0001497253falseQ2--03-312025http://www.vivosim.ai/20250930#ExecutiveChairmanMember0001497253vivs:EquityIncentivePlanTwoThousandTwelveMember2025-09-300001497253vivs:MetacrinesFxrProgramMembersrt:MaximumMember2025-04-012025-09-300001497253vivs:ViscientBiosciencesMember2025-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-04-012025-06-300001497253us-gaap:SellingGeneralAndAdministrativeExpensesMember2025-07-012025-09-300001497253vivs:CommonWarrantsMember2025-03-310001497253us-gaap:AdditionalPaidInCapitalMember2025-04-012025-06-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMembervivs:VestingCriteriaBasedOnAchievingCumulativeRevenueMember2024-08-052024-08-050001497253us-gaap:GeneralAndAdministrativeExpenseMember2025-07-012025-09-300001497253us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001497253us-gaap:EmployeeStockOptionMember2025-04-012025-09-300001497253us-gaap:IPOMembervivs:JonestradingInstitutionalServicesLlcMember2024-05-082024-05-080001497253vivs:PreFundedWarrantMember2025-09-300001497253vivs:ESPPSharesMember2024-04-012024-09-3000014972532025-04-012025-06-3000014972532024-05-082024-05-080001497253vivs:MetacrineIncMember2025-03-250001497253vivs:MetacrineIncMember2025-03-252025-03-250001497253vivs:TwoThousandTwentyThreeEmployeeStockPurchasePlanMember2023-10-310001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMemberus-gaap:EmployeeStockOptionMember2024-08-052024-08-050001497253us-gaap:RetainedEarningsMember2025-06-300001497253us-gaap:RetainedEarningsMember2024-07-012024-09-300001497253vivs:ESPPSharesMember2025-04-012025-09-300001497253vivs:TwoThousandTwentyThreeEmployeeStockPurchasePlanMember2025-09-300001497253us-gaap:RestrictedStockUnitsRSUMember2025-04-012025-09-300001497253us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-04-012024-09-300001497253vivs:SanDiegoPermanentLeaseMember2020-11-230001497253us-gaap:GeneralAndAdministrativeExpenseMember2025-04-012025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMembervivs:VestingCriteriaBasedOnDefinitiveAgreementMember2024-08-052024-08-050001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMember2022-07-2500014972532025-03-310001497253vivs:ViscientBiosciencesMember2024-04-012024-09-300001497253us-gaap:PerformanceSharesMembervivs:ExecutiveChairmanMember2024-08-052024-08-050001497253us-gaap:EmployeeStockOptionMembervivs:TwoThousandAndTwentyOneInducementEquityPlanMember2025-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-300001497253vivs:BICOGroupABMember2024-04-012024-09-3000014972532024-06-300001497253us-gaap:RoyaltyMember2024-04-012024-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001497253us-gaap:EmployeeStockOptionMembervivs:EquityIncentivePlanTwoThousandTwelveMember2025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMemberus-gaap:EmployeeStockOptionMember2025-09-300001497253us-gaap:AdditionalPaidInCapitalMember2025-03-3100014972532024-03-310001497253us-gaap:CommonStockMember2024-07-012024-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMember2024-07-012024-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMember2022-10-120001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-09-300001497253us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001497253vivs:InsurancePremiumFinancingLiabilityMember2025-09-300001497253vivs:SanDiegoPermanentLeaseMember2021-11-172021-11-170001497253us-gaap:TreasuryStockCommonMember2025-07-012025-09-300001497253vivs:ProspectusToTwoThousandAndTwentyFourShelfMembervivs:AtTheMarketFacilityMember2025-04-012025-09-3000014972532024-07-012024-09-300001497253us-gaap:ResearchAndDevelopmentExpenseMember2025-07-012025-09-300001497253vivs:AtTheMarketFacilityMember2025-04-012025-09-3000014972532025-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001497253vivs:ProspectusToTwoThousandAndTwentyFourShelfMembervivs:AtTheMarketFacilityMembersrt:MaximumMember2025-04-110001497253vivs:InsurancePremiumFinancingLiabilityMember2025-03-310001497253vivs:BICOGroupABMember2024-07-012024-09-300001497253us-gaap:ProductMember2024-07-012024-09-300001497253vivs:ViscientBiosciencesMember2025-04-012025-09-300001497253us-gaap:AccruedLiabilitiesMember2025-09-3000014972532021-12-170001497253us-gaap:CommonStockMember2025-07-012025-09-300001497253vivs:CommonWarrantsMemberus-gaap:IPOMembersrt:MaximumMember2024-05-080001497253vivs:ESPPSharesMember2024-07-012024-09-300001497253us-gaap:OperatingSegmentsMember2024-04-012024-09-3000014972532025-03-252025-03-250001497253us-gaap:CommonStockMember2025-09-300001497253us-gaap:PerformanceSharesMember2024-08-050001497253us-gaap:CommonStockMember2024-06-300001497253vivs:CommonWarrantsMemberus-gaap:IPOMembersrt:MaximumMember2024-08-050001497253vivs:InducementAwardAgreementsMember2022-02-280001497253us-gaap:RetainedEarningsMember2024-03-310001497253vivs:AtTheMarketFacilityMember2025-09-300001497253us-gaap:TreasuryStockCommonMember2025-03-310001497253us-gaap:ResearchAndDevelopmentExpenseMember2025-04-012025-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMember2025-07-012025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwelveMember2022-10-120001497253us-gaap:CommonStockMember2024-04-012024-06-300001497253us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-07-012024-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMember2024-05-082024-05-080001497253vivs:InsurancePremiumFinancingLiabilityMember2025-09-012025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwelveMember2022-07-252022-10-120001497253us-gaap:IPOMember2024-05-132024-05-130001497253us-gaap:ProductMember2025-04-012025-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:ProductMember2024-07-012024-09-300001497253vivs:AtTheMarketFacilityMembervivs:TwoThousandAndTwentyFourShelfMember2025-09-300001497253us-gaap:CommonStockMember2025-04-012025-06-300001497253us-gaap:SellingGeneralAndAdministrativeExpensesMember2025-04-012025-09-300001497253us-gaap:RetainedEarningsMember2025-09-300001497253us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001497253us-gaap:RoyaltyMember2025-07-012025-09-300001497253us-gaap:RetainedEarningsMember2024-09-300001497253vivs:ProspectusToTwoThousandAndTwentyFourShelfMembervivs:AtTheMarketFacilityMembersrt:MaximumMember2025-02-260001497253vivs:ViscientBiosciencesMember2024-07-012024-09-300001497253us-gaap:RetainedEarningsMember2025-03-310001497253us-gaap:AdditionalPaidInCapitalMember2025-06-300001497253vivs:UniversityOfMissouriMember2022-12-052022-12-050001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-07-012025-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001497253vivs:IncentiveAwardPlanMemberus-gaap:EmployeeStockOptionMember2025-09-300001497253vivs:BICOGroupABMember2022-02-222022-02-220001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMembervivs:VestingCriteriaBasedOnMarketConditionsMember2024-08-052024-08-050001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMember2025-04-012025-09-300001497253us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001497253vivs:TwoThousandTwentyThreeEmployeeStockPurchasePlanMember2025-04-012025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMemberus-gaap:RestrictedStockUnitsRSUMember2025-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMember2025-04-012025-09-3000014972532025-04-012025-09-300001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001497253vivs:UniversityOfMissouriMember2009-03-012009-03-310001497253us-gaap:CommonStockMember2024-03-310001497253us-gaap:TreasuryStockCommonMember2025-06-300001497253us-gaap:RestrictedStockUnitsRSUMember2025-09-3000014972532025-07-012025-09-300001497253vivs:MetacrineIncMembervivs:MetacrinesFxrProgramMember2025-03-252025-03-250001497253us-gaap:RetainedEarningsMember2024-04-012024-06-300001497253us-gaap:RetainedEarningsMember2025-04-012025-06-300001497253us-gaap:RoyaltyMember2025-04-012025-09-300001497253us-gaap:ResearchAndDevelopmentExpenseMember2024-04-012024-09-3000014972532024-04-012024-06-300001497253us-gaap:OperatingSegmentsMemberus-gaap:RoyaltyMember2024-04-012024-09-3000014972532024-04-012024-09-300001497253us-gaap:IPOMember2024-05-082024-05-080001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001497253vivs:CommonWarrantsMember2024-05-082024-05-080001497253us-gaap:AdditionalPaidInCapitalMember2024-06-300001497253us-gaap:RoyaltyMember2024-07-012024-09-300001497253us-gaap:AdditionalPaidInCapitalMember2024-09-300001497253us-gaap:CommonStockMember2025-03-310001497253us-gaap:TreasuryStockCommonMember2025-09-300001497253us-gaap:OperatingSegmentsMember2025-07-012025-09-300001497253us-gaap:OperatingSegmentsMember2024-07-012024-09-300001497253us-gaap:RetainedEarningsMember2024-06-300001497253us-gaap:CommonStockMember2024-09-300001497253us-gaap:TreasuryStockCommonMember2024-09-300001497253us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-09-300001497253us-gaap:RestrictedStockUnitsRSUMember2025-03-310001497253vivs:PreFundedWarrantMember2024-05-080001497253us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310001497253us-gaap:TreasuryStockCommonMember2024-04-012024-06-3000014972532025-06-300001497253vivs:CommonWarrantsMember2024-05-080001497253vivs:CommonWarrantsMember2025-09-300001497253vivs:ViscientBiosciencesMember2025-03-310001497253vivs:BICOGroupABMembervivs:SalesBasedRoyaltiesMember2025-04-012025-09-300001497253vivs:TwoThousandAndTwentyTwoInducementEquityPlanMember2022-10-120001497253us-gaap:OperatingSegmentsMemberus-gaap:ProductMember2025-07-012025-09-300001497253us-gaap:IPOMember2024-01-260001497253vivs:PreFundedWarrantMember2024-08-0500014972532025-11-010001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMemberus-gaap:CommonStockMembersrt:MaximumMember2022-10-120001497253us-gaap:AdditionalPaidInCapitalMember2025-09-300001497253us-gaap:TreasuryStockCommonMember2024-06-300001497253vivs:ESPPSharesMember2025-07-012025-09-300001497253vivs:CommonWarrantsMember2025-04-012025-09-300001497253us-gaap:OperatingSegmentsMember2025-04-012025-09-300001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMemberus-gaap:CommonStockMember2022-07-250001497253vivs:TwoThousandAndTwentyOneInducementEquityPlanMember2021-03-310001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMember2025-09-300001497253srt:MinimumMember2025-04-012025-09-300001497253vivs:CommonWarrantsMemberus-gaap:IPOMember2024-08-052024-08-050001497253vivs:EquityIncentivePlanTwoThousandTwentyTwoMembervivs:ExecutiveChairmanMember2024-08-052024-08-050001497253us-gaap:ProductMember2024-04-012024-09-300001497253vivs:PreFundedWarrantMember2024-05-082024-05-0800014972532024-09-300001497253us-gaap:TreasuryStockCommonMember2025-04-012025-06-300001497253vivs:BICOGroupABMembervivs:SalesBasedRoyaltiesMember2025-07-012025-09-300001497253us-gaap:TreasuryStockCommonMember2024-07-012024-09-300001497253us-gaap:EmployeeStockOptionMembervivs:TwoThousandTwentyThreeEmployeeStockPurchasePlanMember2025-09-300001497253us-gaap:ProductMember2025-07-012025-09-300001497253us-gaap:CommonStockMember2025-06-300001497253vivs:InsurancePremiumFinancingLiabilityMember2025-04-012025-09-300001497253us-gaap:RetainedEarningsMember2025-07-012025-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:ProductMember2024-04-012024-09-300001497253us-gaap:OperatingSegmentsMemberus-gaap:ProductMember2025-04-012025-09-300001497253vivs:AtTheMarketFacilityMember2025-07-012025-09-300001497253vivs:ARTwoThousandTwentyTwoPlanMember2022-10-120001497253us-gaap:RestrictedStockUnitsRSUMembervivs:EquityIncentivePlanTwoThousandTwelveMember2025-09-300001497253vivs:TwoThousandAndTwentyFourShelfMember2025-09-300001497253vivs:MetacrineIncMembervivs:MetacrinesFxrProgramMember2025-03-310001497253vivs:SanDiegoPermanentLeaseMember2020-11-232020-11-230001497253us-gaap:AdditionalPaidInCapitalMember2024-03-310001497253vivs:ProspectusToTwoThousandAndTwentyFourShelfMembervivs:AtTheMarketFacilityMembersrt:MaximumMember2024-01-260001497253us-gaap:AdditionalPaidInCapitalMember2025-07-012025-09-300001497253vivs:CommonWarrantsMember2024-08-050001497253vivs:ViscientBiosciencesMember2025-07-012025-09-300001497253us-gaap:TreasuryStockCommonMember2024-03-31xbrli:pureutr:sqftxbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35996

VivoSim Labs, Inc.

(Exact name of registrant as specified in its charter)


Delaware		27-1488943
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11555 Sorrento Valley Rd, Suite 100, San Diego, CA 92121		(858) 224-1000
(Address of principal executive offices and zip code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of Each Exchange on which registered
Common Stock, $0.001 par value	VIVS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2025, a total of 2,607,962 shares of the registrant’s Common Stock, $0.001 par value, were outstanding.

VIVOSIM LABS, INC.

INDEX

PART I. FINANCIAL INFORMATION


Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and March 31, 2025	3
	Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the Three and Six Months Ended September 30, 2025 and 2024	4
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended September 30, 2025 and 2024	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended September 30, 2025 and 2024	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosure	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIVOSIM LABS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except for share and per share data)


	September 30, 2025			March 31, 2025
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	6,677		$	11,312
Accounts receivable		32			30
Prepaid expenses and other current assets		882			789
Total current assets		7,591			12,131
Fixed assets, net		300			419
Restricted cash		143			143
Operating lease right-of-use assets		641			867
Escrow receivable		1,008			1,000
Prepaid expenses and other assets, net		3			90
Total assets	$	9,686		$	14,650
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	580		$	1,644
Accrued expenses		771			1,226
Insurance premium financing liability		352			128
Liability to be settled in equity		218			218
Operating lease liability, current portion		528			521
Total current liabilities		2,449			3,737
Operating lease liability, net of current portion		172			421
Total liabilities		2,621			4,158
Commitments and Contingencies (Note 6)
Stockholders’ Equity
Common stock, $0.001 par value; 200,000,000 shares authorized, 2,607,962 and 1,898,068 shares issued and outstanding at September 30, 2025 and March 31, 2025, respectively		3			2
Additional paid-in capital		354,607			352,648
Accumulated deficit		(347,545	)		(342,157	)
Treasury stock, 3 shares at cost		—			(1	)
Total stockholders’ equity		7,065			10,492
Total Liabilities and Stockholders’ Equity	$	9,686		$	14,650

The accompanying notes are an integral part of these condensed consolidated financial statements.

VIVOSIM LABS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(in thousands except share and per share data)


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Revenues
Royalty revenue	$	28		$	28		$	65		$	53
Product revenue		—			2			—			16
Total Revenues		28			30			65			69
Cost of revenues		—			1			—			3
Research and development expenses		923			984			1,924			2,386
Selling, general and administrative expenses		1,740			1,653			3,691			3,674
Total costs and expenses		2,663			2,638			5,615			6,063
Loss from Operations		(2,635	)		(2,608	)		(5,550	)		(5,994	)
Other Income (Expense)
Interest income		92			59			168			103
Interest expense		—			—			(4	)		—
Total Other Income		92			59			164			103
Income Tax Expense		(2	)		—			(2	)		(2	)
Net Loss	$	(2,545	)	$	(2,549	)	$	(5,388	)	$	(5,893	)
Other Comprehensive loss:
Unrealized gain on available-for-sale debt securities	$	—		$	1		$	—		$	1
Comprehensive Loss	$	(2,545	)	$	(2,548	)	$	(5,388	)	$	(5,892	)
Net loss per common share—basic and diluted	$	(0.98	)	$	(1.68	)	$	(2.11	)	$	(4.32	)
Weighted average shares used in computing net loss per common share—basic and diluted		2,604,950			1,499,544		$	2,554,419			1,361,518

The accompanying notes are an integral part of these condensed consolidated financial statements.

VIVOSIM LABS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)


	Three and Six Months Ended September 30, 2025

	Common Stock							Treasury Stock
	Shares		Amount		Additional Paid-in Capital			Shares		Amount			Accumulated Deficit			Accumulated Other Comprehensive Income		Total
Balance at March 31, 2025		1,898	$	2	$	352,648			—	$	(1	)	$	(342,157	)	$	—	$	10,492
Retirement of treasury stock		—		—		(1	)		—		1			—			—		—
Issuance of common stock from public offering, net		702		1		1,810			—		—			—			—		1,811
Stock-based compensation expense		—		—		78			—		—			—			—		78
Net loss		—		—		—			—		—			(2,843	)		—		(2,843	)
Balance at June 30, 2025		2,600	$	3	$	354,535			—	$	—		$	(345,000	)	$	—	$	9,538
Issuance of common stock under employee and director stock option, RSU, and purchase plans		8		—		—			—		—			—			—		—
Stock-based compensation expense		—		—		72			—		—			—			—		72
Net loss		—		—		—			—		—			(2,545	)		—		(2,545	)
Balance at September 30, 2025		2,608	$	3	$	354,607			—	$	—		$	(347,545	)	$	—	$	7,065

	Three and Six Months Ended September 30, 2024

	Common Stock							Treasury Stock
	Shares		Amount		Additional Paid-in Capital			Shares		Amount			Accumulated Deficit			Accumulated Other Comprehensive Income		Total
Balance at March 31, 2024		840	$	1	$	343,270			—	$	(1	)	$	(339,669	)	$	—	$	3,601
Issuance of common stock from exercise of pre-funded warrants		115		—		1			—		—			—			—		1
Issuance of common stock from public offering, net		243		—		6,248			—		—			—			—		6,248
Stock-based compensation expense		—		—		156			—		—			—			—		156
Net loss		—		—		—			—		—			(3,344	)		—		(3,344	)
Balance at June 30, 2024		1,198	$	1	$	349,675			—	$	(1	)	$	(343,013	)	$	—	$	6,662
Issuance of common stock from exercise of pre-funded warrants		83		—		1			—		—			—			—		1
Stock-based compensation expense		—		—		155			—		—			—			—		155
Financing Fees		—		—		(590	)		—		—			—			—		(590	)
Net loss		—		—		—			—		—			(2,549	)		—		(2,549	)
Unrealized gain on available-for-sale debt securities		—		—		—			—		—			—			1		1
Balance at September 30, 2024		1,281	$	1	$	349,241			—	$	(1	)	$	(345,562	)	$	1	$	3,680

The accompanying notes are an integral part of these condensed consolidated financial statements.

VIVOSIM LABS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended			Six Months Ended
	September 30, 2025			September 30, 2024
Cash Flows From Operating Activities
Net loss	$	(5,388	)	$	(5,893	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest accretion on escrow receivable		(8	)		—
Accretion on investments		—			(33	)
Write-downs of inventory		—			160
Depreciation and amortization		120			138
Stock-based compensation		150			311
Non-cash lease expense		226			212
Increase (decrease) in cash resulting from changes in:
Accounts receivable		(2	)		4
Inventory		—			(503	)
Prepaid expenses and other assets		345			255
Accounts payable		(1,064	)		(208	)
Accrued expenses		(455	)		152
Operating lease liability		(242	)		(220	)
Net cash used in operating activities		(6,318	)		(5,625	)
Cash Flows From Investing Activities
Purchases of fixed assets		—			(13	)
Purchases of investments		—			(2,467	)
Maturities of investments		—			2,500
Net cash provided by investing activities		—			20
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net		1,811			5,878
Repayment of insurance premium financing liability		(128	)		—
Net cash provided by financing activities		1,683			5,878
Net (decrease) increase in cash, cash equivalents, and restricted cash		(4,635	)		273
Cash, cash equivalents, and restricted cash at beginning of period		11,455			3,044
Cash, cash equivalents, and restricted cash at end of period	$	6,820		$	3,317
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	6,677		$	3,174
Restricted cash		143			143
Total cash, cash equivalents, and restricted cash	$	6,820		$	3,317
Supplemental Disclosure of Cash Flow Information:
Income taxes paid	$	2		$	2
Financed insurance premium exchanged for prepaid insurance	$	352		$	385
Liability to be settled in equity	$	—		$	218
Interest paid	$	4		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

VivoSim Labs, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1. Description of Business

Nature of Operations

VivoSim Labs, Inc., formerly known as Organovo Holdings, Inc. ("VivoSim" and the “Company”), is a pharmaceutical and biotechnology services company that is focused on providing testing of drugs and drug candidates in three-dimensional (“3D”) human tissue models of liver and intestine. The Company offers partners liver and intestinal toxicology insights using its new approach methodologies ("NAM") models. The Company anticipates accelerated adoption of human tissue models following the U.S. Food and Drug Administration (“FDA") announcement on April 10, 2025 to refine animal testing requirements in favor of these non-animal NAM methods. The Company will also offer bespoke services in the areas of investigational toxicology, mechanism of drug action elucidation, and other applications of these complex human tissue models.

The Company also advances product candidates to treat inflammatory bowel disease ("IBD") discovered and developed using its complex human tissue intestinal models. Prior to March 2025, the Company was a clinical stage biotechnology company that was focused on developing FXR314 in IBD, including ulcerative colitis ("UC"), based on demonstration of clinical promise in 3D human tissues as well as strong preclinical data. The Company's clinical focus was in advancing FXR314 in IBD, including UC and Crohn’s disease ("CD"). The Company planned to start a Phase 2a clinical trial in UC in the calendar year 2025 and was also exploring the potential for combination therapies using FXR314 and approved mechanisms in preclinical animal studies and the Company's IBD disease models. The Company also has advanced a second program since 2023, a novel drug that will be a new chemical entity (“NCE”) to an undisclosed target discovered in its intestinal models to have activity for UC and CD. This drug program (the “Preclinical IBD Program”) has now left the in-silico phase in recent quarters, and has moved to medicinal chemistry stage, the real-world synthesis of novel candidate compounds.

In March 2025, the Company sold its FXR program for $10.0 million, with $9.0 million paid at closing and $1.0 million held in escrow for a period of 15 months, with future milestones of up to $50.0 million in the aggregate to be paid if the asset, FXR314, hits key development, regulatory and commercial milestones.

Effective April 24, 2025, the Company changed its corporate name to VivoSim Labs, Inc. by filing a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. The Company changed its name to reflect its new business model, which includes the use of other longstanding assets of the Company, intestinal and liver tox models and expertise, and its IP portfolio for 3D bioprinting.

The Company continues to advance its Preclinical IBD Program, with the goal of having a product candidate ready for an Investigational New Drug (“IND Application”) with the FDA by December 2026.

The Company is now offering liver toxicology predictive screening and research services as well as working on predicting and studying the intestinal side effect profiles of drugs that are therapeutic candidates of pharmaceutical and biotech companies at all stages of drug development. The Company's services offer the potential benefit of reducing the significant risk and cost of bringing therapeutics to market through the regulatory process. It is estimated that less than 10% of drug candidates entering clinical trials are approved, with a portion of the failures due to unexpected liver toxicity or intestinal intolerability. In addition, even approved drugs are occasionally withdrawn after liver toxicity is determined to be caused by the drug in a phenomenon called drug induced liver injury. The Company presented findings at the May 2025 Digestive Disease Week scientific conference showing that the liver toxicology platform had a best-in-class predictive power. VivoSim's liver predictive power was shown to be 87.5% for a set of challenging liver toxicity cases – inclusive of classic cases of “liver tox misses” drugs with unforeseen liver toxicity found in clinical trials or drugs that were withdrawn from the market after liver toxicity issues emerged later. The platform identified correctly that 87.5% of the known liver-toxic drugs could be seen as liver toxic using NAMkind™ liver. This is known as the sensitivity of the platform, which at 87.5% is a world’s best. Importantly, the specificity was 100%, meaning that none of the compounds tested that are not liver toxic were incorrectly identified as having liver toxicity issues by the platform.

The Company uses its proprietary technologies to build functional 3D human tissues that mimic key aspects of native human tissue composition, architecture, function, and disease. The Company believes these attributes can enable critical complex, multicellular disease models that can be used to study and develop clinically effective drugs across multiple therapeutic areas.

The Company has also used these human disease models to identify new molecular targets responsible for driving IBD and to explore the mechanism of action of known drugs including JAK inhibitors and related molecules. A portion of its internal research continues to focus on early stage internal drug discovery programs, validating targets, and testing potentially licensable or transactable external

drug compounds to identify drug candidates for partnering and/or internal clinical development. This includes the Preclinical IND Program, which has reached a more mature stage than other efforts in this area.

Except where specifically noted or the context otherwise requires, references to “VivoSim” and “the Company” in these notes to the unaudited condensed consolidated financial statements refers to VivoSim Labs, Inc. and its wholly owned subsidiaries, Organovo, Inc., and VivoSim, Inc.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not necessarily include all information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet at March 31, 2025 is derived from the Company’s audited consolidated balance sheet as filed with the SEC on June 5, 2025.

The unaudited condensed consolidated financial statements include the accounts of VivoSim and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the unaudited financial information for the interim periods presented reflects all adjustments, which are only normal and recurring, necessary for a fair statement of the Company’s financial position, results of operations, stockholders’ equity and cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, as filed with the Securities and Exchange Commission (“SEC”). Operating results for any interim period are not necessarily indicative of the operating results for any other interim period or the Company’s full fiscal year ending March 31, 2026 (see “Note 1. Description of Business”).

Liquidity and Going Concern

The accompanying condensed consolidated financial statements have been prepared on the basis that the Company is a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2025, the Company had cash and cash equivalents of approximately $6.7 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $347.5 million. The restricted cash was pledged as collateral for a letter of credit that the Company is required to maintain as a security deposit under the terms of the lease agreements for its facilities. The Company also had negative cash flows from operations of approximately $6.3 million during the six months ended September 30, 2025. As of September 30, 2025, the Company had total current assets of approximately $7.6 million and current liabilities of approximately $2.4 million, resulting in working capital of $5.2 million.

Through September 30, 2025, the Company has financed its operations primarily through the sale of common stock through public and at-the-market (“ATM”) offerings, the private placement of equity securities, from revenue derived from the licensing of intellectual property, products and research-based services, grants, and collaborative research agreements, and from the sale of convertible notes. During the six months ended September 30, 2025, the Company issued 701,729 shares of its common stock through its ATM facility, for net proceeds of approximately $1.8 million.

On March 25, 2025, the Company sold its FXR program for $10.0 million, with $9.0 million paid at closing and $1.0 million held in escrow for a period of 15 months, with future milestones of up to $50.0 million to be paid if the lead asset, FXR314, hits key regulatory and commercial milestones.

Based on the Company's current operating plan and available cash resources, the Company will need substantial additional funding to support future operating activities. The Company has concluded that the prevailing conditions and ongoing liquidity risks faced by the Company raise substantial doubt about its ability to continue as a going concern for at least one year following the date these condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. As the Company continues its operations and is focusing its efforts on services, research, and development, the Company will need to raise additional capital to implement this business plan. The Company cannot predict with certainty the exact amount or timing for any future capital raises. The Company will seek to raise additional capital through debt or equity financings, or through some other financing arrangement. However, the Company cannot be sure that additional financing will be available if and when needed, or that, if available, it can obtain financing on terms favorable to its stockholders. Any failure to obtain financing when required will have a material adverse effect on the Company’s business, operating results, and financial condition.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions.

Fair value measurement

Financial assets and liabilities are measured at fair value, which is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

•

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Insurance Premium Financing Liability

In September 2025, the Company entered into an insurance premium financing agreement for $0.4 million, with a term of nine months and an annual interest rate of 7.82%. The Company made a down payment of 10% and is required to make monthly principal and interest payments of $40,468 over the term of the agreement, which will mature in June 2026. The insurance premium financing liability was approximately $0.4 million and $0.1 million as of September 30, 2025 and March 31, 2025, respectively. Related prepaid insurance at September 30, 2025 and March 31, 2025 of $0.4 million and $0.2 million, respectively, is included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheets.

Net Loss Per Share

Basic and diluted net loss per share has been computed using the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares used to compute diluted loss per share includes the assumed exercise of any outstanding pre-funded warrants, and excludes any assumed exercise of stock options, shares reserved for purchase under the Company’s 2023 Employee Stock Purchase Plan ("ESPP"), the assumed vesting of restricted stock units ("RSUs"), the exercise of common warrants, and shares subject to repurchase as the effect would be anti-dilutive. No dilutive effect was calculated for the six months ended September 30, 2025 and 2024 as the Company reported a net loss for each respective period and the effect would have been anti-dilutive.

Common stock equivalents excluded from computing diluted net loss per share due to their anti-dilutive effect were approximately 0.7 million shares and 0.9 million shares at September 30, 2025 and 2024, respectively. The common stock equivalents excluded include unexercised stock options and common warrants.

Revenue recognition

Royalty revenue

The Company has entered into an intellectual property license agreement with another company that includes royalties based on specified percentages of net product sales, if any. At the initiation of the agreement, the Company analyzed whether it results in a contract with a customer under Accounting Standards Codification ("ASC") Topic 606.

The Company considered a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the Company is a principal vs. agent, whether the elements are distinct performance obligations, whether there are determinable stand-alone prices, and whether any licenses are functional or symbolic. The Company evaluates each performance obligation to determine if it can be satisfied and recognized as revenue at a point in time or over time. Typically, sales-based royalty payments have been identified as variable consideration which must be evaluated to determine if it has been constrained and, therefore, excluded from the transaction price. Please refer to “Note 5. Collaborative Research, Development, and License Agreements” for further information.

Product revenue, net

The Company’s former product-based division, Mosaic, produced high-quality cell-based products for use in VivoSim’s R&D and for use by life science customers. The Company recognized product revenue when the performance obligation was satisfied, which is at the point in time the customer obtained control of the Company’s product, typically upon delivery. Product revenues were recorded at the transaction price under Topic 606. The Company provided no right of return to its customers except in cases where a customer obtained authorization from the Company for the return. To date, there have been no product returns. Mosaic's commercial operations ended during the third quarter of fiscal 2025.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies. Unless otherwise stated, the Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. Adoption of the ASU allows for either the prospective or retrospective application of the amendment and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2023-09 on the Company’s Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The standard can be applied either prospectively or retrospectively. The Company has not yet completed its assessment of the impact of ASU 2024-03 on the Company’s Consolidated Financial Statements.

Note 3. Accrued Expenses

Accrued expenses consisted of the following (in thousands):


	September 30, 2025		March 31, 2025
Accrued payroll and other employee benefits	$	229	$	652
Accrued legal and professional fees		533		515
Other accrued expenses		9		59
	$	771	$	1,226

Please refer to “Note 6. Commitments and Contingencies” for further information regarding the accrued loss contingencies presented in the table above.

Note 4. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock. There are no shares of preferred stock currently outstanding, and the Company has no current plans to issue shares of preferred stock.

Common Stock

In March 2021, the Company's Board of Directors ("Board") approved the 2021 Inducement Equity Incentive Plan ("Inducement Plan"). The Inducement Plan authorized the issuance of up to 62,500 shares of common stock for awards of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares, and other stock or cash awards. In February 2022, 4,166 incentive stock options were issued under the Inducement Plan.

On October 12, 2022, the Company's stockholders and the Board approved the 2022 Equity Incentive Plan ("2022 Plan"), and it became effective on that date. The 2022 Plan replaced the Amended and Restated 2012 Equity Incentive Plan ("2012 Plan") on the effective date. Upon the effective date, the Company ceased granting awards under the 2012 Plan and any shares remaining available for future issuance under the 2012 Plan were cancelled and are no longer available for future issuance. The 2012 Plan continues to govern awards previously granted under it. At the time the Board approved the 2022 Plan, an aggregate of 113,583 shares of the Company’s common stock was initially reserved for issuance under the 2022 Plan. The Company committed to reducing the new 2022 Plan share reserve by the number of shares that were granted under the 2012 Plan and the Inducement Plan between July 25, 2022 and October 12, 2022. From July 25, 2022 to October 12, 2022, the Company issued 10,521 shares of its common stock under the 2012 Plan. As a result, the number of shares reserved for future issuance under the 2022 Plan was 103,062 shares of common stock. The Company also committed to reducing the aggregate number of shares of its common stock issuable pursuant to the Inducement Plan from 62,500 shares to 4,250 shares (which includes 4,166 shares of its common stock issuable pursuant to an outstanding option to purchase common stock with an exercise price of $33 per share, leaving only 83 shares available for future issuance under the Inducement Plan) and the share reserve was reduced effective October 12, 2022. On November 20, 2024, the Company’s stockholders approved the amendment and restatement of the 2022 Plan (the “A&R 2022 Plan”) to increase the number of shares reserved for issuance thereunder by 147,916 shares.

On January 26, 2024, the Company filed a shelf registration statement on Form S-3 (File No. 333-276722) to register $150.0 million of the Company's common stock, preferred stock, debt securities, warrants and units, or any combination of the foregoing (the "2024 Shelf"). The 2024 Shelf was declared effective by the SEC on February 8, 2024.

On March 16, 2018, the Company entered into a Sales Agreement with Jones Trading Institutional Services LLC (the “Agent”).

On January 26, 2024, the Company filed a prospectus with the 2024 Shelf (the "2024 ATM Prospectus"), pursuant to which the Company may offer and sell, from time to time through the Agent, shares of its common stock in ATM sales transactions having an aggregate offering price of up to $2,605,728. The Company filed amendments to the 2024 ATM Prospectus on February 26, 2025 and again on April 11, 2025, providing that the Company may offer and sell, from time to time through the Agent, shares of its common stock in ATM sales transactions having an additional aggregate offering price of up to $5,311,508 and $4,766,105, respectively. Any shares offered and sold in these ATM transactions will be issued pursuant to the 2024 Shelf.

During the three months and six months ended September 30, 2025, the Company issued zero and 701,729 shares of common stock in ATM offerings, respectively, for net proceeds of approximately $1.8 million, pursuant to the 2024 Shelf. As of September 30, 2025, the Company has sold an aggregate of 1,198,134 shares of common stock in ATM offerings under the 2024 ATM Prospectus, with gross proceeds of approximately $6.9 million. As of September 30, 2025, there was approximately $140.1 million unallocated and available for future offerings under the 2024 Shelf, and approximately $3.1 million available for future offerings through the Company’s ATM program under the 2024 ATM Prospectus.

May 2024 Best Efforts Public Offering

On May 8, 2024, the Company priced a best efforts public offering (the “Offering”) of: (i) 130,202 shares of its common stock and accompanying common warrants (“Common Warrants”) to purchase up to 130,202 shares of common stock at a combined public offering price of $9.60 per share and accompanying Common Warrant to purchase one share of common stock and (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase 416,666 shares of common stock and accompanying Common Warrants to purchase up to 416,666 shares of common stock at a combined public offering price of $9.588 per Pre-Funded Warrant and accompanying Common Warrant to purchase one share of common stock. In connection with the Offering, the Company entered into Securities Purchase Agreements with the purchasers of the securities in the Offering on May 8, 2024.

The per share exercise price for the Pre-Funded Warrants was $0.001, subject to adjustment as provided therein. The Pre-Funded Warrants were immediately exercisable, subject to certain beneficial ownership limitations, and were to expire when exercised in full. The holders could exercise the Pre-Funded Warrants by means of a “cashless exercise.” During the year ended March 31, 2025, all 416,666 Pre-Funded Warrants were exercised.

The per share exercise price for the Common Warrants is $9.60, subject to adjustment as provided therein. The Common Warrants were immediately exercisable, subject to certain beneficial ownership limitations, and will expire on the date that is five years following the original issuance date. If a registration statement covering the issuance of the shares of common stock issuable upon exercise of the Common Warrants is not available for the issuance, then the holders may exercise the Common Warrants by means of a “cashless exercise.”

In connection with the Offering, the Company paid JonesTrading Institutional Services LLC, which acted as the placement agent in connection with the Offering, a cash fee of 5.0% of the aggregate gross proceeds raised in the Offering.

The closing of the Offering occurred on May 13, 2024. The Company received net proceeds of approximately $4.5 million from the Offering, after deducting the offering expenses payable by the Company, including the Placement Agent fees.

The Company sold (i) 130,202 shares of its common stock and Common Warrants to purchase up to 130,202 shares of common stock and (ii) Pre-Funded Warrants to purchase 416,666 shares of common stock and accompanying Common Warrants to purchase up to 416,666 shares of common stock.

Restricted Stock Units

The following table summarizes the Company’s RSUs activity for the three months ended September 30, 2025:


	Number of Shares			Weighted Average Price
Unvested at March 31, 2025		8,165		$	6.57
Granted		—		$	—
Vested		(8,165	)	$	6.57
Cancelled / forfeited		—		$	—
Unvested at September 30, 2025		—		$	—

Stock Options

During the six months ended September 30, 2025, under the A&R 2022 Plan, 47,974 stock options were granted at various exercise prices.

On August 5, 2024, the Company granted 83,841 stock options to its Executive Chairman under the A&R 2022 Plan. Of the stock options granted, 47,910 will vest evenly on an annual basis over three years. 11,977 of the options granted have unique vesting criteria based on market conditions, more specifically the Company's stock price. As the market condition based stock options require significant estimates and assumptions to calculate their fair value, the Company engaged with valuation specialists to calculate the fair value and requisite service periods using Monte Carlo simulations. The stock options will be expensed over their determined requisite service periods. The remaining 23,954 options granted have unique vesting criteria based on specific Company performance conditions. The vesting criteria for 11,977 of these options includes the Company achieving cumulative revenue of $1.5 million. The vesting criteria for the remaining 11,977 options includes the Company entering into a definitive agreement that constitutes a major strategic partnership, at the discretion of the Board. As of September 30, 2025, no performance conditions have been met. The grant date fair value of the performance based awards is $118,000 in the aggregate, which will be recognized when the performance condition is probable of being satisfied.

The following table summarizes the Company’s stock option activity from March 31, 2025 to September 30, 2025:


	Options Outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at March 31, 2025		141,397		$	22.66	$	—
Options granted		47,974		$	1.81	$	—
Options cancelled / forfeited		(2,552	)	$	14.51	$	—
Options expired		(5,239	)	$	33.28	$	—
Outstanding at September 30, 2025		181,580		$	16.96	$	—
Vested and Exercisable at September 30, 2025		56,268		$	42.03	$	—

The weighted average remaining contractual term of stock options exercisable and outstanding at September 30, 2025 was approximately 8.49 years.

Warrants

In connection with the Offering described above, the Company issued Common Warrants to purchase up to 130,202 shares of common stock at a combined public offering price of $9.60 per share and accompanying Common Warrant to purchase one share of common stock and (ii) Pre-Funded Warrants to purchase 416,666 shares of common stock and accompanying Common Warrants to purchase up to 416,666 shares of common stock at a combined public offering price of $9.588 per Pre-Funded Warrant and accompanying Common Warrant to purchase one share of common stock. The Company has determined that these warrants should be classified as equity instruments since they do not require the Company to repurchase the underlying common stock and do not require

the Company to issue a variable amount of common stock. In addition, these warrants are indexed to common stock and do not have any antidilution rights.

The following table summarizes the Company’s Common Warrant activity from March 31, 2025 to September 30, 2025:


	Number of Warrants		Exercise Price
Outstanding at March 31, 2025		539,060	$	9.60
Issued		—		—
Exercised		—		—
Outstanding at September 30, 2025		539,060	$	9.60

Employee Stock Purchase Plan

In July 2023, the Board adopted, and subsequently on October 31, 2023, the Company's stockholders approved, the ESPP. The ESPP became effective on October 31, 2023. The Company reserved 3,750 shares of common stock for issuance thereunder. The ESPP permits employees to purchase common stock through payroll deductions, limited to 15 percent of each employee’s compensation up to $25,000 per employee per year or 42 shares per employee per six-month purchase period. Shares under the ESPP are purchased at 85 percent of the fair market value at the lower of (i) the closing price on the first trading day of the six-month purchase period or (ii) the closing price on the last trading day of the six-month purchase period. The initial offering under the ESPP commenced on March 1, 2024. During the six months ended September 30, 2025 there were no shares issued under the ESPP. At September 30, 2025, there were 3,708 shares remaining available for purchase under the ESPP.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance consisted of the following at September 30, 2025:


Common stock issuable pursuant to options outstanding and reserved under the 2012 Plan			27,780
Common stock reserved under the 2012 Plan			—
Common stock issuable pursuant to options outstanding and reserved under the A&R 2022 Plan			149,634
Common stock reserved under the A&R 2022 Plan			166,756
Common stock reserved under the ESPP			3,708
Common stock reserved under the 2021 Inducement Equity Plan			83
Common stock issuable pursuant to restricted stock units outstanding under the 2012 Plan			—
Common stock issuable pursuant to restricted stock units outstanding under the A&R 2022 Plan			—
Common stock issuable pursuant to options outstanding and reserved under the Inducement Plan			4,166
Common stock issuable pursuant to outstanding pre-funded warrants			—
Common stock issuable pursuant to outstanding common warrants			539,060
Total at September 30, 2025			891,187

Stock-based Compensation Expense and Valuation Information

Stock-based awards include stock options and RSUs under the Company's A&R 2022 Plan, 2012 Plan, Inducement Plan, and rights to purchase stock under the ESPP.

Stock-based compensation expense for all stock-based awards consists of the following (in thousands):


	Three Months Ended		Three Months Ended		Six Months Ended		Six Months Ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Research and development	$	13	$	25	$	26	$	51
General and administrative		59		130		124		260
Total	$	72	$	155	$	150	$	311

The total unrecognized compensation cost related to unvested stock option grants as of September 30, 2025 was approximately $0.5 million and the weighted average period over which these grants are expected to vest is 2.48 years.

The Company uses either the Black-Scholes or Monte Carlo option-pricing models to calculate the fair value of stock options, depending on the complexity of the equity grants. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. The measurement and classification of share-based payments to non-employees is consistent with the measurement and classification of share-based payments to employees. The fair value of stock options was estimated at the grant date using the following weighted average assumptions:


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Dividend yield		—			—			—			—
Volatility		111.00	%		99.00	%		112.30	%		99.37	%
Risk-free interest rate		3.83	%		3.64	%		3.87	%		3.75	%
Expected life of options	6 years			6 years			6 years			6 years
Weighted average grant date fair value	$	1.50		$	5.11		1.53			$	5.67

The fair value of each RSU is recognized as stock-based compensation expense over the vesting term of the award. The fair value is based on the closing stock price on the date of the grant.

The Company uses the Black-Scholes valuation model to calculate the fair value of shares issued pursuant to the ESPP. Stock-based compensation expense is recognized over the purchase period using the straight-line method. The fair value of ESPP shares was estimated at the purchase period commencement date using the following assumptions:


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2025*			September 30, 2024			September 30, 2025*			September 30, 2024
Dividend yield		—			—			—			—
Volatility		0.00	%		95.20	%		0.00	%		95.20	%
Risk-free interest rate		0.00	%		5.27	%		0.00	%		5.27	%
Expected term		—		6 months				—		6 months
Grant date fair value	$	—		$	4.68		$	—		$	4.68

*There were no participants in the ESPP for the purchase periods that commenced on March 1, 2025.

The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption is based on U.S. Treasury rates. The expected life is the 6-month purchase period.

Note 5. Collaborative Research, Development, and License Agreements

License Agreements

BICO Group AB

In February 2022, the Company entered into a license agreement with Cellink AB and its subsidiaries (collectively, “BICO Group AB”), where the Company agreed to grant a non-exclusive license to BICO Group AB to use the Company’s aforementioned patents for its business operations of manufacturing and selling bioprinters as well as bioinks. As part of the license agreement, BICO Group AB agreed to pay the Company a one time, nonrefundable upfront fee of $1,500,000, as well as ongoing sales-based royalties (based on percentages of BICO Group AB’s net sales) for the use of the granted license, which is recorded as revenue. The sales-based royalties became effective beginning on February 22, 2022, the effective date of the license agreement, and continues until the expiration of the last surviving licensed patent. As the sales-based royalties are required to be paid 45 days after the end of every quarter, there is variable consideration that must be estimated to determine royalty revenue within a given reporting period. Once actual revenue earned is determined in the following fiscal quarter, an adjustment is made from the previously estimated amount. For the three and six months ended September 30, 2025, the Company recorded $28,000 and $65,000 of royalty revenue, respectively, based on sales-based royalties from the license Agreement. Royalty revenue presented on the statements of operations and other comprehensive loss was $28,000 and $53,000 for the three and six months ended September 30, 2024, respectively.

Also as part of the license agreement, certain patents involved in the agreement are sublicensed by the Company from the University of Missouri. See below for further information.

University of Missouri

In March 2009, the Company entered into a license agreement with the Curators of the University of Missouri ("University of Missouri") to in-license certain technology and intellectual property relating to self-assembling cell aggregates and intermediate cellular units. The Company received the exclusive worldwide rights to commercialize products comprising this technology for all fields of use. The Company was required to pay the University of Missouri royalties ranging from 1% to 3% of net sales of covered tissue products, and of the fair market value of covered tissues transferred internally for use in the Company’s commercial service business, depending on the level of net sales achieved by the Company each year.

On December 5, 2022, the Company amended the license agreement with the University of Missouri, whereby the Company agreed to pay a single, up-front payment of $50,000 to the University of Missouri in exchange for the aforementioned licensed intellectual property to be fully paid up by the Company. As a result, the Company will continue to have rights to the licensed intellectual property until its expiration, but will no longer owe minimum annual royalty payments, royalty payments based on net sales, or any other payments (other than patent annuities and any prosecution costs) in the future.

Note 6. Commitments and Contingencies

Legal Matters

In addition to commitments and obligations in the ordinary course of business, the Company may be subject, from time to time, to various claims and pending and potential legal actions arising out of the normal conduct of its business.

On August 27, 2024, H.C. Wainwright & Co., LLC (“H.C. Wainwright”) filed a complaint against the Company in the State of New York alleging that the Company breached a tail financing provision included in an engagement agreement the Company entered into with H.C. Wainwright in May 2023. In its complaint, H.C. Wainwright is seeking compensatory and consequential damages and attorneys’ fees. On October 18, 2024, the Company filed an answer to the complaint and on September 2, 2025, the Company filed an amended answer and counterclaimed for rescission, fraudulent inducement, and breach of contract, alleging that the Court should rescind the engagement agreement and award the Company damages, interest, costs, and attorneys’ fees because H.C. Wainwright misrepresented the services it would provide and breached its duties to the Company under the engagement agreement. H.C. Wainwright currently is scheduled to respond to the Company's counterclaims no later than November 7, 2025. The Company is defending against H.C. Wainwright’s claims and pursuing its counterclaims vigorously, but there is no guarantee that the Company will be successful in these efforts.

The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing litigation contingencies is subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability.

The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures and monitors each related legal issue and adjusts accruals as might be warranted based on new information and further developments. As of September 30, 2025, the Company recognized an accrual of $0.6 million (which was considered a financing fee related to the Offering discussed in Note 4. Stockholders' Equity) for the loss contingencies associated with the above described H.C. Wainwright complaint. Of the $0.6 million loss contingency accrual, $0.4 million is included in accrued expenses on the accompanying condensed consolidated balance sheets. The remaining $0.2 million of the loss contingency accrual is classified as a liability to be settled in equity on the accompanying condensed consolidated balance sheets. The liability to be settled in equity relates to a fixed number of warrants that were included in the complaint as part of the sought compensatory damages. The Company recorded the loss contingency accrual as it determined that an unfavorable outcome is probable or reasonably possible and believed that the amount or range of any possible loss was reasonably estimable. However, amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments, and the outcome of legal proceedings and claims brought against the Company is subject to significant uncertainty. If one or more legal matters were resolved against the Company in a reporting period, the Company’s consolidated financial statements for that reporting period could be materially adversely affected.

Note 7. Leases

After the initial adoption of ASC Topic 842 (“ASC 842”), on an on-going basis, the Company evaluates all contracts upon inception and determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If a lease is identified, the Company will apply the guidance from ASC 842 to properly account for the lease.

Operating Leases

On November 23, 2020, the Company entered into a lease agreement, pursuant to which the Company permanently leased approximately 8,051 square feet of lab and office space (the “Permanent Lease”) in San Diego once certain tenant improvements were completed by the landlord and the premises were ready for occupancy. Additionally, on November 17, 2021, the Permanent Lease was amended to add an additional 2,892 square feet of office space in the same building. The Permanent Lease commenced on December 17, 2021 and is intended to serve as the Company’s permanent premises for approximately sixty-two months. Monthly rental payments will be approximately $40,800 with 3% annual escalators.

The Company determined that the Permanent Lease is considered an operating lease under ASC 842, and therefore upon the lease commencement date of December 17, 2021, recognized lease liabilities and corresponding right-of-use assets of $2.3 million. The Company records operating lease expense on a straight-line basis over the life of the lease (referred to as “operating lease expense”). Variable lease expenses associated with the Company’s leases, such as payments for additional monthly fees to cover the Company’s share of certain facility expenses (common area maintenance) are expensed as incurred.

The table below summarizes the Company’s lease liabilities and corresponding right-of-use assets as of September 30, 2025 (in thousands except the year and percentage):


	September 30, 2025
ASSETS
Operating lease right-of-use assets	$	641
Total lease right-of-use assets	$	641

LIABILITIES
Current
Operating lease liability	$	528
Noncurrent
Operating lease liability, net of current portion	$	172
Total lease liabilities	$	700

Weighted average remaining lease term:	1.33
Weighted average discount rate:		6	%

Variable lease expense was approximately $34,000 and $73,000 for the three and six months ended September 30, 2025, respectively, and approximately $22,000 and $23,000 for the three and six months ended September 30, 2024, respectively. Operating lease expense was approximately $126,000 and $252,000 for the three and six months ended September 30, 2025, respectively, and approximately $126,000 and $252,000 for the three and six months ended September 30, 2024, respectively.

Cash outflows associated with the Company’s operating lease for the three and six months ended September 30, 2025, were approximately $134,000 and $267,000, respectively, and approximately $130,000 and $260,000 for the three and six months ended September 30, 2024, respectively.

Future lease payments relating to the Company’s operating lease liabilities as of September 30, 2025 are as follows (in thousands):


Fiscal year ending March 31, 2026		271
Fiscal year ending March 31, 2027		459
Total future lease payments		730
Less: Imputed interest		(30	)
Total lease obligations		700
Less: Current obligations		(528	)
Noncurrent lease obligations	$	172

Note 8. Concentrations

Credit risk and significant customers

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents and short-term investments. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any material losses in such accounts and believes it is not exposed to significant risk. The Company has invested its excess cash primarily in money market funds and U.S. Treasury securities. Additionally, the Company adheres to established guidelines regarding approved investments and maturities of investments, which are designed to preserve their principal value and maintain liquidity.

The Company is also potentially subject to concentrations of credit risk in its revenues and receivable accounts. The Company’s receivables to date related to royalty revenue have been derived from one customer. The Company makes judgment as to its ability to collect outstanding receivables and provides reserves against receivables for estimated losses that may result from a customer or third party's ability to pay. Specific amounts determined to be uncollectible are charged against the reserve. The Company has not historically experienced any receivable write-downs and management does not believe significant credit risk exists as of September 30, 2025.

Note 9. Related Parties

From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by the Board or a committee thereof pursuant to its related party transaction policy.

Viscient Biosciences

Viscient Biosciences (“Viscient”) is an entity for which Keith Murphy, the Company’s Executive Chairman, serves as the Chief Executive Officer and President. Certain board members of the company are investors of Viscient through convertible promissory notes, but do not serve as employees, officers or directors of Viscient.

On December 28, 2020, the Company entered into an intercompany agreement (the “Intercompany Agreement”) with Viscient and Organovo, Inc., the Company’s wholly-owned subsidiary, which included an asset purchase agreement for certain lab equipment. Pursuant to the Intercompany Agreement, the Company agreed to provide Viscient certain services related to 3D bioprinting technology, which includes, but is not limited to, histology services, cell isolation, and proliferation of cells and Viscient agreed to provide the Company certain services related to 3D bioprinting technology, including bioprinter training, bioprinting services, and qPCR assays, in each case on payment terms specified in the Intercompany Agreement and as may be further determined by the parties. In addition, the Company and Viscient each agreed to share certain facilities and equipment and, subject to further agreement, to each make certain employees available for specified projects for the other party at prices to be determined in good faith by the parties. During the second quarter of fiscal 2025, first quarter of fiscal 2026, and second quarter of fiscal 2026, the companies added Statements of Work to the Intercompany Agreement, where Viscient agreed to provide the Company with certain testing services related to the Company's ongoing R&D. The Company evaluated the accounting for the Intercompany Agreement and concluded that any services provided by Viscient to the Company will be expensed as incurred, and any compensation for services provided by the Company to Viscient will be considered a reduction of personnel related expenses. Any services provided to Viscient do not fall under Topic 606 as the Intercompany Agreement is not a contract with a customer. For the three and six months ended September 30, 2025, the Company incurred $144,000 and $216,000 in R&D consulting expenses from Viscient, respectively. As of September 30, 2025 and March 31, 2025, the accounts payable balance to Viscient was approximately $68,000 and zero, respectively. For each of the three and six months ended September 30, 2024, the Company incurred $70,000 of toxicity testing services from Viscient. Additionally, for the three and six months ended September 30, 2025 and 2024, the Company provided approximately $5,000 and $4,000 of histology services to Viscient, respectively.

Aegis

On July 25, 2025, the Company entered into a letter agreement with SternAegis Ventures through Aegis Capital Corp. (“Aegis”), pursuant to which the Company retained Aegis to act as the Company’s non-exclusive financial advisor for a period of 12 months, unless earlier terminated pursuant to the terms of agreement. Pursuant to the agreement, the Company agreed to pay Aegis certain fees if the Company consummates, during the term of the agreement and in certain circumstances for a period of time thereafter (i) a placement of the Company’s securities, (ii) an acquisition, sale or purchase of all of the Company’s assets, business combination, merger or related change of control transaction, (iii) an acquisition of a third party, or (iv) a merger, business combination or other change of control transaction with a third party. The Company also agreed to reimburse Aegis for all actual, documented and reasonable out of pocket expenses, up to an agreed-upon cap.

Adam Stern, a member of the Company’s board of directors, is the Head of Private Equity Banking at Aegis and is the CEO of SternAegis Ventures.

Note 10. Business Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. The Company identified one operating segment in fiscal 2026, named the R&D segment, which did not impact prior periods. During fiscal 2026, the Company's operating segment was as follows:

Research & Development

The R&D segment focuses on providing testing of drugs and drug candidates in 3D human tissue models of liver and intestine, offering partners liver and intestinal toxicology insights using its NAM models. The Company plans to work with pharmaceutical and biotech companies at all stages of drug development to reduce the significant risk and cost of bringing therapeutics to market through the regulatory process and offer bespoke services in the areas of investigational toxicology, mechanism of drug action elucidation, and other applications of these complex human tissue models.

For purposes of evaluating performance and allocating resources, the Company’s CODM, its Executive Chairman, regularly reviews Consolidated Net Loss as reported in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss as compared to budget. The measure of segment assets is reported in the Condensed Consolidated Balance Sheets as Total Consolidated Assets.

In addition to the significant expense categories included within Consolidated Net Loss presented in the Company’s Condensed Consolidated Statements of Operations and Other Comprehensive Loss, see below for disaggregated expense amounts for the three and six months ended September 30, 2025 and 2024 (in thousands):


	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	September 30, 2025			September 30, 2024			September 30, 2025			September 30, 2024
Revenue
Royalty revenue	$	28		$	28		$	65		$	53
Product revenue		—			2			—			16
Total revenue		28			30			65			69
Operating expenses
Cost of revenues		—			1			—			3
Research and development expenses (a)(b)		855			902			1,787			2,220
Selling, general, and administrative expenses (a)(b)		1,677			1,511			3,558			3,391
Non-cash stock-based compensation (see Note 4)		72			155			150			311
Depreciation and amortization		59			69			120			138
Total operating expense	$	2,663		$	2,638		$	5,615		$	6,063
Consolidated operating loss	$	(2,635	)	$	(2,608	)	$	(5,550	)	$	(5,994	)

(a) Stock-based compensation expense of $13,000 and $26,000 related to research and development and $59,000 and $124,000, related to selling, general, and administration have been excluded for the three and six months ended September 30, 2025, respectively. Stock-based compensation expense of $25,000 and $51,000 related to research and development and $130,000 and $260,000, related to selling, general, and administration have been excluded for the three and six months ended September 30, 2024, respectively.

(b) Depreciation and amortization expense of $55,000 and $111,000 related to research and development as well as $4,000 and $9,000 related to selling, general, and administration have been excluded for the three and six months ended September 30, 2025, respectively. Depreciation and amortization expense of $57,000 and $115,000 related to research and development as well as $12,000 and $23,000 related to selling, general, and administration have been excluded for the three and six months ended September 30, 2024, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our historical consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. This management’s discussion and analysis contains forward-looking statements, such as statements related to our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions such as “will,” “may,” “could,” “should,” or similar expressions, identify certain of these forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to risks and uncertainties, including those described in this Quarterly Report on Form 10-Q, as well as the risk factors disclosed in our Annual Report on the Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission on June 5, 2025, and discussed in the section titled “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q, that could cause our actual results or events to differ materially from those expressed or implied by such forward-looking statements. Unless the context otherwise requires, the terms "VivoSim", the “Company”, “we”, “us” and “our” in this Quarterly Report on Form 10-Q refer to VivoSim Labs, Inc. and its wholly owned subsidiaries, Organovo, Inc. and VivoSim Inc.

Except to the limited extent required by applicable law, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Basis of Presentation

The unaudited condensed consolidated financial statements included in this Form 10-Q have been prepared in accordance with the Securities and Exchange Commission (the “SEC”) instructions to Quarterly Reports on Form 10-Q. Accordingly, the unaudited condensed consolidated financial statements presented elsewhere in this Form 10-Q and discussed below are unaudited and do not contain all the information required by U.S. generally accepted accounting principles (“GAAP”) to be included in a full set of financial statements. The audited financial statements for the year ended March 31, 2025, filed with the SEC on Form 10-K on June 5, 2025, include a summary of our significant accounting policies and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

Overview

We are a pharmaceutical and biotechnology services company that is focused on providing testing of drugs and drug candidates in three-dimensional (“3D”) human tissue models of liver and intestine. We offer partners liver and intestinal toxicology insights using our new approach methodologies ("NAM") models. We anticipate accelerated adoption of human tissue models following the U.S. Food and Drug Administration (“FDA") announcement on April 10, 2025 to refine animal testing requirements in favor of these non-animal NAM methods. We will also offer bespoke services in the areas of investigational toxicology, mechanism of drug action elucidation, and other applications of these complex human tissue models.

We also advance product candidates to treat inflammatory bowel disease ("IBD") discovered and developed using our complex human tissue intestinal models. Prior to March 2025, we were a clinical stage biotechnology company that was focused on developing FXR314 in IBD, including ulcerative colitis ("UC"), based on demonstration of clinical promise in 3D human tissues as well as strong preclinical data. Our clinical focus was in advancing FXR314 in IBD, including UC and Crohn’s disease ("CD"). We planned to start a Phase 2a clinical trial in UC in the calendar year 2025 and were also exploring the potential for combination therapies using FXR314 and approved mechanisms in preclinical animal studies and our IBD disease models. We have also advanced a second program since 2023, a novel drug that will be a new chemical entity (“NCE”) to an undisclosed target discovered in our intestinal models to have activity for UC and CD. This drug program (the “Preclinical IBD Program”) has now left the in-silico phase in recent quarters, and has moved to medicinal chemistry stage, the real-world synthesis of novel candidate compounds.

In March 2025, we sold our FXR program for $10.0 million, with $9.0 million paid at closing and $1.0 million held in escrow for a period of 15 months, with future milestones of up to $50.0 million in the aggregate to be paid if the lead asset, FXR314, hits key development, regulatory and commercial milestones.

Effective April 24, 2025, we changed our corporate name to VivoSim Labs, Inc. by filing a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. We changed our name to reflect our new business model, which includes the use of other longstanding assets of the Company, intestinal and liver tox models and expertise, and our IP portfolio for 3D bioprinting.

We continue to advance our Preclinical IBD Program, with the goal of having a product candidate ready for an Investigational New Drug (“IND Application”) with the FDA by December 2026.

We are now offering liver toxicology predictive screening and research services as well as working on predicting and studying the intestinal side effect profiles of drugs that are therapeutic candidates of pharmaceutical and biotech companies at all stages of drug development. Our services offer the potential benefit of reducing the significant risk and cost of bringing therapeutics to market through the regulatory process. It is estimated that less than 10% of drug candidates entering clinical trials are approved, with a portion of the failures due to unexpected liver toxicity or intestinal intolerability. In addition, even approved drugs are occasionally withdrawn after liver toxicity is determined to be caused by the drug in a phenomenon called drug induced liver injury. We presented findings at the May 2025 Digestive Disease Week scientific conference showing that our liver toxicology platform had a best-in-class predictive power. Our liver predictive power was shown to be 87.5% for a set of challenging liver toxicity cases – inclusive of classic cases of “liver tox misses” drugs with unforeseen liver toxicity found in clinical trials or drugs that were withdrawn from the market after liver toxicity issues emerged later. The platform identified correctly that 87.5% of the known liver-toxic drugs could be seen as liver toxic using NAMkind™ liver. This is known as the sensitivity of the platform, which at 87.5% is a world’s best. Importantly, the specificity was 100%, meaning that none of the compounds tested that are not liver toxic were incorrectly identified as having liver toxicity issues by the platform.

We use our proprietary technologies to build functional 3D human tissues that mimic key aspects of native human tissue composition, architecture, function, and disease. We believe these attributes can enable critical complex, multicellular disease models that can be used to study and develop clinically effective drugs across multiple therapeutic areas.

We have also used these human disease models to identify new molecular targets responsible for driving IBD and to explore the mechanism of action of known drugs including JAK inhibitors and related molecules. A portion of our internal research continues to focus on early stage internal drug discovery programs, validating targets, and testing potentially licensable or transactable external drug compounds to identify drug candidates for partnering and/or internal clinical development. This includes the Preclinical IND Program, which has reached a more mature stage than other efforts in this area.

Critical Accounting Policies, Estimates, and Judgments

Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We continually evaluate our estimates and judgments used in preparing our financial statements and related disclosures, none of which are considered critical. All estimates affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known.

There have been no significant changes to our critical accounting policies since March 31, 2025. For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our condensed consolidated financial statements, refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 1. Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on June 5, 2025.

Results of Operations

Comparison of the three months ended September 30, 2025 and 2024:

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (in thousands, except %):


	Three Months Ended
	September 30,				Increase (decrease)
	2025		2024		$			%
Royalty revenue	$	28	$	28	$	—			0	%
Product revenue	$	—	$	2	$	(2	)		(100	%)
Cost of revenues	$	—	$	1	$	(1	)		(100	%)
Research and development	$	923	$	984	$	(61	)		(6	%)
Selling, general and administrative	$	1,740	$	1,653	$	87			5	%
Other income	$	92	$	59	$	33			56	%

Revenues

For the three months ended September 30, 2025 and 2024, total revenue was less than $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. We expect royalty revenue to remain consistent going forward. Product revenue was zero and less than $0.1 million for the three months ended September 30, 2025 and 2024, respectively. Product revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Cost of Revenues

For the three months ended September 30, 2025 and 2024, cost of revenues was zero and less than $0.1 million, respectively. Cost of revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended September 30, 2025 and 2024 (in thousands, except %):


	Three Months Ended					Three Months Ended					Increase (decrease)
	September 30, 2025		% of total			September 30, 2024		% of total			$			%
Research and development	$	855		93	%	$	902		91	%	$	(47	)		(5	%)
Non-cash stock-based compensation		13		1	%		25		3	%		(12	)		(48	%)
Depreciation and amortization		55		6	%		57		6	%		(2	)		(4	%)
Total research and development expenses	$	923		100	%	$	984		100	%	$	(61	)		(6	%)

For the three months ended September 30, 2025, total research and development expenses were $0.9 million, a decrease of approximately $0.1 million, or 6%, from the prior year period. Our average full-time research and development staff decreased from an average of fourteen full-time employees for the three months ended September 30, 2024, to an average of nine full-time employees for the three months ended September 30, 2025. Our operations for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted in a $0.3 million decrease in personnel related expenses, which included salary and share-based compensation expense, due to the decrease in headcount. These decreases were offset by a $0.2 million increase in materials related costs, mainly due to the capitalization of materials costs in the prior fiscal year. Going forward, we expect research and development expenses to decrease, cost of revenues to increase, and service revenue to increase as we execute our service model.

Selling, General and Administrative Expenses

The following table summarizes our selling, general and administrative expenses for the three months ended September 30, 2025 and 2024 (in thousands, except %):


	Three Months Ended					Three Months Ended					Increase (decrease)
	September 30, 2025		% of total			September 30, 2024		% of total			$			%
Selling, general and administrative	$	1,677		96	%	$	1,511		91	%	$	166			11	%
Non-cash stock-based compensation		59		3	%		130		8	%		(71	)		(55	%)
Depreciation and amortization		4		1	%		12		1	%		(8	)		(67	%)
Total selling, general and administrative expenses	$	1,740		100	%	$	1,653		100	%	$	87			5	%

For the three months ended September 30, 2025, total selling, general and administrative expenses were approximately $1.7 million, an increase of approximately $0.1 million, or 5%, from the prior year period. Our average full-time selling, general and administrative staff decreased from an average of five full-time employees for the three months ended September 30, 2024 to an average of four full-time employees for the three months ended September 30, 2025. Our operations for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 resulted in a $0.1 million increase in personnel related expenses. Of the $0.1 million increase in personnel expenses, there was $0.2 million increase in recruiting expenses, which was offset by $0.1 decrease in stock-based compensation.

Other Income

Other income was approximately $0.1 million and less than $0.1 million for the three months ended September 30, 2025 and 2024, respectively, which was related to interest income.

Comparison of the six months ended September 30, 2025 and 2024:

The following table summarizes our results of operations for the six months ended September 30, 2025 and 2024 (in thousands, except %):


	Six Months Ended
	September 30,				Increase (decrease)
	2025		2024		$			%
Royalty revenue	$	65	$	53	$	12			23	%
Product revenue	$	—	$	16	$	(16	)		(100	%)
Cost of revenues	$	—	$	3	$	(3	)		(100	%)
Research and development	$	1,924	$	2,386	$	(462	)		(19	%)
Selling, general and administrative	$	3,691	$	3,674	$	17			0	%
Other income	$	164	$	103	$	61			59	%

Revenues

For each of the six months ended September 30, 2025 and 2024, total revenue was $0.1 million. Royalty revenue is related to sales-based royalties from licensing intellectual property. We expect royalty revenue to remain consistent going forward. Product revenue was zero and less than $0.1 million for the six months ended September 30, 2025 and 2024, respectively. Product revenue is related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Cost of Revenues

For the six months ended September 30, 2025 and 2024, total cost of revenues was zero and less than $0.1 million, respectively, and related to the Company's former Mosaic division which ended operations during the third quarter of fiscal 2025.

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended September 30, 2025 and 2024 (in thousands, except %):


	Six Months Ended					Six Months Ended					Increase (decrease)
	September 30, 2025		% of total			September 30, 2024		% of total			$			%
Research and development	$	1,787		93	%	$	2,220		93	%	$	(433	)		(20	%)
Non-cash stock-based compensation		26		1	%		51		2	%		(25	)		(49	%)
Depreciation and amortization		111		6	%		115		5	%		(4	)		(3	%)
Total research and development expenses	$	1,924		100

VivoSim Labs, INC. 10-Q