, particularly the risk-free interest rate, volatility, and expected term.
We identified management’s judgments and assumptions used in the valuation of the warrants and stock options as a critical audit matter because of the significant judgments made by management to determine the grant date fair values. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our valuation specialists, when performing audit procedures to evaluate the reasonableness of management’s valuation methodology and related assumptions.
How the Critical Audit Matter was Addressed
The primary procedures we performed to address this critical audit matter included the following:
| · | We obtained and inspected the underlying agreements and management’s valuation analyses, including supporting schedules. |
|
|
|
| · | We agreed inputs used in the models to the a) underlying agreement such as the number of options or warrants and b) observable third party inputs, such as Company’s stock price as of the grant date and the risk-free interest rate. |
|
|
|
| · | We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value that would result from changes in these assumptions. |
|
|
|
| · | With the assistance of our valuation specialists, we evaluated management’s valuation methodology, including the selection of the pricing model. |
|
|
|
| · | With the assistance of our valuation specialists, we evaluated the reasonableness of management’s assumptions and the source of the information underlying those assumptions, including the risk-free interest rate, volatility and expected term. |
|
|
|
| · | With the assistance of our valuation specialists, we assessed whether management’s calculations of the fair values were applied in accordance with the selected methodology, including testing the mathematical accuracy of the valuation analyses. |
|
|
|
| · | We assessed whether the disclosures in the consolidated financial statements are complete and accurate. |
We have served as the Company’s auditor since 2007.
/s/
March 30, 2026
| F-2 |
| Table of Contents |
GUIDED THERAPEUTICS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands)
|
| December 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
ASSETS |
| |||||||
|
|
|
|
|
|
| ||
Current Assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ |
|
| $ |
| ||
Trade receivables, net of allowance for credit losses of $ |
|
|
|
|
|
| ||
Inventory, net of reserves of $ |
|
|
|
|
|
| ||
Other current assets |
|
|
|
|
|
| ||
Total current assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Non-Current Assets: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
|
|
| ||
Operating lease right-of-use asset, net of amortization |
|
|
|
|
|
| ||
Other assets |
|
|
|
|
|
| ||
Total non-current assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts Payable |
| $ |
|
| $ |
| ||
Accounts payable, related parties |
|
|
|
|
|
| ||
Accrued liabilities |
|
|
|
|
|
| ||
Deferred revenue |
|
|
|
|
|
| ||
Current portion of lease liability |
|
|
|
|
|
| ||
Short-term notes payable due to related parties |
|
|
|
|
|
| ||
Current portion of long-term debt, related parties |
|
|
|
|
|
| ||
Current portion of notes payable |
|
|
|
|
|
| ||
Short-term convertible debt, net of discounts |
|
|
|
|
|
| ||
Short-term convertible debt in default |
|
|
|
|
|
| ||
Derivative liability at fair value |
|
|
|
|
|
| ||
Total current liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Long-Term Liabilities |
|
|
|
|
|
|
|
|
Long-term lease liability |
|
|
|
|
|
| ||
Long-term notes payable |
|
|
|
|
|
| ||
Long-term convertible debt, net of discounts |
|
|
|
|
|
| ||
Long-term debt, related parties |
|
|
|
|
|
| ||
Total long-term liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ DEFICIT: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C convertible preferred stock, $ |
|
|
|
|
|
| ||
Series C1 convertible preferred stock, $ |
|
|
|
|
|
| ||
Series C2 convertible preferred stock, $ |
|
|
|
|
|
| ||
Series D convertible preferred stock, $ |
|
|
|
|
|
| ||
Series E convertible preferred stock, $ |
|
|
|
|
|
| ||
Series F convertible preferred stock, $ |
|
|
|
|
|
| ||
Series F-2 convertible preferred stock, $ |
|
|
|
|
|
| ||
Common stock, $ |
|
|
|
|
|
| ||
Additional paid-in capital |
|
|
|
|
|
| ||
Treasury stock at cost |
|
| ( | ) |
|
| ( | ) |
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Total stockholders’ deficit |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated statements.
| F-3 |
| Table of Contents |
GUIDED THERAPEUTICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
|
| Years Ended |
| |||||
|
| December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Sales - devices and disposables |
| $ |
|
| $ |
| ||
Cost of goods sold |
|
|
|
|
|
| ||
Gross profit |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
|
|
|
| ||
Sales and marketing |
|
|
|
|
|
| ||
General and administrative |
|
|
|
|
|
| ||
Total operating expenses |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
| ( | ) |
|
| ( | ) |
Interest income |
|
|
|
|
|
| ||
Change in fair value of derivative liability |
|
|
|
|
| ( | ) | |
Gain from forgiveness of debt |
|
|
|
|
|
| ||
Loss on extinguishment of debt |
|
| ( | ) |
|
|
| |
Other income |
|
|
|
|
|
| ||
Total other income (expense) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
| ( | ) |
|
| ( | ) |
Provision for income taxes |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net loss |
|
| ( | ) |
|
| ( | ) |
Preferred stock dividends |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
|
|
|
|
|
|
|
Basic |
| $ | ( | ) |
| $ | ( | ) |
Diluted |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
| ||
Diluted |
|
|
|
|
|
| ||
The accompanying notes are an integral part of these consolidated statements.
| F-4 |
| Table of Contents |
GUIDED THERAPEUTICS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2025
(in thousands)
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
| ||||||||||||||||||||
Series C | Series C1 | Series C2 | Series D |
| ||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
| ||||||||
Balance at December 31, 2024 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
| |||||||
Issuance of common stock and warrants in private placement offerings |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series D preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series E preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series F preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Conversion of Preferred Stock Series C to common stock |
|
| - |
|
|
| ( | ) |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series C1 to common stock |
|
| - |
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series C2 to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series D to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Conversion of Preferred Stock Series E to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Conversion of Preferred Stock Series F-2 to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Conversion of debt and accrued interest to common stock and warrants |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Accrued preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Balance at December 31, 2025 |
|
| - |
|
| $ |
|
|
| - |
|
| $ |
|
|
| - |
|
| $ |
|
|
| - |
|
| $ |
| ||||
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
| |||||||||||||||
Series E | Series F | Series F2 |
| |||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
| ||||||
Balance at December 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
| |||||
Issuance of common stock and warrants in private placement offerings |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series D preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series E preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series F preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series C to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series C1 to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series C2 to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series D to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Preferred Stock Series E to common stock |
|
| ( | ) |
|
| ( | ) |
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||
Conversion of Preferred Stock Series F-2 to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
| ( | ) | ||
Conversion of debt and accrued interest to common stock and warrants |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Accrued preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Balance at December 31, 2025 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
| ||||
| F-5 |
| Table of Contents |
|
| Common Stock |
|
| Additional Paid-In |
|
| Treasury |
|
| Accumulated |
|
|
| ||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Deficit |
|
| Total |
| ||||||
Balance at December 31, 2024 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |||
Issuance of common stock and warrants in private placement offerings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series D preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series E preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series F preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series C to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series C1 to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series C2 to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series D to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series E to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Preferred Stock Series F-2 to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of debt and accrued interest to common stock and warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Accrued preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Balance at December 31, 2025 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |||
| F-6 |
| Table of Contents |
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
| ||||||||||||||||||||
Series C | Series C1 | Series C2 | Series D |
| ||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
| ||||||||
Balance at December 31, 2023 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
| |||||||
Issuance of common stock and warrants in private placement offerings, net of expenses |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series D preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series E preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series F preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of common stock for payment of interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Conversion of Series F preferred stock to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Settlement of previously accrued professional fees through common stock issuance |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Accrued preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| ||||
Balance at December 31, 2024 |
|
| - |
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
| |||||||
| F-7 |
| Table of Contents |
|
| Preferred Stock |
|
| Preferred Stock |
|
| Preferred Stock |
| |||||||||||||||
Series E | Series F | Series F2 |
| |||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
| ||||||
Balance at December 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
| |||||
Issuance of common stock and warrants in private placement offerings, net of expenses |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series D preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series E preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series F preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of common stock for payment of interest |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Conversion of Series F preferred stock to common stock |
|
| - |
|
|
|
|
|
| - |
|
|
| ( | ) |
|
| - |
|
|
|
| ||
Settlement of previously accrued professional fees through common stock issuance |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Stock-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Accrued preferred dividends |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
| |||
Balance at December 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
| |||||
| F-8 |
| Table of Contents |
|
| Common Stock |
|
| Additional Paid-In |
|
| Treasury |
|
| Accumulated |
|
|
| ||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Deficit |
|
| Total |
| ||||||
Balance at December 31, 2023 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |||
Issuance of common stock and warrants in private placement offerings, net of expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series D preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series E preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series F preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of Series F-2 preferred dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of common stock for payment of interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Conversion of Series F preferred stock to common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Settlement of previously accrued professional fees through common stock issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Issuance of warrants with debt |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Stock-based compensation |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Accrued preferred dividends |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Net loss |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | |||
Balance at December 31, 2024 |
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | |||
The accompanying notes are an integral part of these consolidated financial statements.
| F-9 |
| Table of Contents |
GUIDED THERAPEUTICS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
| Year Ended |
| |||||
December 31, | ||||||||
|
| 2025 |
|
| 2024 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Bad debt expense |
|
|
|
|
|
| ||
Depreciation |
|
|
|
|
|
| ||
Amortization of debt issuance costs and discounts |
|
|
|
|
|
| ||
Stock-based compensation |
|
|
|
|
|
| ||
Change in fair value of derivative liability |
|
| ( | ) |
|
|
| |
Amortization of lease right-of-use-asset |
|
|
|
|
|
| ||
Loss on extinguishment of debt |
|
|
|
|
|
| ||
Gain from forgiveness of debt |
|
| ( | ) |
|
| ( | ) |
Other non-cash expenses |
|
|
|
|
|
| ||
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| ( | ) |
|
|
| |
Inventory |
|
|
|
|
| ( | ) | |
Other current assets |
|
|
|
|
|
| ||
Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
Lease liabilities |
|
| ( | ) |
|
| ( | ) |
Deferred revenue |
|
| ( | ) |
|
|
| |
NET CASH USED IN OPERATING ACTIVITIES |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
| ( | ) |
|
|
| |
NET CASH USED FOR INVESTING ACTIVITIES |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from the issuance of notes payable |
|
|
|
|
|
| ||
Proceeds from the issuance of notes payable issued to related parties |
|
|
|
|
|
| ||
Payments made on notes payable |
|
| ( | ) |
|
| ( | ) |
Payments made on notes payable issued to related parties |
|
| ( | ) |
|
| ( | ) |
Payments of debt issuance costs |
|
| ( | ) |
|
| ( | ) |
Proceeds from issuance of common stock and warrants in private placement offerings |
|
|
|
|
|
| ||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Cash at beginning of period |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
CASH AT END OF PERIOD |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Dividends on preferred stock |
| $ |
|
| $ |
| ||
Common stock issued for payment of interest |
| $ |
|
| $ |
| ||
Common stock issued for payment of accrued dividends |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series C to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series C1 to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series C2 to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series D to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series E to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series F to common stock |
| $ |
|
| $ |
| ||
Conversion of Preferred Stock Series F-2 to common stock |
| $ |
|
| $ |
| ||
Conversion of debt and accrued interest into common stock |
| $ |
|
| $ |
| ||
Directors and Officers Insurance obtained with Financing |
| $ |
|
| $ |
| ||
Non-cash lease liability remeasurement |
| $ |
|
| $ |
| ||
Warrants issued with debt |
| $ |
|
| $ |
| ||
Inception of derivative liability |
| $ |
|
| $ |
| ||
Accrued payroll liability exchanged for promissory note |
| $ |
|
| $ |
| ||
Settlement of previously accrued professional fees through common stock issuance |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these consolidated statements.
| F-10 |
| Table of Contents |
GUIDED THERAPEUTICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION, BACKGROUND, AND BASIS OF PRESENTATION
Guided Therapeutics, Inc. (formerly SpectRx, Inc.), together with its wholly owned subsidiary, InterScan, Inc. (formerly Guided Therapeutics, Inc.), collectively referred to herein as the “Company”, is a medical technology company focused on developing innovative medical devices that have the potential to improve healthcare. The Company’s primary focus is the continued commercialization of its LuViva non-invasive cervical cancer detection device and extension of its cancer detection technology into other cancers, including esophageal. The Company’s technology, including products in research and development, primarily relates to biophotonics technology for the non-invasive detection of cancers.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. All intercompany transactions and balances have been eliminated in consolidation.
The Company’s prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. The Company has experienced net losses since its inception and, as of December 31, 2025, it had an accumulated deficit of approximately $157.1 million. To date, the Company has engaged primarily in research and development efforts and the early stages of marketing its products. The Company may not be successful in growing sales for its products. Moreover, required regulatory clearances or approvals may not be obtained in a timely manner, or at all. The Company’s products may not ever gain market acceptance and the Company may not ever generate significant revenues or achieve profitability. The development and commercialization of the Company’s products requires substantial development, regulatory, sales and marketing, manufacturing and other expenditures. The Company expects operating losses to continue for the foreseeable future as it continues to expend substantial resources to complete development of its products, obtain regulatory clearances or approvals, build its marketing, sales, manufacturing and finance capabilities, and conduct further research and development.
| F-11 |
| Table of Contents |
Going Concern
The Company’s consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. The factors below raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty.
At December 31, 2025, the Company had a negative working capital of approximately $
During the year ended December 31, 2025, the Company received $
2. SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the inventory valuation, valuation of share-based compensation and the valuation of the convertible note payable derivative liability. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to the Company’s financial statements.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 effective January 1, 2025. The adoption did not impact the Company’s consolidated financial position, results of operations, or cash flows and resulted only in expanded income tax disclosures in the consolidated financial statements.
Recently Issued Accounting Standard Updates (“ASUs”) Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. All public business entities, including those with non-calendar year ends, are required to adopt the new disclosure requirements in their first annual reporting period beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that adoption of ASU 2025-01 will have on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). ASU 2024-04 clarifies the accounting guidance for determining whether a settlement of a convertible debt instrument should be accounted for as an induced conversion or as a debt extinguishment. Specifically, the amendments require that an inducement offer include, at a minimum, the form and amount of consideration that would have been issuable under the original conversion privileges and provide additional guidance for instruments with cash conversion features and volume-weighted average price (VWAP) formulas. The amendments also clarify that the induced conversion guidance can apply to convertible debt instruments that are not currently convertible, provided they contain a substantive conversion feature at issuance and at the date of the inducement offer.
ASU 2024-04 is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for entities that have adopted ASU 2020-06. The amendments may be applied either prospectively to settlements occurring after the effective date or retrospectively to the beginning of the earliest period presented, provided such settlements occurred after the adoption of ASU 2020-06. The Company is currently evaluating the impact that the adoption of ASU 2024-04 will have on its consolidated financial statements.
A variety of proposed or otherwise potential accounting standards are currently under consideration by standard-setting organizations and certain regulatory agencies. Because of the tentative and preliminary nature of such proposed standards, management has not yet determined the effect, if any, that the implementation of such proposed standards would have on the Company’s consolidated financial statements.
Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent.
| F-12 |
| Table of Contents |
Concentrations of Credit Risk
The Company maintains a cash balance in a financial institution that is insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations. The amount in excess of insured limitations was nil and $
Inventory Valuation
All inventories are stated at the lower of cost or net realizable value, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when incurred. Inventories consisted of the following at December 31, 2025 and 2024:
|
| (in thousands) |
| |||||
|
| December 31, |
|
| December 31, |
| ||
| 2025 |
| 2024 |
| ||||
|
|
|
|
|
|
| ||
Raw materials |
| $ |
|
| $ |
| ||
Work-in-progress |
|
|
|
|
|
| ||
Finished goods |
|
|
|
|
|
| ||
Inventory reserve |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Total inventory |
| $ |
|
| $ |
| ||
The company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Depreciation and amortization expense are included in general and administrative expense on the statements of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment consisted of the following at December 31, 2025 and 2024:
|
| (in thousands) |
| |||||
|
| December 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Equipment |
| $ |
|
| $ |
| ||
Software |
|
|
|
|
|
| ||
Furniture and fixtures |
|
|
|
|
|
| ||
Leasehold improvements |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
| ||
Less accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
| |
Property, equipment and leasehold improvements, net |
| $ |
|
| $ |
| ||
Depreciation expense related to property and equipment for the years ended December 31, 2025 and 2024 was not material.
| F-13 |
| Table of Contents |
Debt Issuance Costs
Debt issuance costs are capitalized and amortized over the term of the associated debt. Debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of the debt liability consistent with the debt discount.
Patent Costs (Principally Legal Fees)
Costs incurred in filing, prosecuting, and maintaining patents are recurring, and expensed as incurred. Costs for maintaining patents are expensed as incurred as the Company has not yet received U.S. FDA approval and recovery of these costs is uncertain. Such costs were not material for the years ended December 31, 2025 and 2024.
Leases
A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.
Where an operating lease contains extension options that the Company is reasonably certain to exercise, the extension period is included in the calculation of the right-of-use assets and lease liabilities.
The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Right-of-use assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both right-of-use assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions or covenants. See Note 6 – “Commitments and Contingencies.”
Accrued Liabilities
Accrued liabilities as of December 31, 2025 and 2024 are summarized as follows:
|
| (in thousands) |
| |||||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
|
|
|
|
|
|
| ||
Compensation |
| $ |
|
| $ |
| ||
Professional fees |
|
|
|
|
|
| ||
Interest |
|
|
|
|
|
| ||
Vacation |
|
|
|
|
|
| ||
Preferred dividends |
|
|
|
|
|
| ||
Other accrued expenses |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
| F-14 |
| Table of Contents |
Revenue Recognition
ASC 606, Revenue from Contracts with Customers, establishes a single and comprehensive framework which sets out how much revenue is to be recognized, and when. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the vendor expects to be entitled in exchange for those goods or services. Revenue is recognized when control over the goods or services is transferred to the customer. For the Company, revenue is primarily generated from the sale of medical devices and related components, and in certain circumstances may also include service, licensing, or distribution arrangements. The application of the core principle in ASC 606 is carried out in five steps:
| · | Step 1 – Identify the contract with a customer: a contract is defined as an agreement (including oral and implied), between two or more parties, that creates enforceable rights and obligations and sets out the criteria for each of those rights and obligations. The contract needs to have commercial substance and it is probable that the entity will collect the consideration to which it will be entitled. In the medical device industry, contracts may include sales agreements with hospitals, clinics, distributors, or international partners. |
|
|
|
| · | Step 2 – Identify the performance obligations in the contract: a performance obligation in a contract is a promise (including implicit) to transfer a good or service to the customer. Each performance obligation should be capable of being distinct and is separately identifiable in the contract. For the Company, performance obligations typically consist of the delivery of medical devices, related disposables or accessories, and in certain arrangements may include installation services, training, technical support, or other post-delivery obligations. |
|
|
|
| · | Step 3 – Determine the transaction price: transaction price is the amount of consideration that the entity can be entitled to, in exchange for transferring the promised goods and services to a customer, excluding amounts collected on behalf of third parties. Transaction prices for the Company’s products include fixed prices stated in purchase orders or distribution agreements |
|
|
|
| · | Step 4 – Allocate the transaction price to the performance obligations: If a contract contains multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price of each promised good or service. Standalone selling prices are determined using observable market prices when available or estimated using appropriate pricing methods. |
|
|
|
| · | Step 5 – Recognize revenue when (or as) performance obligations are satisfied: Revenue is recognized when control of the promised goods or services transfers to the customer. For product sales, this generally occurs at a point in time when the device is shipped or delivered to the customer in accordance with the contractual shipping terms. Revenue related to services or other ongoing obligations, if any, is recognized over the period in which the services are performed. |
| F-15 |
| Table of Contents |
The Company’s revenues do not require significant estimates or judgments and are recognized when control of the promised goods or services is transferred to the Company’s customers, which occurs at a point in time, most frequently upon shipment of the product or receipt of the product, depending on shipment terms. Revenue is measured as the amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. The Company is not party to contracts that include multiple performance obligations or material variable consideration.
The Company evaluated its arrangements under the principal versus agent guidance in ASC 606 and determined that it acts as the principal in its revenue arrangements because it controls the specified goods prior to transfer to the customer, is primarily responsible for fulfilling the promise to provide the goods and has discretion in establishing pricing. Accordingly, revenue is recognized on a gross basis. For the year ended December 31, 2025, all of the Company’s revenue was generated from sales customers located in China.
Contract Balances
The Company defers payments received as revenue until earned based on the related contracts and applying ASC 606 as required. Deferred revenue totaled $
The Company did not have material contract asset balances as of the periods presented.
Trade Receivables
Trade receivables are recorded net of allowances for chargebacks, cash discounts for prompt payment and credit losses. The Company estimates an allowance for expected credit losses by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The corresponding expense for the credit loss allowance is reflected in selling, general and administrative expenses. The credit loss allowance was immaterial as of December 31, 2025 and December 31, 2024.
Research and Development
Research and development expenses consist of expenditures for research conducted by the Company and payments made under contracts with consultants or other outside parties and costs associated with internal and contracted clinical trials. All research and development costs are expensed as incurred.
Income Taxes
The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company has filed its 2024 federal and state corporate tax returns. Although the Company has been experiencing recurring losses, it is obligated to file tax returns for compliance with IRS regulations and that of applicable state jurisdictions. At December 31, 2025, the Company had approximately $
The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than
Warrants
The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes or binomial option pricing models.
The Company evaluates all warrants to determine whether they should be classified as equity or liabilities in accordance with ASC 815-40. Warrants that are not indexed to the Company’s own stock or that require net cash settlement are classified as liabilities and remeasured at fair value each reporting period. As of the periods presented, the Company had no liability-classified warrants outstanding.
Stock Based Compensation
The Company accounts for its stock-based awards in accordance with ASC Subtopic 718, “Compensation – Stock Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all stock-based payment awards made to employees and directors. The Company determines the fair value of stock options using the Black-Scholes model. The fair value of restricted stock awards is based upon the quoted market price of the shares of common stock on the date of grant. The fair value of stock-based awards is expensed over the requisite service periods of the awards. The Company accounts for forfeitures of stock-based awards as they occur.
The Black-Scholes option pricing model requires the input of certain assumptions that require the Company’s judgment, including the expected term and the expected stock price volatility of the underlying stock. The assumptions used in calculating the fair value of stock-based compensation represent management’s best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change resulting in the use of different assumptions, stock-based compensation expense could be materially different in the future.
| F-16 |
| Table of Contents |
During the year ended December 31, 2025, the Company recognized $
Derivatives
The Company reviews the terms of convertible debt issued to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.
Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense.
Fair Value Measurements
ASC 820, “Fair Value Measurements and Disclosures,” clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
| · | Level 1: Quoted prices for identical assets or liabilities in active markets that the Company can access at the measurement date. |
|
|
|
| · | Level 2: Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. |
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|
|
| · | Level 3: Significant unobservable inputs that reflect the Company’s judgment about the assumptions that market participants would use in pricing an asset or liability. |
An asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC 820:
| · | Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
|
|
|
| · | Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). |
|
|
|
| · | Income approach: Techniques to convert future amounts to a single present value amount |
The Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
| F-17 |
| Table of Contents |
3. STOCKHOLDERS’ DEFICIT
November 2025 Private Placement Offering
On November 21, 2025, the Company entered into a Securities Purchase Agreement (the “November Purchase Agreement”) with certain institutional investors in a private placement that generated gross proceeds of $
In connection with the November Purchase Agreement,
August 2025 Private Placement Offering
On August 29, 2025, the Company entered into a Securities Purchase Agreement (the “August Purchase Agreement”) with certain institutional investors, including Dr. John Imhoff and Michael James, members of the Company’s board of directors, for the purpose of raising $
In connection with the August Purchase Agreement, the Company entered into an exchange agreement with Alan Grujic, a member of the Company’s board of directors, whereby
March 2025 Private Placement Offering
On March 18, 2025, the Company entered into a Securities Purchase Agreement (the “March Purchase Agreement”) with certain institutional investors, including Dr. Imhoff and Mr. James, for the purpose of raising $
In connection with the March Purchase Agreement, the Company entered into an exchange agreement with Dr. Imhoff, whereby
C-1 and C-2 Preferred Stock Exchanges
On March 3, 2025, the Company entered into exchange agreements with certain accredited investors, including Mark Faupel and John Imhoff, members of the Company’s board of directors, to exchange
2024 Private Placement Offerings
On September 23, 2024, the Company entered into a Securities Purchase Agreement (the “September Purchase Agreement”) with certain institutional investors, including John Imhoff a member of the Company’s Board of Directors, for the purpose of raising $
On December 18, 2024, the Company entered into a Securities Purchase Agreement (the “December Purchase Agreement”) with certain institutional investors, including John Imhoff, a member of the Company’s Board of Directors, for the purpose of raising $
| F-18 |
| Table of Contents |
Common Stock
The Company has authorized
During the years ended December 31, 2025 and 2024, the Company issued
|
| Number of Shares |
| |
Issuance of common stock in private placement offerings |
|
|
| |
Issuance of common stock for payment of Series D preferred dividends |
|
|
| |
Issuance of common stock for payment of Series E preferred dividends |
|
|
| |
Issuance of common stock for payment of Series F preferred dividends |
|
|
| |
Issuance of common stock for payment of Series F-2 preferred dividends |
|
|
| |
Conversion of Series F preferred stock to common stock |
|
|
| |
Issuance of common stock for payment of interest |
|
|
| |
Issuance of common stock to consultants |
|
|
| |
Total common stock issued during the year ended December 31, 2024 |
|
|
| |
|
| Number of Shares |
| |
Issuance of common stock in private placement offering |
|
|
| |
Issuance of common stock for payment of Preferred Series D dividends |
|
|
| |
Issuance of common stock for payment of Preferred Series E dividends |
|
|
| |
Issuance of common stock for payment of Preferred Series F dividends |
|
|
| |
Issuance of common stock for payment of Preferred Series F-2 dividends |
|
|
| |
Conversion of Preferred Series C stock to common stock |
|
|
| |
Conversion of Preferred Series C-1 stock to common stock |
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|
| |
Conversion of Preferred Series C-2 stock to common stock |
|
|
| |
Conversion of Preferred Series D stock to common stock |
|
|
| |
Conversion of Preferred Series E stock to common stock |
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|
| |
Conversion of Preferred Series F-2 stock to common stock |
|
|
| |
Issuance of common stock for payment of interest |
|
|
| |
Conversion of debt and accrued interest to common stock |
|
|
| |
Total common stock issued during the year ended December 31, 2025 |
|
|
| |
|
|
|
|
|
Summary table of common stock transactions: |
|
|
|
|
Shares outstanding at December 31, 2023 |
|
|
| |
Common shares issued during the year ended December 31, 2024 |
|
|
| |
Shares outstanding at December 31, 2024 |
|
|
| |
Common shares issued during the year ended December 31, 2025 |
|
|
| |
Shares outstanding at December 31, 2025 |
|
|
| |
Preferred Stock
The Company has authorized
| F-19 |
| Table of Contents |
Series C Convertible Preferred Stock
The board designated
Holders of the Series C Preferred Stock were entitled to quarterly cumulative dividends at an annual rate of
Series C1 Convertible Preferred Stock
The board designated
The Series C1 Preferred Stock has terms that are substantially the same as the Series C Preferred Stock, except that the Series C1 Preferred Stock does not pay dividends (unless and to the extent declared on the common stock) or at-the-market “make-whole payments” and, while it has the same anti-dilution protections afforded the Series C Preferred Stock, it does not automatically reset in connection with a reverse stock split or conversion of our outstanding convertible debt.
Series C2 Convertible Preferred Stock
On August 31, 2018, the Company entered into agreements with certain holders of the Company’s Series C1 Convertible Preferred Stock, including the chairman of the Company’s board of directors, the former Chief Operating Officer (now the Chief Executive Officer) and a director of the Company pursuant to which those holders separately agreed to exchange each share of the Series C1 Preferred Stock held for one (1) share of the Company’s newly created Series C2 Convertible Preferred Stock. In total, for
| F-20 |
| Table of Contents |
Series D Convertible Preferred Stock
The board designated
Initially, each share of Series D Preferred Stock was convertible, at the option of the holder, at any time during the five-year period following issuance, into that number of shares of common stock determined by dividing the stated value by $
During the year ended December 31, 2025, the Company issued
| F-21 |
| Table of Contents |
Series E Convertible Preferred Stock
The Board designated
Each share of Series E Preferred was convertible, at any time for a period of
Each holder of Series E Preferred Stock is entitled to receive cumulative dividends of
During the year ended December 31, 2025, the Company issued
Series F Convertible Preferred Stock
The Board designated
Each share of Series F Preferred Stock is convertible, at any time for a period of
During the year ended December 31, 2025, the Company issued
| F-22 |
| Table of Contents |
Series F-2 Convertible Preferred Stock
The Company was oversubscribed for its Series F Preferred Stock, resulting in the requirement to file an additional Certificate of Designation for Series F-2 Preferred Stock with substantially the same terms as the Series F Preferred Stock. The Board designated
Each share of Series F-2 Preferred Stock is convertible, at any time for a period of
During the year ended December 31, 2025, the Company issued
Series G Convertible Preferred Stock
During January 2021, the board designated
Warrants
The following table summarizes transactions involving the Company’s outstanding warrants to purchase common stock for the years ended December 31, 2025 and 2024:
|
| Warrants (Underlying Shares) |
|
| Weighted-Average Exercise Price Per Share |
| ||
Outstanding, December 31, 2023 |
|
|
|
| $ |
| ||
Warrants issued |
|
|
|
| $ |
| ||
Warrants expired |
|
| ( | ) |
| $ |
| |
Outstanding, December 31, 2024 |
|
|
|
| $ |
| ||
Warrants issued |
|
|
|
| $ |
| ||
Outstanding, December 31, 2025 |
|
|
|
| $ |
| ||
| F-23 |
| Table of Contents |
Warrants Issued in 2025
Private Placement Offerings
On November 21, 2025, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
On November 21, 2025, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
On August 29, 2025, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
On March 18, 2025, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
The proceeds from the 2025 private placement offerings were allocated between common stock and the warrants based on their relative fair values. The estimated fair value of warrants issued in connection with the exchange agreements was included in the calculation of the loss on extinguishment of debt.
Warrants Issued with Debt
During the year ended December 31, 2025, the Company issued
| Expected term (years) |
|
|
| |
| Volatility |
|
| % | |
| Risk-free interest rate |
|
| % | |
| Dividend yield |
|
| % |
| F-24 |
| Table of Contents |
Warrants Issued in 2024
During the year ended December 31, 2024, the Company issued
Warrants Issued with Debt
During the year ended December 31, 2024, the Company issued
On July 1, 2024, the Company issued
Management estimated the fair value of the warrants issued with debt utilizing the Black-Scholes Option Pricing model with the following weighted-average assumptions:
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
Private Placement Offerings
During the year ended December 31, 2024, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
During the year ended December 31, 2024, the Company issued
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
The offering proceeds were allocated between common stock and the warrants based on their relative fair values.
| F-25 |
| Table of Contents |
4. STOCK OPTIONS
The Company’s Stock Plan (the “Plan”) allows for the issuance of incentive stock options, nonqualified stock options, and stock purchase rights. The exercise price of options was determined by the Company’s board of directors, but incentive stock options were granted at an exercise price equal to the fair market value of the Company’s common stock as of the grant date. Options historically granted have generally become exercisable over three years and expire ten years from the date of grant. The aggregate number of common shares that may be issued or reserved pursuant to stock option or other awards under the plan may not exceed
In addition to awards granted under the Plan, the Company issued stock options outside of the Plan that were approved by the Board of Directors. During the years ended December 31, 2025 and 2024, the Company granted
The following tables summarize the Company’s stock option activity and related information for the years ended December 31, 2025 and 2024. The activity presented includes options granted both under and outside of the Plan:
|
| Number of Shares |
|
| Weighted-Average Exercise Price Per Share |
|
| Weighted-Average Remaining Contractual Life |
| Aggregate Intrinsic Value of In-the-Money Options (in thousands) |
| |||
Options outstanding as of December 31, 2023 |
|
|
|
| $ |
|
|
| $ |
| ||||
Options granted |
|
|
|
| $ |
|
|
|
|
|
|
| ||
Options outstanding as of December 31, 2024 |
|
|
|
| $ |
|
|
| $ |
| ||||
Options exercisable as of December 31, 2024 |
|
|
|
| $ |
|
|
| $ |
| ||||
Options granted |
|
|
|
| $ |
|
|
|
|
|
|
| ||
Options forfeited |
|
| ( | ) |
| $ |
|
|
|
|
|
|
| |
Options expired |
|
| ( | ) |
| $ |
|
|
|
|
|
|
| |
Options outstanding as of December 31, 2025 |
|
|
|
| $ |
|
|
| $ |
| ||||
Options exercisable as of December 31, 2025 |
|
|
|
| $ |
|
|
| $ |
| ||||
The aggregate intrinsic value is calculated as the difference between the Company’s closing stock price as of December 31, 2025 and the exercise price, multiplied by the number of options. As of December 31, 2025, there was $
The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. During the years ended December 31, 2025, the Company recognized expense for stock options of $
2025 Stock Option Activity
On June 3, 2025, the Company granted
The Black-Scholes option pricing model and the following weighted-average assumptions were used to estimate the fair value of awards granted during the year ended December 31, 2025:
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
|
|
2024 Stock Option Activity
On July 9, 2024, the Company granted
The Black-Scholes option pricing model and the following weighted-average assumptions were used to estimate the fair value of awards granted during the year ended December 31, 2024:
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
|
|
| F-26 |
| Table of Contents |
5. LITIGATION AND CLAIMS
From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Management believes that the dispositions of these matters, individually or in aggregate, are not expected to have a material adverse effect on the Company’s financial condition. However, depending on the amount and timing of such disposition, an unfavorable resolution of some or all of these matters could materially affect the future results of operations or cash flows in a particular year.
As of December 31, 2025, and 2024, there was no accrual recorded for any potential losses related to pending litigation.
6. COMMITMENTS AND CONTINGENCIES
Operating Leases
Our corporate office, which includes our administrative, research and development, marketing and production facilities, are located in a 12,835 square-foot leased property. The lease originally terminated on May 31, 2026 and included a renewal option allowing the Company to extend the term for an additional five years. At lease commencement, the renewal option was not considered reasonably certain to be exercised and, accordingly, was not included in the measurement of the lease liability or right-of-use (“ROU”) asset.
On November 30, 2025, management determined that it was reasonably certain that the renewal option would be exercised. The lease amendment formalizing the extension was executed on December 23, 2025. Accordingly, during the year ended December 31, 2025, the Company accounted for the extension as a lease modification and remeasured the related operating lease liability and ROU asset based on the revised lease term. The remeasurement resulted in an increase of $
Total operating lease cost recognized for this lease was $
|
| (in thousands) |
| |||||
|
| Year Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Operating lease right-of-use asset |
|
|
|
|
|
| ||
Operating lease liability |
|
|
|
| ||||
The table below presents the maturities of operating lease liabilities as of December 31, 2025:
|
| (in thousands) |
| |
|
| Operating |
| |
|
| Leases |
| |
2026 |
|
|
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total future lease payments |
|
|
| |
Less: discount |
|
| ( | ) |
Total lease liabilities |
| $ |
| |
The table below presents the weighted-average remaining lease term and discount rate used in the calculation of operating lease right-of-use assets and lease liabilities, as well as cash paid for operating lease liabilities, as of December 31, 2025 and December 31, 2024:
|
| Year Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Weighted average remaining lease term (years) |
|
|
|
|
|
| ||
Weighted average discount rate |
|
| % |
|
| % | ||
Cash paid for operating lease liability (in thousands) |
|
|
|
|
|
| ||
Related Party Contracts
Executive Compensation Agreement
On June 3, 2025, the Company’s Board of Directors approved a revised compensation agreement for the Company’s Chief Executive Officer (“CEO”), Dr. Mark Faupel. As of December 31, 2025, Dr. Faupel is entitled to:
| 1. | Warrants to purchase an additional |
| · | |
| · | |
| · | These warrants have an exercise price of $ |
| 2. | An additional warrant to purchase |
| F-27 |
| Table of Contents |
Additionally, deferred salary of $
As of December 31, 2025, Mr. Faupel’s deferred compensation balance totaled $
Related Party Debt
See Note 9, “Related Party Debt” for details regarding debt issued to related parties.
Director Consulting Agreements
On March 10, 2021, the Company entered into a consulting agreement with Richard Blumberg. As a result of the consulting agreement Mr. Blumberg provided a non-refundable payment of $
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
During the years ended December 31, 2025 and 2024, the Company issued nil and
On August 24, 2022, the Company entered into an agreement with Ironstone Capital Corp. and Alan Grujic (the “Advisory Group”) whereby the Advisory Group agreed to perform marketing and investor relations services over a term of twelve months, commencing on the closing of a financing of at least $2.5 million. In consideration for these services, the Company issued
| F-28 |
| Table of Contents |
The agreement also provided for monthly payments of $
Expense related to the first and second tranches of warrants was recognized in prior years. The Company estimated the fair value of the third tranche warrants using the Binomial Lattice model with the following assumptions:
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
The Company recognized expense for the third tranche of warrants of nil and $
Other Commitments
On January 22, 2017, we entered into a license agreement with Shandong Yaohua Medical Instrument Corporation (“SMI”), as amended on March 28, 2017, pursuant to which we granted SMI an exclusive global license to manufacture the LuViva device and related disposables (subject to a carve-out for manufacturing in Turkey). On December 18, 2018, we entered into a co-development agreement with Newmars Technologies, Inc. (“NTI”), whereby NTI performs final assembly of the LuViva device for its contracted distribution countries in Eastern Europe and Russia at its ISO 13485 facility in Hungary. This additional carve-out was agreed to by SMI.
The Company then entered into several amendments to the SMI agreement, the most recent of which was executed on May 8, 2025. During 2025, SMI made a required payment of $
During the fourth quarter of 2025, SMI failed to fulfill certain obligations under the agreement and consequently lost its rights to manufacture and distribute LuViva in China. As a result of this breach, the Company concluded that no remaining performance obligations existed under the agreement and recognized an additional $
Following the May 2025 amendment, we entered into a purchase agreement with HDMT for 35 LuViva devices (without rolling carts) totaling $
Although SMI continues to work with partners in China to pursue NMPA approval, we are no longer obligated to work with SMI and have instead increased our engagement with HDMT and YMIC.
Contingencies
The conflict in Ukraine, which has already affected global financial markets, continues to create uncertainty that could impact the Company’s operating business. Although approval to market and sell the Company’s products in Russia was granted on August 11, 2025, ongoing geopolitical tensions could still disrupt supply chains, distribution activities, or future regulatory interactions within the region. The ultimate impact of the conflict remains highly uncertain, and the Company cannot provide assurance that it will not have a material adverse effect on its operations, financial condition, or future regulatory matters.
Recent conflicts and heightened geopolitical tensions in the Middle East have contributed to increased uncertainty in global financial markets and may result in volatility in commodity prices, including oil and natural gas, as well as disruptions to international trade routes. Any escalation or expansion of these conflicts could adversely affect global supply chains, increase transportation and energy costs, and create additional regulatory or economic uncertainty. While the Company does not currently have significant direct exposure to the region, the indirect effects of continued instability could adversely impact the Company’s operations, financial condition, and results of operations.
Tariffs imposed and/or publicly contemplated by the U.S. government in 2025, particularly those affecting imports from China, create significant uncertainty with respect to future tax and trade regulations and the potential competitive effects of such actions. Although the countries in which our products are manufactured or imported may from time to time impose additional quotas, duties, tariffs, or other restrictions, or adversely modify existing ones, we have established an auxiliary manufacturing site in Hungary. This strategic initiative helps mitigate our exposure to currently imposed tariffs, particularly those targeting Chinese imports, and limits the overall impact on our operations. Nevertheless, it remains unclear what the U.S. administration or foreign governments specifically will or will not do with respect to tariffs, tax policies, or other international trade agreements, regulations, and policies. A trade war, other governmental actions related to tariffs or international trade agreements, or changes in U.S. or foreign social, political, regulatory and economic conditions—especially as they relate to manufacturing and investment—could still materially adversely affect the Company’s business, financial condition, operating results, and cash flows.
| F-29 |
| Table of Contents |
7. NOTES PAYABLE
Short-term Promissory Notes
On July 23, 2024, the Company issued a promissory note totaling $
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
On July 4, 2025, the Company entered into a premium finance agreement to finance its insurance policies totaling $
On July 4, 2024, the Company entered into a premium finance agreement to finance its insurance policies totaling $
Long-term Promissory Notes
On April 15, 2024, the Company entered into an exchange agreement with a former employee, whereby the former employee agreed to exchange outstanding amounts due to him for deferred compensation in the amount of $
| F-30 |
| Table of Contents |
The following tables summarize notes payable (in thousands):
|
| Notes Payable (in thousands) |
| |||||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Short-term promissory notes |
| $ |
|
| $ |
| ||
Deferred compensation note |
|
|
|
|
|
| ||
Insurance policy financing |
|
|
|
|
|
| ||
Debt discount |
|
|
|
|
| ( | ) | |
Total |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Less: Current portion of notes payable |
|
| ( | ) |
|
| ( | ) |
Total long-term notes payable |
| $ |
|
| $ |
| ||
Future debt obligations at December 31, 2025 for notes payable are as follows:
Year |
| Amount (thousands) |
| |
2026 |
|
|
| |
2027 |
|
|
| |
Total |
| $ |
| |
8. CONVERTIBLE DEBT
10% Senior Unsecured Convertible Debentures
On May 17, 2021, the Company issued
If a Change of Control (as defined in the Convertible Debenture Certificate) occurs prior to repayment, the Company must repay all outstanding principal and accrued interest plus a premium equal to
Beginning after May 2023, if the volume-weighted average trading price of the Company’s common stock equals or exceeds $
At December 31, 2025 and December 31, 2024, the balance due on the 10% Senior Unsecured Convertible Debenture was $
| F-31 |
| Table of Contents |
Convertible Promissory Notes
The following table summarizes convertible promissory notes outstanding as of December 31, 2025 and December 31, 2024:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Convertible promissory notes |
| $ |
|
| $ |
| ||
Unamortized debt issuance costs |
|
| ( | ) |
|
| ( | ) |
Debt discount |
|
| ( | ) |
|
| ( | ) |
Less: Convertible debt in default |
|
| ( | ) |
|
|
| |
Convertible promissory notes |
| $ |
|
| $ |
| ||
1800 Diagonal Lending LLC Notes
On June 11, 2024, the Company entered into a securities purchase agreement and contingently convertible note with Diagonal Lending LLC (“Diagonal Lending”). The convertible note issued to Diagonal Lending had a total principal balance of $
On July 22, 2024, the Company entered into a securities purchase agreement and contingently convertible note with Diagonal Lending. The convertible note had a total principal balance of $
On April 1, 2025, the Company entered into a securities purchase agreement and contingently convertible note with Diagonal Lending. The convertible note issued to Diagonal Lending had a total principal balance of $
On May 1, 2025, the Company entered into a securities purchase agreement and contingently convertible note with Diagonal Lending. The convertible note issued to Diagonal Lending had a total principal balance of $
On October 3, 2025, the Company entered into a securities purchase agreement and contingent convertible note with Diagonal Lending (together with the previously issued notes, the “Notes”). The convertible note, which had a total principal balance of $
| F-32 |
| Table of Contents |
Upon an event of default, the outstanding principal and accrued interest under the Notes are convertible into common stock at a variable conversion price equal to 65% of the lowest closing market price during the ten trading days preceding the conversion date.
The Company evaluated the embedded conversion features and determined that they are not clearly and closely related to the host debt and meet the definition of derivatives. Accordingly, the features were bifurcated and accounted for separately as derivative liabilities. The derivative liabilities were initially recorded at fair value on the issuance dates as debt discounts and are remeasured to fair value at each reporting date, with changes recognized in current earnings (see Note 11 for additional information on fair value measurements).
At December 31, 2025, the balance due on the Notes was $
GS Capital Partners, LLC Convertible Note
On December 30, 2025, the Company issued an unsecured promissory note to GS Capital Partners, LLC with a principal amount of $
Upon an event of default, the holder may convert all or a portion of the outstanding principal, accrued interest, and other amounts into shares of common stock at a conversion price equal to 65% of the lowest trading price of the Company’s common stock during the fifteen trading days preceding the conversion date, subject to a 4.99% beneficial ownership limitation.
The Company evaluated the embedded conversion feature and determined that it met the definition of a derivative liability. The feature was bifurcated and initially recorded at fair value as a debt discount and is remeasured at fair value each reporting period, with changes recognized in earnings (see Note 11 for additional information on fair value measurements).
Flynn D. Case Living Trust Convertible Note
On October 10, 2024, the Company issued a $
The Holder also received
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
On December 5, 2024, the Company amended the note to extend the maturity date to June 4, 2026 and to provide the holder with the option to convert specified portions of principal and accrued interest at variable conversion prices based on fixed prices or discounts to market. The Company evaluated the embedded conversion features and determined that they were not clearly and closely related to the host debt and therefore met the definition of derivatives under ASC 815. Accordingly, the embedded features were bifurcated and accounted for as derivative liabilities.
The derivative liabilities were initially measured at fair value on the amendment date and recorded as debt discounts against the convertible note. The Company remeasures the derivative liabilities at fair value at each reporting date, with changes in fair value recognized in earnings (see Note 11 for additional information).
| F-33 |
| Table of Contents |
During the year ended December 31, 2025, the Holder converted $
In connection with the November Purchase Agreement, the Company entered into an exchange agreement with the Holder pursuant to which the remaining $
At December 31, 2024, the balance due on the convertible promissory note was $
Labrys Fund II Convertible Note
On August 27, 2025, the Company issued a promissory note totaling $
Labrys may convert all or any portion of the outstanding principal and accrued interest upon the occurrence of an event of default or missed amortization payment at a conversion price equal to 75% of the average of the two lowest closing prices of the Company’s common stock during the ten trading days preceding the conversion date, subject to customary adjustments.
The Company assessed the embedded conversion features and determined that they are not considered clearly and closely related to the host note and meet the definition of derivatives. Therefore, these embedded conversion features are required to be bifurcated from the note and accounted for separately as a derivative liability. The Company estimated the fair value of the derivative liabilities on the date the amendment was executed and recorded them as discounts that net against the convertible note. The Company is required to remeasure the derivative liabilities to their then fair values at each subsequent balance sheet date, through an adjustment to current earnings (see Note 11 for further details on the Company’s fair value measurement).
A payment of $
Auctus Convertible Note
On December 17, 2019, the Company issued a $
On September 1, 2022, the Company entered into an Exchange Agreement with Auctus pursuant to which certain outstanding debt and equity instruments were restructured. Immediately prior to the exchange, Auctus held $
The outstanding principal balance of the convertible note was $
Other Convertible Promissory Notes
On May 2, 2025, the Company issued a promissory note totaling $
On May 22, 2025, the Company issued a $
9. RELATED PARTY DEBT
Short-Term Notes Payable Due to Related Parties
During the year ended December 31, 2024, the Company issued promissory notes totaling $
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
| F-34 |
| Table of Contents |
On August 21, 2025, the Company entered into an exchange agreement with Mr. Alan Grujic, a member of the Board of Directors, to exchange $
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
During the year ended December 31, 2025, the Company entered into exchange agreements with members of the Board of Directors to exchange $50,000 of notes payable and accrued interest of $
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
The outstanding principal and associated debt discounts as of December 31, 2025 and December 31, 2024 are presented below (in thousands):
|
| Short-Term Notes Payable Due to Related Parties |
| |||||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Short-term promissory notes |
| $ |
|
| $ |
| ||
Debt discount |
|
|
|
|
| ( | ) | |
Short-term notes payable due to related parties |
| $ |
|
| $ |
| ||
Long-Term Notes Payable Due to Related Parties
Executive Deferred Compensation Notes Payable
In 2018, the Company issued promissory notes to Dr. Mark Faupel and Dr. Gene Cartwright to settle previously deferred compensation and other amounts owed. The notes bear interest at 6.0% per annum and have been amended and extended multiple times.
On February 19, 2021, the Company replaced the original notes with new promissory notes totaling $
On August 27, 2025,
Expected term (years) |
|
|
| |
Volatility |
|
| % | |
Risk-free interest rate |
|
| % | |
Dividend yield |
|
| % |
| F-35 |
| Table of Contents |
The tables below summarize the outstanding balance of debt owed to Dr. Faupel and Dr. Cartwright (in thousands):
For Dr. Faupel: |
|
|
|
|
|
|
|
|
|
Salary |
| $ |
| |
Bonus |
|
|
| |
Vacation |
|
|
| |
Interest on compensation |
|
|
| |
Loans to Company |
|
|
| |
Interest on loans |
|
|
| |
Total outstanding prior to exchange |
|
|
| |
|
|
|
|
|
Balance forgiven in prior years |
|
| ( | ) |
Balance exchanged for Series F-2 Preferred Stock |
|
| ( | ) |
Total interest accrued through December 31, 2024 |
|
|
| |
Balance outstanding at December 31, 2024 |
| $ |
| |
|
|
|
|
|
Interest accrued through December 31, 2025 |
|
|
| |
Balance exchanged for common stock and warrants |
|
| ( | ) |
Balance outstanding at December 31, 2025 |
| $ |
|
For Dr. Cartwright |
|
|
|
|
|
|
|
|
|
Salary |
| $ |
| |
Bonus |
|
|
| |
Loans to Company |
|
|
| |
Interest on loans |
|
|
| |
Total outstanding prior to exchange |
|
|
| |
|
|
|
|
|
Balance forgiven in prior years |
|
| ( | ) |
Balance exchanged for Series F-2 Preferred Stock |
|
| ( | ) |
Total interest accrued through December 31, 2024 |
|
|
| |
Payments on outstanding debt |
|
| ( | ) |
Balance outstanding at December 31, 2024 |
| $ |
| |
|
|
|
|
|
Interest accrued through December 31, 2025 |
|
|
| |
Balance outstanding at December 31, 2025 |
| $ |
|
On March 22, 2021, the Company entered into an exchange agreement with Richard Fowler, a former executive. As of December 31, 2020, the Company owed Mr. Fowler $
During the years ended December 31, 2025 and 2024, Mr. Fowler forgave $
| F-36 |
| Table of Contents |
Other Notes Payable Issued to Related Parties
On September 25, 2025, the Company issued a $
During the year ended December 31, 2025, the holder converted $
The following tables summarize long-term notes payable due to related parties:
|
| Notes Payable Due to Related Parties (in thousands) |
| |||||
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Executive deferred compensation notes |
| $ |
|
| $ |
| ||
Contingently convertible promissory note |
|
|
|
|
|
| ||
Total |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Less: Current portion of notes payable due to related parties |
|
| ( | ) |
|
| ( | ) |
Total long-term notes payable due to related parties |
| $ |
|
| $ |
| ||
Future debt obligations at December 31, 2024 for debt owed to related parties is as follows:
Year |
| Amount (in thousands) |
| |
|
|
|
| |
2026 |
|
|
| |
2027 |
|
|
| |
Total |
| $ |
| |
10. INCOME (LOSS) PER SHARE OF COMMON STOCK
Basic net income (loss) per share attributable to common stockholders, amounts are computed by dividing the net income (loss) plus preferred stock dividends and deemed dividends on preferred stock by the weighted average number of shares outstanding during the year.
Diluted net income (loss) per share attributable to common stockholders amounts are computed by dividing the net income (loss) plus preferred stock dividends, deemed dividends on preferred stock, after-tax interest on convertible debt and convertible dividends by the weighted average number of shares outstanding during the year, plus Series C, Series C-1, Series C-2, Series F and Series F-2 convertible preferred stock, convertible debt, convertible preferred dividends, warrants and stock options convertible into common stock shares.
During a period of net loss, basic and diluted earnings per share are the same as the assumed exercise of warrants and the conversion of convertible debt and preferred stock are anti-dilutive. For the years ended December 31, 2025 and 2024, all stock options, convertible preferred stock, convertible debt, convertible deferred compensation and warrants were anti-dilutive and were therefore excluded from the computation of diluted loss per share. At December 31, 2025 and 2024, these instruments were convertible into
The following table sets forth pertinent data relating to the computation of basic and diluted net loss per share attributable to common shareholders (in thousands, except for per-share data):
|
| December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Net loss attributable to common stockholders |
|
| ( | ) |
|
| ( | ) |
Basic weighted average number of shares outstanding |
|
|
|
|
|
| ||
Net loss attributable to common stockholders per share (basic) |
|
| ( | ) |
|
| ( | ) |
Diluted weighted average number of shares outstanding |
|
|
|
|
|
| ||
Net loss attributable to common stockholders per share (diluted) |
|
| ( | ) |
|
| ( | ) |
| F-37 |
| Table of Contents |
11. FAIR VALUE MEASUREMENTS
The convertible notes payable derivative liabilities are considered Level 3 measurements, due to the significant unobservable inputs in the valuation, which are based on a forecast of the Company’s future stock performance and, as the note payable is contingently convertible upon an event of default, management’s estimate of the likelihood and timing of conversion.
Management utilized a pricing model simulation based on the terms of the bifurcated conversion features, which projects potential future stock prices using the Company’s historical volatility. The model estimates a variable conversion price as of an assumed future conversion date, based on management’s best estimate of the timing and probability of conversion.
The key inputs to the valuation model that was utilized to estimate the fair value of the bifurcated conversion option included:
| · | The forecasted future stock prices were determined using historical stock prices and the Company’s equity volatility. |
| · | The expected conversion price was determined using the forecast and the contractual terms of the convertible note agreements. |
| · | The probability and timing of potential conversions are based on management’s best estimate of the future settlements of the convertible notes. |
The following table presents the fair value of the bifurcated conversion options as of December 31, 2025 and December 31, 2024:
|
| Fair Value at December 31, 2025 (in thousands) |
| |||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Derivative liability/bifurcated conversion options in connection with convertible promissory notes |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total derivative liabilities at fair value |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Fair Value at December 31, 2024 (in thousands) |
| |||||||||||||||
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Derivative liability/bifurcated conversion options in connection with convertible promissory notes |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total short-term liabilities at fair value |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Derivative financial instruments and changes thereto recorded in the years ended December 31, 2025 and 2024 are presented below:
|
| Year Ended December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Fair value, beginning of period |
| $ |
|
| $ |
| ||
Inception of derivative liability |
|
|
|
|
|
| ||
Settlements (upon conversion) |
|
| ( | ) |
|
|
| |
Change in fair value of beneficial conversion features |
|
| ( | ) |
|
|
| |
Fair value, end of period |
| $ |
|
| $ |
| ||
| F-38 |
| Table of Contents |
12. INCOME TAXES
The Company has incurred net operating losses (“NOLs”) since inception. As of December 31, 2025, the Company had NOL carryforwards available to offset future taxable income through 2038 of approximately $
Components of deferred taxes are as follows at December 31, 2025 and 2024 (in thousands):
|
| December 31, |
| |||||
|
| 2025 |
|
| 2024 |
| ||
Deferred tax assets: |
|
|
|
|
|
| ||
Warrants |
| $ |
|
| $ |
| ||
Accrued executive compensation |
|
|
|
|
|
| ||
Reserves and other |
|
|
|
|
|
| ||
Stock options |
|
|
|
|
|
| ||
Net operating loss carryforwards |
|
|
|
|
|
| ||
Total deferred tax assets: |
|
|
|
|
|
| ||
Valuation allowance |
|
| ( | ) |
|
| ( | ) |
Net deferred tax assets |
| $ |
|
| $ |
| ||
The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory federal income tax rate for the years ended December 31, 2025 and 2024:
|
| 2025 |
|
| 2024 |
| ||
Statutory federal tax rate |
|
| % |
|
| % | ||
State taxes, net of federal benefit |
|
| % |
|
| % | ||
Nondeductible expenses |
|
|
|
|
|
| ||
Valuation allowance |
|
| ( | )% |
|
| ( | )% |
Effective tax rate |
|
| % |
|
| % | ||
The Company applies the applicable authoritative guidance which prescribes a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the Company has taken or expects to take on a tax return. As of December 31, 2025 and 2024, the Company has no uncertain tax positions. There are no uncertain tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months from December 31, 2025.
The Company files federal income tax returns and income tax returns in the state of Georgia with varying statutes of limitations. The Company has filed its 2024 federal and state corporate tax returns.
| F-39 |
| Table of Contents |
The total provision for income taxes as of December 31, 2025 and 2024 was as follows:
|
| 2025 |
|
| 2024 |
| ||
Current |
| $ |
|
| $ |
| ||
Deferred |
|
|
|
|
|
| ||
Deferred provision (credit) |
|
| ( | ) |
|
| ( | ) |
Change in valuation allowance |
|
|
|
|
|
| ||
Total provision for income taxes |
| $ |
|
| $ |
| ||
In 2025 and 2024, our effective tax rate differed from the U.S. federal statutory rate due to the valuation allowance over our deferred tax assets.
13. SEGMENT REPORTING
The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment. The Company’s principal decision maker is the Chief Executive Officer and acting Chief Financial Officer. Management believes that its business operates as one reportable segment because: a) the Company measures profit and loss as a whole; b) the principal decision maker does not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements.
14. SUBSEQUENT EVENTS
Promissory Note
On January 8, 2026, the Company issued a promissory note to Diagonal Lending with a principal amount of $
Warrant Exchange Transactions
On February 25, 2026, the Company entered into a series of warrant exchange agreements with certain holders of its outstanding common stock purchase warrants originally issued in 2022. Under these agreements, holders exchanged an aggregate of approximately
As a result of these transactions, holders exercised approximately
Conversion of Related Party Promissory Note
During February 2026, Dr. John Imhoff, a member of the Company’s Board of Directors, elected to convert portions of principal and accrued interest under his September 25, 2025 convertible promissory note into shares of the Company’s common stock. With the mutual agreement of the Company, these conversions were completed in lieu of scheduled principal payments, even though the Company was not in default under the note.
In connection with these elections, Dr. Imhoff converted an aggregate of $
Debt Conversion and Warrant Issuance
Subsequent to December 31, 2025, the Company entered into an exchange agreement with the holder of a $
Other Common Stock Issuances
Subsequent to December 31, 2025,
Stock Options Awarded
On March 10, 2026, the Company granted
| F-40 |
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported, within the time periods specified in Securities and Exchange Commission (“Commission”) rules and forms. We carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer/Acting Chief Financial Officer, Gene Cartwright, of the effectiveness of its disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer/Acting Chief Financial Officer has concluded that our disclosure controls and procedures were ineffective as of December 31, 2025, due to the existence of material weaknesses in our internal control over financial reporting, described below, that we have yet to fully remediate.
Management’s Annual Report on Internal Control over Financial Reporting
Our management, including our Chief Executive Officer/Acting Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer/Chief Financial Officer and implemented by our board of directors, management and other personnel, 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 and 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 that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and (ii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of their 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.
Under the supervision and with the participation of our management, including our Principal Executive Officer/Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 version of the Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on our evaluation, our management concluded that our internal control over financial reporting was ineffective as of December 31, 2025, due to the existence of the material weaknesses described below:
| 1) | The Company lacks the resources to properly research and account for complex transactions. |
|
|
|
| 2) | There is a lack of oversight and approval by the Board of Directors and Audit Committee, including formally documented approval of significant transactions, including related party transactions. |
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the Commission that permit non-accelerated filers to provide only the management’s report in their annual reports on Form 10-K.
There were no changes to the Company’s internal controls over financial reporting occurred during the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. OTHER INFORMATION
None.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officers are elected by and serve at the discretion of our board of directors. The following table lists information about our directors and executive officers:
Name |
| Age |
| Position with Guided Therapeutics |
Mark Faupel, Ph.D. |
| 69 |
| Chief Executive Officer, President, Acting Chief Financial Officer, Chief Operating Officer and Director |
Michael C. James |
| 66 |
| Chairman and Director |
Richard P. Blumberg |
| 68 |
| Director |
John E. Imhoff, M.D. |
| 75 |
| Director |
Alan Grujic |
| 57 |
| Director |
Mark Faupel, Ph.D., rejoined us as Chief Operating Officer and director on December 8, 2016. On March 7, 2023, the Board appointed Dr. Mark Faupel to replace Mr. Cartwright as the Company’s President and Chief Executive Officer, effective as of March 6, 2023. He previously served on our board of directors through 2013 and has more than 30 years of experience in developing non-invasive alternatives to surgical biopsies and blood tests, especially in the area of cancer screening and diagnostics. Dr. Faupel was one of our co-founders and also served as our Chief Executive Officer from May 2007 through 2013. Prior thereto was our Chief Technical Officer from April 2001 to May 2007. Dr. Faupel has served as a National Institutes of Health reviewer, is the inventor on 26 U.S. patents and has authored numerous scientific publications and presentations, appearing in such peer-reviewed journals as The Lancet. Dr. Faupel earned his Ph.D. in neuroanatomy and physiology from the University of Georgia. Dr. Faupel is also a shareholder of Shenghuo Medical, LLC.
Michael C. James has served as a member of our Board of Directors since March 2007 and as Chairman of the Board since October 2013. Mr. James was a founder of Edible Garden AG Incorporated and served as Chief Financial Officer and a director from March 2020 until January 2024. Mr. James previously served as Chief Financial Officer of Unrivaled Brands, Inc. (formerly Terra Tech) from February 2012 to March 2020. In addition to this role, Mr. James served as the Chief Executive Officer and Chief Financial Officer of Inergetics, Inc. from June 2012 until January 2016. Previously, Mr. James served as Chief Executive Officer of Nestor,the Inc. (“Nestor”), where he successfully completed a financial restructuring of Nestor prior to its sale in September 2009 from the Receiver’s Estate in Superior Court of the State of Rhode Island. He also served on Nestor’s Board of Directors from 2006 to 2009. Mr. James was the Managing Partner of Kuekenhof Capital Management, LLC, a private investment management company, from 1999 to 2015. During his career, Mr. James has served as a Partner at Moore Capital Management, Inc., a premiere private investment management company; Chief Financial and Administrative Officer at Buffalo Partners, L.P., a private investment management company; and Treasurer and Chief Financial Officer of National Discount Brokers. Mr. James began his career in 1980 as a staff accountant with EisnerAmper, LLP. Mr. James is a retired CPA. Mr. James received a B.S. degree in Accounting from Fairleigh Dickinson University in 1980.
Mr. James has experience both in the areas of company finance and accounting, which is invaluable to us during financial audits and offerings. Mr. James has extensive experience in the management of both small and large companies and his entrepreneurial background is relevant as we develop as a company.
Richard P. Blumberg was appointed to the Board of Directors on November 10, 2016 and resigned on March 27, 2019, but was reappointed on September 1, 2020. Mr. Blumberg has been a long-time investor in the Company. Since 1978, Mr. Blumberg has been a Principal at Webster, Mrak & Blumberg, a medical-legal and class action labor litigation firm. He is also currently a Managing Member of K2 Medical, LLC formerly known as Shenghuo Medical, LLC (“Shenghuo”), a company with licensing rights in several Asian countries for the Company’s LuViva Advanced Cervical Scan, and is a Managing Member of Elysian Medical, LLC, a company with world-wide rights for certain breast cancer detection technology. He served from 2004 to 2007 as Chief Executive Officer of Energy Logics, a wind power company that developed projects in Alberta, Canada and Montana. Mr. Blumberg holds a B.S. in Electrical Engineering and Computer Science from the University of Illinois and received a J. D. from Stanford University. He also brings extensive experience as a venture capitalist specializing in high-tech and life science companies.
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| Table of Contents |
John E. Imhoff, M.D. has served as a member of our Board of Directors since April 2006. Dr. Imhoff is an ophthalmic surgeon who specializes in cataract and refractive surgery. He is one of our principal stockholders and invests in many other private and public companies. He has a B.S. in Industrial Engineering from Oklahoma State University, an M.D. from the University of Oklahoma and completed his ophthalmic residency at the Dean A. McGee Eye Institute. He has worked as an ophthalmic surgeon and owner of Southeast Eye Center since 1983.
Dr. Imhoff has experience in clinical trials and in other technical aspects of a medical device company. His background in industrial engineering is especially helpful to us, especially as Dr. Imhoff can combine this knowledge with clinical applications. His experience in the investment community is invaluable to a public company often undertaking capital raising efforts.
Alan Grujic was appointed to serve as a member of our Board of Directors in March 2023. Mr. Grujic earned a bachelor’s degree in electrical engineering from the University of Toronto and an MBA with a concentration in finance from the University of British Columbia. After commencing his engineering career at CAMI Automotive (Ingersoll, Ontario), Mr. Grujic began a new career in capital markets finance where he was promoted to Director at TD Bank from 1994 to 2002. While in this role, he was stationed in various cities including Toronto, London, and Tokyo. In 2002, Mr. Grujic co-founded and was a managing partner of Infinium Securities, a company which was a large participant in the U.S. and European financial markets, and, at times, was the top equity trader in Canada. In 2012, Mr. Grujic founded Galiam Capital, a hedge fund that raised most of its capital from several large financial institutions. This fund was the largest new quantitative fund launch in 2012. From 2018 to 2022, Mr. Grujic served as Managing Partner and Chief Executive Officer of All of Us Financial, which he sold to a large publicly listed fintech company in 2021. More recently he founded Silvertrain AI in January 2024 which focuses on consulting in service of the commercial real estate industry’s AI transformation, and in February 2025 co-founded Real Asset Industries which is acquiring and developing active adult multi-family real estate projects.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who beneficially own more than 10% of a registered class of our equity securities to file reports of ownership and reports of changes in ownership with the Securities and Exchange Commission. These persons are required by regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of these forms received by us, we believe that, with respect to fiscal year 2025, our officers and directors were in compliance with all applicable filing requirements.
Code of Ethics
We have adopted a code of ethics that applies to all of our directors, officers and employees. To obtain a copy without charge, contact our Corporate Secretary, Guided Therapeutics, Inc., 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092. If we amend our code of ethics, other than a technical, administrative or non-substantive amendment, or we grant any waiver, including any implicit waiver, from a provision of the code that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, we will disclose the nature of the amendment or waiver on our website, www.guidedinc.com,within the “Investor Relations” section. Also, we may elect to disclose the amendment or waiver in a report on Form 8-K filed with the Securities and Exchange Commission.
| 39 |
| Table of Contents |
Risk Oversight
Our board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant board committees that report on their deliberations to the full board, as further described below. Given the small size of the board, the board feels that this structure for risk oversight is appropriate (except for those risks that require risk oversight by independent directors only). The audit committee is specifically charged with discussing risk management (primarily financial and internal control risk) and receives regular reports from management and independent auditors on risks related to, among others, our financial controls and reporting. Mr. James is the Chairman, while Dr. Imhoff and Mr. Blumberg are members of the audit committee. The compensation committee reviews risks related to compensation and makes recommendations to the board with respect to whether the Company’s compensation policies are properly aligned to discourage inappropriate risk-taking and is regularly advised by management. Dr. Imhoff is the Chairman, while Mr. James and Mr. Blumberg are members of the compensation committee. The Company’s management regularly communicates with the board to discuss important risks for their review and oversight, including regulatory risk, and risks stemming from periodic litigation or other legal matters in which we are involved.
Material Changes to Security Holders Nomination Procedure
There has been no material change to the procedures by which security holders may recommend nominees to the registrant’s board of directors since the last disclosure.
Item 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table lists specified compensation we paid or accrued during each of the fiscal years ended December 31, 2025 and 2024 to the Chief Executive Officer, Chief Operating Officer and Acting Chief Financial Officer.
On June 3, 2025, the Board of Directors approved a revised compensation arrangement for Dr. Faupel. Effective June 1, 2025, Dr. Faupel’s annual base salary was increased to $240,000. Dr. Faupel may elect to defer up to $100,000 of his annual salary, which accrues interest at a rate of 6% per annum. Deferred compensation totaling $373,783 as of May 23, 2025 continues to accrue interest at 6%. Beginning December 31, 2025, all accrued and future deferred compensation amounts are convertible, at Dr. Faupel’s option, into shares of the Company’s common stock at a conversion price of $0.25 per share. All amounts owed to Dr. Faupel become due and payable within ten business days if his employment as Chief Executive Officer is terminated by the Board.
Dr. Faupel was also granted warrants to purchase up to an aggregate of 6,000,000 shares of common stock, subject to the achievement of specified performance milestones related to regulatory progress for the Company’s LuViva Advanced Cervical Scan. The awards consist of (i) warrants to purchase 2,500,000 shares upon receipt of an approvable letter from the U.S. Food and Drug Administration, (ii) warrants to purchase 1,500,000 shares upon receipt of comparable approval from the Chinese National Medical Products Administration, each at an exercise price of $0.40 per share, and (iii) warrants to purchase 2,000,000 shares upon the filing of U.S. pivotal trial data with the FDA at an exercise price of $0.25 per share. The warrants include cashless exercise provisions and expire five years after becoming exercisable, subject to a maximum term of ten years from the date of issuance.
The below table reflects the updated roles and total compensation owed to the named executive officer for the years ended December 31, 2025 and 2024:
Name and Principal Position |
| Year |
| Salary ($) |
|
| Stock Awards ($) |
|
| Warrants ($) |
|
| Stock Options ($) |
|
| Other ($) |
|
| Total ($) |
| ||||||
Mark Faupel, Ph.D. - Chief Executive Officer, Chief Operating Officer and Acting Chief Financial Officer |
| 2025 |
|
| 240,000 | (1) |
|
| 38,819 | (2) |
|
| 36,878 | (2) |
|
| 15,171 | (3) |
|
| 8,388 | (5) |
|
| 339,256 |
|
|
| 2024 |
|
| 200,000 | (1) |
|
| - |
|
|
| - |
|
|
| 12,000 | (4) |
|
| 6,773 | (5) |
|
| 218,773 |
|
(1) From January 2024 - May 2025, Dr. Faupel was owed $16,667 per month as compensation. Beginning May 2025, Mr. Faupel was owed $20,000 per month as compensation. Mr. Faupel was paid $126,725 from January 2024 - December 2025. The remaining balance of his compensation has been deferred.
(2) On August 27, 2025, the Company entered into an agreement with Dr. Faupel to exchange $25,000 of a promissory note payable (issued for deferred compensation) for 138,889 shares of common stock and 138,889 warrants to purchase up to 138,889 shares of common stock. The warrants, which were immediately exercisable upon issuance, expire four years following the issuance date and have an exercise price of $0.25 per share.
(3) On June 3, 2025, the Company granted 110,000 stock options to Dr. Faupel. The stock options, which have an exercise price of $0.14, will expire on June 3, 2025. One fourth of the stock options vested immediately, while the remaining options will vest over a period of 33 months, beginning on September 9, 2025.
(4) On July 9, 2024, the Company granted 100,000 stock options to Mr. Faupel. The stock options, which have an exercise price of $0.12, will expire on July 8, 2034. One fourth of the stock options vested immediately, while the remaining options will vest over a period of 33 months, beginning on October 9, 2024.
(5) Other compensation is related to health insurance benefits.
| 40 |
| Table of Contents |
Outstanding Equity Awards to Officers at December 31, 2025
Name and Principal Position |
| Number of Securities Underlying Vested Options and Warrants |
|
| Number of Securities Underlying Unvested Options |
|
| Weighted-Average Exercise Price |
|
| Weighted-Average Expiration Date | ||||
Mark Faupel, Ph.D. - Chief Executive Officer, Chief Operating Officer and Acting Chief Financial Officer |
|
| 835,934 |
|
|
| 4,112,955 |
|
|
| 0.26 |
|
| 01/17/29 | |
Outstanding Equity Awards to Directors at December 31, 2025
Name and Principal Position |
| Number of Securities Underlying Vested Options |
|
| Number of Securities Underlying Unvested Options |
|
| Weighted-Average Exercise Price |
|
| Weighted-Average Expiration Date | ||||
Michael C. James, Chairman and Director |
|
| 249,318 |
|
|
| 110,682 |
|
|
| 0.17 |
|
| 11/05/33 | |
John E. Imhoff, M.D., Director |
|
| 249,318 |
|
|
| 110,682 |
|
|
| 0.17 |
|
| 11/05/33 | |
Alan Grujic, Director |
|
| 197,045 |
|
|
| 112,955 |
|
|
| 0.18 |
|
| 05/28/34 | |
Equity Compensation Policy
While we do not have a formal written policy in place with regard to the timing of certain equity awards in relation to the disclosure of material nonpublic information, our Board and the Compensation Committee do not seek to time equity grants to take advantage of information, either positive or negative, about our company that has not been publicly disclosed. It has been our practice generally to grant initial equity awards to our officers and non-employee directors in connection with their hiring or appointment to the Board, as applicable. We generally intend to issue equity awards to our officers at approximately the same time each year, typically in close proximity to the first regularly scheduled meeting of our Compensation Committee each fiscal year.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following tables list information regarding the beneficial ownership of our equity securities as of March 10, 2026 by (1) each person whom we know to beneficially own more than 5% of the outstanding shares of our common stock, (2) each director, (3) each officer named in the summary compensation table below, and (4) all directors and executive officers as a group. Unless otherwise indicated, the address of each officer and director is 5835 Peachtree Corners East, Suite B, Peachtree Corners, Georgia 30092.
|
| Common Stock Beneficially Owned (2) |
| |||||
Name and Address of Beneficial Owner (1) |
| Number of Shares |
|
| % |
| ||
Blumberg, Richard (6) |
|
| 14,264,364 |
|
|
| 14.64 | % |
Faupel, Mark (7) |
|
| 6,413,886 |
|
|
| 6.59 | % |
Grujic, Alan (8) |
|
| 3,240,558 |
|
|
| 3.47 | % |
Imhoff, John (9) |
|
| 26,628,069 |
|
|
| 27.27 | % |
James, Michael (10) |
|
| 1,517,401 |
|
|
| 1.63 | % |
All directors and executive officers as a group (5 persons) (11) |
|
| 52,064,278 |
|
|
| 47.10 | % |
| 41 |
| Table of Contents |
* | Less than 1%. |
|
|
(1) | Except as otherwise indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock. |
|
|
(2) | Percentage ownership is based on 92,073,062 shares of common stock outstanding as of March 10, 2026. Beneficial ownership is determined in accordance with the rules of the SEC, based on factors that include voting and investment power with respect to shares. Shares of common stock subject to convertible securities convertible or exercisable within 60 days after the record date are deemed outstanding for purposes of computing the percentage ownership of the person holding those securities but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Subject to customary exceptions, these provisions are triggered anytime we issue shares of common stock to third parties at a price lower than the then-current conversion price or exercise price of the subject securities. As a result, the beneficial ownership reported in this table is only as of the date presented, and the beneficial ownership amounts of the persons in this table may increase on a future date, even though such persons have not actually acquired any additional shares of common stock. |
|
|
(3) | As of March 10, 2026, there were 981 shares of Series F preferred stock outstanding, and each such share was convertible into approximately 4,000 shares of common stock. |
|
|
(4) | As of March 10, 2026, there were 430 shares of Series F-2 preferred stock outstanding, and each such share was convertible into approximately 4,000 shares of common stock. |
|
|
(5) | As of March 10, 2026, there were 3,452,000 stock options outstanding, and 2,485,637 shares vested and issuable upon exercise within 60 days after the record date. |
|
|
(6) | Beneficial ownership includes 8,924,182 shares of common stock, 3,700,000 shares issuable upon exercise of warrants exercisable within 60 days (exercise prices ranging from $0.30 to $0.65 per share), 1,040,000 and 352,000 shares issuable upon conversion of Series F and Series F-2 preferred stock, respectively, and 248,182 shares issuable upon exercise of stock options exercisable within 60 days (exercise prices ranging from $0.12 to $0.29 per share). |
|
|
(7) | Beneficial ownership includes 1,138,815 shares of common stock directly held, 4,138,889 shares issuable upon exercise of warrants exercisable within 60 days with a strike price of $0.25, 388,000 shares issuable upon conversion of 97 shares of Series F-2 preferred stock, and 748,182 shares issuable upon exercise of stock options exercisable within 60 days (exercise prices ranging from $0.12 to $0.49 per share). |
|
|
(8) | Beneficial ownership includes 1,817,541 shares of common stock directly held, 1,177,108 shares issuable upon exercise of warrants exercable within 60 days (exercise prices ranging from $0.25 to $0.65 per share), and 245,909 shares issuable upon exercise of stock options exercisable within 60 days (exercise prices ranging from $0.12 to $0.29 per share). |
|
|
(9) | Beneficial ownership includes 26,629,069 shares of common stock directly held, 5,236,788 shares issuable upon exercise of warrants exercisable within 60 days (exercise prices ranging from $0.12 to $0.65), 40,000 shares issuable upon conversion of 10 shares of Series F preferred stock, and 298,182 shares issuable upon exercise of stock options exercisable within 60 days (exercise prices ranging from $0.12 to $0.49 per share). |
|
|
(10) | Beneficial ownership includes 653,496 shares of common stock directly held, 566,723 shares issuable upon exercise of warrants exercisable within 60 days (exercise prices ranging from $0.13 to $0.50), and 298,182 shares issuable upon exercise of stock options exercisable within 60 days (exercise prices ranging from $0.12 to $0.49). |
|
|
(11) | Includes the beneficial ownership of Richard Blumberg (6), Mark Faupel (7), Alan Grujic (8), John Imhoff (9), and Michael James (10). |
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| Table of Contents |
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Policies and Procedures for Related Party Transactions
Our Board of Directors recognizes that transactions involving related persons present a heightened risk of conflicts of interest. The Audit Committee reviews and approves transactions involving directors, executive officers, or other related persons. When management becomes aware of a related person transaction, the matter is presented to the Audit Committee for approval or ratification. The Audit Committee generally approves only those transactions it determines are on terms comparable to arm’s-length transactions with an unrelated third party and reports such transactions to the full Board of Directors. Based on the definition of independence of the NASDAQ Stock Market, the board has determined that Mr. James and Dr. Imhoff are independent directors.
Related Person Transactions
During the year ended December 31, 2025, the Company entered into transactions with Dr. Mark Faupel, the Company’s Chief Executive Officer, related to the deferral and settlement of compensation.
Deferred salary owed to Dr. Faupel accrues interest at a rate of 6% per annum. During 2025, the Company issued shares of common stock and warrants to Dr. Faupel in exchange for portions of previously deferred compensation. In addition, all accrued and future deferred compensation balances are convertible, at Dr. Faupel’s option, into shares of the Company’s common stock at a conversion price of $0.25 per share. These arrangements were approved by the Board of Directors.
During the year ended December 31, 2024, the Company issued promissory notes totaling $75,000 to members of its Board of Directors. The notes accrued interest at a rate of 9.0% per annum. In connection with these financings, the Company issued warrants to purchase an aggregate of 75,000 shares of common stock at an exercise price of $0.25 per share. The warrants expire four years from the date of issuance.
During the year ended December 31, 2025, the Company entered into exchange agreements with members of its Board of Directors to convert outstanding indebtedness into equity. These transactions included:
| · | On August 21, 2025, the exchange of $25,000 of principal and $2,379 of accrued interest owed to a director for 152,108 shares of common stock and warrants to purchase 152,108 shares at an exercise price of $0.25 per share, expiring four years from issuance. |
|
|
|
| · | Additional exchanges with members of the Board of Directors totaling $50,000 of principal and $2,602 of accrued interest for an aggregate of 526,014 shares of common stock and warrants to purchase 526,014 shares at an exercise price of $0.13 per share, expiring four years from issuance. |
On September 25, 2025, the Company issued a $160,000 promissory note to Dr. John Imhoff, a member of the Board of Directors. The note bears interest at a rate of 10% per annum and matures on February 28, 2027. Beginning November 30, 2025, the Company is required to make monthly payments of $10,000 plus accrued interest.
If the Company fails to make a required payment, Dr. Imhoff has the option to convert the unpaid balance, including accrued interest, into shares of the Company’s common stock at a conversion price of $0.07 per share if the 10-day volume-weighted average price is below $0.50, or $0.14 per share if the 10-day volume-weighted average price is $0.50 or higher. The Company may prepay the note at any time with the holder’s written consent.
During the year ended December 31, 2025, Dr. Imhoff converted $10,000 of principal and $3,682 of accrued interest into 195,460 shares of common stock at a conversion price of $0.07 per share. As of December 31, 2025, the remaining principal balance was $150,000 and accrued interest totaled $534.
All of the foregoing transactions were approved by the Board of Directors. Except as described above, there were no related person transactions during the years ended December 31, 2025 or 2024 that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.
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| Table of Contents |
Indemnification of Officers and Directors
Our Amended and Restated Certificate of Incorporation and amended and restated bylaws, provide that we will indemnify each of our directors and officers to the fullest extent permitted by the DGCL. Further, we intend to enter into indemnification agreements with each of our directors and officers, and we intend to purchase a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances. For further information, see “Elimination of Monetary Liability for Officers and Directors.”
To the best of our knowledge, during the past two fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds the lesser of (A) $120,000 or (B) one percent of our average total assets at year-end for the last two completed fiscal years, and in which any director or executive officer, or any security holder who is known by us to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the foregoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
UHY LLP is our current independent registered public accounting firm. We were billed by UHY LLP approximately $184,856 and $189,695 during the fiscal years ended December 31, 2025 and 2024, respectively, for professional services, which include fees associated with the annual audit of financial statements, as well as the 10-K annual report, review of our quarterly reports, and other SEC filings. The following table summarizes fees billed to us by UHY LLP for the years ended December 31, 2025 and 2024:
|
| 2025 |
|
| 2024 |
| ||
Audit Fees |
| $ | 178,606 |
|
| $ | 181,750 |
|
Audit-Related Fees |
|
| - |
|
|
| - |
|
Tax Fees |
|
| 6,250 |
|
|
| 7,945 |
|
Total Fees |
| $ | 184,856 |
|
| $ | 189,695 |
|
Audit Committee Pre-Approval Policy and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Our Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with the pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
The consolidated financial statements included in Item 8 of this report are filed as part of this report.
The exhibits listed below are filed as part hereof, or incorporated by reference into, this Report. All documents referenced below were filed pursuant to the Securities and Exchange Act of 1934 by Guided Therapeutics, Inc. (f/k/a SpectRx, Inc.), file number 0-22179, unless otherwise indicated.
Exhibit Number | Exhibit Description | |
| ||
| ||
| ||
| ||
| ||
| ||
| ||
| ||
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| Certification of the Principal Executive Officer and Principal Financial Officer | |
| 101.1* | Interactive data files for Guided Therapeutics, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL: (i) the Audited Consolidated Balance Sheets; (ii) the Audited Consolidated Statements of Income; (iii) the Audited Consolidated Statements in Stockholders' Deficit; (iv) the Audited Consolidated Statements of Cash Flows; and (v) the Notes to the Audited Consolidated Financial Statements. | |
104 |
| The cover page from Guided Therapeutics, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2025 (formatted in Inline XBRL and included in Exhibit 101) |
*Filed herewith
Item 16. Form 10-K Summary
None.
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SIGNATURES
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.
GUIDED THERAPEUTICS, INC. | ||
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By: | /s/ Mark Faupel | |
Mark Faupel | ||
President, Chief Executive Officer, Chief Operating Officer and Acting Chief Financial Officer | ||
Date: March 30, 2026
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