6. COMMITMENTS AND CONTINGENCIES

Operating Leases

Our corporate office, which includes administrative, research and development, marketing and production facilities, is located in a 12,835 square-foot leased property.

The Company’s operating lease was modified in December 2025 to extend the lease term through July 31, 2031. Accordingly, during the year ended December 31, 2025, the Company accounted for the extension as a lease modification and remeasured the related operating lease liability and ROU asset based on the revised lease term. The remeasurement resulted in an increase of $642 thousand to both the operating lease liability and the corresponding ROU asset. The amended lease term now expires on July 31, 2031.

Operating lease cost recognized for this lease was $84 thousand and $55 thousand for the six months ended June 30, 2026 and 2025, respectively. The table below presents total operating lease right-of-use asset and lease liability as of June 30, 2026 and December 31, 2025 (in thousands):

The table below presents the maturities of the operating lease liability as of June 30, 2026 (in thousands):

The table below presents the weighted-average remaining lease term and discount rate used in the calculation of the operating lease right-of-use asset and lease liability as of June 30, 2026 and December 31, 2025:

Cash paid for the operating lease liability was $50 thousand and $59 thousand during the six months ended June 30, 2026 and 2025, respectively.

Related Party Contracts

Executive Compensation Agreement

On June 3, 2025, the Company's Board of Directors approved a revised compensation agreement for the Company’s Chief Executive Officer (“CEO”), Dr. Mark Faupel. As of June 30, 2026, Dr. Faupel is entitled to:

Additionally, deferred salary of $374 thousand, which had accrued as of May 23, 2025, will continue accruing interest at an annual rate of 6%, and Dr. Faupel’s annual compensation was increased to $240 thousand effective June 1, 2025. Up to $100 thousand of this salary may be deferred at Dr. Faupel’s discretion, accruing interest at 6%.

Dr. Faupel’s deferred compensation totaled approximately $557 thousand and $473 thousand as of June 30, 2026 and December 31, 2025, respectively. The deferred compensation accrues interest at a rate of 6% and is convertible at his option into common stock at a conversion price of $0.25 per share. All amounts owed to Dr. Faupel are payable within ten business days if his position as Chief Executive Officer is terminated by the Board.

Because settlement into equity is at the employee's election, the conversion feature does not qualify for equity classification and is accounted for as a liability-classified award under ASC 718. Accordingly, the conversion feature is measured at fair value at each reporting date, with changes in fair value recognized as compensation cost or a reduction thereof in the condensed consolidated statements of operations.

During the year ended December 31, 2025, the fair value of the conversion feature was determined based on its intrinsic value, representing the excess of the Company's closing stock price over the $0.25 conversion price. Accordingly, the Company recognized $548 thousand of compensation expense during 2025 and recorded a corresponding liability classified as "Deferred compensation conversion liability, at fair value" on the condensed consolidated balance sheets.

During the six months ended June 30, 2026, the Company's stock price fell below the $0.25 conversion price, rendering the feature out-of-the-money. Accordingly, the fair value was estimated using the Black-Scholes option pricing model, which captures the remaining time value of the conversion right. The model utilized an expected term of approximately 1.3 years, stock price of $0.24, exercise price of $0.25, volatility of 171.9%, risk-free interest rate of 3.98%, and no expected dividends.

The fair value of the deferred compensation conversion liability was $326 thousand and $548 thousand as of June 30, 2026 and December 31, 2025, respectively. During the six months ended June 30, 2026, the Company recognized a gain on the remeasurement of the deferred compensation conversion liability of $222 thousand.

Related Party Debt

See Note 9, “Related Party Debt” for details regarding debt issued to related parties.

Advisory Services Agreement

The Company has an ongoing consulting arrangement with Ironstone Capital Corp. (the “Advisory Group”) and Alan Grujic to provide marketing and investor relations services. Under the current agreement, the Company pays the Advisory Group a monthly fee of $2,500, which has been extended through July 31, 2026.

Expense recognized under this arrangement was $15 thousand for the six months ended June 30, 2026 and 2025.

Other Commitments

On January 22, 2017, we entered into a license agreement with Shandong Yaohua Medical Instrument Corporation (“SMI”), as amended on March 28, 2017, pursuant to which we granted SMI an exclusive global license to manufacture the LuViva device and related disposables (subject to a carve-out for manufacturing in Turkey). On December 18, 2018, we entered into a co-development agreement with Newmars Technologies, Inc. (“NTI”), whereby NTI performs final assembly of the LuViva device for its contracted distribution countries in Eastern Europe and Russia at its ISO 13485 facility in Hungary. This additional carve-out was agreed to by SMI.

The Company then entered into several amendments to the SMI agreement, the most recent of which was executed on May 8, 2025. During the three months ended March 31, 2025, the Company and SMI agreed to apply previous payments towards reimbursement of expenses the Company incurred in prior periods. As a result of this agreement, the Company recognized $184 thousand of deferred revenue in income, which is included in “Other income” during the six months ended June 30, 2025.

During the fourth quarter of 2025, SMI failed to fulfill certain obligations under the agreement and consequently lost its rights to manufacture and distribute LuViva in China.

Following the May 2025 amendment, we entered into a purchase agreement with HDMT for 35 LuViva devices (without rolling carts) totaling $700 thousand. As of June 30, 2026, seven devices had been paid for and shipped, with four additional units completed. On July 10, 2026 we received a payment of $80 thousand for these four devices. They are expected to ship later in 2026. Additionally, on November 11, 2025, we entered into a purchase agreement with YMIC for $200 thousand of LuViva parts and components used in our single-use cervical guides. On June 30, 2026, we executed an agreement with YMIC which amended the November 11, 2025 agreement such that YMIC would supply Guided Therapeutics with approximately $300 thousand worth of parts and cash payments in return for certain services and finished goods. In addition, YMIC committed to purchasing 50 LuViva devices and 500,000 single-use components upon approval of LuViva by NMPA 

Contingencies

The conflict in Ukraine, which has already affected global financial markets, continues to create uncertainty that could impact the Company’s operating business. Although approval to market and sell the Company’s products in Russia was granted on August 11, 2025, ongoing geopolitical tensions could still disrupt supply chains, distribution activities, or future regulatory interactions within the region. The ultimate impact of the conflict remains highly uncertain, and the Company cannot provide assurance that it will not have a material adverse effect on its operations, financial condition, or future regulatory matters.

Recent conflicts and heightened geopolitical tensions in the Middle East have contributed to increased uncertainty in global financial markets and may result in volatility in commodity prices, including oil and natural gas, as well as disruptions to international trade routes. Any escalation or expansion of these conflicts could adversely affect global supply chains, increase transportation and energy costs, and create additional regulatory or economic uncertainty. While the conflicts had no direct effect on us, the indirect effects of continued instability could adversely impact the Company’s operations, financial condition, and results of operations.

In 2025, the U.S. government invoked the International Emergency Economic Powers Act ("IEEPA") to impose broad tariffs on imports from China and other trading partners, creating significant uncertainty with respect to future tax and trade regulations and the potential competitive effects of such actions. On February 20, 2026, the U.S. Supreme Court ruled 6-3 that IEEPA does not authorize the imposition of tariffs, and all IEEPA-based tariffs were terminated effective February 24, 2026. Following the ruling, the administration announced a 10% global tariff under Section 122 of the Trade Act of 1974, which expired on July 24, 2026.

The Company's primary exposure to tariff-related risk arises not from U.S. import tariffs but from China's retaliatory trade measures and broader geopolitical and trade uncertainty, given that the Company's revenue is derived primarily from the sale of medical devices to customers in China. Although the countries in which our products are manufactured or imported may from time to time impose additional quotas, duties, tariffs, or other restrictions, or adversely modify existing ones, we have established an auxiliary manufacturing site in Hungary. This strategic initiative helps mitigate our exposure to tariffs targeting Chinese imports and limits the overall impact on our operations. Nevertheless, it remains unclear what the U.S. administration or foreign governments will do with respect to tariffs, tax policies, or other international trade agreements going forward. A trade war, other governmental actions related to tariffs or international trade agreements, or changes in U.S. or foreign social, political, regulatory and economic conditions—especially as they relate to manufacturing and investment—could materially adversely affect the Company's business, financial condition, operating results, and cash flows.