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What changed in FIREFLY NEUROSCIENCE, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FIREFLY NEUROSCIENCE, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+469 added−408 removedSource: 10-K (2026-03-31) vs 10-K (2025-04-03)

Top changes in FIREFLY NEUROSCIENCE, INC.'s 2025 10-K

469 paragraphs added · 408 removed · 176 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe anticipated expiration dates are without taking into account all possible patent term adjustments, extensions, or abandonments, and assuming payment of all appropriate maintenance, renewal, annuity, and other governmental fees. We continue to evaluate our intellectual property portfolio as patents reach end of life to determine the optimal course for continuing to protect our technology.
Biggest changePatents As of December 31, 2025, we owned 23 issued U.S. patents, which have expiration dates ranging from November 2028 to November 2037. The anticipated expiration dates are without taking into account all possible patent term adjustments, extensions, or abandonments, and assuming payment of all appropriate maintenance, renewal, annuity, and other governmental fees.
On the August 12, 2024, pursuant to the Merger Agreement, FFN merged with and into Firefly Neuroscience, Inc., with Firefly Neuroscience, Inc. surviving the merger as a wholly owned subsidiary of WaveDancer, Inc.
On August 12, 2024, pursuant to the Merger Agreement, FFN merged with and into Firefly Neuroscience, Inc., with Firefly Neuroscience, Inc. surviving the merger as a wholly owned subsidiary of WaveDancer, Inc.
On the Closing Date (i) pursuant to the Amended and Restated Certificate of Incorporation of WaveDancer, we changed our name to Firefly Neuroscience, Inc. and (ii) pursuant to an amendment to its Certificate of Incorporation, Firefly changed its name to Firefly Neuroscience 2023, Inc. and (iii) Firefly and FFN filed the Certificate of Merger with the State of Delaware.
On the Merger Closing Date (i) pursuant to the Amended and Restated Certificate of Incorporation of WaveDancer, we changed our name to Firefly Neuroscience, Inc. and (ii) pursuant to an amendment to its Certificate of Incorporation, Firefly changed its name to Firefly Neuroscience 2023, Inc. and (iii) Firefly and FFN filed the Certificate of Merger with the State of Delaware.
If FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● warning letters, untitled letters, fines, injunctions, consent decrees, and civil penalties; ● recalls, withdrawals, or administrative detention, or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products; ● withdrawing 510(k) clearances or PMA approvals that have already been granted; ● refusal to grant export or import approvals for our products; or ● criminal prosecution. 17 Table of Contents International Regulation Many countries throughout the world have established regulatory frameworks for marketing and commercialization of medical devices.
If FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● warning letters, untitled letters, fines, injunctions, consent decrees, and civil penalties; ● recalls, withdrawals, or administrative detention, or seizure of our products; ● operating restrictions or partial suspension or total shutdown of production; ● refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products; ● withdrawing 510(k) clearances or PMA approvals that have already been granted; ● refusal to grant export or import approvals for our products; or ● criminal prosecution. 15 Table of Contents International Regulation Many countries throughout the world have established regulatory frameworks for marketing and commercialization of medical devices.
Compliance with such laws and regulations will result in additional costs and may necessitate changes to our business practices and divergent operating models, limit the effectiveness of our marketing activities, adversely affect our business, results of operations, and financial condition, and subject us to additional liabilities. 20 Table of Contents Corporate History and Structure Firefly’s corporate history began in April 2006 with the formation of Elminda Ltd, a company organized under the laws of the State of Israel, for the purpose of developing a system to provide clinicians with an objective assessment of brain electrophysiology to support better outcomes for people with mental illnesses and cognitive disorders.
Compliance with such laws and regulations will result in additional costs and may necessitate changes to our business practices and divergent operating models, limit the effectiveness of our marketing activities, adversely affect our business, results of operations, and financial condition, and subject us to additional liabilities. 18 Table of Contents Corporate History and Structure Firefly’s corporate history began in April 2006 with the formation of Elminda Ltd, a company organized under the laws of the State of Israel, for the purpose of developing a system to provide clinicians with an objective assessment of brain electrophysiology to support better outcomes for people with mental illnesses and cognitive disorders.
Among others, the federal Health Insurance Portability and Accountability Act of 1996, as amended by HITECH, and their implementing regulations, which we collectively refer to as HIPAA, establish privacy and security standards that limit the use and disclosure of Protected Health Information (“PHI”) and require covered entities and business associates to implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of individually identifiable health information in electronic form, among other requirements. 19 Table of Contents Violations of HIPAA may result in civil and criminal penalties.
Among others, the federal Health Insurance Portability and Accountability Act of 1996, as amended by HITECH, and their implementing regulations, which we collectively refer to as HIPAA, establish privacy and security standards that limit the use and disclosure of Protected Health Information (“PHI”) and require covered entities and business associates to implement administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of individually identifiable health information in electronic form, among other requirements. 17 Table of Contents Violations of HIPAA may result in civil and criminal penalties.
Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. 18 Table of Contents Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute.
Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. 16 Table of Contents Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute.
As of December 31, 2024, we own one trademark registration for “BNA” in the United States and other countries, including Israel, Switzerland, European Union, Canada, and India. The trademark is also registered with World Intellectual Property Organization.
As of December 31, 2025, we own one trademark registration for “BNA” in the United States and other countries, including Israel, Switzerland, European Union, Canada, and India. The trademark is also registered with World Intellectual Property Organization.
In September 2014, the company received the Conformity European approval for the BNA Platform allowing use in European Economic Area. In December 2020, Firefly received Class II medical device 510(k) clearance from the FDA for Firefly’s current product, the BNA Platform, with indication for use in individuals 12 to 85 years of age.
In September 2014, the company received the Conformity European approval for the BNA Platform allowing use in European Economic Area. In December 2020, Firefly received Class II medical device 510(k) clearance from the FDA for the BNA Platform, with indication for use in individuals 12 to 85 years of age.
Our breach of any license agreements or failure to obtain a license necessary to our business may have a material adverse impact on us. Trademarks Our trademark portfolio is designed to protect the brands of our BNA Platform and any future products.
Our breach of any license agreements or failure to obtain a license necessary to our business may have a material adverse impact on us. Trademarks Our trademark portfolio is designed to protect the brands of our current and any future products.
The marketing and distribution of the BNA Platform, is subject to continuing regulation and enforcement by FDA and other government authorities, which includes product listing requirements, medical device reporting regulations.
The marketing and distribution of Firefly’s products are subject to continuing regulation and enforcement by FDA and other government authorities, which includes product listing requirements, medical device reporting regulations.
Firefly relies on a strategy that combines the use of patents, trademarks, trade secrets, know-how, and license agreements, as well as other intellectual property laws, employment, confidentiality and invention assignment agreements, and contractual protections, to establish and protect its intellectual property rights. 14 Table of Contents Patents Our patents and patent applications assert claims generally related methods and systems.
Firefly relies on a strategy that combines the use of patents, trademarks, trade secrets, know-how, and license agreements, as well as other intellectual property laws, employment, confidentiality and invention assignment agreements, and contractual protections, to establish and protect its intellectual property rights.
Approved PMAs can include post-approval conditions and post-market surveillance requirements, analogous to some of the special controls that may be imposed on Class II devices. 16 Table of Contents Our BNA Platform is a Class II medical device, which was cleared by FDA for commercialization in the U.S. pursuant to the 510(k) notification process for the post-hoc statistical analysis of the human electroencephalogram, including ERP in December 2020.
Approved PMAs can include post-approval conditions and post-market surveillance requirements, analogous to some of the special controls that may be imposed on Class II devices. 14 Table of Contents Our BNA Platform and Evoke System are Class II medical devices, which were cleared by FDA for commercialization in the U.S. pursuant to the 510(k) notification process.
Intellectual Property Firefly’s commercial success depends in part on its ability to obtain and maintain intellectual property protection for the BNA Platform and any future products, to prevent others from infringing, misappropriating, or otherwise violating its intellectual property rights, to defend and enforce its intellectual property rights, and to operate without infringing, misappropriating, or otherwise violating valid and enforceable intellectual property rights of others.
We believe our ability to attract and retain talent with deep expertise across these complementary disciplines is essential to the continued development and commercialization of the Firefly Platform. 12 Table of Contents Intellectual Property Firefly’s commercial success depends in part on its ability to obtain and maintain intellectual property protection for Firefly’s products and any future products, to prevent others from infringing, misappropriating, or otherwise violating its intellectual property rights, to defend and enforce its intellectual property rights, and to operate without infringing, misappropriating, or otherwise violating valid and enforceable intellectual property rights of others.
The patent positions of medical device companies like ours are generally uncertain and involve complex legal, scientific, and factual questions.
We recognize that the ability to obtain patent protection and the degree of such protection depends on a number of factors. The patent positions of medical device companies like ours are generally uncertain and involve complex legal, scientific, and factual questions.
Firefly also seeks patent protection for other processes and inventions that are commercially or strategically important to developing and maximizing the value of its enterprise.
Firefly actively seeks to protect intellectual property that it believes is important to its business, which includes patents covering the components of its software and the methods used for optimizing the assessments its products perform. Firefly also seeks patent protection for other processes and inventions that are commercially or strategically important to developing and maximizing the value of its enterprise.
None of Firefly’s employees are represented by a labor union or covered by collective bargaining agreements, and Firefly considers its relationship with its employees to be good.
None of Firefly’s employees are represented by a labor union or covered by collective bargaining agreements, and Firefly considers its relationship with its employees to be good. Government Regulation Our products are considered medical devices, and, accordingly, are subject to rigorous regulation by government agencies in the United States and other countries in which we intend to sell our products.
We cannot ensure that patents will issue from any of our pending applications or that, if patents are issued, they will be of sufficient scope or strength to provide meaningful protection for our technology. We recognize that the ability to obtain patent protection and the degree of such protection depends on a number of factors.
We continue to evaluate our intellectual property portfolio as patents reach end of life to determine the optimal course for continuing to protect our technology. We cannot ensure that patents will issue from any of our pending applications or that, if patents are issued, they will be of sufficient scope or strength to provide meaningful protection for our technology.
The Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws contain certain provisions relating to limitations of liability and indemnification of directors and certain officers, provide advance notice procedures for stockholder proposals at stockholder meetings, and other matters.
The Charter and the Bylaws contain certain provisions relating to limitations of liability and indemnification of directors and certain officers, provide advance notice procedures for stockholder proposals at stockholder meetings, and other matters. See “ Description of Capital Stock – Anti-Takeover Provisions ” in Exhibit 4.1 to this Annual Report on Form 10-K and Item 10.
For more information regarding the risks related to our intellectual property, please see “Risk Factors-Risks Related to Our Intellectual Property.” Manufacturing Our BNA Platform is hardware-agnostic and we do not manufacture any compatible hardware. 15 Table of Contents Employees As of March 31, 2025, we have thirteen full-time employees and one contractor.
For more information regarding the risks related to our intellectual property, please see “Risk Factors-Risks Related to Our Intellectual Property.” 13 Table of Contents Manufacturing Our Evoke system is manufactured by a third party contract manufacturer based in the United States. Employees As of the date of this report, we have 17 full-time employees.
Neither we nor any of our predecessors have been in bankruptcy, receivership or any similar proceeding.
“ Directors, Executive Officers and Corporate Governance – Limitation on Liability and Indemnification of Directors and Certain Officers ”. Our fiscal year ends on December 31. Neither we nor any of our predecessors have been in bankruptcy, receivership or any similar proceeding. 19 Table of Contents
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ITEM 1. BUSINESS. Overview We are an Artificial Intelligence (“AI”) technology company developing innovative neuroscientific solutions with goals to improve brain health outcomes for patients with mental illnesses and neurological disorders.
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ITEM 1. BUSINESS. Overview Firefly Neuroscience, Inc. is an artificial intelligence company advancing precision neuroscience, applying AI and large-scale electrophysiological data to give clinicians a more complete, objective picture of how an individual patient's brain is functioning. Firefly Neuroscience, Inc. is rebuilding the foundation of how electrophysiological data flows into clinical decision-making for brain health.
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Our FDA-510(k) cleared BNA™, or Brain Network Analytics, is an advanced neurophysiological assessment tool that uses AI and machine learning to analyze EEG data recorded during rest and cognitive activity. It may enhance neurological assessments by providing objective, data-driven insights that allow for the early and longitudinal detection of neurophysiological deviations.
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We believe the brain is the most under-measured organ in medicine, and that the tools to change this have, until now, been inaccessible to the clinicians who need them most.
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These insights into brainwave patterns underlying cognitive function may help in tailoring personalized treatment plans and improving patient outcomes more effectively than traditional EEG analysis. Most neurological disorders affect the neurophysiological state of brain networks. BNA™ has the potential to detect these subtle changes, aiding the management of various cognitive and neurological disorders where cognitive functions are impacted.
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We have built the Firefly Platform: a vertically integrated hardware, software, and data infrastructure that captures standardized electroencephalographic (EEG) and event-related potential (ERP) assessments at the point of care, analyzes that data through our proprietary analytics engine, and delivers structured, clinician-ready reports back to the provider, all within a single seamless workflow. Every scan expands and enriches our database.
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This can include but is not limited to: Mood and anxiety disorders as well as neurodevelopmental and neurodegenerative diseases and brain injuries. While it offers significant benefits in these areas, BNA™ is may be most effective when integrated into a comprehensive diagnostic and treatment approach.
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Every clinic that joins our network increases the depth and diversity of our data. We describe this compounding relationship between clinical deployment, data acquisition, and report quality as the Firefly Flywheel.
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We have taken a period of 15 years and an investment of more than $60 million, to develop the software, compile the requisite database of brain wave tests, gain patent protection, and receive Federal Drug Administration (“FDA”) clearance to market and sell the BNA Platform.
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Our FDA-510(k) cleared Evoke System, commercially deployed as the Evoke System, is in active use across more than 85 clinical sites in the United States as of December 31, 2025. Clinicians use the system to perform EEG and ERP assessments, which are analyzed by our cloud-based platform and returned as structured reports designed to support clinical decision-making.
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The BNA Platform is a software as a medical solution that was developed using AI through unsupervised machine learning (via clustering analysis) on our extensive proprietary database of standardized, high-definition longitudinal electroencephalograms (“EEG”) of over 18,000 patients representing twelve disorders, as well as clinically healthy normal patients.
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Our subscription-based commercial model creates a recurring revenue stream that scales in lockstep with clinical utilization, meaning that the more deeply clinicians integrate electrophysiological assessment into their practice, the more revenue we generate and the more our database grows.
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The AI algorithms underlying the BNA platform play a crucial role throughout the workflow by automating complex computational tasks during the following steps of data analysis: (1) data pre-processing, (2) data segmentation, (3) clustering data, (4) functional modeling of the data and (5) single subject matching and scoring.
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Figure 1: The Firefly Flywheel — each clinical assessment simultaneously generates revenue and expands our proprietary database, compounding the intelligence of every future report. 6 Table of Contents The Problem We Are Solving Clinicians treating neurological and psychiatric conditions have access to a range of assessment tools, including standardized cognitive and behavioral rating instruments such as the Montreal Cognitive Assessment (MoCA), the Mini-Mental State Examination (MMSE), the Generalized Anxiety Disorder scale (GAD-7), and the Patient Health Questionnaire (PHQ-9).
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These algorithms find and measure patterns of brain activity, identify locations and measure intensity over time and lastly compare the data generated to an age-matched normative database. Clustering data further aids in breaking down the dataset by grouping subjects based on EEG outputs and identifying key characteristics of the cluster such as age, gender, alertness or dominant hand.
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These tools provide valuable, reproducible data points and play an important role in clinical evaluation. However, they assess behavior, self-reported symptoms, and observable cognitive performance; they do not directly measure the underlying functional activity of the brain.
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As of the date of this filing, the BNA Platform has been developed and is in the early stages of a commercial launch. We believe there is potential for such commercialization, both with respect to pharmaceutical companies in their drug research and clinical trial activities, as well as medical practitioners in their clinics.
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As a result, clinicians may have a clear picture of how a patient is presenting clinically, but limited visibility into what is occurring at the neural level: which regions of the brain are deviating from expected activity for a patient of that age, and in which direction.
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In concert with the commercialization of BNA Platform, we are collaborating with neuroscience drug development companies to support their clinical strategies. We plan to generate revenue through two segments: through the use of BNA Platform by United States health care professionals and through collaborations with pharmaceutical companies in support of neuroscience drug development.
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The Evoke System is designed to provide exactly this additional layer of insight; to add a direct electrophysiological signal that complements other testing modalities and gives clinicians a more complete biological picture to inform treatment planning.
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The proposed business model for healthcare provider clinics consists of a base service fee for licensing the product and a per use fee based on volume. The proposed business model for pharmaceutical companies will be tailored to each customer based on the volume and costs associated to provide such services.
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We believe four structural problems define the current state of brain health diagnostics, and that Firefly is uniquely positioned to address each of them: 1. Adding electrophysiological insight to existing assessments.
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In order to commercially launch to the medical community, the company has hired sales staff, conducted soft launches into a number of strategic accounts and plans to continue marketing efforts to secure new accounts. In the first half of 2025, the company will focus on targeted outreach and client engagement to commercialize the BNA Platform in the clinics segment.
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While standardized rating scales such as the MoCA, MMSE, GAD-7, and PHQ-9 provide reproducible and clinically valuable data, they measure cognitive performance and self-reported symptoms rather than the direct electrical activity of the brain.
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Using its database of potential customers and external lead generating services, the company will identify key targets in select markets and connect with them through personalized emails and calls to schedule meetings with decision-makers.
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Electrophysiological assessment captures what these tools cannot: which neural circuits are active, how quickly they respond, and how a given patient's brain activity compares to a reference group. The Evoke System adds this direct biological signal to the clinical picture, helping clinicians understand not just how a patient is presenting, but what is measurably occurring in their brain. 2.
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The sales team, equipped with marketing materials, case studies, peer-reviewed publications, and knowledge gained from our current research partners, will present the platform’s benefits and practical applications during these meetings. Follow-up efforts, including addressing questions and offering assistance by our Clinical Support Team, will aim to build strong client relationships and drive adoption of the platform.
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Population-level context at the point of care. A clinician evaluating a patient's brain activity in isolation may not have a population-level frame of reference for what they are seeing.
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The clinical utility of EEG technology to support better outcomes for patients with mental illnesses and cognitive disorders has been well documented.
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Our analytics platform addresses this by comparing each patient's electrophysiological data against a reference group; giving clinicians a standardized benchmark that reflects what healthy brain activity typically looks like for a patient of that age and gender.
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Historically, clinical adoption of EEG by medical professionals, including psychiatrists, neurologists, nurse practitioners and general practitioners, has been limited due to the complexity of interpreting EEG recordings and the inability to practically compare a patient’s brain electrophysiology to that of a clinically normal age-matched patient.
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As our database continues to grow, we expect to expand the granularity of these reference populations over time, with the goal of enabling comparisons across increasingly specific clinical subgroups. The foundation for that future capability is being built with every assessment performed on our network today. 3. Late detection of cognitive and neurological disease.
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Firefly believes that without defining a standard deviation to the norm, it is not possible to objectively assess brain electrophysiology.
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Many of the most debilitating neurological conditions; including Mild Cognitive Impairment (MCI), early-stage Alzheimer's disease, and prodromal psychiatric disorders; progress substantially before they are clinically detectable through behavioral observation alone. Electrophysiological biomarkers captured by EEG and ERP can surface neurological change earlier, giving clinicians a window to intervene before disease progression accelerates. 4. Imprecise treatment selection.
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By establishing an objective baseline measurement of brain electrophysiology, the BNA Platform enables clinicians to optimize patient care, leading to improved outcomes for people suffering from mental illnesses and cognitive disorders. 6 Table of Contents Our value proposition is supported by real-world use of the BNA Platform.
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Even when a diagnosis is established, selecting the right treatment plan often remains a process of elimination. Our growing database is enabling the identification of electrophysiological subtypes within diagnostic categories; meaning that a patient's specific EEG/ERP signature may predict which therapy is most likely to produce a meaningful response, potentially reducing the time and cost of trial-and-error prescribing.
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Incorporating the BNA Platform as part of a patient management protocol demonstrated improved response rates, enhanced therapy compliance, reduced non-responder rates and a reduction in need for medication switching among patients.
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The Firefly System The Firefly System is a closed-loop system designed to continuously improve with use. It combines three interdependent layers: standardized hardware acquisition through the Evoke System, cloud-based electrophysiological analytics, and a growing proprietary data repository.
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Further, we believe that our extensive clinical database, when combined with advanced AI, provides the opportunity to identify clinically relevant biomarkers that will support better patient outcomes through precision medicine and companion diagnostics. We expect to gather additional data through the clinical deployments and clinical studies conducted by drug companies.
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Each layer reinforces the others, and the system as a whole, we believe, becomes more beneficial with every assessment performed across our network. 7 Table of Contents The Evoke System The Evoke System is our FDA-510(k) cleared EEG and ERP acquisition hardware and associated software, deployed in clinical settings across the United States under the commercial brand name Evoke System.
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This additional data should allow us to discover new biomarkers and objectively measure the impact of therapeutic interventions on patients of different types, further enhancing our platform’s effectiveness. We believe that we will be able to enhance accurate diagnosis and predict what therapy or drug, or a combination thereof, is best suited to optimize patient outcomes.
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The system is purpose-built for standardized electrophysiological assessment in clinical environments; not limited to research laboratories; and is designed to be operable by clinical staff without specialized neurophysiology training. The Evoke System captures brain activity using a 19-channel EEG electrode array configured according to the International 10-20 system, the clinical standard for electrode placement.
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This represents a paradigm shift in how clinicians manage patients with mental illnesses and cognitive disorders holding the potential to transform brain health. Our Strategy We are dedicated to transforming brain health with the goal of advancing diagnostic and treatment approaches for people suffering from neurodegenerative diseases, disorders, and cognitive impairment and injuries.
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In addition to the cortical EEG signal, the system incorporates a Heart Rate Variability (HRV) sensor, enabling simultaneous measurement of autonomic nervous system function alongside neural activity. This multimodal data capture; cortical EEG across 19 channels plus HRV; provides a richer physiological signal than single-modality approaches, and we believe distinguishes our hardware from more limited EEG-only assessment tools.
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Firefly’s strategy is to develop state-of-the-art technologies that bridge the gap between neuroscience and clinical practice. Firefly’s next steps to realize this strategy include: Commercially launching the BNA Platform to medical professionals, including neurologists, psychiatrists, nurse practitioners, and general practitioners in the United States .
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Figure 2: Evoke System hardware configuration — 19 EEG electrode channels (10-20 system) plus integrated HRV sensor for multimodal brain and autonomic nervous system measurement. The Evoke System captures two principal categories of electrophysiological data. Resting-state EEG records spontaneous neural oscillatory activity in the absence of deliberate stimulation, providing a baseline measure of brain network function.
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Firefly believes that there are significant clinical, societal, and economic benefits that maybe realized when BNA Platform is used as part of a regular patient management protocol. Firefly aims to realize these benefits by providing medical professionals and their patients with objective, comparative data of brain electrophysiology.
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Event-Related Potentials (ERPs) are captured during cognitive task paradigms, measuring the brain's time-locked electrical responses to specific stimuli across standardized cognitive task types. Together, resting EEG and ERPs enable assessment of up to 20 distinct cognitive functional measures per session; including early sensory processing, attention, working memory, response inhibition, and executive function.
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Poor outcomes associated with the treatment of disorders often result from the subjective, trial and error approach to patient treatment.
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The standardized nature of the Evoke System's acquisition protocol is a critical design requirement, not merely a technical characteristic. Our analytics engine compares each patient's data against a reference database. As our database continues to grow, every assessment will add further clinical value.
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Firefly believes that by providing clinicians with the ability to compare a patient’s brain electrophysiology (as defined by BNA results to its FDA-cleared normative age-matched database will give both the clinician and the patient an objective baseline comparison of their brain electrophysiology that could aid in the diagnosis and optimization of the patient’s treatment pathway.
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The Evoke System's standardized protocol enables this comparability, ensuring that each record entering our database can meaningfully inform the interpretation of future assessments. Analytics Engine — Assessment and Reporting Electrophysiological data captured by the Evoke System is transmitted to our cloud-based analytics platform for processing.
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This strategy is supported by the fact that real-world clinical use of the BNA Platform has shown that, when used as part of a patient management protocol, patients showed improved response rates, enhanced therapy compliance, and reduced non-responder rates and a reduction in the need for medication switching.
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Our proprietary analytics engine analyzes raw EEG and ERP signals across captured dimensions and compares each patient’s electrophysiological profile to a reference dataset. As our dataset expands, we intend to further stratify and refine reference comparisons, which may include demographic segmentation, condition-specific cohorts, and longitudinal outcome data, subject to data availability and applicable regulatory considerations.
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There is a strong motivation for medical professionals, looking to improve outcomes, to integrate the BNA Platform into their clinics. The BNA Platform could be new recurring revenue stream opportunity for the medical practitioner while providing new patient management strategies. In addition, the adoption of the BNA Platform represents an opportunity to offer a perceived competitive advantage in their market.
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The output of this analysis is a structured clinical report delivered to the clinician. This report contextualizes the patient's electrophysiological data relative to a reference database, surfacing deviations in signal characteristics that may be relevant to the clinician’s assessment. Reports are delivered through our cloud-based portal and are designed to integrate into clinical workflows.
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Performing research and clinical studies to identify clinically relevant biomarkers that could support diagnosis and possibly identify patients who are most likely to positively respond to a certain drug or treatment .
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As more assessments are added, the database becomes richer and more diverse; broadening the body of data against which future assessments may be contextualized and supporting our longer-term goal of developing more granular reference populations for specific clinical subgroups. 8 Table of Contents The Firefly Database Our proprietary database, which includes more than 191,000 standardized EEG and ERP assessment records, represents a significant long-term strategic asset of our business.
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Firefly is continuously improving the BNA Platform by actively analyzing its comprehensive database, which includes clinical and behavioral data, to discover biomarkers that may support diagnosis and optimize patient care pathways. In doing so, Firefly intends to empower the practitioners to apply principles of precision medicine to improve outcomes for people suffering from mental illnesses and cognitive disorders.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our ESG practices fail to meet investors’ or other industry stakeholders’ evolving expectations and standards, including environmental stewardship, support for local communities, board of director and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency and employing ESG strategies in our operations, our brand, reputation and employee retention may be negatively impacted, potential customers and suppliers may be unwilling to do business with us and investors may be unwilling to invest in us.
Biggest changeIf our ESG practices fail to meet evolving investor expectations — including with respect to environmental stewardship, human capital management, supply chain practices, board diversity, and corporate governance — our access to capital, stock price, and relationships with key counterparties may be adversely affected.
While we are currently in compliance, WaveDancer has been in the past been, and we may in the future be, unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our Common Stock on Nasdaq.
While we are currently in compliance, WaveDancer has in the past been, and we may in the future be, unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our Common Stock on Nasdaq.
The sale or availability for sale of a substantial number of shares of Common Stock of could adversely affect the market price of such shares.
The sale or availability for sale of a substantial number of shares of Common Stock could adversely affect the market price of such shares.
Some of the factors that may cause the market price of our Common Stock to fluctuate include: ● investors reacting negatively to the effect of our business and prospects from the Merger; ● the announcement of new products, new developments, services or technological innovations by us or our competitors; ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by us or our competitors; ● conditions or trends in the life sciences and medical technology industries; ● changes in the economic performance or market valuations of other life sciences and medical technology companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition; ● sale of our Common Stock by stockholders, including executives and directors; ● volatility and limitations in trading volumes of our Common Stock; ● volatility in the market prices and trading volumes of the life sciences and medical technology stocks; ● our ability to finance our business; ● ability to secure resources and the necessary personnel to pursue our plans; ● failure to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of Common Stock by stockholders; ● our cash position; ● announcements and events surrounding financing efforts, including debt and equity securities; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● investigations by regulators into our operations or those of our competitors; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
Some of the factors that may cause the market price of our Common Stock to fluctuate include: ● investors reacting negatively to the effect of our business and prospects from the Merger; ● the announcement of new products, new developments, services or technological innovations by us or our competitors; ● actual or anticipated quarterly increases or decreases in revenue, gross margin or earnings, and changes in our business, operations or prospects; ● announcements relating to strategic relationships, mergers, acquisitions, partnerships, collaborations, joint ventures, capital commitments, or other events by us or our competitors; ● conditions or trends in the life sciences and medical technology industries; ● changes in the economic performance or market valuations of other life sciences and medical technology companies; ● general market conditions or domestic or international macroeconomic and geopolitical factors unrelated to our performance or financial condition; ● sale of our Common Stock by stockholders, including executives and directors; ● volatility and limitations in trading volumes of our Common Stock; ● volatility in the market prices and trading volumes of the life sciences and medical technology stocks; ● our ability to finance our business; ● ability to secure resources and the necessary personnel to pursue our plans; ● failure to meet external expectations or management guidance; ● changes in our capital structure or dividend policy, future issuances of securities, sales or distributions of large blocks of Common Stock by stockholders; ● our cash position; ● a reverse stock split; ● announcements and events surrounding financing efforts, including debt and equity securities; ● analyst research reports, recommendations and changes in recommendations, price targets, and withdrawals of coverage; ● departures and additions of key personnel; ● disputes and litigation related to intellectual properties, proprietary rights, and contractual obligations; ● investigations by regulators into our operations or those of our competitors; ● changes in applicable laws, rules, regulations, or accounting practices and other dynamics; and ● other events or factors, many of which may be out of our control.
If our securities are delisted from trading on Nasdaq, and we are not able to list its securities on another exchange or to have them quoted on Nasdaq, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences including: ● a limited availability of market quotations for its securities; ● a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage for us; and ● a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or to obtain additional financing in the future. 42 Table of Contents The market price of our Common Stock may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses.
If our securities are delisted from trading on Nasdaq, and we are not able to list its securities on another exchange or to have them quoted on Nasdaq, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences including: ● a limited availability of market quotations for its securities; ● a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage for us; and ● a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or to obtain additional financing in the future. 40 Table of Contents The market price of our Common Stock may be subject to significant fluctuations and volatility, and the stockholders of the company may be unable to resell their shares at a profit and may incur losses.
There are also criminal penalties, including imprisonment and criminal fines, for making or presenting false, fictitious or fraudulent claims to the federal government; 33 Table of Contents ● Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payers, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements or representations, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of, or payment for, healthcare benefits, items or services.
There are also criminal penalties, including imprisonment and criminal fines, for making or presenting false, fictitious or fraudulent claims to the federal government; 31 Table of Contents ● Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payers, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements or representations, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of, or payment for, healthcare benefits, items or services.
As demand for our BNA Platform increases in the future, we will need to expand customer service, billing and systems processes and enhance our internal quality assurance program. We cannot be certain that any increases in scale, related improvements and quality assurance will be successfully implemented or that appropriate personnel will be available to facilitate the growth of our business.
As demand for our platform increases in the future, we will need to expand customer service, billing and systems processes and enhance our internal quality assurance program. We cannot be certain that any increases in scale, related improvements and quality assurance will be successfully implemented or that appropriate personnel will be available to facilitate the growth of our business.
Artifact-free data cannot always be guaranteed. This variability may lead to customer dissatisfaction which could harm our sales, business, financial condition, and results of operations. Use of our BNA Platform requires appropriate training and inadequate training may lead to negative clinician experiences, which could harm our business, financial condition, and results of operations.
Artifact-free data cannot always be guaranteed. This variability may lead to customer dissatisfaction which could harm our sales, business, financial condition, and results of operations. Use of our platform requires appropriate training and inadequate training may lead to negative clinician experiences, which could harm our business, financial condition, and results of operations.
Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws. 34 Table of Contents To enforce compliance with healthcare regulatory laws, certain enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under one or more of these laws. 32 Table of Contents To enforce compliance with healthcare regulatory laws, certain enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
If clinicians utilize our BNA Platform incorrectly, or without adhering to or completing all relevant training, their patient outcomes may not be consistent with the outcomes achieved in our research studies and any future clinical studies.
If clinicians utilize our platform incorrectly, or without adhering to or completing all relevant training, their patient outcomes may not be consistent with the outcomes achieved in our research studies and any future clinical studies.
It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as laws prohibiting false claims for reimbursement, any of which would have a material adverse effect on our financial condition and/or business as a whole. 32 Table of Contents Additionally, we must have competent and reliable scientific evidence or, where applicable, other adequate substantiation for each reasonable interpretation of every promotional claim we make.
It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as laws prohibiting false claims for reimbursement, any of which would have a material adverse effect on our financial condition and/or business as a whole. 30 Table of Contents Additionally, we must have competent and reliable scientific evidence or, where applicable, other adequate substantiation for each reasonable interpretation of every promotional claim we make.
These regulations vary from country to country but cover, among other things, the following activities with respect to medical devices: ● design, development and manufacturing; ● testing, labeling, content and language of instructions for use and storage; ● product storage and safety; ● marketing, sales and distribution; ● pre-market clearance and approval; ● record keeping procedures; ● advertising and promotion; ● recalls and field safety corrective actions; ● post-market surveillance; ● post-market approval studies; and ● product import and export. 28 Table of Contents The regulations to which we are subject are complex.
These regulations vary from country to country but cover, among other things, the following activities with respect to medical devices: ● design, development and manufacturing; ● testing, labeling, content and language of instructions for use and storage; ● product storage and safety; ● marketing, sales and distribution; ● pre-market clearance and approval; ● record keeping procedures; ● advertising and promotion; ● recalls and field safety corrective actions; ● post-market surveillance; ● post-market approval studies; and ● product import and export. 26 Table of Contents The regulations to which we are subject are complex.
Furthermore, additional trade restrictions could be adopted with little to no advanced notice, and we may not be able to effectively mitigate the adverse impacts from such measures, which could further increase the cost of our products, disrupt our supply chain and impair our ability to effectively operate and compete in the countries where we do business. 38 Table of Contents In addition, various countries regulate cross-border transactions of certain products through import permitting and licensing requirements.
Furthermore, additional trade restrictions could be adopted with little to no advanced notice, and we may not be able to effectively mitigate the adverse impacts from such measures, which could further increase the cost of our products, disrupt our supply chain and impair our ability to effectively operate and compete in the countries where we do business. 36 Table of Contents In addition, various countries regulate cross-border transactions of certain products through import permitting and licensing requirements.
In preparing our consolidated financial statements for the ended December 31, 2024, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting as related to the (i) not having adequate Information Technology General Controls ("ITGC") or related Information Produced by Entity ("IPE") Controls, and (ii) lack of segregation of duties To remediate our material weaknesses, we expect to incur substantially more additional costs for addressing our material weaknesses and deficiencies.
In preparing our consolidated financial statements for the ended December 31, 2025, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting as related to the (i) not having adequate Information Technology General Controls ("ITGC") or related Information Produced by Entity ("IPE") Controls, and (ii) lack of segregation of duties To remediate our material weaknesses, we expect to incur substantially more additional costs for addressing our material weaknesses and deficiencies.
If significant reforms are made to the healthcare system in the United States, or in other jurisdictions, those reforms may increase our costs or otherwise negatively effect on our business, results of operations, and financial condition. 30 Table of Contents On April 5, 2017, the European Parliament passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the EU Medical Device Directive and became effective on May 26, 2021.
If significant reforms are made to the healthcare system in the United States, or in other jurisdictions, those reforms may increase our costs or otherwise negatively effect on our business, results of operations, and financial condition. 28 Table of Contents On April 5, 2017, the European Parliament passed the Medical Devices Regulation (Regulation 2017/745), which repeals and replaces the EU Medical Device Directive and became effective on May 26, 2021.
Risks related to out Intellectual Property Our success depends in part on our proprietary technology, and if we are unable to successfully enforce our intellectual property rights, our competitive position may be harmed.
Risks related to Our Intellectual Property Our success depends in part on our proprietary technology, and if we are unable to successfully enforce our intellectual property rights, our competitive position may be harmed.
We cannot be certain that clinicians that will use our BNA Platform will have received sufficient training, and clinicians who have not received adequate training may nonetheless attempt to use our BNA Platform with their patients.
We cannot be certain that clinicians that will use our platform will have received sufficient training, and clinicians who have not received adequate training may nonetheless attempt to use our platform with their patients.
Our ability to accurately forecast demand for our BNA Platform or our future our products could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, our inability to forecast the lifecycle of our products, an increase or decrease in customer demand for our products or for competitor products, our failure to accurately forecast customer adoption of new products, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.
Our ability to accurately forecast demand for our products or our future our products could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, our inability to forecast the lifecycle of our products, an increase or decrease in customer demand for our products or for competitor products, our failure to accurately forecast customer adoption of new products, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.
Moreover, these rules and regulations will increase our legal and financial compliance costs relative to those of we incurred as a private company, and will make some activities more time consuming and costly. 45 Table of Contents The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures.
Moreover, these rules and regulations will increase our legal and financial compliance costs relative to those of we incurred as a private company, and will make some activities more time consuming and costly. 43 Table of Contents The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures.
The commercial success of our BNA Platform will continue to depend on a number of factors, including the following: ● the actual and perceived effectiveness and clinical benefit, of our BNA Platform; ● the prevalence and severity of any adverse patient events involving our BNA Platform; ● our ability to provide earlier awareness of and education about our BNA Platform to patients and clinicians; ● the degree to which clinicians and patients adopt our BNA Platform; ● the availability, relative cost and perceived advantages and disadvantages of alternative technologies or treatment methods for cognitive disorders; ● the results of future clinical and other studies relating to the health, economic or other benefits of our BNA Platform; ● whether key thought leaders in the medical community accept that our future clinical utility is sufficiently meaningful to influence their decision to adopt our BNA Platform; 24 Table of Contents ● the extent to which we are successful in educating clinicians and patients about the benefits of our BNA Platform; ● our reputation among clinicians and patients; ● our ability to predict product performance; ● the strength of our marketing and distribution infrastructure, including our ability to drive adoption and utilization of our BNA Platform; ● our ability to obtain, maintain, protect, enforce and defend our intellectual property rights, including those covering our BNA Platform; ● our ability to maintain compliance with all legal and regulatory requirements, including those applicable to our BNA Platform; and ● our ability to continue to attract and retain key talent.
Our commercial success will continue to depend on a number of factors, including the following: ● the actual and perceived effectiveness and clinical benefit, of our products; ● the prevalence and severity of any adverse patient events involving our products; ● our ability to provide earlier awareness of and education about our products to patients and clinicians; ● the degree to which clinicians and patients adopt our products; ● the availability, relative cost and perceived advantages and disadvantages of alternative technologies or treatment methods for cognitive disorders; ● the results of future clinical and other studies relating to the health, economic or other benefits of our products; ● whether key thought leaders in the medical community accept that our future clinical utility is sufficiently meaningful to influence their decision to adopt our products; 22 Table of Contents ● the extent to which we are successful in educating clinicians and patients about the benefits of our products; ● our reputation among clinicians and patients; ● our ability to predict product performance; ● the strength of our marketing and distribution infrastructure, including our ability to drive adoption and utilization of our products; ● our ability to obtain, maintain, protect, enforce and defend our intellectual property rights, including those covering our products; ● our ability to maintain compliance with all legal and regulatory requirements, including those applicable to our products; and ● our ability to continue to attract and retain key talent.
Patient and product variability may produce misleading BNA results Misled clinical decision due to incorrect score results is a known risk and is continually mitigated. EEG is subject to external “noise” or artifact that contaminates waveforms such as Electrical grid; nearby medical/other devices which cause interference in frequencies near EEG frequencies., or excessive patient movement.
Patient and product variability may produce misleading report results Misled clinical decision due to incorrect score results is a known risk and is continually mitigated. EEG is subject to external “noise” or artifact that contaminates waveforms such as Electrical grid; nearby medical/other devices which cause interference in frequencies near EEG frequencies., or excessive patient movement.
This will expose us to legal risk of patients or neurologists who may have a negative experience with our BNA Platform filing lawsuits claiming damages or other claims. Although we will seek insurance coverage for such legal actions, there is no assurance that the amount of coverage will be sufficient to cover these claims.
This will expose us to legal risk of patients or neurologists who may have a negative experience with our software platform filing lawsuits claiming damages or other claims. Although we will seek insurance coverage for such legal actions, there is no assurance that the amount of coverage will be sufficient to cover these claims.
Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require us to make significant payments. 43 Table of Contents We currently take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies, which could result in our Common Stock being less attractive to investors.
Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require us to make significant payments. 41 Table of Contents We currently take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies, which could result in our Common Stock being less attractive to investors.
These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel. 23 Table of Contents In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.
These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel. 21 Table of Contents In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.
Material weaknesses could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis, reduce our ability to obtain financing or cause investors to lose confidence in our reported financial information, leading to a decline in our stock price, and significantly hinder our ability to prevent fraud. 46 Table of Contents As a recently public company, we may not be able to timely and effectively implement controls and procedures required by Section 404 that are applicable to us as public company.
Material weaknesses could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis, reduce our ability to obtain financing or cause investors to lose confidence in our reported financial information, leading to a decline in our stock price, and significantly hinder our ability to prevent fraud. 44 Table of Contents As a recently listed public company, we may not be able to timely and effectively implement controls and procedures required by Section 404 that are applicable to us as public company.
Failure to secure such trademark registrations in the United States and in foreign jurisdictions could adversely affect our ability to market our products and our business. 40 Table of Contents We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Failure to secure such trademark registrations in the United States and in foreign jurisdictions could adversely affect our ability to market our products and our business. 38 Table of Contents We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
Moreover, the report of our independent registered public accounting firm for the fiscal year ended December 31, 2024, includes a statement that substantial doubt exists about our ability to continue as a going concern, which may also limit our ability to access the capital markets or obtain favorable financing terms.
Moreover, the report of our independent registered public accounting firm for the fiscal year ended December 31, 2025, includes a statement that substantial doubt exists about our ability to continue as a going concern, which may also limit our ability to access the capital markets or obtain favorable financing terms.
The report of our independent registered public accounting firm for the fiscal year ended December 31, 2024, includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern, which may further impair our ability to raise capital and negatively impact investor confidence.
The report of our independent registered public accounting firm for the fiscal year ended December 31, 2025 includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern, which may further impair our ability to raise capital and negatively impact investor confidence.
Our future financial performance and our ability to successfully market and sell our BNA Platform will depend, in part, on our ability to effectively manage or time any future growth, and our management may also have to divert a disproportionate amount of attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
Our future financial performance and our ability to successfully market and sell our software platform will depend, in part, on our ability to effectively manage or time any future growth, and our management may also have to divert a disproportionate amount of attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
We currently own registered trademarks for our BNA Platform, and we intend to rely on both registered and common law rights for our trademarks in the future. There can be no assurance that our future trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.
We currently own registered trademarks for our BNA Platform and Evoke Systems, and we intend to rely on both registered and common law rights for our trademarks in the future. There can be no assurance that our future trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.
Any of these results from litigation could adversely affect our business, financial condition, and results of operations. 39 Table of Contents Successful cybersecurity attacks, data breaches, unapproved use of machine learning or AI tools, or other security incidents could result in the loss of IP and key technological advantages.
Any of these results from litigation could adversely affect our business, financial condition, and results of operations. 37 Table of Contents Successful cybersecurity attacks, data breaches, unapproved use of machine learning or AI tools, or other security incidents could result in the loss of IP and key technological advantages.
An inability to attract, hire, train and retain employees will harm our sales, business, financial condition, and results of operations. 26 Table of Contents We expect to increase the size of our organization in the future, and we may experience difficulties in managing the operational elements or timing of this growth.
An inability to attract, hire, train and retain employees will harm our sales, business, financial condition, and results of operations. 24 Table of Contents We expect to increase the size of our organization in the future, and we may experience difficulties in managing the operational elements or timing of this growth.
Where such insurance or third-party reimbursement becomes available in the future, any reduction in insurance or other third-party payor reimbursement for our BNA Platform may cause negative price pressure, which would reduce our revenues. Without a corresponding reduction in the cost to produce such products, the result would be a reduction in our overall gross profit.
Where such insurance or third-party reimbursement becomes available in the future, any reduction in insurance or other third-party payor reimbursement for our products may cause negative price pressure, which would reduce our revenues. Without a corresponding reduction in the cost to produce such products, the result would be a reduction in our overall gross profit.
These failures could result in reputational damage, legal liabilities, or loss of user confidence, which could materially affect our business. 41 Table of Contents The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of patients and users of such applications.
These failures could result in reputational damage, legal liabilities, or loss of user confidence, which could materially affect our business. 39 Table of Contents The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of patients and users of such applications.
Additionally, the third-party software integrated into or interoperable with our products and services will routinely reach end of life, and as a consequence, may be exposed to additional vulnerabilities, including increased security risks, errors and malfunctions that may be irreparable or difficult to repair.
Additionally, any third-party software integrated into or interoperable with our products and services will routinely reach end of life, and as a consequence, may be exposed to additional vulnerabilities, including increased security risks, errors and malfunctions that may be irreparable or difficult to repair.
Any of these developments could have a material adverse effect on our business, financial condition, and results of operations. 35 Table of Contents Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the U.S.
Any of these developments could have a material adverse effect on our business, financial condition, and results of operations. 33 Table of Contents Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the U.S.
Our products may cause or contribute to adverse medical events that we are required to report to FDA and other governmental authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, results of operations, and financial condition.
Our products may contribute to adverse medical events that we are required to report to FDA and other governmental authorities, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, results of operations, and financial condition.
Since the success of our business will be dependent on the widespread adaptation of our BNA Platform as a valid method for statistical analysis of EEG scans, neurologists across multiple geographies will be needed to use our BNA Platform and provide positive feedback and results.
Since the success of our business will be dependent on the widespread adaptation of our software platform as a valid method for statistical analysis of EEG scans, neurologists across multiple geographies will be needed to use our software platform and provide positive feedback and results.
We use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. We incorporate AI solutions into our BNA platform, services, and features, and these applications are important in our operations.
We use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations. We incorporate AI solutions into our software platform, services, and features, and these applications are important in our operations.
We have commenced the implementation of several aforementioned remedial measures, which we expect to complete in 2025. The implementation of any or all of these aforementioned measures, however, still may not fully address the material weaknesses in our internal control over financial reporting.
We have commenced the implementation of several aforementioned remedial measures, which we expect to complete in 2026. The implementation of any or all of these aforementioned measures, however, still may not fully address the material weaknesses in our internal control over financial reporting.
The pricing of our products could be impacted by several factors, including pressure to reduce prices by our customers due to a decline in the amount that third-party payors reimburse for EEG tests for clinicians utilizing our BNA Platform.
The pricing of our products could be impacted by several factors, including pressure to reduce prices by our customers due to a decline in the amount that third-party payors reimburse for EEG tests for clinicians utilizing our products.
If these executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted. Changes in internet regulations could adversely affect our business. Laws, rules, and regulations governing internet communications, advertising, and e-commerce are dynamic, and the extent of future government regulation is uncertain.
If these executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted. 29 Table of Contents Changes in internet regulations could adversely affect our business. Laws, rules, and regulations governing internet communications, advertising, and e-commerce are dynamic, and the extent of future government regulation is uncertain.
Our continued success depends on, among other things, our ability to: ● successfully launch our commercialization program to target clinicians (i.e. neurologists in the United States); ● drive awareness to increase the number of mental illness and cognitive impairment patients referred to target clinicians, namely neurologists in the United States; ● attract and retain skilled research, development, sales, marketing and clinical personnel; ● continue to innovate in order to improve our BNA Platform and enhance the patient and provider experience; ● adequately predict product performance; 25 Table of Contents ● obtain and maintain regulatory clearances and approvals, including for expanded indications; ● cost-effectively market and sell our BNA Platform; ● obtain, maintain, protect, enforce and defend our intellectual property rights and operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others; and ● acquire products or technologies complementary to or necessary for our business.
Our continued success depends on, among other things, our ability to: ● successfully scale our commercialization program to target clinicians (i.e. neurologists in the United States); ● drive awareness to increase the number of mental illness and cognitive impairment patients referred to target clinicians, namely neurologists in the United States; ● attract and retain skilled research, development, sales, marketing and clinical personnel; ● continue to innovate in order to improve our software platform and enhance the patient and provider experience; ● adequately predict product performance; 23 Table of Contents ● obtain and maintain regulatory clearances and approvals, including for expanded indications; ● cost-effectively market and sell our products; ● obtain, maintain, protect, enforce and defend our intellectual property rights and operate our business without infringing, misappropriating or otherwise violating the intellectual property rights of others; and ● acquire products or technologies complementary to or necessary for our business.
For example, we may experience cybersecurity incidents and unauthorized internal employee exfiltration of company information. 36 Table of Contents Further, the frequency of third-party cyber-attacks has increased over the last several years.
For example, we may experience cybersecurity incidents and unauthorized internal employee exfiltration of company information. 34 Table of Contents Further, the frequency of third-party cyber-attacks has increased over the last several years.
Moreover, clinicians rely on their previous medical training and experience when recommending or utilizing our BNA Platform, and we cannot guarantee that all clinicians will have the necessary skills to properly utilize the BNA Platform.
Moreover, clinicians rely on their previous medical training and experience when recommending or utilizing our software platform, and we cannot guarantee that all clinicians will have the necessary skills to properly utilize the platform.
The misuse or off-label use of our BNA Platform may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies, particularly if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies, particularly if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand, which may negatively affect our business, financial condition, and results of operations. 27 Table of Contents Adoption of our BNA Platform depends on positive clinical data as well as clinician acceptance of the data and our products, and negative clinical data or perceptions among these clinicians would harm our sales, business, financial condition, and results of operations.
Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand, which may negatively affect our business, financial condition, and results of operations. 25 Table of Contents Adoption of our products depends on positive clinical data as well as clinician acceptance of the data and our products, and negative clinical data or perceptions among these clinicians would harm our sales, business, financial condition, and results of operations.
We conduct certain of our operations in Israel. Conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and Israel ’ s war against them, may affect our operations. We currently have seven full-time employees, who are located in and/or reside in Israel.
We conduct certain of our operations in Israel. Conditions in Israel, including the attack by Hamas and other terrorist organizations from the Gaza Strip and Israel ’ s war against them, may affect our operations. We currently have five full-time employees, who are located in and/or reside in Israel.
For example, if we decide to market the BNA Platform for a broader or additional indication(s) for use and/or make any material modifications to any element of the device and/or the manufacturing or distribution thereof in the future, an additional 510(k) submission, and FDA clearance thereof, will be required prior to making any promotional communications expressly or impliedly claiming that the device may be used for such indication(s) and/or prior to making such modification, respectively.
For example, if we decide to market our products for a broader or additional indication(s) for use and/or make any material modifications to any element of the device and/or the manufacturing or distribution thereof in the future, an additional 510(k) submission, and FDA clearance thereof, will be required prior to making any promotional communications expressly or impliedly claiming that the device may be used for such indication(s) and/or prior to making such modification, respectively.
By requesting additional information, the FDA can delay market introduction of an updated BNA Platform. Delays in receipt of or failure to receive any necessary 510(k) clearance, de novo classification, or PMA, or the imposition of stringent restrictions for our BNA Platform, could have a material adverse effect on our business, results of operations and financial condition.
By requesting additional information, the FDA can delay market introduction of an updated product. Delays in receipt of or failure to receive any necessary 510(k) clearance, de novo classification, or PMA, or the imposition of stringent restrictions for our products, could have a material adverse effect on our business, results of operations and financial condition.
Our operations and financial performance depend on global and regional economic conditions. Inflation, fluctuations in currency exchange rates, changes in consumer confidence and demand, and weakness in general economic conditions and threats, or actual recessions, could materially affect our business, results of operations, and financial condition.
Our operations and financial performance depend on global and regional economic conditions. Inflation, fluctuations in currency exchange rates, changes in consumer confidence and demand, tariffs and trade policy changes, and weakness in general economic conditions and threats, or actual recessions, could materially affect our business, results of operations, and financial condition.
Our ability to grow sales of our BNA Platform and drive market acceptance will depend on successfully educating clinicians and patients of the relative benefits of our BNA Platform. If we are unable to successfully drive interest in our BNA Platform, our business, financial condition and results of operations would be harmed.
Our ability to grow sales of our products and drive market acceptance will depend on successfully educating clinicians and patients of the relative benefits of our products. If we are unable to successfully drive interest in our products, our business, financial condition and results of operations would be harmed.
In the future, we may make other modifications to our products, including our BNA Platform, and determine, based on our review of the applicable FDA regulations and guidance, that in certain instances new 510(k) clearances or other premarket submissions are not required.
In the future, we may make other modifications to our products, and determine, based on our review of the applicable FDA regulations and guidance, that in certain instances new 510(k) clearances or other premarket submissions are not required.
If any of these events were to occur, they could harm our business. We may not receive the necessary authorizations to market our BNA Platform or any future new products, and any failure to timely do so may adversely affect our ability to grow our business.
If any of these events were to occur, they could harm our business. We may not receive the necessary authorizations to market any future new products, and any failure to timely do so may adversely affect our ability to grow our business.
Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders. 49 Table of Contents
Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders. 46 Table of Contents
We cannot predict how quickly, if at all, clinicians and patients will adopt our BNA Platform. Moreover, we cannot predict how quickly, if at all, those currently living with mental illness or cognitive disorders but who are not being treated will seek treatment.
We cannot predict how quickly, if at all, clinicians and patients will adopt our product. Moreover, we cannot predict how quickly, if at all, those currently living with mental illness or cognitive disorders but who are not being treated will seek treatment.
Our results of operations may be harmed if we are unable to accurately forecast clinician demand for our BNA Platform or any future products.
Our results of operations may be harmed if we are unable to accurately forecast clinician demand for our products or any future products.
As our sales and marketing strategies evolve and as we launch commercialization of our BNA Platform, we may need additional managerial, operational, sales, marketing, financial and other personnel.
As our sales and marketing strategies evolve and as we launch commercialization of our software platform, we may need additional managerial, operational, sales, marketing, financial and other personnel.
If we are forced to lower or are unable to increase the price we charge for our BNA Platform, our gross margins will decrease, which will harm our ability to invest in and grow our business.
If we are forced to lower or are unable to increase the price we charge for our products, our gross margins will decrease, which will harm our ability to invest in and grow our business.
Future sales of our BNA Platform may depend on healthcare providers ’ or patients ’ ability to obtain reimbursement from third-party payors, such as insurance carriers. Future sales of our BNA Platform may depend on healthcare providers’ or patients’ ability to obtain reimbursement from third-party payors, such as insurance carriers.
Future sales of our products may depend on healthcare providers ’ or patients ’ ability to obtain reimbursement from third-party payors, such as insurance carriers. Future sales of our products may depend on healthcare providers’ or patients’ ability to obtain reimbursement from third-party payors, such as insurance carriers.
We are highly dependent on our senior management and key personnel. Our success will depend on our ability to retain senior management and to attract and retain qualified personnel in the future, including sales and marketing professionals, engineers, scientists, data science specialists and other highly skilled personnel and to integrate current and additional personnel in all departments.
Our success will depend on our ability to retain senior management and to attract and retain qualified personnel in the future, including sales and marketing professionals, engineers, scientists, data science specialists and other highly skilled personnel and to integrate current and additional personnel in all departments.
The successful use of our BNA Platform depends in part on the training and skill of the clinician performing EEG recording and reading BNA reports. Clinicians could experience difficulty interpreting the results of BNA reports.
The successful use of our products depends in part on the training and skill of the clinician performing EEG recording and reading our reports. Clinicians could experience difficulty interpreting the results of our reports.
If we fail to successfully initiate our broad commercialization program, market and sell our BNA Platform cost-effectively, our sales, business, financial condition and results of operations will be negatively affected. Our commercial success will depend on the future adoption of the BNA Platform into patient work streams in clinics.
If we fail to successfully initiate our broad commercialization program, market and sell our products cost-effectively, our sales, business, financial condition and results of operations will be negatively affected. Our commercial success will depend in large part on the future adoption of our products into patient work streams in clinics.
If we are unable to manage or appropriately time the anticipated growth of our business, our future revenue and operating results may be harmed. As of the date of this report, we have thirteen full time employees and one contractor.
If we are unable to manage or appropriately time the anticipated growth of our business, our future revenue and operating results may be harmed. As of the date of this report, we have 17 full time employees.
Our existing capital resources may be insufficient to fund our operations for the next twelve months, and we may be unable to realize our assets or discharge our liabilities in the normal course of business. These conditions raise substantial doubt about our ability to continue as a going concern.
Our financial position raises significant liquidity concerns. Our existing capital resources may be insufficient to fund our operations for the next twelve months, and we may be unable to realize our assets or discharge our liabilities in the normal course of business. These conditions raise substantial doubt about our ability to continue as a going concern.
Patients may be dissatisfied if their expectations of the BNA Platform are not met or if the performing clinicians are not adequately trained on use of our BNA Platform.
Patients may be dissatisfied if their expectations of the products are not met or if the performing clinicians are not adequately trained on the use of our products.
Although the development of our BNA Platform has been carefully monitored and documented by professionals who are experienced in the FDA clearance process, there is no assurance that the FDA will agree that an updated component of our BNA Platform is substantially equivalent to the cleared BNA Platform and allow the updated BNA Platform to be marketed in the United States.
Although the development of our products have been carefully monitored and documented by professionals who are experienced in the FDA clearance process, there is no assurance that the FDA will agree that an updated component of our product is substantially equivalent to the cleared product and allow the updated product to be marketed in the United States.
Since our BNA Platform will utilize cloud-based information systems and the exchange of information between patents and doctors, we will be subject to numerous U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, including health information.
Since our software platform will utilize cloud-based information systems and the exchange of protected information, we will be subject to numerous U.S. federal and state laws and regulations related to the privacy and security of personally identifiable information, including health information.
Although we have positive research data from a 2023 white paper study, there can be no assurance that future clinical studies, including those to demonstrate the efficacy of our BNA Platform or future products in current target patient populations and those to support label retention and expansion for our products, will demonstrate clinical utility and effectiveness.
Although we have positive research data from our publications, there can be no assurance that future clinical studies, including those to demonstrate the efficacy of our current products or future products in current target patient populations and those to support label retention and expansion for our products, will demonstrate clinical utility and effectiveness.
As we launch the commercialization program for our BNA Platforms, expand our product offerings in the future and increase our future marketing efforts, we will need to build and expand the reach of our marketing and sales networks.
As we scale, the commercialization program for our platform, expand our product offerings in the future and increase our future marketing efforts, we will need to build and expand the reach of our marketing and sales networks.
While our BNA Platform received 510(k) clearance in December 2020, we may in the future apply for 510(k) clearance for updated components of our BNA Platform, which must, then, be found by the FDA to be substantially equivalent to the cleared BNA Platform and, thus, may not be lawfully marketed in the U.S. until FDA make a substantial equivalence determination and issues the requisite 510(k) clearance for the updated BNA Platform.
While our products have received 510(k) clearance, we may in the future apply for 510(k) clearance for updated components, which must, then, be found by the FDA to be substantially equivalent to the existing cleared product and, thus, may not be lawfully marketed in the U.S. until FDA make a substantial equivalence determination and issues the requisite 510(k) clearance for the updated product.
Risks Related to the BNA Platform If we are not successful in enhancing awareness of our BNA Platform, driving adoption across our current target population and expanding the population of eligible patients, our sales, business, financial condition and results of operations will be negatively affected.
If we are not successful in enhancing awareness of our products, driving adoption across our current target markets and expanding the population of eligible patients, our sales, business, financial condition and results of operations will be negatively affected.
We, thus, are not currently able to promote the BNA Platform for any other indications for use or make any promotional claims that are inconsistent with, or outside the scope of, such FDA clearance (often referred to as “off-label” claims).
We, thus, are not currently able to promote the products for any other indications for use or make any promotional claims that are inconsistent with, or outside the scope of, our respective FDA clearances (often referred to as “off-label” claims).
We are unable to predict what effect, if any, market sales of securities held by our significant stockholders, directors or officers or the availability of these securities for future sale will have on the market price of our Common Stock.
As of March 25, 2026 we have approximately 14,793,075 shares of Common Stock outstanding. We are unable to predict what effect, if any, market sales of securities held by our significant stockholders, directors or officers or the availability of these securities for future sale will have on the market price of our Common Stock.
Our business currently depends primarily on our ability to successfully market our BNA Platform, which involves successfully launching our commercialization program, increasing adoption of and driving utilization our BNA Platform by target clinicians, namely neurologists in the United States.
Our business currently depends primarily on our ability to successfully market our products, which involves successfully executing our commercialization program, increasing adoption of and driving utilization our products by clinicians, in the United States.
Any change in the laws or regulations that govern the clearance and approval processes relating to our current, planned and future products could make it more difficult and costly to obtain clearance or approval for new products or to produce, market and distribute existing products.
These modifications may have an effect on the way we conduct our business. Any change in the laws or regulations that govern the clearance and approval processes relating to our current, planned and future products could make it more difficult and costly to obtain clearance or approval for new products or to produce, market and distribute existing products.
The medical device industry has a history of price competition, and we can give no assurance that we will be able to maintain satisfactory prices for our BNA Platform or any future products at competitive levels.
We may not be able to achieve or maintain satisfactory pricing and margins for our products, which could harm our business and results of operations. The medical device industry has a history of price competition, and we can give no assurance that we will be able to maintain satisfactory prices for our products or any future products at competitive levels.
We may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing business.
We may acquire businesses or products, or form strategic alliances, in the future, and may not realize the benefits of such acquisitions. We may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing business.
It is impossible to predict the ultimate content and timing of any healthcare reform legislation and its resulting impact on us.
Healthcare reform initiatives will continue to be proposed and may reduce healthcare related funding. It is impossible to predict the ultimate content and timing of any healthcare reform legislation and its resulting impact on us.
Further, we are unable to predict the impact of efforts by central banks and federal, state and local governments to combat elevated levels of inflation. If their efforts to reduce inflation are too aggressive, they may lead to a recession.
Attempts to offset cost increases with price increases could reduce sales, increase customer dissatisfaction or otherwise harm our reputation. Further, we are unable to predict the impact of efforts by central banks and federal, state and local governments to combat elevated levels of inflation. If their efforts to reduce inflation are too aggressive, they may lead to a recession.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results. ITEM 4 MINE SAFETY DISCLOSURES. Not applicable. PART II
Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results. ITEM 4 MINE SAFETY DISCLOSURES. Not applicable. 48 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities No repurchases of our Common Stock were made during the 2024 fiscal year. .
Biggest changePurchases of Equity Securities No repurchases of our Common Stock were made during the 2025 fiscal year. ITEM 6. [RESERVED]
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See also Part II. Item 1A.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See also Part I. Item 1A.
“ Risk Factors – We do not anticipate that we will pay any cash dividends in the foreseeable future .” 51 Table of Contents Recent Sales of Unregistered Securities During 2024, we did not sell any equity securities that were not subsequently registered under the Securities Act and that were not previously disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.
“ Risk Factors – We do not anticipate that we will pay any cash dividends in the foreseeable future .” 49 Table of Contents Recent Sales of Unregistered Securities During 2025, we did not sell any equity securities that were not subsequently registered under the Securities Act and that were not previously disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Number of Holders of Our Common Stock As of March 25, 2025, there were approximately 380 holders of record of our Common Stock, which does not include holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions.
Number of Holders of Our Common Stock As of March 25, 2026, there were approximately 354 holders of record of our Common Stock, which does not include holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear ended December 31, $US, in thousands 2024 2023 Change ($) REVENUE $ 108 $ 498 $ (390 ) OPERATING EXPENSES: Research and development expenses 1,954 741 1,213 Selling and marketing expenses 1,201 639 562 General and administration expenses 6,113 2,196 3,937 Impairment of intangible assets 874 - 874 TOTAL OPERATING EXPENSES 10,162 3,576 6,586 OPERATING LOSS 10,054 3,078 6,976 OTHER (INCOME) EXPENSE Interest and bank fees 69 18 51 Foreign exchange gain (11 ) (37 ) 26 Change in derivate fair value 156 - 156 Other (income) expenses 190 (457 ) 647 TOTAL OTHER EXPENSE 404 (476 ) 880 LOSS BEFORE INCOME TAX $ 10,458 $ 2,602 $ 7,856 Revenue Revenue for the year ended December 31, 2024, was $108,000, as compared to $498,000 in the year ended December 31, 2023, representing a decrease of $390,000 or 76%.
Biggest changeHowever, there can be no assurance that sufficient capital will be raised on acceptable terms, or at all. 56 Table of Contents Results of Operations The following table sets forth key components of our results of operations during the years ended December 31, 2025 and 2024. ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ $US, in thousands ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ 2024 ​ ​ Change ($) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ REVENUE ​ $ 1,142 ​ ​ $ 108 ​ ​ $ 1,034 ​ COST OF GOODS SOLD ​ ​ 497 ​ ​ ​ - ​ ​ $ 497 ​ GROSS PROFIT ​ $ 645 ​ ​ $ 108 ​ ​ $ 537 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING EXPENSES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 1,482 ​ ​ ​ 1,954 ​ ​ ​ (472 ) Selling and marketing expenses ​ ​ 800 ​ ​ ​ 1,201 ​ ​ ​ (401 ) General and administration expenses ​ ​ 6,968 ​ ​ ​ 6,133 ​ ​ ​ 835 ​ Impairment of assets ​ ​ 251 ​ ​ ​ 874 ​ ​ ​ (623 ) TOTAL OPERATING EXPENSES ​ ​ 9,501 ​ ​ ​ 10,162 ​ ​ ​ (661 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING (LOSS) ​ ​ (8,856 ) ​ ​ (10,054 ) ​ ​ 1,198 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER INCOME (EXPENSE) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and bank fees ​ ​ (159 ) ​ ​ (69 ) ​ ​ (90 ) Interest income ​ ​ 89 ​ ​ ​ - ​ ​ ​ 89 ​ Foreign exchange gain (loss) ​ ​ (5 ) ​ ​ 11 ​ ​ ​ (16 ) Change in derivative fair value ​ ​ (9,369 ) ​ ​ (156 ) ​ ​ (9,213 ) Loss on settlement ​ ​ (1,353 ) ​ ​ - ​ ​ ​ (1,353 ) Other (income) expenses ​ ​ (224 ) ​ ​ (190 ) ​ ​ (34 ) TOTAL OTHER (EXPENSE) ​ ​ (11,021 ) ​ ​ (404 ) ​ ​ (10,617 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (LOSS) BEFORE INCOME TAX ​ $ (19,877 ) ​ $ (10,458 ) ​ $ (9,419 ) Revenue Revenue for the year ended December 31, 2025, was $1,142, as compared to $108 in the year ended December 31, 2024, representing an increase of $1,034, or 957%.
The prefunded warrants also contain a beneficial ownership limitation which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise, any portion of a prefunded to the extent that, after giving effect to the exercise, such holder (together with such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares issuable upon the exercise.
The prefunded warrants also contain a beneficial ownership limitation which provides that the Company shall not affect any exercise, and a holder shall not have the right to exercise, any portion of a prefunded to the extent that, after giving effect to the exercise, such holder (together with such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares issuable upon the exercise.
During the two most recent fiscal years ended December 31, 2023, and December 31, 2022, and the subsequent interim period through October 29, 2024, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K of the Securities Exchange Act of 1934, as amended (“Regulation S-K”) and the related instructions to Item 304 of Regulation S-K) with Turner Stone on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Turner Stone, would have caused Turner Stone to make reference to the subject matter of the disagreements in connection with its reports on the Company’s consolidated financial statements for such years.
During the two fiscal years ended December 31, 2023, and December 31, 2022, and the subsequent interim period through October 29, 2024, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K of the Securities Exchange Act of 1934, as amended (“Regulation S-K”) and the related instructions to Item 304 of Regulation S-K) with Turner Stone on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Turner Stone, would have caused Turner Stone to make reference to the subject matter of the disagreements in connection with its reports on the Company’s consolidated financial statements for such years.
Each Unit consists of (i) either (A) one share of Common Stock or (B) a prefunded warrant to purchase Common Stock to the extent that acquiring the shares of Common Stock instead of such prefunded warrants would have caused the Subscriber to own in excess of 4.99% of the shares of outstanding Common Stock on a post-issuance basis and (ii) one common stock purchase warrant to purchase Common Stock over thirty-six (36) months at an exercise price of $4.00 per share.
Each March 2025 Unit consists of (i) either (A) one share of Common Stock or (B) a prefunded warrant to purchase Common Stock to the extent that acquiring the shares of Common Stock instead of such prefunded warrants would have caused the Subscriber to own in excess of 4.99% of the shares of outstanding Common Stock on a post-issuance basis and (ii) one Common Stock purchase warrant to purchase Common Stock over thirty-six (36) months at an exercise price of $4.00 per share.
While we are attempting to raise funds for commercialization, our monthly cash requirements during the year ended December 31, 2024 have been met through the sale of common stock and convertible notes. These conditions raise substantial doubt about our ability to continue as a going concern.
While we are attempting to raise funds for commercialization, our monthly cash requirements during the year ended December 31, 2025 have been met through the sale of Common Stock and convertible notes. These conditions raise substantial doubt about our ability to continue as a going concern.
Selling and Marketing Expenses Selling and marketing expenses consist of employee-related expenses, including salaries, benefits, travel, clinical fees and other marketing functions, as well as fees paid for consulting services.
Selling and Marketing Expenses Selling and marketing expenses consist of employee-related expenses, including salaries, benefits, travel, clinical fees and other marketing functions such as conferences, as well as fees paid for consulting services.
This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice to the Company. In connection with the Units Offering, we entered into a finder fee agreement with Canaccord Genuity Corp.
This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice to the Company. In connection with the March 2025 Units Offering, we entered into a finder’s fee agreement with Canaccord Genuity Corp.
Furthermore, other than as discussed in this filing, we have no committed source of financing and may not be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.
Furthermore, other than as discussed in this Form 10-K, we have no committed source of financing and may not be able to raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to severely curtail, or even to cease, our operations.
Recent Accounting Pronouncements See the sections titled “ BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ” and “ w. Recent accounting pronouncements ” in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10‑K.
Recent Accounting Pronouncements See the sections titled “ BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ” and “ w. Recent accounting pronouncements ” in Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10‑K. ITEM 9A. CONTROLS AND PROCEDURES.
On the same date, the closing under the Subscription Agreement occurred, and we issued the Units to the Subscribers. 53 Table of Contents The prefunded warrants have a nominal exercise price of $0.0001 (subject to standard adjustments for stock splits, stock dividends, recapitalizations, mergers and similar transactions) and may be exercised on a cashless basis.
On the same date, the closing under the Subscription Agreement occurred, and we issued the March 2025 Units to the Subscribers. The prefunded warrants have a nominal exercise price of $0.0001 (subject to standard adjustments for stock splits, stock dividends, recapitalizations, mergers and similar transactions) and may be exercised on a cashless basis.
In addition, the emergence and effects of public health crises, such as endemics and epidemics are difficult to predict and the consequences of the ongoing war between Israel and Hamas, including related sanctions and countermeasures and the effects of such war on our employees in Israel, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations.
In addition, the emergence and effects of public health crises, such as endemics and epidemics are difficult to predict, changes in Economic and trade policies could have a material and significant impact and the consequences of the ongoing war between Israel and Hamas, including related sanctions and countermeasures and the effects of such war on our employees in Israel, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations.
Impairment of Intangible Assets Impairment expenses for the year ended December 31, 2024, were $874,000, as compared to $nil for the year ended December 31, 2023 due to one of the capitalized upgrades no longer being expected to be utilized as a result in a change in management and subsequent direction.
Impairment of Assets Impairment expenses for the year ended December 31, 2025, were $251, as compared to $874 for the year ended December 31, 2024 due to one of the capitalized upgrades no longer being expected to be utilized as a result in a change in management and subsequent direction.
On October 31, 2024, the Audit Committee engaged Marcum Canada, LLP (“Marcum”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024, effective immediately.
On October 31, 2024, the Audit Committee engaged CBIZ Canada, LLP (formerly known as Marcum Canada, LLP) (“CBIZ”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024, effective immediately.
Therefore, we may be unable to realize our assets and discharge our liabilities in normal course of business. Management has a reasonable expectation that we can continue raising additional capital to continue in operational existence for the foreseeable future.
Therefore, we may be unable to realize our assets and discharge our liabilities in normal course of business. Management has a reasonable expectation that we can continue raising additional capital.
Operating Expense Research and Development Expenses Research and development expenses represent costs incurred to conduct research and development, such as the development of the BNA Platform. We recognize all research and development costs as they are incurred.
Research and Development Expenses Research and development expenses represent costs incurred to conduct research and development, such as the development/enhancements of the Evoke Platform and BNA technology. We recognize all research and development costs as they are incurred.
In the future, we plan to generate revenue through two segments: through the use of BNA Platform by neurologists in the United States and through collaborations with pharmaceutical companies in support of neuroscience drug development.
In the future, we plan to generate revenue through two segments: through the use of our products by healthcare professionals in the United States and through collaborations with pharmaceutical companies in support of neuroscience drug development.
During the fiscal years ended December 31, 2023, and December 31, 2022, and the subsequent interim period through October 31, 2024, neither we nor anyone on our behalf has consulted with Marcum regarding (i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us that Marcum concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable event,” as defined in Item 304(a)(1)(v) of Regulation S-K. 58 Table of Contents Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
During the fiscal years ended December 31, 2023, and December 31, 2022, and the subsequent interim period through October 31, 2024, neither we nor anyone on our behalf has consulted with CBIZ regarding (i) the application of accounting principles to any specified transaction, either completed or proposed or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us that CBIZ concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K, or a “reportable event,” as defined in Item 304(a)(1)(v) of Regulation S-K.
Liquidity and Capital Resources Going Concern As of December 31, 2024, we had an accumulated deficit of $87,084,000 and negative cash flow from operating activities for the year ended December 31, 2024 of $6,155,000. Further, we have recurring losses with minimal revenue from operations and we expect to continue generate losses and using cash for operations.
Liquidity and Capital Resources Going Concern As of December 31, 2025, we had an accumulated deficit of $111,615 and negative cash flows from operating activities for the year ended December 31, 2025 of $8,194. Further, we have recurring losses with minimal revenue from operations and we expect to continue to generate losses and using cash for operations.
(“Canaccord”), pursuant to which the Company will pay Canaccord at the closing of the Units Offering (i) a payment of up to 7.5% of the gross proceeds raised from subscriptions in the Units Offering from persons introduced to the Company by Canaccord, payable in cash; and (ii) the issuance of share purchase warrants (the “Finder’s Warrant”) of the Company to Canaccord of up to 7.5% of the Units subscribed for by person introduced to the Company by Canaccord.
(“Canaccord”), pursuant to which the Company paid Canaccord at the closing of the March 2025 Units Offering (i) a payment of up to 7.5% of the gross proceeds raised from subscriptions in the March 2025 Units Offering from persons introduced to the Company by Canaccord, paid in cash; and (ii) the issuance of the Finder’s Warrant to Canaccord of up to 7.5% of the Units subscribed for by person introduced to the Company by Canaccord.
Until we can generate adequate revenues from the sale of our products to cover our operating expenses and capital expenditure requirements, we expect to finance our operations through the sale of equity, debt financing, or other sources. There can be no guarantee that debt or equity financings will be available to us on commercially reasonable terms, if at all.
Until we generate sufficient revenues from product sales to cover operating expenses, working-capital requirements, and capital expenditures, we expect to finance our operations through the issuance of equity, debt financing, or other sources of capital. There can be no assurance that such financing will be available to us on commercially reasonable terms, or at all.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure On October 29, 2024, the Audit Committee dismissed Turner, Stone & Company LLP (“Turner Stone”) as our independent registered public accounting firm, effective immediately.
The full text of our audited consolidated financial statements begins on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. On October 29, 2024, the Audit Committee dismissed Turner, Stone & Company LLP (“Turner Stone”) as our independent registered public accounting firm, effective immediately.
We have no material off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. 56 Table of Contents Summary of Cash Flow The following table provides detailed information about our net cash flow for fiscal years ended December 31, 2024 and December 31, 2023: For the year ended December 31, 2024 2023 Change (in thousands) Net cash (used in) provided by Operating activities $ (6,155 ) $ (2,172 ) $ (3,983 ) Investing activities $ (477 ) $ (386 ) $ (91 ) Financing activities $ 6,299 $ 4,643 $ 1,656 Operating Activities For the year December 31, 2024, cash used in operating activities was $6,155,000, as compared to $2,172,000 for the year December 31, 2023 representing an increase of $3,983,000 or 183%.
We have no material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that would be material to investors. 58 Table of Contents Cash flows The following table provides detailed information about our net cash flow for fiscal years ended December 31, 2025 and December 31, 2024: ​ ​ For the year ended December 31, ​ ​ ​ 2025 ​ ​ 2024 ​ ​ Change ​ ​ ​ (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash (used in) provided by ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ $ (8,194 ) ​ $ (6,155 ) ​ $ (2,039 ) Investing activities ​ $ (2,488 ) ​ $ (477 ) ​ $ (2,011 ) Financing activities ​ $ 11,619 ​ ​ $ 6,299 ​ ​ $ 5,320 ​ Operating Activities For the year December 31, 2025, cash used in operating activities was $8,194, as compared to $6,155 for the year December 31, 2024, representing an increase of $2,039 or 33%.
Units Offering On March 28, 2025, we entered into a private placement subscription agreement (the “Subscription Agreement”) with certain accredited investors (the “Subscribers”), pursuant to which we agreed to issue and sell $547,737 of units (each a “Unit” and, collectively the “Units”), at a purchase price of $3.00 per Unit (the “Units Offering”).
March 2025 Units Offering On March 28, 2025, we entered into the private placement subscription agreement (the “Subscription Agreement”) with the subscribers (“Subscribers”), pursuant to which we issued and sold 547,737 of units (each “March 2025 Unit”, and collectively, the “March 2025 Units”), at a purchase price of $3.00 per Unit.
This increase in net cash used in operating activities is primarily due to an increase in day-to-day operating costs, a reduction in liabilities, costs related to the Merger, prepayment of insurance policies and research costs associated with the development of the next generation of the BNA Platform.
This increase in net cash used in operating activities is primarily due to an increase in day-to-day operating costs, a reduction in liabilities, and research and development costs associated with the integrations of the BNA and Evoke Platforms within the business.
Financing Activities For the year December 31, 2024, net cash provided from financing activities was $6,299,000, as compared to $4,643,000 for the year December 31, 2023 representing an increase of $1,656,000 or 36%.
Financing Activities For the year December 31, 2025, net cash provided from financing activities was $11,619 as compared to $6,299 for the year December 31, 2024, representing an increase of $5,320 or 84%.
Other than as discussed above and elsewhere in this filing, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.
Other than as discussed above and elsewhere in this Form 10-K, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition. 60 Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Investing Activities For the year December 31, 2024, net cash used in investing activities was $477,000, as compared to cash used in investing activities of $386,000 for the year December 31, 2023 representing an increase of $95,000 or 24%.
Investing Activities For the year December 31, 2025, net cash used in investing activities was $2,488 as compared to cash used in investing activities of $477 for the year December 31, 2024, representing an increase of $2,011 or 422%. The increase in net cash used in investing activities is attributable to the acquisition of Evoke Neuroscience.
Each Finder’s Warrant will be exercisable to purchase one additional Common Stock at $4.00 per share for a period of 36 months from the closing of the Units Offering. Financial Operations Overview Revenue Revenue consists of BNA testing, equipment rental and the undertaking of projects and/or clinical studies.
Each Finder’s Warrant is exercisable to purchase one additional Common Stock at $4.00 per share for a period of 36 months from the closing of the March 2025 Units Offering.
Research and development expenses consist primarily of the following: ● salaries and benefits; ● consulting arrangements; and ● other expenses incurred to advance our research and development activities. The largest component of our operating expenses has historically been the investment in research and development activities.
Research and development expenses consist primarily of the following: ● salaries and benefits; ● consulting arrangements; and ● other expenses incurred to advance our research and development activities. We expect research and development expenses to continue to increase in the future as we further refine and optimize our products and invest in their evolution.
Consequently, the upgrade was deemed fully impaired, resulting in the Company recording an impairment charge of $874,000. 55 Table of Contents Other (income) expense Other (income) expense for the year months ended December 31, 2024, was $404,000, as compared to ($476,000) for the year ended December 31, 2023, representing an increase in costs of $880,000 mainly due to an agreement settlement occurring in 2023 representing 52% of the increase, interest and penalties related to late filing of historical taxes each representing approximately 20% of the increase, and the change in the derivate fair value which relates to 18% of the increase.
Consequently, the upgrade and associated assets were deemed fully impaired, resulting in the Company recording an impairment charge of $251. 57 Table of Contents Other (income) expense Other (income) expense for the year ended December 31, 2025, was $11,021, as compared to $404 for the year ended December 31, 2024, representing an increase of $10,617, mainly due to the change in derivative fair value and loss on settlement of promissory note.
General and Administration Expenses General and administration expenses for the year ended December 31, 2024, were $6,133,000, as compared to $2,196,000 for the year ended December 31, 2023, representing an increase of $3,937,000, or 179%.
The decrease was primarily due to a reduction in consultant use driven by a rebranding in 2024. General and Administration Expenses General and administration expenses for the year ended December 31, 2025, were $6,968, as compared to $6,133 for the year ended December 31, 2024, representing an increase of $835, or 13%.
Operating Expenses Research and Development Expenses Research and development expenses for the year ended December 31, 2024, were $1,954,000, as compared to $741,000 for the year ended December 31, 2023, representing an increase of $1,213,000, or 164%.
The increase is attributable to manufacturing and inventory costs representing 43% of the increase and a further 33% attributable to labor costs. Research and Development Expenses Research and development expenses for the year ended December 31, 2025, were $1,482, as compared to $1,954 for the year ended December 31, 2024, representing a decrease of $472, or 24%.
The estimates and assumptions underlying our belief in the sufficiency of our capital resources in the short term and our ability to obtain capital resources in the long term may prove to be wrong, and we could exhaust our capital resources sooner than we expect and may not be able to obtain resources on favorable terms, or at all.
As a result, we could exhaust our available capital resources sooner than anticipated and may not be able to obtain additional funding on favorable terms, or at all.
The increase was primarily due to the proceeds the convertible note entered into in December 2024. 57 Table of Contents Known Trends, Events, and Uncertainties As with other companies that are in our industry, we will need to successfully manage normal business and scientific risks. Research and development of new technologies is, by its nature, unpredictable.
As with other companies that are in our industry, we will need to successfully manage normal business and scientific risks. Research and development of new technologies is, by its nature, unpredictable. We cannot assure you that our technology will be adopted, that we will ever earn revenues sufficient to support our operations, or that we will ever be profitable.
Selling and Marketing Expenses Selling and marketing expenses for the year ended December 31, 2024, were $1,201,000, as compared to $639,000 for the year ended December 31, 2023, representing an increase of $562,000, or 88%.
The decrease is primarily due to equity vesting in conjunction with the merger in August 2024. Selling and Marketing Expenses Selling and marketing expenses for the year ended December 31, 2025, were $800, as compared to $1,201 for the year ended December 31, 2024, representing a decrease of $401, or 33%.
As a result, we will require significant capital to support our ongoing operations and to drive our business strategy before we can be profitable.
As a result, we will require substantial additional capital to fund ongoing operations and to implement our business strategy prior to achieving positive cash flows from operating activities.
Other (Income) Expense Other (income) expense consists primarily of interest bank fees and loan fees, foreign exchange gain or loss, changes in derivative fair value and penalties. Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with GAAP.
Other (Income) Expense Other (income) expense, consists, primarily of interest bank fees and loan fees, foreign exchange gain or loss, changes in derivative fair value, impairments and penalties. 53 Table of Contents Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities.
For the next 12 months, we expect to continue to incur negative cash flows from operations as we continue to make targeted investments in sales and marketing and research and development of our next generation BNA Platform.
For the next 12 months, we expect to continue to incur negative cash flows from operations as we integrate our products and continue to invest in the expansion of our sales organization. On April 30, 2025, we acquired all outstanding stock of Evoke for $6,221, consisting of $3,000 in cash and 857,142 shares of our Common Stock.
Pursuant to the December 2024 Purchase Agreement, the Company and Helena also entered into the December 2024 Registration Rights Agreement. On the same date, the closing under the December 2024 Purchase Agreement occurred, and the Company issued the December 2024 Note and the December 2024 Warrant to Helena.
On the same date, the closing under the June 2025 Purchase Agreement occurred, and the Company issued 400,000 Units to investors at a total purchase price of $1,200.
Removed
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This summary highlights selected information from this filing and may not contain all of the information that is important to you in making an investment decision.
Added
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below.
Removed
Before investing in our securities, you should carefully read this entire filing, including our financial statements and the related notes included in this filing and the information set forth under the headings “ Risk Factors ” and “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. ” Overview We are an Artificial Intelligence (“AI”) technology company developing innovative neuroscientific solutions that improve brain health outcomes for patients with mental illnesses and neurological disorders.
Added
The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, management.
Removed
Our FDA-510(k) cleared Brain Network Analytics software platform (the “BNA Platform”) is focused on advancing diagnostic and treatment approaches for people suffering from mental illnesses and cognitive disorders, including depression, dementia, anxiety disorders, concussions, and attention-deficit/hyperactivity disorder.
Added
Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly in the sections titled Part I. Item 1A. “Risk Factors” and “Introductory Notes – Cautionary Note Regarding Forward-Looking Statements”.
Removed
We have invested a substantial amount of time and resources to develop the software, compile the requisite database of brain wave tests, gain patent protection, and receive Federal Drug Administration (“FDA”) clearance to market and sell the BNA Platform.
Added
Overview Firefly Neuroscience, Inc. is an artificial intelligence company advancing precision neuroscience, applying AI and large-scale electrophysiological data to give clinicians a more complete, objective picture of how an individual patient's brain is functioning. Firefly Neuroscience, Inc. is rebuilding the foundation of how electrophysiological data flows into clinical decision-making for brain health.
Removed
The BNA Platform is a software as a medical solution that was developed using AI through unsupervised machine learning (via clustering analysis) on our extensive proprietary database of standardized, high-definition longitudinal electroencephalograms (“EEG”) of over 18,000 patients representing twelve disorders, as well as clinically normal patients.
Added
We believe the brain is the most under-measured organ in medicine, and that the tools to change this have, until now, been inaccessible to the clinicians who need them most.
Removed
The BNA Platform, in conjunction with an FDA-cleared EEG system, may provide clinicians with comprehensive insights into brain function (cognition). These insights could enhance a clinician’s ability to accurately diagnose mental illnesses and cognitive disorders and assist in evaluating what therapy or drug is best suited to optimize a patient’s outcome.
Added
We have built the Firefly Platform: a vertically integrated hardware, software, and data infrastructure that captures standardized electroencephalographic (EEG) and event-related potential (ERP) assessments at the point of care, analyzes that data through our proprietary analytics engine, and delivers structured, clinician-ready reports back to the provider, all within a single seamless workflow. Every scan expands and enriches our database.
Removed
As of the date of this filing, the BNA Platform has been developed and is in the pre-commercial stages, but has not yet been launched widely. However, we are currently planning to undertake a commercial launch of the BNA Platform in 2025. We do not expect that additional development costs to achieve this commercial launch will be material.
Added
Every clinic that joins our network increases the depth and diversity of our data. We describe this compounding relationship between clinical deployment, data acquisition, and report quality as the Firefly Flywheel.
Removed
We believe there is potential for such commercialization, both with respect to pharmaceutical companies in their drug research and clinical trial activities, as well as medical practitioners in their clinics. In concert with the commercialization of BNA Platform, we are collaborating with neuroscience drug development companies to support their clinical strategies.
Added
Our FDA-510(k) cleared Evoke System, commercially deployed as the Evoke System, is in active use across more than 85 clinical sites in the United States as of December 31, 2025. Clinicians use the system to perform EEG and ERP assessments, which are analyzed by our cloud-based platform and returned as structured reports designed to support clinical decision-making.
Removed
We plan to generate revenue through two segments: through the use of BNA Platform by United States neurologists and through collaborations with pharmaceutical companies in support of neuroscience drug development. The proposed business model for neurological clinics consists of a base service fee for licensing the product and a per use fee based on volume.
Added
Our subscription-based commercial model creates a recurring revenue stream that scales in lockstep with clinical utilization, meaning that the more deeply clinicians integrate electrophysiological assessment into their practice, the more revenue we generate and the more our database grows. 50 Table of Contents Recent Developments Warrants Exercises During the week of February 21, 2025, we received total proceeds of $8,825 from the exercise of warrants to purchase 823,530 shares of the Common Stock, at an exercise price of $6.83, and warrants to purchase 800,000 shares of Common Stock, at an exercise price of $4.00, respectively.
Removed
The proposed business model for pharmaceutical companies will be tailored to each customer based on the volume and costs associated to provide such services. In order to commercially launch to the medical community, the company has hired sales staff, conducted soft launches into a number of strategic accounts and plans to continue marketing efforts to secure new accounts.
Added
The warrants were issued pursuant to private placements that closed on August 12, 2024, and December 20, 2024, and no new warrants were issued by the Company as a result of the exercises.
Removed
In 2025, the company will focus on targeted outreach and client engagement to commercialize the BNA Platform in the clinics segment. Using its database of potential customers, the company will identify key targets in select markets and connect with them through personalized emails and calls to schedule meetings with decision-makers.
Added
In connection with the March 2025 Units Offering, we entered into a finder’s fee agreement with Research Capital Corporation (“Research Capital”), pursuant to which the Company paid Research Capital at the closing of the March 2025 Units Offering (i) a payment of up to 7.5% of the gross proceeds raised from subscriptions in the March 2025 Units Offering from persons introduced to the Company by Research Capital, paid in cash; and (ii) the issuance of the Finder’s Warrant of the Company to Research Capital of up to 7.5% of the March 2025 Units subscribed for by person introduced to the Company by Research Capital.
Removed
The sales team, equipped with marketing materials, case studies, peer-reviewed publications, and knowledge gained from our current research partners, are focused on presenting the platform’s benefits and practical applications during these meetings. Follow-up efforts, including addressing questions and offering support by our Neurological Team, will aim to build strong client relationships and drive adoption of the platform.
Added
Each Finder’s Warrant is exercisable to purchase one additional Common Stock at $3.00 per share for a period of 3 years from the date of issuance of such Finder’s Warrant.
Removed
The clinical utility of EEG technology to support better outcomes for patients with mental illnesses and cognitive disorders has been well documented.
Added
Share Issuance to Wellington-Altus On April 29, 2025, the Company issued 16,666 shares of Common Stock to National Bank Financial Inc. as consideration for financial advisory services provided by Wellington-Altus Private Wealth Inc., at a price of $3.00 per share, for an aggregate amount of $49,998. Letter Agreements with BPY Limited and Nomis Bay Ltd.
Removed
Historically, clinical adoption of EEG by medical professionals, including psychiatrists, neurologists, nurse practitioners and general practitioners, has been limited due to the complexity of interpreting EEG recordings and the inability to practically compare a patient’s brain function to that of a clinically normal age-matched patient.
Added
On January 9, 2025, the Board approved the issuance of an aggregate of 122,407 shares of the Common Stock to BPY Limited (“BPY”) and an aggregate of 217,593 shares of Common Stock to Nomis Bay Ltd. (“Nomis Bay”), as an inducement for the exercise of their respective Common Stock purchase warrants dated August 12, 2024 (collectively, the “Investors Share Issuances”).
Removed
Firefly believes that without defining a standard deviation to the norm, it is not possible to objectively assess brain function. By establishing an objective baseline measurement of brain function, the BNA Platform enables clinicians to optimize patient care, leading to improved outcomes for people suffering from mental illnesses and cognitive disorders.
Added
On February 11, 2025, the Investors exercised such warrants (the “Prior Exercise”) in reliance on the Investors Share Issuances. On April 18, 2025, the Board approved the Company’s entry into separate letter agreements with BPY and Nomis Bay (collectively, the “Letter Agreements”) in connection with the Investors Share Issuance and in exchange for, and in reliance upon the Prior Exercise.
Removed
Our value proposition is supported by real-world use of the BNA Platform. Incorporating the BNA Platform as part of a patient management protocol demonstrated improved response rates, enhanced therapy compliance, reduced non-responder rates and a reduction in need for medication switching among patients.
Added
The Letter Agreements were executed on the same date.
Removed
Further, we believe that our extensive clinical database, when combined with advanced AI, provides the opportunity to identify clinically relevant biomarkers that will support better patient outcomes through precision medicine and companion diagnostics. We expect to gather additional data through the clinical deployments and clinical studies conducted by drug companies.
Added
Pursuant to the Letter Agreements, the Company agreed to issue common stock comprising the Investors Share Issuance within two (2) business days from the date of the Letter Agreements, with such shares to be registered in the manner designated by each Investor and each Investor granted the Company a broad release of any and all claims relating to the Prior Exercise.
Removed
This additional data may allow us to discover new biomarkers and objectively measure the impact of therapeutic interventions on patients of different types, further enhancing our platform’s effectiveness. We believe that we will be able to enhance accurate diagnosis and predict what therapy or drug, or a combination thereof, may be best suited to optimize patient outcomes.
Added
Share Issuance to Midwood Advisors On April 16, 2025, we issued 3,333 shares of Common Stock to Midwood Advisors LLC as consideration for financial advisory services, at a price of $3.00 per share, for an aggregate amount of $10,000. Settlement Agreement with Ian McLean and 1128526 Alberta Ltd.
Removed
This represents a paradigm shift in how clinicians manage patients with mental illnesses and cognitive disorders holding the potential to transform brain health. 52 Table of Contents Recent Developments Reverse Merger with WaveDancer On November 15, 2023, we entered into the Agreement and Plan of Merger (as amended, the “Merger Agreement”) with WaveDancer and FFN Merger Sub, Inc.
Added
On April 18, 2025, the Board approved the Company’s entry into a Mutual Release & Settlement Agreement (the “Settlement Agreement”) and a related Private Placement Subscription Agreement (the “Subscription Agreement”) with Ian McLean (“McLean”) and 1128526 Alberta Ltd.
Removed
(“Merger Sub”), pursuant to which, among other things, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub merged with and into Private Firefly, with Private Firefly becoming a wholly-owned subsidiary of WaveDancer and the surviving corporation of the merger (the “Merger”).
Added
(“1128526 Alberta”), an entity controlled by McLean (collectively, the “McLean Parties”), to resolve a dispute arising from McLean’s prior employment with the Company and a pending civil claim in the Ontario Superior Court of Justice.
Removed
On August 12, 2024, prior to the consummation of the Merger, WaveDancer effectuated a 1-for-3 reverse stock split of its common stock (the “Reverse Stock Split”).

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