UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
OR
For the transition period from __________ to __________.
Commission File Number:
(Exact name of registrant as specified in its charter)
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incorporation or organization) | Identification Number) |
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(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
|
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
As of August 5, 2026,
ZOMEDICA CORP.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED
June 30, 2026
TABLE OF CONTENTS
Page | ||
3 | ||
Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | ||
Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2026 and 2025 | ||
Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025 | ||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | ||
Notes to the Condensed Consolidated Financial Statements | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |
32 | ||
33 | ||
33 | ||
34 | ||
2
PART I — FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Zomedica Corp.
Consolidated Balance Sheets as of June 30, 2026 (Unaudited) and December 31, 2025
(United States Dollars in Thousands)
| June 30, | | December 31, | |||
| 2026 | | 2025 | |||
Assets |
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Current assets |
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Cash and cash equivalents | $ | | $ | | ||
Available-for-sale securities |
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Trade receivables, net |
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Inventory, net |
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Prepaid expenses and deposits |
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Other receivables |
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Total current assets |
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Prepaid expenses and deposits |
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Property and equipment, net |
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Right-of-use assets |
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Intangible assets, net |
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Other assets |
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Total assets | $ | | $ | | ||
Liabilities and shareholders’ equity |
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Current liabilities |
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Accounts payable | $ | | $ | | ||
Accrued income taxes |
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Current portion of lease obligations |
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Customer contract liabilities |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Lease obligations |
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Deferred tax liabilities, net |
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Customer contract liabilities |
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Other liabilities |
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Total liabilities | $ | | $ | | ||
Commitments and contingencies (Note 14) |
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Shareholders’ equity |
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$ | | $ | | |||
Additional paid-in capital |
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Accumulated deficit |
| ( |
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Accumulated comprehensive income |
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Total shareholders' equity |
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Total liabilities and shareholders’ equity | $ | | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Zomedica Corp.
Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2026 and 2025
(Unaudited) (United States Dollars in Thousands, Except for Per Share Data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Net revenue | $ | | $ | | $ | | $ | | ||||
Cost of revenue |
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Gross profit |
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Expenses |
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General and administrative |
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Research and development |
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Selling and marketing |
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Impairment expense |
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Loss from operations |
| ( |
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| ( |
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Other income (expense), net | ||||||||||||
Interest income |
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(Loss) gain on disposal of assets | ( | | ( | ( | ||||||||
Other expense |
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Foreign exchange (loss) income |
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Loss before income taxes |
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Income tax expense (benefit) |
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Net loss |
| ( |
| ( |
| ( |
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Unrealized loss, change in fair value of available-for-sale securities, net of tax |
| ( |
| ( |
| ( |
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Change in foreign currency translation |
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Net loss and comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
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Weighted average number of common shares - basic and diluted |
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Loss per share - basic and diluted (Note 16) | $ | ( | $ | ( | $ | ( | $ | ( | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Zomedica Corp.
Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025
(Unaudited) (United States Dollars in Thousands)
| For the Three and Six Months Ended June 30, 2026 | ||||||||||||||||
Additional | Accumulated | ||||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive |
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Shares | | Amount | | Capital | | Deficit | | Income (Loss) | | Total | |||||||
Balance at December 31, 2025 | | $ | | $ | | $ | ( |
| $ | | $ | | |||||
Stock-based compensation |
| — |
| — |
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| — |
| — |
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Net loss | — | — | — | ( | — | ( | |||||||||||
Other comprehensive loss |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Balance at March 31, 2026 |
| | $ | | $ | | $ | ( |
| $ | | $ | | ||||
Stock-based compensation |
| — |
| — |
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Net loss | — | — | — | ( | — | ( | |||||||||||
Other comprehensive loss |
| — |
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| — |
| — |
| ( |
| ( | |||||
Balance at June 30, 2026 |
| | $ | | $ | | $ | ( |
| $ | | $ | | ||||
| For the Three and Six Months Ended June 30, 2025 | ||||||||||||||||
Additional | Accumulated | ||||||||||||||||
Common Stock | Paid-In | Accumulated | Comprehensive |
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Shares | | Amount | | Capital | | Deficit | | Income (Loss) | | Total | |||||||
Balance at December 31, 2024 | | $ | | $ | | $ | ( | $ | | $ | | ||||||
Stock-based compensation |
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Net loss |
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| ( |
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Other comprehensive income |
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Balance at March 31, 2025 |
| | $ | | $ | | $ | ( |
| $ | | $ | | ||||
Stock-based compensation |
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Net loss |
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Other comprehensive income |
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Balance at June 30, 2025 |
| | $ | | $ | | $ | ( |
| $ | | $ | | ||||
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Zomedica Corp.
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025
(Unaudited) (United States Dollars in Thousands)
| Six Months Ended June 30, | |||||
| 2026 | | 2025 | |||
Cash flows from operating activities: |
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Net loss | $ | ( | $ | ( | ||
Adjustments for: |
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Depreciation |
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Amortization - intangible assets |
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Impairment loss |
| — |
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Loss on disposal of property and equipment |
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Stock-based compensation |
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Noncash portion of rent benefit |
| ( |
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Accretion/amortization of available-for-sale securities |
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Equity in loss of nonconsolidated entities | | | ||||
Deferred tax expense |
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Change in assets and liabilities, net of acquisitions: |
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Purchased inventory |
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Prepaid expenses and deposits |
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Trade receivables |
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Other receivables |
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Accounts payable |
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Accrued income tax |
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Accrued expenses and other current liabilities |
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Customer contract liabilities |
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Other liabilities |
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Net cash used in operating activities | ( | ( | ||||
Cash flows from investing activities: |
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Securities matured | | | ||||
Investment in property and equipment |
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Acquisition of intangibles |
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Net cash provided by investing activities | | | ||||
(Decrease) increase in cash and cash equivalents | ( | | ||||
Effect of exchange rate changes on cash | ( | | ||||
Cash and cash equivalents, beginning of year |
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Cash and cash equivalents, end of period | $ | | $ | | ||
Noncash activities: |
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Change in fair value of available-for-sale securities, net of tax | $ | ( | $ | ( | ||
Property and equipment accrued for in accounts payable | | | ||||
Transfer of property and equipment into intangibles | — | | ||||
Net transfer of property and equipment into inventory | — | | ||||
Intangible assets accrued for in accounts payable | | | ||||
Right-of-use assets obtained in exchange for operating lease obligations | — | | ||||
Supplemental cash flow information: |
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Interest received on available-for-sale securities | $ | | $ | | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
1. Nature of Operations
Zomedica Corp. (“Zomedica” or the “Company”) is a veterinary health company creating products for companion animals by focusing on the unmet needs of clinical veterinarians. While prioritizing animal health, we also strategically leverage our existing manufacturing and engineering capabilities to provide development services beyond animal health. The Company consists of the parent company, Zomedica Corp., its wholly owned U.S subsidiary, Zomedica Inc., and the wholly owned subsidiaries of Zomedica Inc.
2. Basis of Preparation
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries. Intercompany transactions and balances between consolidated businesses have been eliminated. The accounting policies set out below have been applied consistently in the condensed consolidated financial statements.
The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. The Company’s management believes the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements and the notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 16, 2026 (“2025 Form 10-K”).
3. Significant Accounting Policies
Basis of Measurement
The condensed consolidated financial statements have been prepared on the historical cost basis except as otherwise noted.
Estimates and Assumptions
In preparing these condensed consolidated financial statements, management was required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other outside sources, as appropriate. These estimates and assumptions are subject to an inherent degree of uncertainty. We are not presently aware of any events or circumstances that would require us to update such estimates and assumptions or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur, and additional information is obtained. As a result, actual results may differ significantly from our estimates, and any such differences may be material to our financial statements.
Functional and Reporting Currencies
The functional currency for Canada and our subsidiaries in the United States and Switzerland is U.S. dollars, which is also our reporting currency. The functional currency, as determined by management, for our Japanese subsidiary is Japanese Yen. Japanese Yen is translated for financial reporting purposes, with translation gains and losses recorded as a component of other comprehensive income or loss. In respect of transactions denominated in currencies other than the Company’s and its wholly owned operating subsidiaries’ functional currencies, the monetary assets and liabilities are remeasured at the period end rates. Revenue and expenses are measured at rates of exchange prevailing on the transaction dates. All exchange gains or losses resulting from these transactions are recognized in the consolidated statements of operations.
7
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Recently Issued Accounting Pronouncements
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270 and results in a comprehensive list of interim disclosures required by other standards. In addition, the ASU also includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU and has not yet determined its effect on the consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU updates the existing accounting standards over internal-use software capitalization to increase the operability of the recognition guidance considering different methods of software development. The ASU removes all references to prescriptive and sequential software development stages (referred to as “project stages”) and replaces it with a probable-to-complete recognition model. As part of this updated recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software. This ASU is effective for annual reporting periods beginning after December 15, 2027, and for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted. The Company is currently evaluating the impact of this ASU and has not yet determined its effect on the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosures to disaggregate costs and expense line items presented on the face of the consolidated statements of operations and comprehensive loss. These disclosures include: (a) amounts related to purchased inventory, employee compensation, depreciation, amortization, and other significant components of costs and expenses; (b) an explanation of costs and expenses that are not disaggregated quantitatively; and (c) the definition and total amount of selling expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU and has not yet determined its effect on the consolidated financial statements.
Recently Adopted Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This ASU is effective for public entities with fiscal years beginning after December 15, 2024. The Company adopted this guidance for the year ended December 31, 2025 and applied the guidance on a prospective basis. The adoption did not have a material impact on the consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient permitting an entity to assume the conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for the current classified accounts receivable and contract assets. The Company early adopted the standard during the year ended December 31, 2025 on a prospective basis. The adoption did not have a material impact on the consolidated financial statements.
Segment Reporting
The Company reports segment information based on the management approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company’s reportable segments consist of Diagnostics, Therapeutic Devices, and Development Services.
Cash and Cash Equivalents
The Company considers all highly liquid securities with an original maturity of three months or less to be cash equivalents. As of June 30, 2026 and December 31, 2025, the Company's cash balances exceeded federally insured limits by approximately $
8
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Investment Securities
Our investment securities, which are comprised of corporate bonds/notes and US treasuries, are accounted for in accordance with ASC 320, Investments – Debt Securities (“ASC 320”). The Company considers all of its securities for which there is a determinable fair market value, and there are no restrictions on the Company’s ability to sell within the next twelve months, as available for sale. We classify these securities as both current and non-current depending on their time to maturity. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported as a component of comprehensive loss.
Trade Receivables and Allowance for Credit Losses
Trade receivables are recorded net of an allowance for credit losses and have payment terms of 30-90 days. Our policy for determining the allowance is based on factors that affect collectability, including: (a) historical trends of write-offs, recoveries, and credit losses; (b) the credit quality of our customers; and (c) projected economic and market conditions. As of June 30, 2026, December 31, 2025, and December 31, 2024, trade receivables were $
Inventories
Inventories are stated at the lower of cost or net realizable value. The Company utilizes the specific identification and First in, First out (“FIFO”) method to track inventory costs. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
Property and Equipment
Property and equipment are carried at historical cost less accumulated depreciation and any accumulated impairment losses. Property and equipment acquired in a business combination are recorded at fair value as of the date of acquisition. Maintenance and repair expenditures that do not improve or extend the life are expensed in the period incurred. Depreciation is recognized so as to write off the cost less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each year, with the effect of any changes in estimate accounted for on a prospective basis. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
Included in property and equipment is construction in progress (“CIP”), which consists of property and equipment that are purchased or constructed and require time before being ready for their intended use. CIP is recorded at acquisition cost, including directly attributable installation costs. No depreciation is recorded on CIP until assets are complete and ready for use, at which point CIP balances are transferred to the appropriate property and equipment accounts, and depreciation begins in accordance with our policy.
Intangible Assets
Definite-lived intangible assets include acquired customer relationships, developed technology, licenses, trademarks, and tradenames. These assets are capitalized and amortized on a straight-line basis over their estimated useful lives. Intangible assets acquired as part of a business combination are initially recorded at their estimated fair value as of the acquisition date, while all other intangible assets are capitalized at cost. The estimated useful lives and amortization methods are reviewed annually, with any changes applied prospectively.
Expenditures for the planning and ongoing operation of the Company’s website are expensed as incurred. Costs incurred for website application development and infrastructure enhancements are capitalized and amortized over their estimated useful life.
Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses. These assets are not amortized but are assessed for impairment at least annually, or more frequently if events or circumstances indicate potential impairment.
9
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Impairment of Long-Lived and Indefinite-Lived Intangible Assets
The Company evaluates long-lived assets, including property, equipment, and definite-lived intangible assets, for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. If the sum of estimated undiscounted future cash flows expected to be generated by an asset or asset group is less than its carrying value, an impairment loss is recognized. The impairment loss is measured as the excess of the asset’s carrying amount over its fair value.
Indefinite-lived intangible assets, including goodwill, are tested for impairment at least annually or when impairment indicators arise. If the carrying amount exceeds the fair value, an impairment loss is recognized.
During the first quarter of 2025, the Company identified a triggering event and recorded a material impairment charge related to certain long-lived and indefinite-lived intangible assets, including goodwill. See Note 10, Property and Equipment and Note 11, Goodwill and Intangible Assets, for further information.
Revenue Recognition
The Company enters into agreements which may contain multiple promises where customers purchase products, services, or a combination thereof. Determining whether products and services are considered distinct performance obligations that should be accounted for separately requires judgment. We determine the transaction price for a contract based on the total consideration we expect to receive in exchange for the transferred goods or services.
The Company allocates revenue to each performance obligation in proportion to the relative standalone selling prices and recognizes revenue when control of the related goods or services is transferred for each obligation. We utilize the observable standalone selling price when available, which represents the price charged for the performance obligation when sold separately.
The Company's contracts with customers are generally comprised of purchase orders for the sale of the point of care instrument, consumable products, development services, and extended warranties, or some variation thereof. The instrument and consumables each represent a single performance obligation when sold separately, that is satisfied at a point in time upon transfer of control of the product to the customer which is typically upon receipt of the goods by the customer. The extended warranties are also a separate performance obligation, whereby revenue is recognized over time. Development services are recognized over time, as they do not create an asset with alternative use to us, and we have an enforceable right to payment for performance completed to date. ASC 606, Revenue from Contracts with Customers (“ASC 606”) contains a practical expedient whereby if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. The Company has elected to apply this practical expedient to our services revenue.
The Company also enters into contracts with customers where it receives payment for the consumable products and does not receive additional or separate consideration for the use of the point of care instrument furnished by the Company for the clinical veterinarian’s use. For these contracts, the Company considers the guidance under ASC 842, Leases (“ASC 842”), in order to determine if the furnishing of the point of care instrument to the customer during the period of use creates an embedded lease. If the point of care instrument is identified as a lease, it is classified as an operating lease as it does not meet any of the finance lease criteria per ASC 842. In these arrangements, the consumable products are classified as non-lease components. The Company allocates revenue to these lease and non-lease components based on standalone selling prices or, if not available, a cost-plus approach. Revenue related to the lease component is recognized ratably over the term of the contract. Revenue related to the non-lease components is recognized when control of the product has been transferred to the customer.
The nature of the Company’s PulseVet® business gives rise to variable consideration, including discounts and applicator (“trode”) returns for refurbishment. Credits are issued for unused shocks on returned trodes, which can be used toward the purchase of replacement trodes. Discounts and the estimated unused shock credits decrease the transaction price, which reduces revenue. Variable consideration related to unused shock credits is estimated using the expected value method, which estimates the amount that is expected to be earned.
10
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are based upon historical experience and known trends. These estimated credits are nonrefundable and may only be used towards the purchase of future trode refurbishments. These credits give rise to the contract liability contained on the balance sheet. This practice encourages refurbishment purchase prior to complete utilization of the previous trode, so the customer will always have a trode on hand with ample capacity to perform treatments. As of June 30, 2026, December 31, 2025 and December 31, 2024, contract liabilities were $
Sales are recorded net of sales tax. Sales tax is charged on sales to end users and remitted to the appropriate state authority.
Disaggregated revenue for the three months ended June 30, 2026 and 2025 is as follows:
Three Months Ended June 30, | ||||||||||||||||||||||||
Diagnostics | Therapeutic | Development | Consolidated | |||||||||||||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | | 2026 | | 2025 | | 2026 | | 2025 | |||||||||
Capital | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Consumables | | | | | | - | | | ||||||||||||||||
Engineering | - | - | - | - | | - | | - | ||||||||||||||||
Other | - | - | | | | - | | | ||||||||||||||||
Total revenue | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Disaggregated revenue for the six months ended June 30, 2026 and 2025 is as follows:
Six Months Ended June 30, | ||||||||||||||||||||||||
Diagnostics | Therapeutic | Development | Consolidated | |||||||||||||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | | 2026 | | 2025 | | 2026 | | 2025 | |||||||||
Capital | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Consumables | | | | | | - | | | ||||||||||||||||
Engineering | - | - | - | - | | - | | - | ||||||||||||||||
Other | - | - | | | | - | | | ||||||||||||||||
Total revenue | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Cost of Revenue
Cost of goods sold consists of overhead, materials, labor, shipping costs, and a portion of depreciation incurred internally to produce and receive the products or to provide services. Shipping and handling costs incurred by the Company are included in cost of revenue.
Research and Development
Research and development costs related to continued research and development programs are expensed as incurred.
Stock-based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, (“ASC 718”). Stock-based compensation expense is recognized for awards granted to employees and directors based on the fair value of the awards on the grant date. The Company’s stock-based compensation includes stock options, which are classified as equity awards, and stock appreciation rights (SARs), which are classified as liability awards.
11
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
The Company calculates stock-based compensation for stock options using the fair value method. The fair value of stock options at the grant date is determined using the Black-Scholes Option Pricing Model. The resulting fair value is recognized as compensation expense over the vesting period of the award using the graded vesting method. The Company’s stock option plans do not require the settlement of awards by transferring cash or other assets. Therefore, stock options are classified as equity awards. Compensation expense recognized during the period reflects the fair value of stock-based payment awards that are ultimately expected to vest. In accordance with ASC 718, the Company recognizes forfeitures of employee awards as they occur.
The Company accounts for SARs under ASC 718 as liability-classified awards because they are settled solely in cash and do not result in the issuance of equity. The fair value of SARs is measured at the grant date and remeasured at each reporting date until settlement. Changes in fair value are recognized as compensation expense in the consolidated statements of operations and comprehensive loss in the period of remeasurement. The fair value of SARs is determined using the Black-Scholes Option Pricing Model, incorporating significant assumptions such as expected stock price volatility, expected term of the award, and risk-free interest rate.
SARs vest over the defined vesting period, and compensation expense is recognized based on the proportion of the vesting period that has elapsed. Upon exercise, participants receive a cash payment equal to the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the SAR.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”), on a tax jurisdictional basis. The Company files income tax returns in Canada and the province of Alberta and its subsidiaries file income tax returns in Switzerland, Japan, the United States and various states within, including in Michigan where the Company’s headquarters are located.
Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax basis of assets and liabilities and their financial statement reported amounts using enacted tax rates and laws in effect in the year in which the differences are expected to reverse. A valuation allowance is provided against deferred tax assets when it is determined to be more likely than not that the deferred tax asset will not be realized.
The Company assesses the likelihood of the financial statement effect of an uncertain tax position that should be recognized when it is more likely than not that the position will be sustained upon examination by a taxing authority based on the technical merits of the tax position, circumstances, and information available as of the reporting date. The Company is subject to examination by taxing authorities in the United States, Canada, Japan, and Switzerland. The Company recognizes tax-related interest and penalties, if any, as a component separate from income tax expense.
Comprehensive Loss
Our comprehensive loss is reported in accordance with ASC 220, Income Statement — Reporting Comprehensive Income (“ASC 220”). Comprehensive loss is net loss plus certain items that are recorded directly to shareholders’ equity. The Company has recorded a currency translation adjustment associated with the translation of its Japanese subsidiary to the reporting currency.
Loss Per Share
Basic loss per share (“EPS”) is computed by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options is excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.
12
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
4. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
The preparation of financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and further periods if the revision affects both current and future periods.
Critical areas of estimation and judgements in applying accounting policies include the following:
Impairment Testing
Prior to fully impairing goodwill during the first quarter of 2025, we evaluated goodwill for impairment annually or more frequently when an event occurs or circumstances change indicating the carrying value may not be recoverable. When testing goodwill for impairment, we would first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, we considered the impact of changes, if any, to the following factors: macroeconomic, industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting a reporting unit. If our qualitative assessment indicated a goodwill impairment is more likely than not, we performed additional quantitative analyses. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. For reporting units where a quantitative analysis is performed, we perform a test measuring the fair values of the reporting units and comparing them to their aggregate carrying values, including goodwill. If the fair value is less than the carrying value of the reporting unit, an impairment was recognized for the difference, up to the carrying amount of goodwill.
We estimated the fair values of our reporting units using a discounted cash flow method or a weighted combination of discounted cash flows and a market-based method. The discounted cash flow method includes assumptions about a wide variety of internal and external factors. Significant assumptions used in the discounted cash flow method include financial projections of free cash flow, including revenue trends, medical costs trends, operating productivity, income taxes and capital levels; long-term growth rates for determining terminal value beyond the discretely forecasted periods; and discount rates. Financial projections and long-term growth rates used for our reporting units will be consistent with, and use inputs from, our internal long-term business plan and strategies.
Discount rates were determined for each reporting unit and include consideration of the implied risk inherent in their forecasts. Our most significant estimate was the discount rate determinations involves our adjustments to the peer company weighted average costs of capital reflecting reporting unit-specific factors. We did not make any adjustments to decrease a discount rate below the calculated peer company weighted average cost of capital for any reporting unit. Company-specific adjustments to discount rates are subjective and thus are difficult to measure with certainty.
The passage of time and the availability of additional information regarding areas of uncertainty with respect to the reporting units’ operations could cause these assumptions to change in the future. Additionally, as part of our quantitative impairment testing, we performed various sensitivity analyses on certain key assumptions, such as discount rates, cash flow projections, and peer company multiples to analyze the potential for a material impact. The market-based method requires determination of an appropriate peer group whose securities are traded on an active market. The peer group is used to derive market multiples to estimate fair value.
Valuation and Payback of Property and Equipment
Diagnostic based TRUFORMA® capital is placed in fixed assets once purchased or manufactured, where they remain, undepreciated, until they are placed with our customers under the agreement that they will repeatedly purchase consumables or services which are utilized within. Each instance of this placed capital represents an asset that we own. An estimate is made of the anticipated future revenue over its respective life which is
13
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Revenue Recognition
The nature of the Company’s business gives rise to variable consideration, including discounts and applicator (“trode”) returns for refurbishment. Credits are issued for unused shocks on returned trodes, which can be used toward the purchase of replacement trodes. Discounts and the estimated unused shock credits decrease the transaction price, which reduces revenue. Variable consideration related to unused shock credits is estimated using the expected value method, which estimates the amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration are estimated based upon historical experience and known trends. These estimated credits are non-refundable and may only be used towards the purchase of future trode refurbishments. This practice encourages refurbishment purchase prior to complete utilization of the previous trode, so the customer will always have a trode at hand with ample capacity to perform treatments.
5. Investment Securities
The following represents the Company’s investment securities as of June 30, 2026 and December 31, 2025:
Balance at June 30, 2026 | Acquisition | Accretion / | Unrealized | Estimated | ||||||||
Commercial paper | $ | | $ | | $ | ( | $ | | ||||
Corporate notes / bonds | | | ( | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | | | ( | | ||||||||
U.S. treasuries | | ( | ( | | ||||||||
Total investment securities | $ | | $ | | $ | ( | $ | |
Balance at December 31, 2025 | Acquisition | Accretion / | Unrealized | Estimated | ||||||||
Commercial paper | $ | | $ | | $ | — | $ | | ||||
Corporate notes / bonds | | | | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | | | | | ||||||||
U.S. treasuries | | | ( | | ||||||||
Total investment securities | $ | | $ | | $ | | $ | |
Accretion / (amortization) refers to the discounts and premiums incurred on bonds and notes purchased and are included within Interest income on the consolidated statements of operations and comprehensive loss.
Accrued interest receivable related to the above investment securities amounted to $
Acquisition | Estimated | |||||
Original maturities of 90 days or less | $ | | $ | | ||
Original maturities of 91-365 days | | | ||||
Original maturities of 366+ days | - | - | ||||
Total investment securities | $ | | $ | |
14
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
6. Fair Value Measurements
In accordance with FASB ASC 820, Fair Value Measurement (“ASC 820”), the Company measures its cash and cash equivalents and investments at fair value on a recurring basis. The Company also measures certain assets and liabilities at fair value on a non-recurring basis when applying acquisition accounting.
ASC 820 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. As such, fair value is a market-based measurement that should be determined based on 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: | Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities. |
Level 2: | Observable inputs other than quoted prices included in Level 1 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 for substantially the full term of the related assets or liabilities. |
Level 3: | Unobservable data points for the assets or liability, and include situations where there is little, if any, market activity for the asset or liability. Valuations based on inputs that are unobservable and involve management judgement and the reporting entity’s own assumptions about market participants and pricing. |
Cash and cash equivalents, trade receivable, and accounts payable: The carrying amount of these assets approximate fair value due to the short maturity of these instruments. Cash and cash equivalents include marketable securities with an original maturity within 90 days.
Available-for-sale securities: The Company classifies marketable securities and other highly liquid investments, with a maturity of greater than three months and that can be readily purchased or sold using established markets, as available-for-sale. These investments are reported at fair value on the Company’s consolidated balance sheets and unrealized gains and losses are reported as a component of shareholders’ equity.
Stock Appreciation Rights liability: The Company measures its cash-settled SARs at fair value on a recurring basis using a Black-Scholes option-pricing model. The liability, classified as Level 2 within the fair-value hierarchy, is reported at fair value on the Company’s consolidated balance sheets, and changes in fair value are recognized as compensation expense in the consolidated statements of operations and comprehensive loss in the period of remeasurement.
In accordance with the fair value hierarchy described above, the following table shows the fair value of our investments as of June 30, 2026 and December 31, 2025:
Balance at June 30, 2026 | Level 1 | Level 2 | Level 3 | Estimated | ||||||||
Commercial paper | $ | — | $ | | $ | — | $ | | ||||
Corporate notes / bonds | — | | — | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | | — | — | | ||||||||
U.S. treasuries | | — | — | | ||||||||
Total investment securities | $ | | $ | | $ | — | $ | |
15
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
Balance at December 31, 2025 | Level 1 | Level 2 | Level 3 | Estimated | ||||||||
Commercial paper | $ | — | $ | | $ | — | $ | | ||||
Corporate notes / bonds | — | | — | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | | — | — | | ||||||||
U.S. treasuries | | — | — | | ||||||||
Total investment securities | $ | | $ | | $ | — | $ | |
The following tables show our investments as of June 30, 2026 and December 31, 2025 and their respective balance sheet classifications:
Balance at June 30, 2026 | Cash & | Available- | Available- | Estimated | ||||||||
Commercial paper | $ | — | $ | | $ | — | $ | | ||||
Corporate notes / bonds | — | | — | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | — | | — | | ||||||||
U.S. treasuries | — | | — | | ||||||||
Total investment securities | $ | | $ | | $ | - | $ | |
Balance at December 31, 2025 | Cash & | Available- | Available- | Estimated | ||||||||
Commercial paper | $ | — | $ | | $ | — | $ | | ||||
Corporate notes / bonds | — | | — | | ||||||||
Money market funds | | — | — | | ||||||||
U.S. govt. agencies | — | | — | | ||||||||
U.S. treasuries | | | — | | ||||||||
Total investment securities | $ | | $ | | $ | — | $ | |
Unrealized gains and losses on our investments have not been recorded into income as we do not intend to sell nor is it more likely than not that we will be required to sell these investments prior to recovery of their amortized cost basis. The decline in fair value of our debt securities is largely due to the rising interest rate environment driven by current market conditions that have resulted in higher credit spreads. The credit ratings associated with our debt securities are mostly unchanged, are highly rated, and the debtors continue to make timely principal and interest payments. As a result, there were no credit or non-credit impairment charges recorded through June 30, 2026.
7. Inventory
June 30, 2026 | December 31, 2025 | |||||||||||||||||
Diagnostics | | Therapeutic | | Consolidated | | Diagnostics | | Therapeutic | | Consolidated | ||||||||
Raw materials | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Finished goods |
| |
| |
| |
| |
| |
| | ||||||
Purchased inventory |
| |
| |
| |
| |
| |
| | ||||||
Total inventory |
| |
| |
| |
| |
| |
| | ||||||
Less: reserves |
| ( |
| — |
| ( |
| ( |
| — |
| ( | ||||||
Inventory, net | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
There was
16
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
8. Prepaid Expenses and Deposits
| June 30, | | December 31, | |||
2026 | 2025 | |||||
Deposits | $ | | $ | | ||
Prepaid marketing |
| |
| | ||
Prepaid insurance |
| |
| | ||
Other |
| |
| | ||
Total prepaid expenses and deposits | $ | | $ | | ||
9. Accrued Expenses and Other Current Liabilities
| June 30, | | December 31, | |||
2026 | 2025 | |||||
Accrued employee compensation and benefits | $ | | $ | | ||
Stock appreciation rights | | | ||||
Accrued taxes |
| |
| | ||
Accrued professional services |
| |
| | ||
Other |
| |
| | ||
Total accrued expenses and other current liabilities | $ | | $ | | ||
10. Property and Equipment
| June 30, | | December 31, | |||
2026 | 2025 | |||||
Machinery and equipment | $ | | $ | | ||
Furniture and fixtures |
| |
| | ||
Laboratory equipment |
| |
| | ||
Leasehold improvements |
| |
| | ||
Construction in progress | | | ||||
Total property and equipment |
| |
| | ||
Less: accumulated depreciation |
| ( |
| ( | ||
Property and equipment, net | $ | | $ | | ||
Depreciation expense related to property and equipment is as follows:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Depreciation expense | $ | | $ | | $ | | $ | | ||||
During the first quarter of 2025, a significant decline in the Company’s market-capitalized value following the delisting of its common shares from NYSE American constituted a triggering event requiring interim impairment testing of goodwill. In connection with this assessment, the Company reviewed its property and equipment for recoverability under ASC 360, Property, Plant, and Equipment (“ASC 360”). That review determined that certain assets within the Diagnostics segment were not fully recoverable. As a result, the Company recognized a $
17
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
11. Goodwill and Intangible Assets
The following table provides a rollforward of the carrying amount of goodwill by segment:
Diagnostics | Therapeutic | Development Services | Total | |||||||||
Balance at December 31, 2024 | $ | — | $ | | $ | — | $ | | ||||
Impairment | — | ( | — | ( | ||||||||
Balance at December 31, 2025 | $ | — | $ | — | $ | — | $ | — | ||||
During the first quarter of 2025, the Company determined that a triggering event had occurred that required interim goodwill impairment analysis in accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”), due to a significant decline in its market capitalization, driven by a substantial decrease in its stock price following the delisting of its common shares from NYSE American. The Company concluded that the fair values of certain reporting units were below their carrying values. The difference between the reporting units’ carrying values and fair values was recognized as impairment charges. The Company recognized $
During the first quarter of 2025, the Company also evaluated its amortizable intangible assets for recoverability under ASC 360. It was determined that the carrying values of certain intangible assets exceeded their fair values. The decline in fair value was related to the same facts and circumstances as those noted above as part of our interim goodwill impairment analysis. The Company recognized $
The following table summarizes our intangible assets, net of accumulated amortization:
| June 30, | | December 31, | |||
2026 | 2025 | |||||
Computer software | $ | | $ | | ||
Customer relationships |
| |
| | ||
Licenses |
| |
| | ||
Technology |
| |
| | ||
Tradenames |
| |
| | ||
Trademarks | | | ||||
Website |
| |
| | ||
Intangibles under construction | | | ||||
Total intangibles |
| |
| | ||
Less: accumulated amortization |
| ( |
| ( | ||
Intangibles, net | $ | | $ | | ||
Included within intangibles are $
18
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
The estimated future amortization of intangible assets is as follows:
2026 | | $ | |
2027 |
| | |
2028 |
| | |
2029 |
| | |
2030 | | ||
Thereafter |
| | |
Total | $ | |
Amortization expense associated with intangible assets is as follows:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Amortization expense | $ | | $ | | $ | | $ | | ||||
12. Stock-Based Compensation
Stock Options
The Zomedica Amended and Restated Stock Option Plan (the “Plan”) was amended and restated on June 15, 2022, and provides incentives through the grant of stock options which may be granted to the directors, officers, employees of the Company, and consultants. The Plan is administered by the Board of Directors of the Company, and the aggregate number of shares reserved for issuance under the Plan shall not, at the time of the stock option grant, exceed
During the six months ended June 30, 2026 and 2025, the Company issued
The continuity of stock options for the six months ended June 30, 2026 and 2025 are as follows:
Number of Options | Weighted-Average Exercise Price | |||||
Balance at December 31, 2025 | | | | $ | | |
Stock options granted |
| | | |||
Stock options forfeited |
| ( | ( | |||
Vested stock options expired |
| ( | ( | |||
Balance at June 30, 2026 |
| | $ | | ||
Vested at June 30, 2026 |
| | $ | | ||
Number of Options | Weighted-Average Exercise Price | |||||
Balance at December 31, 2024 | | | | $ | | |
Stock options granted |
| | | |||
Stock options forfeited |
| ( | ( | |||
Vested stock options expired |
| ( | ( | |||
Balance at June 30, 2025 |
| | $ | | ||
Vested at June 30, 2025 |
| | $ | | ||
19
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
The Company recorded the following stock-based compensation expense associated with outstanding stock options:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2026 | | 2025 | | 2026 | | 2025 | ||||||
Stock-based compensation expense | $ | | $ | | $ | | $ | | ||||
As of June 30, 2026, the total unrecognized compensation cost related to nonvested awards was $
Cash-Settled Stock Appreciation Rights (“SARs”)
On August 12, 2024, the Board of Directors of the Company adopted the Zomedica Corp. 2024 Stock Appreciation Rights Plan (the “SAR Plan”). The SAR Plan is administered by the Board of Directors, which may delegate administration to a committee of the Board. Up to
The Board determines the exercise price of each SAR, which must not be less than the fair market value of one share of common stock on the grant date, as well as the term and vesting provisions of each award. The term of a SAR may not exceed
SARs granted to employees vest
Following termination of service, vested SARs may generally be exercised within
The continuity of SARs for the six months ended June 30, 2026 and 2025 is as follows:
Number of SARs | Weighted-Average Exercise Price | |||||
Balance at December 31, 2025 | | $ | | |||
Balance at June 30, 2026 | | $ | | |||
Vested at June 30, 2026 | | | ||||
Number of SARs | Weighted-Average Exercise Price | |||||
Balance at December 31, 2024 | | $ | | |||
Balance at June 30, 2025 | | $ | | |||
Vested at June 30, 2025 | — | — | ||||
As of June 30, 2026, unrecognized stock-based compensation expense related to non-employee director SARs was $
20
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
13. Income Taxes
The Company is in an overall domestic net deferred tax liability position for the six months ended June 30, 2026. Management has assessed that the future taxable income resulting from the deferred tax liability position will result in partial utilization of the Company's US federal and state net operating loss carryforwards and has therefore concluded a valuation allowance of $
14. Commitments and Contingencies
From time to time, the Company may be exposed to claims and legal actions in the normal course of business. As of June 30, 2026, and continuing as of August 5, 2026, the Company is not aware of any pending or threatened material litigation claims against the Company.
Agreements with Qorvo Biotechnologies, LLC
On January 17, 2023, the Company entered into a series of agreements with Qorvo Biotechnologies, LLC. Other than the obligation to purchase a minimum quantity of BAW sensors during the term of the BAW Sensor Supply Agreement from Qorvo US, Inc., the obligations under these agreements were terminated upon the acquisition of Qorvo Biotechnologies, LLC on October 4, 2023.
Development and License Agreement with Brisby, Inc.
On April 4, 2023, the Company entered into a Development and License Agreement with Brisby Inc. Under the terms of this agreement, Brisby grants the Company a license to use, develop, manufacture, have manufactured, offer for sale, sell, and import certain Brisby products, such as the Smart Pet Pad and the Intelligent Pet Bed, along with any future developments of these products.
As part of this agreement, the Company is required to make the following milestone payments:
| ● | $ |
| ● | $ |
| ● | $ |
| ● | $ |
As of June 30, 2026, the Company has made $
The Company’s investment in Brisby Inc. is accounted for under the equity method in accordance with ASC 323, Investments – Equity Method and Joint Ventures (“ASC 323”), and is included in Other assets on the consolidated balance sheets.
License and Supply Agreement with Cresilon, Inc.
On December 30, 2024 (the “Effective Date”), the Company entered into a License and Supply Agreement with Cresilon, Inc. Under the terms of this agreement, Cresilon will manufacture and supply VETIGEL® Hemostatic Gel and related products (the “Products”) to the Company, ensuring the Products materially conform to agreed specifications.
21
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
The agreement grants the Company a perpetual, royalty-bearing exclusive license to promote, market, and sell VETIGEL® Products in the United States and, upon regulatory approval, Japan, as well as a non-exclusive license for global markets outside these territories. Both licenses include sublicensing rights but exclude any rights to manufacture the Products. Additionally, the Company received a non-exclusive, transferable trademark license to use Cresilon trademarks solely for the sale and importation of VETIGEL® Products.
As part of this agreement, the Company is required to make the following payments:
| ● | $ |
| ● | $ |
| ● | $ |
| ● | $ |
| ● | Royalties on Net Sales less amounts paid to Cresilon for the Products (“Cresilon Net Sales”), ranging from |
| ● | A Minimum Royalty obligation (beginning in the second calendar year following the Effective Date), consisting of: (a) a royalty based on at least $ |
Agreement with Oxford Science, Inc.
On March 4, 2026, the Company entered into an agreement with Oxford Science Inc. to acquire certain assets which will be useful in the development and expansion of its product offerings. As part of this agreement, the Company was required to make an upfront payment of $
15. Segment Information
The Company’s operations are comprised of
| ● | Diagnostics, which consists of TRUFORMA®, VETGuardian®, and TRUVIEW® products; |
| ● | Therapeutic Devices, which consists of Assisi®, PulseVet®, and VETIGEL® products; and |
| ● | Developmental Services, which consists of contract manufacturing and engineering services, including Cell-Guardian. |
The Company’s Chief Operating Decision Maker (CODM) is its Chief Executive Officer who has ultimate responsibility for enterprise decisions. Segment information is used by the CODM to evaluate financial performance and to make strategic decisions related to resource allocation and operational focus across the segments. The CODM does not assess individual expense line items beyond cost of goods sold, nor does the CODM evaluate additional financial measures or allocate assets at the segment level.
Although our reportable segments provide similar products, each one is managed separately to better align with the Company’s customers and distribution / development partners. The CODM determines resource allocation for, and monitors performance of, the consolidated enterprise, which includes the Diagnostics, Therapeutic Devices and Development Services segments. The CODM relies on internal segment reporting that analyzes results on certain key performance indicators, namely, revenues, cost of goods sold, and gross profit. Cost of goods sold is the only significant expense evaluated at the segment level, as it is critical for assessing gross profit and segment performance. Costs below gross profit, such as operating expenses, are not allocated to the segments, nor are asset groupings, except for the purpose of periodic impairment analysis.
22
Zomedica Corp.
Notes to the Condensed Consolidated Financial Statements
(United States Dollars in Thousands)
The following is a reconciliation of consolidated revenue, cost of revenue, and gross profit amongst our reportable segments for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30, | ||||||||||||||||||||||||
| Diagnostics | | Therapeutic | | Development | | Consolidated | |||||||||||||||||
2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
Net revenue | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Cost of revenue |
| | | | | | - |
| | |
| | ||||||||||||
Gross profit | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||
| Diagnostics | | Therapeutic | | Development | | Consolidated | |||||||||||||||||
2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
Net revenue | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
Cost of revenue |
| | | | | | - |
| | |
| | ||||||||||||
Gross profit | $ | | $ | | $ | | $ | | $ | | $ | - | $ | | $ | | ||||||||
For the three months ended June 30, 2026, revenue from external customers in the U.S. was $
16. Loss Per Share
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2026 | | 2025 | | 2026 | | 2025 | |||||
Numerator | | | | | ||||||||
Net loss for the period | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Denominator |
|
| ||||||||||
Weighted-average shares - basic |
| | | | | |||||||
Loss per share - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | ||||
As of June 30, 2026 and 2025, the Company had stock options outstanding of
17. Subsequent Events
We have evaluated events and transactions occurring subsequent to the consolidated balance sheet date of June 30, 2026 for items that could potentially be recognized or disclosed in these financial statements. We did not identify any items which would require disclosure in or adjustment to the consolidated financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
(All amounts are expressed in thousands unless otherwise indicated)
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of the Company. The Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and notes thereto for the quarter ended June 30, 2026. This report contains forward-looking statements or forward-looking information (collectively, “forward-looking statements”) made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as well as the safe harbor provisions of applicable Canadian securities legislation, that are based on management’s beliefs and assumptions and involve risks and uncertainties. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact.
Forward-looking statements can also be identified by words such as “future”, “anticipates”, “believes”, “projects”, “estimates”, “expects”, “intends”, “plans”, “predicts”, “will”, “should”, “would”, “could”, “can”, “may”, or similar terms. Forward-looking statements are not guarantees of future performance and Zomedica’s actual results may differ significantly from the results discussed in the forward-looking statements. Zomedica cautions that these statements are subject to numerous important risks, uncertainties, assumptions, and other factors, some of which are beyond Zomedica’s control. These risks could cause Zomedica’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to adverse macroeconomic conditions; geopolitical tensions; laws and policies resulting from change in federal government administration; impact of trade tariffs; changes in consumer confidence and spending in response to economic volatility; our ability to develop and commercialize our products; our ability to integrate our acquisitions successfully into our business; supply chain disruptions that increase our costs and impair our ability to manufacture our products; our ability to attract and keep senior management and key scientific personnel; our ability to obtain and maintain intellectual property protection; the accuracy of our estimates regarding expenses, future revenues, and capital requirements; and the “Risk Factors” described in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”). The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations, except as required by applicable law.
Components of Revenue and Costs and Expenses
Revenue
Our revenue consisted of consumables sold in the U.S. and internationally associated with our Assisi® products; capital and consumables sold in the U.S and internationally associated with our PulseVet® platform; consumables sold in the U.S and internationally associated with our TRUFORMA® platform; subscriptions and services sold in the U.S. associated with our TRUVIEW® products; capital and service agreements sold in the U.S. and internationally associated with our VETGuardian® products; consumables sold in the U.S. and internationally associated with our VETIGEL® products; contract manufacturing of Cell-Guardian, a non-animal health product; and contract manufacturing and engineering services, consumables and capital sold in the U.S.
Cost of Revenue
Cost of revenue consisted primarily of the cost of raw materials, labor and overhead used in the assembly of: PulseVet® capital and consumables; TRUFORMA® capital and consumables; Assisi® consumables; TRUVIEW® capital and consumables; VETGuardian® capital and services; VETIGEL® consumables sourced under our supply arrangement with Cresilon, Inc.; and labor cost associated with contract manufacturing and engineering services. We expense all inventory obsolescence provisions related to normal manufacturing changes as cost of revenue.
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Operating Expenses
Our current operating expenses consist of three components — general and administrative expenses, research and development expenses, and selling and marketing expenses.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries, wages, stock-based compensation, and overhead costs incurred to support our business as a publicly traded company. The functions involved include Accounting, Business Development, Finance, Human Resources, Information & Innovation Technology, Investor Relations, Legal, and portions of other functional areas. Included within these support costs are significant public company expenses such as stock exchange fees, annual meeting expenses, audit, tax, Sarbanes-Oxley, and other compliance costs.
Research and Development Expenses
Research and development (“R&D”) expenses consist of salaries and related expenses for R&D personnel, fees paid to consultants and outside service providers, travel costs, and materials used in clinical trials and general R&D. These costs are primarily focused on leveraging our acquisition of Qorvo Biotechnologies, LLC into new assay development for our TRUFORMA® platform, expanding capabilities and usability within existing products, and exploring new market opportunities.
Selling and Marketing Expenses
Selling and marketing expenses consist of personnel costs, including salaries and related benefits, as well as costs associated with sales and marketing activities including conference and tradeshow attendance, sponsorships, and general advertising and promotional activities.
Canadian Taxes
In Canada, due to the uncertainty of realizing any tax benefits as of June 30, 2026, we continue to record a full valuation allowance against our Canadian deferred tax assets.
Translation of Foreign Currencies
The functional currency, as determined by management, for our subsidiaries in the United States, Switzerland, and Canada is the U.S. dollar, which is also our reporting currency.
The functional currency, as determined by management, for our Japanese subsidiary is the Japanese Yen. Japanese Yen is translated for financial reporting purposes with translation gains and losses recorded as a component of other comprehensive income or loss.
Stock-Based Compensation
Stock-based compensation expense is recognized for awards granted to employees and directors based on the fair value of the awards on the grant date. The Company’s stock-based compensation includes stock options, which are classified as equity awards, and SARs, which are classified as liability awards.
Equity-Classified Awards (Stock Options)
We measure the cost of equity-settled transactions by reference to the fair value of the equity instruments at the grant date. The fair value of stock options is calculated using the Black-Scholes Option Pricing Model and recognized as compensation expense over the vesting period of the award using the graded vesting method. Since our stock-based compensation plans do not require settlement in cash or other assets, stock options are classified as equity awards.
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Compensation expense recognized during the period reflects the fair value of stock-based payment awards that are ultimately expected to vest. We account for forfeitures of employee awards as they occur. The expected term of stock options, which represents the period the options are expected to remain outstanding, is estimated based on the average term of the options. The risk-free interest rate is based on the U.S. treasury yield curve at the time of grant for the expected term. We assume a zero dividend yield at the date of grant, as we do not anticipate paying dividends in the foreseeable future. The expected volatility used in valuing stock options is calculated based on the historical price of the Company’s stock. Changes in volatility would result in a corresponding increase or decrease in the fair value of the options.
Liability-Classified Awards (SARs)
The Company accounts for SARs as liability-classified awards because they are settled solely in cash and do not result in the issuance of equity. The fair value of SARs is initially measured at the grant date and subsequently remeasured at each reporting date until settlement. The fair value of SARs is calculated using the Black-Scholes Option Pricing Model and recognized as compensation expense over the vesting period of the award using the straight-line method. Changes in fair value are recognized as compensation expense in the consolidated statement of operations during the period of remeasurement based on the proportion of the vesting period that has elapsed. The expected term of SARs, which represents the period the SARs are expected to remain outstanding, is estimated based on the average term of the SARs. The risk-free interest rate is based on the U.S. treasury yield curve at the time of valuation for the expected term. We assume a zero-dividend yield, as we do not anticipate paying dividends in the foreseeable future. The expected volatility used in valuing SARs is calculated based on the historical price of the Company’s stock. Changes in volatility would result in a corresponding increase or decrease in the fair value of the SARs.
Upon exercise, SAR participants receive a cash payment equal to the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the SAR. Since SARs are remeasured at each reporting date, volatility in the Company’s stock price may lead to fluctuations in the recognized compensation expense and recorded liability.
Loss Per Share
Basic loss per share, or EPS (earnings per share), is computed by dividing the loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur from common shares issuable through the exercise or conversion of stock options, restricted stock awards, warrants and convertible securities. In certain circumstances, the conversion of options, warrants and convertible securities are excluded from diluted EPS if the effect of such inclusion would be anti-dilutive.
Comprehensive Loss
Our comprehensive loss is reported in accordance with ASC 220, Income Statement — Reporting Comprehensive Income (“ASC 220”). Comprehensive loss is net loss plus certain items that are recorded directly to shareholders’ equity.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue, costs and expenses, and related disclosures during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those described below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 3 of the notes to our consolidated financial statements included within our 2025 Form 10-K, management has identified the following as “Critical Accounting Policies and Estimates”: Intangible Assets and Business Combinations; Impairment Testing; Valuation and Payback of Property and Equipment; and Revenue Recognition and Liabilities Due to Customers. We believe that the estimates and assumptions involved in these accounting policies may have the greatest potential impact on our financial statements.
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Impairment Testing
Prior to fully impairing goodwill during the first quarter of 2025, we evaluated goodwill for impairment annually or more frequently when an event occurs or circumstances change indicating the carrying value may not be recoverable. When testing goodwill for impairment, we would first assess qualitative factors to determine if it is more likely than not the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, we considered the impact of changes, if any, to the following factors: macroeconomic industry and market factors; cost factors; changes in overall financial performance; and any other relevant events and uncertainties impacting a reporting unit. If our qualitative assessment indicated a goodwill impairment is more likely than not, we performed additional quantitative analyses. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. For reporting units where a quantitative analysis was performed, we performed a test measuring the fair values of the reporting units and comparing them to their aggregate carrying values, including goodwill. If the fair value is less than the carrying value of the reporting unit, an impairment was recognized for the difference, up to the carrying amount of goodwill.
We estimated the fair values of our reporting units using a discounted cash flow method or a weighted combination of discounted cash flows and a market-based method. The discounted cash flow method includes assumptions about a wide variety of internal and external factors. Significant assumptions used in the discounted cash flow method include financial projections of free cash flow, including revenue trends, medical costs trends, operating productivity, income taxes and capital levels; long-term growth rates for determining terminal value beyond the discretely forecasted periods; and discount rates. Financial projections and long-term growth rates used for our reporting units will be consistent with, and use inputs from, our internal long-term business plan and strategies.
Discount rates will be determined for each reporting unit and include consideration of the implied risk inherent in their forecasts. Our most significant estimate in the discount rate determinations involves our adjustments to the peer company weighted average costs of capital reflecting reporting unit-specific factors. We do not make any adjustments to decrease a discount rate below the calculated peer company weighted average cost of capital for any reporting unit. Company-specific adjustments to discount rates are subjective and thus are difficult to measure with certainty.
The passage of time and the availability of additional information regarding areas of uncertainty with respect to the reporting units’ operations could cause these assumptions to change in the future. Additionally, as part of our quantitative impairment testing, we perform various sensitivity analyses on certain key assumptions, such as discount rates, cash flow projections, and peer company multiples to analyze the potential for a material impact. The market-based method requires determination of an appropriate peer group whose securities are traded on an active market. The peer group is used to derive market multiples to estimate fair value.
During the first quarter of 2025, the Company determined that a triggering event occurred, which required interim testing for impairment in accordance with ASC 350, Intangibles – Goodwill and Other (“ASC 350”). The triggering event was related to the Company’s market capitalized value, which is a function of its stock price, which had reduced significantly subsequent to the delisting of the Company’s common shares from NYSE American during the three months ended March 31, 2025. We elected to perform a quantitative analysis as part of our interim goodwill impairment test. Our analysis of the PulseVet reporting unit indicated that its carrying amount, including goodwill, exceeded its fair value by approximately 163%. Our analysis of the Assisi reporting unit indicated that its carrying amount, including goodwill, exceeded its fair value by approximately 128%. As part of the Company’s quantitative analysis, we updated our implied fair value calculations to more closely align with our reduced market capitalization as of March 31, 2025. As a result, a non-cash goodwill impairment charge of $45,556 was recorded for the three months ended March 31, 2025. Given that no goodwill remained on our consolidated balance sheets after March 31, 2025, there were no further impairment considerations for the six months ended June 30, 2026.
In connection with our interim impairment analysis during the first quarter of 2025, the Company also evaluated its amortizable intangible assets for recoverability in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”). It was determined that the carrying values of certain intangible assets exceeded their fair values, which were impacted by the same factors noted in the goodwill impairment analysis. As a result, the Company recognized $8,296 in non-cash impairment charges related to these amortizable intangible assets. During the six months ended June 30, 2026, no impairment indicators were identified, which would require a recoverability assessment of intangible assets under ASC 360.
Additionally, as part of the interim impairment analysis the Company evaluated its property and equipment for recoverability under ASC 360. Based on this assessment, it was determined that certain property and equipment assets were not fully recoverable due to the same triggering event described above. As a result, the Company recognized a non-cash impairment charge of $1,981 related to property and equipment during the three months ended March 31, 2025. During the six months ended June 30, 2026, no impairment indicators were identified requiring a recoverability assessment of property and equipment under ASC 360.
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While the Company continues to believe its estimates of fair value for its amortizable intangible assets and property and equipment are reasonable, changes in assumptions concerning future financial performance, increases in discount rates, or other market and operational factors could negatively impact the recoverability of these assets. As a result, the Company may be required to recognize additional impairment charges related to its amortizable intangible assets or property and equipment in future periods.
Valuation and Payback of Property and Equipment
Diagnostic based TRUFORMA® capital is placed in fixed assets once purchased or manufactured, where they remain, undepreciated, until they are placed with our customers under the agreement that they will repeatedly purchase consumables or services which are utilized within. Each instance of this placed capital represents an asset that we own. An estimate is made of the anticipated future revenue over its respective life which is ten years. If the payback period of the initial investment in the asset is less than the ten-year life of the asset, we conclude that the assets have been properly recorded, and no write-down is necessary. We rely on various data points and assumptions, including, but not limited to, the expected volume of consumables which will be sold, anticipated growth rates, and anticipated placements. Realization of the anticipated revenue is dependent on the current assumptions and forecasted models.
The customer is obligated to purchase consumables during the placement period. However, since the customer is not obligated to purchase the capital, and can return it at any time, we are exposed to a risk of loss to the extent the customer returns the capital and discontinues consumable or related service purchases.
As of June 30, 2026, the carrying value of our Diagnostic instruments was $9,268. Significant assumptions included in the realization model are the rate of placement and expected utilization over the life of the instrument. A 25% reduction in the estimated revenues associated with annual placements of instruments would increase the payback period from 3.37 years to 4.74 years as of June 30, 2026.
Revenue Recognition
The nature of our Therapeutic Device business segment gives rise to variable consideration, including discounts and applicator (“trode”) returns for refurbishment. Credits are issued for unused shocks on returned trodes, which can be used toward the purchase of replacement trodes. When revenue is recognized, a simultaneous adjustment for returns is estimated, reducing revenue. Estimated return credits are presented as a reduction to gross sales with the corresponding reserve presented as customer contract liabilities.
Variable consideration related to unused shock credits is calculated using the expected value method, which estimates the amount that is expected to be earned. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. Estimates of variable consideration are based upon historical experience and known trends. These estimated credits are non-refundable and may only be used towards the purchase of future trode refurbishments. This practice encourages refurbishment purchase prior to complete utilization of the previous trode, enabling the customer to always have a trode on hand with ample capacity to perform treatments.
The number of trodes returned by year is tracked against the number of trodes sold in that same year, creating a current experience rate. It is assumed that the ultimate return rate for the trodes is 98%. For annual calculations, it is assumed that the expected returns in the current year for each layer increase to the experience rate of the year immediately preceding it. Once the 98% is reached the layer is removed from the calculation. The annual incremental change in expected returns is multiplied by an average return credit amount, generating the current liability due to customers.
The average return credit is calculated by dividing the actual shock credits issued by the actual number of trodes returned. A variance in the assumed return rate compared to the actual rate would impact the estimate and potentially understate net sales (overestimated rate) or overstate net sales (underestimated rate) in any given year and create a corresponding misstatement of the liability due to customers.
Results of Consolidated Operations
Our results of operations for the three and six months ended June 30, 2026 and 2025 are as follows:
Revenue
Revenue for the three months ended June 30, 2026 was $9,512, compared to $6,964 for the three months ended June 30, 2025, an increase of $2,548, or 37%. Revenue for the six months ended June 30, 2026 was $18,311, compared to $13,464 for the six months ended June 30, 2025, an increase of $4,847, or 36%
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The increase in revenue for the three months ended June 30, 2026, was primarily due to contract manufacturing and engineering revenue recognized during the current period; growth in consumables and capital sales in our existing PulseVet® products; and growth in TRUFORMA® products, including the impact of launching new assays since the end of the comparative period. The increase in revenue for the six months ended June 30, 2026, was primarily due to contract manufacturing and engineering revenue recognized during the current period; growth in TRUFORMA® products, including the impact of launching new assays since the end of the comparative period; growth in consumables sales in our existing PulseVet® products; contract manufacturing of Cell-Guardian which the Company began in the current period; growth in our existing Assisi® products; and growth in our existing VETIGEL® products. In general, we expect revenue to increase in subsequent periods as we increase our sales, marketing, and commercialization efforts.
Cost of Revenue
Cost of revenue for the three months ended June 30, 2026 was $3,471, compared to $2,298 for the three months ended June 30, 2025, an increase of $1,173, or 51%. Cost of revenue for the six months ended June 30, 2026 was $6,786, compared to $4,391 for the six months ended June 30, 2025, an increase of $2,395, or 55%.
The increase in cost of revenue for both the three and six months ended June 30, 2026, was primarily driven by increased manufacturing expense resulting from higher unit sales as well as increased salaries and wages associated with our manufacturing and engineering operations. We anticipate that costs of revenue will continue to increase in subsequent periods in accordance with increased unit sales as described above.
Gross Profit
Gross profit margin for the three months ended June 30, 2026 was 64%, compared to 67% for the three months ended June 30, 2025. Gross profit margin for the six months ended June 30, 2026 was 63%, compared to 67% for the six months ended June 30, 2025.
The decrease in gross profit margin percentage for both the three and six months ended June 30, 2026, was primarily due to the impact of the change in product mix associated with our unit sales and increased salaries and wages associated with engineering operations, partially offset by further absorption of fixed costs driven by increased unit sales.
General and Administrative
General and administrative expense for the three months ended June 30, 2026 was $5,379, compared to $6,162 for the three months ended June 30, 2025, a decrease of $783, or 13%. General and administrative expense for the six months ended June 30, 2026 was $10,792, compared to $12,424 for the six months ended June 30, 2025, a decrease of $1,632, or 13%.
The decrease in general and administrative expense for the three months ended June 30, 2026, was primarily driven by lower wages and related benefits, lower stock -based compensation expense, lower insurance expense and lower annual meeting expenses. The decrease in general and administrative expense for the six months ended June 30, 2026, was primarily driven by lower wages and related benefits, lower general office expenses including those associated with our corporate office move in the prior year which did not recur, lower stock-based compensation expense, lower insurance expense and lower annual meeting expenses. While we expect future general and administrative expense to increase, we expect it to decrease proportionally relative to sales and related product expansion.
Research and Development
Research and development expense for the three months ended June 30, 2026 was $1,070, compared to $1,886 for the three months ended June 30, 2025, a decrease of $816, or 43%. Research and development expense for the six months ended June 30, 2026 was $2,224, compared to $3,739 for the six months ended June 30, 2025, a decrease of $1,515, or 41%.
The decrease in research and development expense for both the three and six months ended June 30, 2026, was primarily driven by lower wages and related benefits and lower external consulting and contracted development expenses following the successful launch of our new TRUFORMA® assays and VETGuardian PLUSTM during the second half of 2025. We anticipate that research and development expense will continue to increase as we maintain and enhance our current product lines and develop new products.
Selling and Marketing
Selling and marketing expense for the three months ended June 30, 2026 was $3,675, compared to $4,653 for the three months ended June 30, 2025, a decrease of $978, or 21%. Selling and marketing expense for the six months ended June 30, 2026 was $7,492, compared to $9,660 for the six months ended June 30, 2025, a decrease of $2,168, or 22%.
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The decrease in selling and marketing expenses for the three months ended June 30, 2026 was primarily driven by lower wages and related benefits and a decrease in discretionary marketing spend. The decrease in selling and marketing expenses for the six months ended June 30, 2026 was primarily driven by lower wages and related benefits, lower discretionary marketing spend, lower travel expenses, and lower selling-related consulting fees. We expect future selling and marketing expense to increase in line with product expansion and growth in our commercialization efforts.
Impairment Expense
There was no impairment expense for the three months ended June 30, 2026 or June 30, 2025. There was no impairment expense for the six months ended June 30, 2026, compared to impairment expense of $55,833 for the six months ended June 30, 2025.
The impairment expense for the six months ended June 30, 2025 was due to impairment charges recognized as a result of a significant decline in the Company’s market capitalization following the delisting of its common shares from NYSE American. The impairment charges consisted of $45,556 related to goodwill, $8,296 related to amortizable intangible assets, and $1,981 related to property and equipment.
Net Loss
Net loss for the three months ended June 30, 2026 was $3,765, compared to a net loss of $7,398 for the three months ended June 30, 2025, a decrease of $3,633, or 49%. Net loss for the six months ended June 30, 2026 was $8,299, compared to net loss of $71,118 for the six months ended June 30, 2025, a decrease of $62,819, or 88%.
The change in net loss for both comparative periods was attributed to the matters described above, particularly the significant impairment expense for the six months ended June 30, 2026. We expect to continue to record net losses in future periods until such time as we have sufficient revenue from product sales to offset our operating expenses.
Cash Flows
The following table shows a summary of our cash flows for the periods set forth below:
| Six Months Ended June 30, | ||||||||||
| 2026 | | 2025 | | Change | ||||||
Cash used in operating activities | $ | (7,808) | $ | (12,090) | $ | 4,282 | | (35)% | |||
Cash provided by investing activities |
| 6,008 |
| 13,085 | (7,077) |
| (54)% | ||||
Increase (decrease) in cash and cash equivalents |
| (1,800) |
| 995 | (2,795) |
| (281)% | ||||
Effect of exchange rate changes on cash |
| (23) |
| 113 | (136) |
| (120)% | ||||
Cash and cash equivalents, beginning of period |
| 9,017 |
| 7,021 | 1,996 |
| 28% | ||||
Cash and cash equivalents, end of period | $ | 7,194 | $ | 8,129 | $ | (935) |
| (12)% | |||
Net cash used in operating activities for the six months ended June 30, 2026 was $7,808 compared to $12,090 for the six months ended June 30, 2025, a decrease in cash used of $4,282, or 35%. The decrease in cash used in operating activities primarily resulted from the decrease in operating expenses noted above, excluding the impact of non-cash charges, including impairment expense, as well as a significant decrease in our accrued expenses and other current liabilities in the prior comparative period, which did not recur. These decreases were partially offset by an increase in our trade receivables balances as of June 30, 2026.
Net cash provided by investing activities for the six months ended June 30, 2026 was $6,008 compared to $13,085 for the six months ended June 30, 2025, a decrease in cash provided of $7,077, or 54%. The decrease in cash provided by investing activities primarily resulted from lower securities matured in the current period and increased intangible investment, partially offset by decreased property and equipment capital expenditures.
Liquidity, Capital Resources, and Financial Condition
We have incurred losses and negative cash flows from operations since our inception in May 2015. As of June 30, 2026, we had an accumulated deficit of $308,072. We continue to fund our working capital requirements primarily through revenue generating activity and proceeds generated from our past sales of our equity and equity-related securities and the exercise of stock options and warrants.
As of June 30, 2026, the Company had working capital (defined as current assets minus current liabilities) of $48,891.
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Short-Term Cash Requirements
We believe that our existing cash, cash equivalents, and available-for-sale securities is sufficient to fund our expected short-term needs (defined as the next 12 months). We currently have fixed obligations in association with our building leases and quarterly inventory orders. We also have payment obligations associated with our on-going clinical studies, and we believe that we have sufficient cash to cover these requirements. We do not expect that our operations will require significant increases in our short-term cash needs, and our short-term cash requirements have not changed materially since the 2025 Form 10-K.
Long-Term Cash Requirements
We believe that our existing cash resources will be sufficient to fund our expected operational requirements for the long-term period (defined as beyond the next twelve months). We regularly evaluate our business plans and strategy. These evaluations often result in changes to our business plans and strategy, some of which may be material and significantly change our cash requirements. Ongoing business development activity may also require us to use some of our liquidity and use of additional capital to fund newly acquired operations. If we raise additional funds by issuing equity securities, our existing security holders will likely experience dilution, and the incurring of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict operations.
Our future capital requirements depend on many factors, including, but not limited to:
| ● | the costs and timing of our development and commercialization activities; |
| ● | the cost of manufacturing our existing and future products; |
| ● | the cost of marketing and selling our existing and future products including marketing, sales, service, customer support and distribution costs; |
| ● | the expenses needed to attract and retain skilled personnel; |
| ● | the costs associated with being a public company; |
| ● | the costs associated with additional business development or mergers and acquisitions activity, including acquisition-related costs, earn-outs or other contingent payments and costs of developing and commercializing any technologies to which we obtain rights; |
| ● | third-party costs associated with the development and commercialization of our existing and future products and the ability of our development partners to satisfy our requirements on a timely basis; |
| ● | the scope and terms of our business plans from time to time, and our ability to realize upon our business plans; and |
| ● | the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing possible patent claims, including litigation costs and the outcome of any such litigation. |
The Company’s long-term cash requirements have not changed materially since the 2025 Form 10-K.
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U.S. Taxes
As of June 30, 2026, we had deferred tax assets for net operating loss carryforwards for U.S. federal income tax purposes of $22,991 and non-capital loss carryforwards for Canada of $9,644, which will begin to expire in fiscal year 2035. We have evaluated the factors bearing upon the realizability of our deferred tax assets, which are comprised principally of net operating loss carryforwards and non-capital loss carryforwards. In 2021, we concluded that, due to the limitations under Section 382, our U.S. federal income tax net operating loss carryforwards, as well as R&D credit carryforwards, for the periods prior to February 11, 2021 have been limited to zero. We therefore have derecognized $3,814 of this asset, reducing the carryforward of these amounts to $19,117.
Climate Change
Increased public awareness and concern about climate change will likely continue to (1) generate more regional and/or national requirements to reduce greenhouse gas emissions; (2) increase energy efficiency and reduce carbon pollution; and (3) cause a shift to cleaner and more sustainable sources of energy which may be more expensive than using fossil fuels as an energy source.
The potential impact of climate change on our operations and the needs of our customers remains uncertain. Scientists have proposed that the impacts of climate change could include changes in rainfall patterns, water shortages, changes to the water levels of lakes and other bodies of water, changing storm patterns, more intense storms and changing temperature levels. These changes could be severe and vary by geographic location. Climate change may also affect the occurrence of certain natural events, the incidence and severity of which are inherently unpredictable.
The effects of climate change also may impact our decisions to construct new buildings or maintain existing facilities in any areas that are or become prone to physical risks, which could similarly increase our operating costs. We could also face indirect financial risks passed through the supply chain that could result in higher prices for resources, such as energy. Additionally, climate change may adversely impact the demand, price and availability of property and casualty insurance that insures our physical assets. Due to significant economic variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on us in the future.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Evaluation of our disclosure controls
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report was made under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer.
Based upon that evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control Over Financial Reporting
During the three months ended June 30, 2026 there were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
There have been no material changes in our risk factors from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 6. Exhibits.
The exhibits listed on the accompanying index to exhibits immediately preceding the exhibits are filed as part of, or hereby incorporated by reference into, this Quarterly Report.
EXHIBIT INDEX
Exhibit |
| Description |
|---|---|---|
10.1**+ | ||
31.1** | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2** | ||
32.1** | ||
101.INS | Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL (1). | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document (1). | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (1). | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (1). | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (1). | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document (1). | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1) |
+ Indicates management contract or compensatory plan
** | Filed herewith |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on August 5, 2026.
Zomedica Corp. | ||
By: | /s/ Larry Heaton | |
Name: | Larry Heaton | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) | ||
By: | /s/ Michael Zuehlke | |
Name: | Michael Zuehlke | |
Title: | Vice President of Finance and Corporate Controller | |
(Principal Financial and Accounting Officer) | ||
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Exhibit 10.1
ZOMEDICA CORP.
CHANGE IN CONTROL SEVERANCE POLICY
1. Purpose. Zomedica Corp. (the “Company”) has established this Change in Control Severance Policy (the “Policy”) to assist Eligible Employees of the Company or its Subsidiaries whose employment is involuntarily terminated on or after the Effective Date in connection with changes made by the Company in connection with a Change of Control. This Policy supersedes and replaces any previous plan, program, policy, practice or arrangement by which the Company, its Subsidiaries or their respective predecessors may have provided severance benefits to employees wherever located. The Company understands and agrees that this Policy creates legal and contractual obligations of the Company to each Eligible Employee. It is the Company’s intent to create such obligations.
2.Definitions. As used in this Policy, the following terms shall have the respective meanings set forth below:
a.“Base Compensation” means (i) with respect to salaried Eligible Employees, the Eligible Employee’s annual rate of base salary as of the Date of Termination, with each month equal to 1/12 of annual base salary; and (ii) with respect to hourly Eligible Employees, the hourly rate paid to such Eligible Employee without taking into consideration overtime or holiday pay or deductions from such hourly rate of pay with each month equal to 160 hours of the hourly rate.
b.“Board” means the Board of Directors of the Company and, after a Change in Control, the “board of directors” of the Successor or Surviving Corporation, as the case may be, and shall also include any other governing body, person, group or entity in control of the parent, successor, or surviving entity or body. References herein to the Board include any committee or person to whom the Board has designated its authority.
c.“Cause” means (i) the Eligible Employee is convicted of a felony; (ii) the Eligible Employee has committed any gross misconduct, theft or fraudulent act, or has acted dishonestly with respect to any business of the Company or a Subsidiary; (iii) the Eligible Employee has materially breached any agreement between the Eligible Employee and the Company or Subsidiary, or any fiduciary duty the Eligible Employee owes to the Company or Subsidiary; (iv) the Eligible Employee has committed a material violation of Company policy that has had or is likely to cause a material adverse effect on the Company or a Subsidiary; or, (v) the Eligible Employee has failed to perform his or her duties, which failure has not been cured by the Eligible Employee after thirty (30) days advance written notice thereof to the Eligible Employee by the Company or Subsidiary.
d.Change in Control” means the occurrence of any one of the following events:
(i) | one Person (or more than one Person acting as a group) acquires ownership of stock of the Company or the Subsidiary that employs Eligible Employee that, together with the stock held by such Person or group, constitutes more than 50% of the total |
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fair market value or total voting power of the stock of the Company or Subsidiary that employs Eligible Employee; provided that, a Change in Control shall not occur if any Person (or more than one Person acting as a group) owns more than 50% of the total fair market value or total voting power of the Company’s stock and acquires additional stock;
(ii) | one Person (or more than one Person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) ownership of the Company's stock possessing 30% or more of the total voting power of the stock of Company; |
(iii) | a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or |
(iv) | the sale of all or substantially all (50% or more of the total gross fair market value) of the assets of the Company or the Subsidiary that employes Eligible Employee. |
Notwithstanding the foregoing, a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company's assets under Section 409A.
e.“Code” means the Internal Revenue Code of 1986, as amended.
f. “Company” means Zomedica Corp., an Alberta, Canada corporation, and any of successors, survivors, or other entity that succeeds to the interests of Zomedica Corp.
g. “Date of Termination” means the effective date on which the Eligible Employee’s employment by the Company terminates as specified in written notice by the Company delivered pursuant to Section 8; provided that, such termination occurs within the Termination Period.
h.“Effective Date” shall mean [insert date].
i.“Eligible Employee” any employee of the Company or a Subsidiary, whether employed on or before the Effective Date unless such employee has an individual agreement providing for severance benefits that would apply in the event of a Change of Control; provided, however, that an employee may become eligible to participate under this Policy if he or she irrevocably waives, in writing, all rights to severance benefits under the individual agreement at the time of separation. .
j. “Exchange Act” means the Securities Exchange Act of 1934, as amended.
k.“Good Reason” means, without the Eligible Employee’s express written consent, the occurrence of any of the following events after a Change in Control: (i) the demotion of the Eligible Employee through the transfer to another Person of some or all of the responsibilities of Eligible Employee; (ii) a requirement to relocate Eligible Employee’s principal place of employment in excess of thirty (30) miles from the Eligible Employee's then-current place of
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residence; or (iii) the Company's failure to pay the Eligible Employee his or her Base Compensation or earned bonus or to provide employee benefits as agreed by the Company.
l.“Investigation” means an investigation authorized by the Board.
m.“Person” means any individual, firm, partnership, corporation, or other entity, including any successor (by merger or otherwise) of such entity, or a group of any of the foregoing acting in concert.
n. “Qualifying Termination” means a termination of the Eligible Employee’s employment (i) by the Company other than for Cause or (ii) by the Eligible Employee for Good Reason within twelve (12) months of a Change of Control. Termination of the Eligible Employee’s employment on account of death or disability shall not be treated as a Qualifying Termination. Notwithstanding the preceding sentence, the death of the Eligible Employee after notice of termination for Good Reason or without Cause has been validly provided shall be deemed to be a Qualifying Termination.
o. “Separation and Release Agreement” means the agreement executed by an Eligible Employee following a Qualifying Termination in substantially the form attached to this Policy as Exhibit A.
p.“Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then-outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors (or members of any similar governing body) or in which the Company has the right to receive 50% or more of the distribution of profits or 50% of the assets or liquidation or dissolution. As of the Effective Date, the Subsidiaries the have Eligible Employees shall include Zomedica Inc. and Zomedica Biotechnologies, LLC.
p.“Termination Period” means the twelve month period following a Change in Control.
3. Eligibility. All Eligible Employees who have been the subject of a Qualifying Termination are eligible to receive payments under Section 4; provided that:
| a. | The Eligible Employee has cooperated as reasonably requested by the Company to transition work responsibilities; |
| b. | The Eligible Employee has executed a Separation and Release Agreement; and |
| c. | If the Eligible Employee owes any debt to the Company, the Eligible Employee must execute a reduction and setoff agreement for the reduction of his or her benefit payable under Section 4 by the amount of such debt. |
4. Payments Upon Termination of Employment. If the employment of an Eligible Employee is terminated pursuant to a Qualifying Termination, then, subject to the Eligible Employee executing the Separation and Release Agreement, the Company shall provide the following:
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a. for Eligible Employees who are a Vice President or higher, (i) an amount equal to twelve (12) months of Base Compensation, payable in a lump sum with the first regularly scheduled payroll date after Zomedica receives the signed Separation and Release Agreement from Employee and all rescission periods applicable to the release have expired; (ii) a lump sum payment equal to the Eligible Employee’s pro-rated bonus, payable with the first regularly scheduled payroll date after Zomedica receives the signed Separation and Release Agreement from Employee and all rescission periods applicable to the release have expired; and (iii) if the Eligible Employee is eligible for and elects continuation of group medical and/or dental insurance coverage with the Company following the Date of Termination in accordance with applicable laws and plans, the Company shall reimburse the Eligible Employee for the premium costs of such continuation coverage, at the same level of coverage that was in effect as of the Date of Termination, for up to twelve (12) consecutive months following the Date of Termination or, if earlier, until such continuation coverage is no longer available to the Eligible Employee under applicable laws and plans.
b. For Eligible Employees who are not a Vice President or higher, (i) an amount equal to six (6) months of Base Compensation, payable in a lump sum with the first regularly scheduled payroll date after Zomedica receives the signed Separation and Release Agreement from Employee and all rescission periods applicable to the release have expired; (ii) a lump sum payment equal to the Eligible Employee’s pro-rated bonus, if any, payable with the first regularly scheduled payroll date after Zomedica receives the signed Separation and Release Agreement from Employee and all rescission periods applicable to the release have expired; and (iii) if the Eligible Employee is eligible for and elects continuation of group medical and/or dental insurance coverage with the Company following the Date of Termination in accordance with applicable laws and plans, the Company shall reimburse the Eligible Employee for the premium costs of such continuation coverage, at the same level of coverage that was in effect as of the Date of Termination, for up to twelve (12) consecutive months following the Date of Termination or, if earlier, until such continuation coverage is no longer available to the Eligible Employee under applicable laws and plans.
c.all outstanding unvested stock options and stock appreciation rights granted to the Eligible Employee during the term of his or her employment shall become fully vested and exercisable for the remainder of their full term.
5. Withholding Taxes. The Company may withhold from all payments due to the Eligible Employee (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold there from.
6. Scope of Policy. Nothing in this Policy shall be deemed to entitle the Eligible Employee to continued employment with the Company or its Subsidiaries, and if the Eligible Employee’s employment with the Company shall terminate prior to a Change in Control, the Eligible Employee shall have no further rights under this Policy (except as otherwise provided hereunder); provided, however, that any termination of an Eligible Employee’s employment during the Termination Period shall be subject to all of the provisions of this Policy.
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7.Successors; Binding Agreement. The provisions of this Policy shall be binding upon any successor or assign of Company. The Company agrees that it will cause any successor entity to the Company unconditionally to assume all of the obligations of the Company hereunder. The benefits provided under this Policy shall inure to the benefit of and be enforceable by the Eligible Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Eligible Employee shall die while any amounts would be payable to the Eligible Employee hereunder had the Eligible Employee continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Policy to such person or persons appointed in writing by the Eligible Employee to receive such amounts or, if no person is so appointed, to the Eligible Employee’s estate.
8.Notice.
If to the Eligible Employee: the address listed as the Eligible Employee’s address in the Company’s personnel files.
If to the Company:
Zomedica Corp.
Attention: CEO
1101 Technology Dr., Suite 100
Ann Arbor, MI 48108
or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
b. A written notice of the Eligible Employee’s Date of Termination by the Company or the Eligible Employee, as the case may be, to the Company, shall specify the date of termination, which date shall be not less than fifteen (15) nor more than sixty (60) days after the giving of such notice; provided, however, that the Company may in its sole discretion accelerate such date to an earlier date or, alternatively, place the Eligible Employee on paid leave during such period. The failure by the Eligible Employee or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Eligible Employee or the Company hereunder or preclude the Eligible Employee or the Company from asserting such fact or circumstance in enforcing the Eligible Employee’s or the Company’s rights hereunder.
9.Employment with Subsidiaries. Employment with the Company for purposes of this Policy shall include employment with any Subsidiary.
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10. Survival. The respective obligations and benefits afforded to the Company and the Eligible Employee as provided in Sections 4 (to the extent that payments or benefits are owed as a result of a termination of employment that occurs during the term of this Policy), 5, 7 and 10 shall survive the termination of this Policy.
11. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS POLICY SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN, WITHOUT REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS, AND APPLICABLE FEDERAL LAWS. THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS POLICY SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS POLICY, WHICH OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.
12. Amendment and Termination. The Board may amend or terminate the Policy at any time; provided, however, that during the period commencing on a Change in Control and ending on the twelve (12) month anniversary of the Change in Control, the Policy (including, for the avoidance of doubt, any Schedules, Appendices and Exhibits) may not be amended or terminated by the Board in any manner which is adverse to the interests of any Eligible Employee without the prior written consent of such Eligible Employee; provided, further, that any termination or amendments to the Policy (including, for the avoidance of doubt, any Schedules, Appendices and Exhibits) that are adverse to the interests of any Eligible Employee that occur during the period of time beginning on a date three (3) months prior to a Potential Change in Control and ending on the termination of the agreement that constituted the Potential Change in Control, shall be void unless consented to in writing by the affected Eligible Employee.
13. Interpretation and Administration. This Policy shall be interpreted and administered by the Board. The Board may delegate any of its powers under the Policy to the Compensation Committee of the Board (or any successor committee). With respect to those Eligible Employees who are not subject to Section 16 of the Exchange Act, the Committee may delegate any of its powers under this Policy to the Chief Executive Officer of the Company. The Board, the Compensation Committee (or any successor committee) and the Chief Executive Officer (to the extent of the powers delegated to him) shall have the authority in their sole and absolute discretion to (i) exercise all of the powers granted to them under the Policy, (ii) construe, interpret and implement the Policy, (iii) prescribe, amend and rescind rules and regulations relating to the Policy, (iv) make all determinations necessary or advisable in administration of the Policy, (v) correct any defect, supply any omission and reconcile any inconsistency in the Policy and (vi) amend this Policy to reflect changes in or interpretations of applicable law, rules or regulations. Actions of the Board or the Compensation Committee (or any successor committee) shall be taken by a majority vote of its members.
14. Claims and Appeals. Eligible Employees may seek injunctive relief to enforce this Policy at any time with or without notice. With regard to other disputes, the Eligible Employees may submit claims for benefits by giving notice to the Company pursuant to Section 8 of this Policy. If the Eligible Employee believes that he or she has not received coverage or benefits to which he or she is entitled under the Policy, the Eligible Employee may notify the Board in writing of a claim
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for coverage or benefits. If the claim for coverage or benefits is denied in whole or in part, the Board shall notify the applicant in writing of such denial within thirty (30) days (which may be extended to sixty (60) days under special circumstances), with such notice setting forth: (i) the specific reasons for the denial; (ii) the Policy provisions upon which the denial is based; (iii) any additional material or information necessary for the applicant to perfect his claim; and (iv) the procedures for requesting a review of the denial. Upon a denial of a claim by the Board, the Eligible Employee may: (i) request a review of the denial by the Board or, where review authority has been so delegated, by such other person or entity as may be designated by the Board for this purpose; (ii) review any Policy documents relevant to his claim; and (iii) submit issues and comments to the Board or its delegate that are relevant to the review. Any request for review must be made in writing and received by the Board or its delegate within sixty (60) days of the date the applicant received notice of the initial denial, unless special circumstances require an extension of time for processing. The Board or its delegate will make a written ruling on the applicant’s request for review setting forth the reasons for the decision and the Policy provisions upon which the denial, if appropriate, is based. This written ruling shall be made within thirty (30) days of the date the Board or its delegate receives the applicant’s request for review unless special circumstances require an extension of time for processing, in which case a decision will be rendered as soon as possible, but not later than sixty (60) days after receipt of the request for review. All extensions of time permitted by this Section 14 will be permitted at the sole discretion of the Board or its delegate. If the Board does not provide the Eligible Employee with written notice of the denial of his appeal, the Eligible Employee’s claim shall be deemed denied.
15. Type of Policy. This Policy is intended to be, and shall be interpreted as an unfunded employee welfare plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Benefits will be paid from the general assets of the Company if and when such benefits are owed. No Eligible Employee or any other person shall have any rights to or interest in nay specific assets or accounts of the Company or any Subsidiary by reason of this Policy.
16. No Duplication of Benefits. Except as otherwise expressly provided pursuant to this Policy, this Policy shall be construed and administered in a manner which avoids duplication of compensation and benefits which may be provided under any other agreement, plan, program, policy, or other arrangement. In the event a Eligible Employee is covered by any other plan, program, policy, individually negotiated agreement or other arrangement, in effect as of his or her Date of Termination, that may duplicate the payments or benefits provided in Section 4, the Company is specifically empowered to reduce or eliminate the duplicative benefits provided for under the Policy. In taking such action, the Company will be guided by the principles that (1) such a Eligible Employee will otherwise be treated no more and no less favorably than are other Eligible Employees who are not covered by such other plan, program, policy, individually negotiated agreement or other arrangement, (2) the provisions of such other plan, program, policy, individually negotiated agreement or other arrangement (including, but not limited to, a special individual pension, a special deferral account and/or a special equity based grant) which are not duplicative of the payments provided in Section 4, will not be considered in determining elimination and/or reductions in Policy benefits, and (3) payments that are exempt from Code Section 409A shall be reduced or eliminated prior to payments that are subject to Code Section 409A.
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17.Nonassignability. Benefits under the Policy may not be assigned by the Eligible Employee. The terms and conditions of the Policy shall be binding on the successors and assigns of the Company.
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IN WITNESS WHEREOF, the Company has executed this Policy as of [date].
ZOMEDICA CORP.
Name:
Title:
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EXHIBIT A
CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
This Confidential Separation and Release Agreement ("Agreement") is made by and between EMPLOYEE NAME ("Employee") and Zomedica Inc. ("Zomedica").
WHEREAS, Employee was an employee of Zomedica from ________________, until Employee’s employment ended on __________________;
WHEREAS, the parties now desire to amicably end Employee's employment with Zomedica due to the elimination of Employee’s position and resolve any and all disputes that currently exist or may arise between them related to Employee's employment with Zomedica and separation therefrom;
NOW, THEREFORE, in consideration of the mutual promises and undertakings of the parties as set forth herein, and for good and valuable consideration, the adequacy of which is hereby acknowledged, the parties agree as follows:
1.Confidentiality. Employee and Zomedica agree that the existence and content of this Agreement, and all terms in this Agreement, shall be and shall remain confidential, and shall not be disclosed to any employee or independent contractor of Zomedica (except on a "need to know basis" by Zomedica as necessary to effect the terms of this Agreement) or to any other person, firm or agency, excluding Employee's spouse and/or legal or financial counsel, unless otherwise required by law, statute or court/agency process.
2.Separation from Employment. Employee was separated from Zomedica on ____________________, and has no right to further benefits from Zomedica as an employee after that date, except as expressly set forth in this Agreement. Please note that any vested options held by Employee pursuant to the Zomedica Corp. Amended and Restated Stock Option Plan will expire ninety (90) days after separation from service in accordance with the terms of such plan.
3.Consideration. In exchange for the mutual promises made in this agreement, Zomedica shall do the following:
(a) | On the first regularly scheduled payroll date after Zomedica receives this signed Agreement from Employee and the 7-day period for revocation specified in paragraph 15 below has passed, Zomedica agrees to pay ______________. The payment shall be subject to applicable local, state, federal and social security tax withholdings. This payment will be included in Employee's W-2. |
(b) | (optional) Provided that Employee elects COBRA continuation coverage for medical, dental, and/or vision insurance, Zomedica will reimburse Employee for ___________ months of COBRA continuation coverage. Other than the foregoing |
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reimbursement, Employee shall be solely responsible for the total cost of Employee's COBRA premium payments.
(c) | Zomedica agrees it will take no affirmative action to contest or appeal any decision by any state agency awarding unemployment benefits to Employee unless Employee has acquired or declined comparable new employment. Both parties acknowledge that Zomedica has a legal obligation to provide truthful, accurate information to any state unemployment agency and that the ultimate decision whether or not to award Employee unemployment benefits rests with the state agency. Employee acknowledges that receipt of separation pay as set forth above in paragraph 3(a) may affect Employee's eligibility for or the amount of unemployment benefits. |
4.Breach of Agreement. Zomedica shall provide the consideration specified in paragraph 3 provided Employee complies with the provisions of this Agreement, including without limitation compliance with the obligations of Confidentiality (paragraph 5) and non-disparagement (paragraph 6). In the event employee breaches this Agreement, Zomedica shall have the right to void its obligation to so perform its obligations under paragraph 3 in the event that Employee violates any provision of this Agreement prior to payment. If any payment is made before a violation, Zomedica shall be entitled to seek reimbursement of the consideration set forth in Section 3(a) as liquidated damages for the breach of this Agreement. Employee acknowledges that damages as of the date of this Agreement are difficult to estimate and the reimbursement of the amount set forth in paragraph 3(a) is intended to be a reasonable estimate of the damages such breach may cause to Zomedica and is not intended to be a penalty. In addition to liquidated damages, Zomedica shall be entitled to reimbursement for its reasonable collection costs including reasonable attorney fees. This clause shall not limit Zomedica’s right to any other legal or equitable remedies available to it under applicable law, including seeking an injunction to prohibit further disclosure of confidential information or disparagement. Nothing in this section shall be construed to prohibit Employee from disclosing discriminatory or unfair employment practices in accordance with applicable law, and such disclosures shall not be considered disparaging.
5.Confidential Information and Trade Secrets. In consideration of the payments provided in this Agreement, and as part of Employee’s continuing obligation to preserve confidentiality, Employee shall not, without an express written authorization from Zomedica, directly or indirectly, disclose to any other person, firm or corporation, any confidential, proprietary, private, or personal information of any nature concerning Zomedica, any member of the Board of Directors of Zomedica, Zomedica customers, clients, employees, independent contractors, or any other individual about whom Employee may have information as a result of Employee’s employment with Zomedica. Confidential, private, or personal information means information not generally known about Zomedica, its customers, clients, directors, officers, managers, and employees, including, but not limited to, Zomedica's financial condition, customer and client lists, projects, marketing and growth strategies, projections, plans, managers, employees, directors, officers, independent contractors or consultants, or private information about other individuals.
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In addition, notwithstanding this provision or any other provision of this Agreement, Employee and Zomedica agree that Employee, pursuant to the Defend Trade Secrets Act of 2016, shall not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) is made solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, and without limiting the preceding sentence, if Employee files a lawsuit for retaliation by Zomedica for reporting a suspected violation of law, Employee may disclose the trade secret to Employee’s attorney and may use the trade secret information in the court proceeding, if Employee: (1) files any document containing the trade secret under seal; and (2) does not disclose the trade secret, except pursuant to court order.
6.Non-Disparagement. Employee further agrees not to, either by conversation or any other oral expression, by letter or any other written expression, or by any other deed or act of communication to the public or to any individual person or entity or groups of persons or entities, specifically including, but not limited to, past, present or future customers, clients, employees, independent contractors, or business associates of Zomedica, hereafter disparage, criticize, condemn or impugn the reputation or character of Zomedica and/or its board members, officers, directors, managers, employees, consultants or agents, based upon any event or circumstances occurring or existing prior to or on the date of this Agreement. Such limitation shall include, but not be limited to, comments or posts to any social media platform, any website, or employee/employer or company review forums, and further specifically including, by way of example but not limitation, any of the following sites: Stocktwits and any of its competitors or alternative social network platforms, Glassdoor, LinkedIn, Upwork, Facebook, and Reddit.
7.Release and Waiver. For and in consideration of the payment and benefits continuation provided in this Agreement, to the fullest extent permitted by applicable law, Employee hereby forever releases and discharges Zomedica, together with its board members, directors, officers, employees and affiliated entities, from any and all claims, demands, equitable relief, damages, costs, expenses, administrative actions and causes of action of any kind or character, whether known or unknown, relating in any manner to or arising from Employee's employment with Zomedica, or the separation thereof, or under the Work Agreement, or which may otherwise arise under any federal or state statute, the common law or in equity, including but not limited to any claim arising under the Americans with Disabilities Act, the Age Discrimination in Employment Act ("ADEA"), the Employee Retirement Income Security Act, the Family Medical Leave Act, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, the Michigan Elliott-Larsen Civil Rights Act, or the Michigan Persons With Disabilities Civil Rights Act, all as amended, and contract or tort claims, as well as claims for attorney’s fees, except claims not subject to be released under federal or state law; PROVIDED THAT, nothing in this provision or Agreement shall preclude Employee from seeking a judicial determination regarding the validity of this waiver with respect to any claims under the ADEA or from filing a charge with the U.S. Equal Employment Opportunity Commission, though Employee agrees not to seek or accept any money damages or other relief sought on Employee’s behalf by the EEOC or by any other federal, state, or local agency.
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8.Non-Admission of Liability. This Agreement shall not be construed as an admission, nor is it an admission, by Zomedica that it is liable in any respect for any claim or cause of action that has been or may hereafter be asserted. This Agreement is being entered into solely for the purpose of conferring consideration upon both parties in return for their resolution of the matters enumerated above.
9.Voluntary Execution. Employee acknowledges reading this Agreement, understands its terms, has entered into it voluntarily, and with full knowledge of its content, meaning, and effect. Employee further acknowledges that Employee has been given 21 days within which to consider this Agreement. Employee acknowledges that if Employee elects to sign this Agreement without considering the terms of this Agreement for at least 21 days, the decision to shorten the time for considering this Agreement prior to signing it is voluntary, and such decision has not been induced by Zomedica through fraud, misrepresentation, or a threat to withdraw or alter the terms and conditions set forth in this Agreement in the event Employee elected to consider this Agreement for at least 21 days prior to signing it. Employee acknowledges that if Employee does not return this Agreement by 5pm EST on _________________, 2025, then Employee will be deemed to have waived any rights under this Agreement. Zomedica advises Employee to consult with an attorney prior to signing this Agreement.
10.Binding Effect. This Agreement shall be binding upon the parties hereto, their heirs, administrators, successors, and assigns.
11.Entire Agreement, and Modification. This Agreement contains the entire understanding of the parties and supersedes all previous verbal and written agreements concerning the same subject matter, and there are no other agreements, representations or warranties between the parties which are not set forth herein. This Agreement may only be modified by writing signed by both parties.
12.Governing Law and Jurisdiction/Venue. This Agreement shall be construed according to the laws of the State of Michigan. The parties agree that any disputes under this Agreement shall be brought in the state or federal courts located in Michigan, and the parties hereby consent to the personal jurisdiction and venue of those courts. The prevailing party shall recover attorney fees from the other party.
13.Severability. If any one or more of the provisions of this Agreement shall be held to be invalid, unlawful, or unenforceable in any respect, all other provisions shall be unaffected, and this Agreement shall be construed as if such invalid, unlawful, or unenforceable provisions had never been contained herein.
14.Return of Company Property. Employee verifies that all the Zomedica property that was in Employee’s control during and following the separation of Employee’s employment with Zomedica has been returned to Zomedica, and acknowledges that any payments otherwise due under this Agreement shall not be paid until such property has been received by Zomedica.
15.Effective Date. Employee will have 7 calendar days following the execution of this Agreement to revoke the Agreement. Notice of revocation must be in a signed writing
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delivered to Kristin Domanski before expiration of the revocation period. This Agreement will not become effective or enforceable until Employee has executed the Agreement, the 7-day revocation period has passed, and the Agreement has been executed by Zomedica.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the day and year set forth above.
NAME
Date:
Zomedica Inc.
By:
Name printed:
Its:
Date:
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EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Larry Heaton, certify that:
1. | I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2026, of Zomedica Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 5, 2026
| /s/ Larry Heaton |
| Larry Heaton |
| Chief Executive Officer |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Zuehlke, certify that:
1. | I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2026, of Zomedica Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 5, 2026
| /s/ Michael Zuehlke |
| Michael Zuehlke |
| Vice President of Finance and Corporate Controller |
| (Principal Financial and Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION OF
THE CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350
In connection with the Quarterly Report on Form 10-Q of Zomedica Corp. (the “Company”) for the three months ended June 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Larry Heaton, Chief Executive Officer of the Company, and Michael Zuehlke, Vice President of Finance and Corporate Controller of the Company, hereby certify, to the knowledge of the undersigned, pursuant to 18 U.S.C. Section 1350, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 5, 2026
| /s/ Larry Heaton |
| Larry Heaton |
| Chief Executive Officer |
| (Principal Executive Officer) |
Date: August 5, 2026
| /s/ Michael Zuehlke |
| Michael Zuehlke |
| Vice President of Finance and Corporate Controller |
| (Principal Financial and Accounting Officer) |
This Certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Report, irrespective of any general incorporation language contained in such filing.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.