0001213900-26-057987
SEC filingRevenue declined sharply as the prior period's ASPIS license fee did not recur, but aggressive cost reductions narrowed operating losses and generated positive operating cash flow.
Revenue for the first quarter of 2026 was $17.3K, a decrease of 91.3% compared to $199.3K in the same period last year. The decline was primarily due to a change in revenue mix: the prior year included a one-time ASPIS license fee, while current revenue was entirely attributable to the Company's legacy Xcite business. The Xcite revenue did not incur associated cost of revenues during the period, resulting in a gross profit of $17.3K, down 90.9% from $191.1K. Gross margin remained at 100%.
Operating income improved 30.2% to -$818.7K from -$1.2M in the prior year. The improvement was primarily due to a decrease in administrative employees and stock compensation, as well as a reduction in software costs. Net income improved 29.0% to -$683.2K from -$961.7K, and diluted EPS improved to -$0.14 from -$0.20. The decrease in expenses and headcount offset the decline in revenue, leading to narrower losses.
Net cash provided by operating activities was $143.9K, a significant improvement from -$641.4K in the prior year. This turnaround was primarily the result of decreased expenses and headcount. The Company's primary cash needs remain for working capital, headcount, capital expenditures, and funding operations. Since inception, the Company has incurred operating losses as it continues to invest in developing and commercializing its technology platform. Management believes that continued focus on strategic partnerships, product licensing, and disciplined cost management may provide opportunities to improve liquidity and position the business for longer-term growth. However, material uncertainties remain until additional financing or sustained positive cash flows are achieved. The Company expects to receive the remaining balance of the purchase price from a stock purchase agreement in the near future.