Nature of the Business and Presentation (Policies) |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Nature of the Business and Presentation [Abstract] | |
| Basis of Presentation | Basis of Presentation
The Company’s condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) or an Accounting Standards Update (“ASU”).
These condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024. The condensed consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods. The results for the six months ended June 30, 2026 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2026, or any other period.
Beginning on April 1, 2026, the Company changed the presentation of certain costs on its condensed consolidated statement of operations. This voluntary change in classification of certain research and development and selling and marketing costs, resulted in a decrease in general and administrative expenses and offsetting increases in research and development and selling and marketing costs. Selling and marketing expense consists primarily of personnel-related costs associated with the Company’s commercial organization, allocated facilities costs, and commercialization readiness activities, including external consulting services, market access initiatives, and pricing studies. Refer to Note 4 for details of the composition of research and development expense. The Company believes this presentation is preferable as it will provide greater transparency regarding its operating expenses and aligns with how the business is managed.
In addition, the Company reclassified the amortization of debt issuance costs from financing related costs to net interest expense on its condensed consolidated statement of operations. The reclassification increased net interest expense and decreased financing related costs by $120 thousand for both the three and six months ended June 30, 2025.
These changes in classification have been applied retrospectively to all periods presented. These changes in presentation had no impact to revenue, cost of revenue, loss from operations, income (loss) before income taxes, income tax provision (benefit), net income (loss), earnings (loss) per common share, or other components of equity or cash flows. In addition, other expense information disclosed in Note 12 – Segment Information was adjusted for these changes.
Except as described elsewhere in Note 2 under the heading “Recently adopted accounting pronouncements,” there have been no material changes to the Company’s significant accounting policies as described in the audited consolidated financial statements as of December 31, 2025. |
| Principles of Consolidation | Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Spectral MD Holdings LLC, Spectral MD, Inc., Spectral MD UK Limited, and Spectral IP, Inc. (“Spectral IP”). Inter-company transactions and balances have been eliminated in consolidation. |
| Use of Estimates | Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheets and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, revenue recognition (including the measure of progress of completion), warrant liabilities, the fair value of certain debt, stock-based compensation expense, stock issued for transaction costs, the net realizable value of inventory, right-of-use assets, and income tax valuation allowances. Actual results could differ from these estimates. |
| Concentrations of Credit Risk | Concentrations of Credit Risk
Financial instruments which potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. Primarily all cash and cash equivalents is held in US financial institutions which, at times, exceed federally insured limits. The Company has not recognized any losses from credit risks on such accounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents.
Additional credit risk is related to the Company’s concentration of accounts receivable. As of June 30, 2026 and December 31, 2025, accounts receivable were concentrated from one customer (which is a U.S. government agency) representing approximately 96% and 100%, respectively, of the total accounts receivable. allowance for expected credit losses was recorded as of June 30, 2026 and December 31, 2025. One customer (which is a U.S. government agency) accounted for 93% and 88% for the three and six months ended June 30, 2026 and 92% and 94% for the three and six months ended June 30, 2025 of the recognized research and development revenue. |
| Risks and Uncertainties | Risks and Uncertainties
The Company is subject to a number of risks common to development stage companies in the medical technology industry, including, but not limited to, risks of failure of preclinical studies and clinical trials, dependence on key personnel, protection of proprietary technology, reliance on third party organizations, risks of obtaining regulatory approval for any products that it may develop, development by competitors of technological innovations, compliance with government regulations and the need to obtain additional financing. |
| Liquidity | Liquidity
As of June 30, 2026 and December 31, 2025, the Company had approximately $14.0 million and $15.4 million, respectively, in cash and cash equivalents, and an accumulated deficit of $63.4 million and $55.8 million, respectively. As of June 30, 2026 and December 31, 2025, the Company had approximately $14.9 million and $8.4 million, respectively, of debt outstanding of which $11.1 million and $5.5 million represented long-term debt as of such periods. The Company also had approximately $1.4 million of remaining undiscounted operating lease payments as of June 30, 2026, extending through February 2028.
On March 18, 2026, the Company received a contract modification from BARDA for the acceleration of $31.7 million from its existing contract with BARDA which included (i) a no-cost extension of the base phase of the contract, and (ii) the acceleration of certain parts of the next phase of such contract. As part of this funding advance, the Company has committed to fund $9.7 million of the total overall development costs associated with these feature advancements. This funding comes as part of an ongoing partnership with BARDA, which has committed $86.6 million to date under the contract with an overall value of approximately $150 million.
As of June 30, 2026, based on our current operating plan, our cash and cash equivalents, together with commitments under the PBS BARDA Contract, and availability under the Yorkville SEPA, provide sufficient working capital to fund operations for at least one year beyond the release date of the condensed consolidated financial statements. Refer to Note 5 for the terms of the Company’s outstanding debt and Note 6 for details on the Company’s warrants.
We have based this determination on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Changing circumstances could also cause us to consume capital significantly faster than we currently anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of circumstances beyond our control. To the extent additional capital is necessary, there are no assurances that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to execute our business plans and the continued work on indications beyond expanding our burn indication. |
| Recently Adopted Accounting Standards | Recently Adopted Accounting Standards
In July 2025, the FASB issued ASU No. 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, (“ASU 2025-05”) which provides a practical expedient to measure credit losses on accounts receivable and contract assets. The Company adopted this guidance prospectively in the three months ended March 31, 2026. The adoption of ASU 2025-05 did not have a material impact on the consolidated financial statements and related disclosures. |
| Recently Issued Accounting Standards | Recently Issued Accounting Standards
In October 2023, the FASB issued ASU 2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”), which modifies certain disclosure and presentation requirements of a variety of Topics in the Codification and is intended to both clarify or improve such requirements and align the requirements with the SEC’s regulations. The effective date for each amendment is the effective date of the removal of the related disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited. The Company will apply the provisions prospectively as such provisions become effective and does not expect ASU 2023-06 to have a material impact on the consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement- Reporting Comprehensive Income- Expense Disaggregation Disclosures (Subtopic 220-40), requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures. |