UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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: 1-37897

VYOME HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		26-1828101
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Harvard Square, One Mifflin Place, Suite 400, Cambridge, MA
(Address of principal executive offices) (zip code)

(973) 832-8147
(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 per share		HIND		The Nasdaq Capital Market

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 13, 2025, 5,644,494 shares of the registrant’s Common Stock were outstanding.

INDEX

PART I – FINANCIAL INFORMATION		1
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2025 and 2024	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 30, 2025 and 2024	3
	Condensed Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II – OTHER INFORMATION		43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
SIGNATURES		45

PART I – FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

VYOME HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(Amount in USD)	September 30, 2025			December 31, 2024
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	5,707,012		$	101,904
Accounts receivables, net		23,001			2,294
Deferred offering costs		-			111,415
Prepaid expenses		214,850			9,039
Other current assets		92,394			77,394
Total current assets		6,037,257			302,046
Non-current assets
Property and equipment, net		50,168			59,179
Intangible asset - shell company		314,191			314,191
Goods and service tax and other credits receivable		606,914			646,758
Right-of-use of asset, net		36,866			59,387
Total non-current assets		1,008,139			1,079,515
Total assets	$	7,045,396		$	1,381,561
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable and accrued expenses	$	1,903,563		$	965,607
Due to Affiliates		184,621			129,346
Operating lease liability - current portion		30,458			28,024
Salary and post-employment benefits payable		906,939			919,440
Other current liabilities		93,204			107,937
Convertible debt - current portion		-			3,589,410
Total current liabilities		3,118,785			5,739,764
Non-current liabilities
Operating lease liability - net of current portion		8,151			32,830
Total non-current liabilities		8,151			32,830
Total liabilities		3,126,936			5,772,594
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit)
Common stock, 300,000,000 shares authorized, 5,556,295 (VHI) and 386 (VTI) shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		5,556			1
VTI’s Preferred stock, 16,000,000 shares authorized, 3,076 shares issued and outstanding as of December 31, 2024		-			3
Additional paid in capital		88,930,632			51,084,877
Accumulated deficit		(86,338,112	)		(55,422,744	)
Accumulated other comprehensive loss		(68,363	)		(53,170	)
Equity attributable to shareowners of VHI		2,529,713			(4,391,033	)
Non-controlling interest		1,388,747			-
Total stockholders’ equity (deficit)		3,918,460			(4,391,033	)
Total liabilities and stockholders’ equity (deficit)	$	7,045,396		$	1,381,561

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

VYOME HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(Amount in USD)	Nine Months ended September 30, 2025			Nine Months ended September 30, 2024

Revenue	$	283,163		$	195,516
Cost of goods sold		(86,458	)		(63,307	)
Gross profit		196,705			132,209
Operating expenses
Depreciation and amortization		9,297			13,483
Selling, general and administrative		1,369,365			651,196
Research and development expenses		210,006			217,864
Transactional and financing advisory fees		7,705,533			-
Total operating expenses		9,294,201			882,543
Operating loss		(9,097,496	)		(750,334	)

Other income/(expense), net:
Interest expense		(136,697	)		(153,229	)
Other income, net		5,649			2,345
Fair value adjustment		30,511			(239,686	)
Total other expense, net		(100,537	)		(390,570	)
Net loss		(9,198,033	)		(1,140,904	)
Net loss attributable to non-controlling interest		(161,489	)		-
Net loss attributable to owners of the Company		(9,036,544	)		(1,140,904	)
Other comprehensive loss
Foreign currency translation adjustments		(15,193	)		60
Total comprehensive loss	$	(9,213,226	)	$	(1,140,844	)

Net loss per share:
Loss per share – basic and diluted	$	(10.00	)	$	(2,955.71	)
Weighted average number of shares outstanding – basic and diluted		919,754			386

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

VYOME HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

(Amount in USD)	July 1 to September 30, 2025			July 1 to September 30, 2024

Revenue	$	34,627		$	84,526
Cost of goods sold		(16,577	)		(47,441	)
		18,050			37,085
Operating expenses
Depreciation and amortization		2,806			4,427
Selling, general and administrative		844,344			246,821
Research and development expenses		39,677			66,815
Transactional and financial advisory fees		7,705,533			-
Total operating expenses		8,592,360			318,063
Operating loss		(8,574,310	)		(280,978	)

Other income/(expense), net:
Interest expenses		(25,604	)		(45,742	)
Other income, net		4,614			638
Fair value adjustment		-			(221,690	)
Total other expense, net		(20,990	)		(266,794	)
Net loss		(8,595,300	)		(547,772	)
Net loss attributable to non-controlling interest		(161,489	)		-
Net loss attributable to owners of the Company		(8,433,811	)		(547,772	)
Other comprehensive loss
Foreign currency translation adjustments		(15,206	)		144
Total comprehensive loss	$	(8,610,506	)	$	(547,628	)

Net loss per share:
Loss per share – basic and diluted	$	(3.12	)	$	(1419.10	)
Weighted average number of shares outstanding – basic and diluted		2,758,490			386

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

VYOME HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025, AND 2024

	Common stock						Preferred stock						Additional Paid-in			Accumulated			Non- Controlling			Accumulated Other Comprehensive Income			Total Stockholders’ Equity
(Amount in USD)	Shares			Amount			Shares			Amount			Capital			Deficit			Interest			(Loss)			(Deficit)
Balance at December 31, 2023		386		$	1			2,968		$	3		$	47,855,358		$	(53,975,283	)	$	-		$	(54,297	)	$	(6,174,217	)
Net loss for the period																	(127,302	)								(127,302	)
Foreign currency translation adjustment																							(81	)		(81	)
Balance at March 31, 2024		386		$	1			2,968		$	3		$	47,855,358		$	(54,102,585	)	$	-		$	(54,378	)	$	(6,301,600	)

Issuance of shares in settlement of accrued compensation liability														1,115,232												1,115,232
Issuance of shares in settlement of liability								86			-			1,680,210											$	1,680,210
Net loss for the period																	(465,830	)								(465,830	)
Foreign currency translation adjustment																						$	(3	)		(3	)
Balance at June 30, 2024		386		$	1			3,054		$	3		$	50,650,800		$	(54,568,415	)	$	-		$	(54,381	)	$	(3,971,992	)

Conversion of note to preferred shares								22						434,077												434,077
Net loss for the period																	(547,772	)								(547,772	)
Foreign currency translation adjustment																						$	144			144
Balance at September 30, 2024		386		$	1			3,076		$	3		$	51,084,877		$	(55,116,187	)	$	-		$	(54,237	)	$	(4,085,543	)

Balance at December 31, 2024		386			1			3,076		$	3		$	51,084,877		$	(55,422,744	)				$	(53,170	)	$	(4,391,033	)
Net loss for the period																	(293,973	)								(293,973	)
Foreign currency translation adjustment																							1.			1
Balance at March 31, 2025		386		$	1			3,076		$	3		$	51,084,877		$	(55,716,717	)	$	-		$	(53,169	)	$	(4,685,005	)

Net loss for the period																$	(308,760	)							$	(308,760	)
Foreign currency translation adjustment																							12			12
Balance at June 30, 2025		386		$	1			3,076		$	3		$	51,084,877		$	(56,025,477	)	$	-		$	(53,157	)	$	(4,993,753	)

Stock based compensation														574,109												574,109
Issuance (and exercise) of warrants to investors		6,008,589			6,009									2,457,513			(2,457,513	)								6,009
Conversion of certain preferred shares for new classes of preferred shares								1,238,604			1,239			19,420,072			(19,421,311	)								-
Issuance of shares to advisors		376,256			376									5,899,318												5,899,694
Conversion of preferred stock to common stock		1,241,680			1,242			(1,241,680	)		(1,242	)														-
Conversion of notes payable to common stock		534,850			535									3,972,994						84,720						4,058,249
Net shares of VTI exchanged into Vyome Holdings common stock		(3,196,998	)		(3,199	)								(534,929	)					540,507						2,379
Shares issued in connection with offering		520,514			521									5,488,531						925,009						6,414,061
Shares issued in connection with ATM financing, net of co,’		71,018			71									679,562												679,633
Deferred cost offset against offering														(111,415	)											(111,415	)
Net loss for the period																	(8,433,811	)		(161,489	)					(8,595,300	)
Foreign currency translation adjustment																							(15,206	)		(15,206	)
Balance at September 30, 2025		5,556,295		$	5,556			-		$	-		$	88,930,632		$	(86,338,112	)	$	1,388,747		$	(68,363	)	$	3,918,460

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

VYOME HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amount in USD)	Nine months ended September 30, 2025			Nine months ended September 30, 2024
Cash flows from operating activities
Net loss	$	(9,198,033	)	$	(1,140,904	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,297			13,483
(Gain) loss on fair value adjustment of convertible debt		(30,511	)		239,686
Non-cash accrued interest expense		130,659			137,942
Stock compensation expense - stock options		574,109			-
Stock compensation expense – common stock		5,899,694			-
Changes in assets and liabilities:
Accounts receivable, net		(20,707	)		66,468
Prepaid expenses and other current assets		(220,811	)		113
Other assets		62,080			20,576
Accounts payable and accrued expenses		521,522			(177,054	)
Due to Affiliates		55,275			64,457
Post employment benefits		(15,501	)		175,510
Other liabilities		(37,728	)		(11,445	)
Net cash used in operating activities		(2,270,655	)		(611,168	)
Cash flows from investing activities:
Purchase of fixed assets		-			(1,151	)
Net cash used in investing activities		-			(1,151	)
Cash flows generated from financing activities:
Proceeds from issuance of convertible debt		191,253			613,542
Proceeds from promissory note issued by Reshape		600,000			-
Proceeds from sale of common stock pursuant to ATM agreement		679,633
Proceeds from sale of common stock under Concurrent Financing		6,675,061			-
Issuance costs of Concurrent Financing		(261,000	)
Proceeds from exercise of warrants		6,009
Advance from affiliates		-			30,943
Net cash from financing activities		7,890,956			644,485
Effect of exchange rate changes on cash and cash equivalents		(15,193	)		60
Net increase in cash and cash equivalents		5,605,108			32,226
Cash and cash equivalents at beginning of the period		101,904			16,646
Cash and cash equivalents at end of the period	$	5,707,012		$	48,872

Supplemental non-cash and financing activities:
Shares issued in settlement of liability to vendor				$	1,680,210
Exchange of accrued fees to director for stock options				$	450,000
Exchange of accrued compensation for stock options				$	665,232
Incremental fair value of exchange of VTI preferred shares for new series of VTI preferred shares	$	19,421,311			-
Conversion of preferred shares of VTI to common stock of VTI	$	1,242			-
Net liabilities assumed upon Merger with Reshape	$	415,000			-
Reclassification of debt and equity accounts to non-controlling interests	$	1,535,227			-
Conversion of debt into common stock	$	3,973,529			-
Fair value of issuance of warrants to preferred shareholders	$	2,457,513			-
Reclass of deferred offering costs to additional paid in capital	$	111,415			-

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

VYOME HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts are in US Dollars except per share data and as stated otherwise)

Organization and principal activities

Merger Transaction:

Vyome Holdings Inc. (“Vyome Holdings” or the “Company”), formerly known as Reshape Lifesciences, Inc. (“Reshape”), is the holding company for Vyome Therapeutics, Inc. (“VTI”), a Delaware corporation, and its subsidiary in India, Vyome Therapeutics Limited (“VTL”) and are collectively referred to as “Vyome”.

VTI signed a definitive merger agreement (“Merger”) with Reshape Lifesciences, Inc. (“Reshape”) in July 2024, and such transaction was completed on August 14, 2025. Immediately prior to the Merger, Reshape sold substantially all of its assets and operations to a third-party. Immediately prior to the Merger, all of the convertible notes and preferred stock of Vyome were converted into shares of common stock based upon negotiated values. As a result of the Merger, the Board of Directors and management team of Reshape resigned, the Board of Directors and management of VTI were installed, and the Company became a Nasdaq-listed company. Reshape changed its name to Vyome Holdings, Inc. (the “Combined Company”) and began trading under the ticker symbol “HIND”. The Company will focus on Vyome’s business of advancing the development of its immuno-inflammatory assets and on identifying additional opportunities in the world-class US-Indian innovation corridor for the global market.

The Company has accounted for the transaction as a reverse recapitalization with Vyome. as the accounting acquirer. Because VTI is the accounting acquirer, its historical financial statements became the Company’s historical financial statements, and such assets and liabilities continued to be recorded at their historical carrying values. The impact of the recapitalization has been retroactively applied to all periods presented. Immediately after the closing of the Merger and the consummation of a private placement offering, the former holders of common stock of VTI owned, in the aggregate, approximately 88% of the common shares, with Reshape’s shareholders immediately prior to the Merger owning approximately 12% of common shares outstanding.

Business

The Company is a Cambridge, Massachusetts-based clinical-stage specialty pharmaceutical company working to treat immune-inflammatory and rare diseases of unmet need with next-generation therapeutic solutions. The lead program VT-1953, a topical gel with a novel molecule to treat signs and symptoms of Malignant Fungating wounds, is a potential orphan drug program. The Company is planning to have discussions with the Food & Drug Administration (FDA) on the pivotal trial protocol in the first quarter of 2026. The Company had initiated a Phase II investigator-initiated trial in the first quarter of 2025 for VT-1953 and announced interim results in September 2025. The Company also has a Pre-Investigative New Drug application stage ophthalmic drops program, a potentially orphan drug program, and a repurposed immune modulator to treat steroid-sparing anterior uveitis. Another late clinical-stage program, VB 1953, for moderate to severe inflammatory acne has successfully completed its Phase II clinical trial with positive read-outs, and this program is Phase III ready. The Company may experience delays in the conduct of clinical trials of its product candidates. Clinical trials can be delayed for a variety of reasons, including delays in obtaining regulatory approval to commence a clinical trial, in securing clinical trial agreements with prospective sites with acceptable terms, in obtaining institutional review board approval to conduct a clinical trial at a prospective site, in recruiting patients to participate in a clinical trial or in obtaining sufficient supplies of clinical trial materials. Any delays in completing the Company’s clinical trials will increase its costs, slow down its product development, timeliness, and approval process, and delay its ability to generate revenue.

The Company is also developing other assets for treating immune-inflammatory diseases, which are in pre-clinical or early clinical development.

The Company also has commercialized novel reformulated topical anti-fungal products using its patented technology after two such products successfully completed clinical testing in India. The Company has entered into a licensing and marketing agreement with the Sun Pharma group of companies in India (“Sun Pharma”) to sell a family of novel topical anti-fungal products owned by the Company. The Company used third-party entities to manufacture the products. In December 2024, the licensing and marketing agreement was terminated.

The Company has entered into a Development and Licensing agreement for Luliconazole (an anti-fungal product) with Sun Pharma for additional development and commercialization in India. Sales of Luliconazole commenced in the third quarter of 2023 by Sun Pharma.

Since its inception, the Company has devoted substantially all its efforts to drug development, business planning, research and development, recruiting management and technical staff, acquiring operating assets, and raising capital. The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, successful development of technology, obtaining additional funding, protection of proprietary technology, compliance with government regulations, risks of failure of pre-clinical studies, clinical studies and clinical trials, the need to obtain marketing approval for its drug candidates and its consumer products, fluctuations in operating results, economic pressure impacting therapeutic pricing, dependence on key personnel, risks associated with changes in technologies, development by competitors of technological innovations and the ability to transition from pilot scale manufacturing to large scale production.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the nine months ended September 30, 2025, and 2024, the Company generated a net loss of $ 9,198,033 and $1,140,904, respectively. For the three months ended September 30, 2025, and 2024, the Company generated a net loss of $ 8,595,300 and $547,772, respectively. The Company’s major sources of funds prior to the Merger have been through the sale of preferred stock and the issuance of convertible debt. As a result of the Merger transaction and private placement offering described in Note 9, and depending upon the timing of the commencement of certain clinical activities, the Company believes it has sufficient funds to finance the operating requirements for at least the next 12 months from the issuance of these Condensed Consolidated Financial Statements. The Company has access to a financing facility to sell shares of common stock of the Company through an ATM facility which may be accessed under certain circumstances– See Note 9. Further, the Company will be able to determine the timing of when planned clinical and pre-clinical operations will commence.

Obtaining additional financing to support the successful development of the Company’s contemplated plan of drug development and operations and its transition, ultimately, to the attainment of profitable operations, is necessary for the Company to continue operations. The Company will continue to seek funds through debt or equity financings, marketing and distribution arrangements, and other collaborations, strategic alliances, and licensing arrangements, or other sources of financing. However, there can be no assurances that such financing or other strategic transactions will be available on acceptable terms, or at all. If the Company is unable to raise additional funds, it will need to do one or more of the following:

●

Delay clinical trials and processes;

●

License third parties to develop and commercialize products or technologies that it would otherwise seek to develop and commercialize itself;

●

Seek strategic alliances or business combinations;

●

Attempt to sell the Company;

●

Cease operations; or

●

Declare bankruptcy

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Management is implementing plans to reduce expenses and seek additional financing. However, there can be no assurance that these plans will be successful. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The consolidated financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements contained herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, the condensed consolidated financial statements reflect all normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of interim periods and may not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”). The information as of September 30, 2025, and for the nine months ended September 30, 2025, is unaudited, whereas the consolidated balance sheet as of December 31, 2024, is derived from the VTI’s audited consolidated financial statements as of that date. These condensed consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto included in the audited financial statements for the year ended December 31, 2024.

The results of operations for the interim periods presented are not necessarily indicative of results to be expected for any other interim period or for the year. Certain reclassifications have been made in prior year’s financial statements to conform to classifications used in the current year.

Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).

In August 2025, the Board of Directors of the Company approved a 5,000: 1 reverse stock split. All share and per share numbers have been updated to reflect such a reverse stock split.

Segments

The Company organized its operations into two operating segments. The segments reflect the way the Company evaluates its business performance and manages its operations by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources, and assessing performance. The Company’s CODM has been identified as its chief executive officer. The Company determined it has two operating segments: (1) Pharmaceutical segment, and (2) Biotechnology segment. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. See Note 14.

As the Company’s long-lived assets, except for the intangible asset, are substantially all located in India, and all of the Company’s revenue and expenses related to the sale of products are derived from within India, no geographical segments are presented.

Basis of Consolidation

The Condensed Consolidated Financial Statements include the accounts of the Company, its majority-owned subsidiaries, VTL and VTI, and other wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results, as determined at a later date, could differ from those estimates. Significant estimates used in preparing these unaudited consolidated financial statements include the realization of deferred tax assets, timing of the recognition of research and development costs, fair value of debt and equity-based instruments, and future obligations under employee benefit plans.

Foreign Currency Translation and Transactions

The Company also operates in India, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between the US dollar and the Indian Rupee.

The Company’s functional currency is the United States Dollar. The functional currency of its Indian subsidiary is Indian National Rupees. Consequently, revenues and expenses of operations of the Indian subsidiary are translated into United States Dollars using average period exchange rates, while assets and liabilities of the Indian subsidiary are translated into United States Dollars using the year-end exchange rate in effect at the balance sheet dates. Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as a part of Accumulated Other Comprehensive loss, a separate component of stockholders’ equity (deficit) in the accompanying consolidated balance sheets.

Transactions in foreign currencies are translated at the exchange rate prevailing on the date of the transaction. Resulting gains or losses from the settlement of such foreign currency transactions are included in the consolidated statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates in effect on the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are expressed in functional currency at the historical exchange rates. Losses resulting from foreign currency transactions amounting to $15,193 and ($60) for the nine months ended September 30, 2025, and 2024, respectively, are included in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Cash and Cash Equivalents

Cash includes all highly liquid instruments with a maturity of three months or less when purchased. VTI and VHI maintain their cash balances in financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times during the year, such balances may exceed the FDIC limit. The Company has not experienced any credit losses associated with its balances in such accounts. Cash held in the U.S. bank account of VTI as of September 30, 2025, and December 31, 2024, was $4,697,807 and $ 3,197, respectively. Cash held in India in VTL bank accounts as of September 30, 2025, and December 31, 2024, was $1,009,205 and $98,707, respectively.

Accounts Receivable, net

Accounts receivable are generally recorded at the invoiced amounts, net of an allowance for expected losses. The Company establishes credit terms for new customers based upon management’s review of their credit information and project terms and performs ongoing credit evaluations of its customers, adjusting credit terms when management believes appropriate based upon payment history and an assessment of the customer’s current creditworthiness. The Company follows Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which removed all current thresholds and requires entities under the new current expected credit loss (“CECL”) model to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that an entity expects to collect over the instrument’s contractual life. The new CECL model is based on expected losses rather than incurred losses. Management determined that no allowance for doubtful accounts was necessary as of September 30, 2025, and December 31, 2024.

Property and equipment, net

Property and equipment is stated as net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, summarized as follows:

●

Computers and software. 3 years

●

Office equipment. 5 years

●

Furniture and Fixtures. 10 Years

●

Lab machinery. 10 years

●

Leasehold improvements Lower of estimated useful life or remaining period of lease term

Repairs and maintenance costs are expensed as incurred; major renewals and betterments are capitalized. When assets are disposed of, the assets and related allowances for depreciation and amortization are eliminated from the accounts, and any resulting gain or loss is reflected in operations.

Goods and Service Tax and Other Credits Receivable

The Company has indirect tax credit carry-forwards arising in India, which may be utilized or refunded as VTL generates sales to third parties or invoices to VTI pursuant to intercompany transfer pricing arrangements. The Company expects to utilize these indirect tax credit carry-forwards over a 4-to-5-year period.

Intangible Assets

On August 21, 2021, Vyome acquired the majority of the outstanding shares, representing substantially all of the outstanding shares of preferred stock of Livechain, Inc. (“LICH”) for $220,000. The total costs of the shares acquisition were $314,191. LICH is an inactive non-reporting shell (“Shell Company”) that trades on the OTCID operated by OTC Markets Group under the ticker symbol LICH. As of the date of the acquisition of LICH and through September 30, 2025, LICH had no operations. LICH did not meet the definition of a business and therefore was accounted for as an asset acquisition of the shell company, a single indefinite-lived asset.

Intangible assets with indefinite lives (i.e., non-reporting shell) are not amortized; rather, they are tested for impairment annually or whenever events or circumstances exist that would make it more likely than not that an impairment exists.

Impairment of Long-Lived Assets

The Company evaluates all long-lived assets for impairment annually, or sooner if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying amount is not fully recoverable, an impairment loss is recognized to reduce the carrying amount to fair value and is charged to expense in the period of impairment. As of September 30, 2025, and December 31, 2024, management has determined that the value of the shares acquired in LICH is not impaired.

Non-Controlling interest

Noncontrolling interest reported as a component of equity on the consolidated balance sheets represents the equity interests not owned by the Company and is recorded for consolidated entities the Company controls, but which the Company owns less than 100%. The portion of the loss attributable to each such subsidiary that is held by outside investors is reported as Loss Attributable to Non-Controlling Interest in the Consolidated Statements of Operations and Comprehensive Loss.

Revenue Recognition

The Company recognizes revenue under ASC Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company determines revenue recognition through the following steps:

●

Step 1: Identify the contract with the customer;

●

Step 2: Identify the performance obligations in the contract;

●

Step 3: Determine the transaction price;

●

Step 4: Allocate the transaction price to the performance obligations in the contract; and

●

Step 5: Recognize revenue when the company satisfies a performance obligation.

The Company records sales of its dermatological products to the pharmaceutical company when performance obligations with its customer are satisfied. The Company’s performance obligation is a promise to transfer a distinct good to the customer, and each distinct good represents a single performance obligation. Such performance obligations are satisfied at a point in time, and revenues are recognized when all rights and rewards of ownership are transferred. The majority of the Company’s products are shipped by common carriers resulting in recognition of revenues upon shipment, at which time control passes to the customer. Revenue is measured at the amount of consideration the Company expects to receive in exchange for the transfer of products. Customers may be entitled to cash discounts, typically denoted at the time of invoicing and shipping. Such amounts are considered to be variable consideration under ASC 606. An estimate for cash discounts is included in the transaction price as a component of sales and is estimated based on the satisfaction of outstanding receivables and historical performance. The Company does not have any material financing terms as payment is received shortly after the transfer of control of the products to the customer within a period of 30-60 days.

Net service fee payment and agent fees for sales of products made by Sun Pharma are recorded as service fee revenue in the period earned

Pursuant to licensing and marketing contracts, the Company receives payments from its pharmaceutical company marketing partner for the right to distribute the products (“royalties”). Such royalty payments are linked to the net sales value of the products by its marketing partner to third parties and are recognized in the period to which the royalty relates. Such amounts are recorded under revenue from operations in the Consolidated Statements of Operations and Comprehensive Loss.

The Company recognizes milestone payments under the license and marketing agreements when all performance obligations are completed, typically when there are no further steps required by the Company for that milestone.

Cost of products sold

The cost of products sold represents the cost of manufacturing the products supplied by third-party manufacturers.

Research and Development Expenses

Research and development costs are expensed as incurred. Research and development expenses consist of internal and external expenses. Internal expenses include employee compensation and overheads. External expenses include development, clinical trials, statistical analysis and report writing, and regulatory compliance costs incurred with clinical research organizations and other third-party vendors. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates have been made as a result of the service provided, the Company may record net prepaid or accrued expenses relating to these costs. Payments made to third parties that perform research and development services on the Company’s behalf are expensed as services are rendered, or as contractually agreed.

Stock-based Compensation

The Company accounts for stock options granted to employees and non-employees at fair value, which is measured using the Black-Scholes Option pricing model. Measurement inputs include share price on the measurement date, the exercise price of the instrument, expected volatility (based on weighted average historic volatility for a duration equal to the weighted average life of the instruments, life based on the average of the vesting and contractual periods for employee awards as minimal prior exercises of options in which to establish historical exercise experience), and the risk-free interest rate. The expected life of the stock options is not necessarily indicative of exercise patterns that may occur. The fair value measurement date for employee awards is the date of the grant.

The expected life of the stock options in years is estimated using the “simplified method,” as prescribed in SEC’s Staff Accounting Bulletin (SAB) No. 107, as the Company has no historical information from which to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. The simplified method is the midpoint between the vesting period and the contractual term of the option. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome. Prior to the Merger, the Company was a private company and lacked company-specific historical and implied volatility information. Therefore, it estimated its expected stock volatility based on the historical data regarding the volatility of a publicly traded set of peer companies. The risk-free rate is based on the U.S. Treasury yield curve commensurate with the expected life of the option. The expected dividend yield is zero as the Company has no history of paying dividends and no plans to do so in the near term.

Stock-based compensation expense attributable to equity awards granted to employees is measured at the grant date based on the fair value of the award. The expense is recognized on a straight-line basis over the requisite service period for awards that vest, which is generally the period from the grant date to the end of the vesting period. Stock-based awards provided to non-employees are measured and expensed as the services are provided.

The Company’s policy is to account for forfeitures of awards when they occur in accordance with ASC 718, Compensation-Stock Compensation. The Company reverses compensation cost previously recognized in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period.

As the Company’s common stock has not been publicly traded prior to the Merger, its board of directors periodically estimated the fair value of the Company’s common stock considering, among other things, contemporaneous valuations of its common stock prepared by an independent valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants 2013 Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards in the Condensed Consolidated Financial Statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the unaudited consolidated statements of operations in the period that includes the enactment date.

Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies. When the Company changes its determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to income tax expense in the period in which such determination is made.

The Company also accounts for uncertain tax positions in accordance with ASC Topic 740, Income Taxes. This guidance prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the Company’s income tax returns. As of September 30, 2025, and December 31, 2024, the Company had no uncertain tax positions that affected its financial position and its results of operations or its cash flows, and will continue to evaluate for uncertain tax positions in the future. There are no interest costs or penalties provided for in the Company’s consolidated financial statements for the nine months ended September 30, 2025, and 2024. If at any time the Company should record interest and penalties in connection with income taxes, the interest and the penalties will be expensed within the general and administrative expenses category in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

Leases

ASC Topic 842, “Leases”, establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Lessor accounting under the new standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required.

The Company adopted the following practical expedients and accounting policies elections related to this standard:

●

Short-term lease accounting policy election allowing lessees to not recognize ROU assets and liabilities for leases with a term of 12 months or less; option to not separate lease and non-lease components in the Company’s lease contracts; and

●

The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing the capitalization of initial direct costs for any existing leases.

Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 12.

Notes Payable

The Company has elected to account for notes payable issued to investors using the fair value option in accordance with the guidance contained in ASC 825-10-25. The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments. See Note 8 for additional information.  Pursuant to ASC 815-40-65-1(d), the Company made a one-time irrevocable election to apply the fair value option in ASC 825-10 for any liability classified convertible securities that are within the scope of ASC 825-10.

Fair Value Measurements

The Company considers its cash and cash equivalents, accounts receivable, and accounts payable to meet the definition of financial instruments, and the carrying amounts of such instruments approximated their fair values due to the short maturities of these instruments. The Company recorded the convertible debt at fair value.

The Company measures fair value as required by the ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). ASC Topic 820 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, there exists a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 -

Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2 -

Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 -

Unobservable inputs for the asset or liability are only used when there is little if any, market activity for the asset or liability at the measurement date.

The Company utilizes a Probability Weighted Expected Return Model (“PWERM”) to value the convertible debt and promissory notes. The quantitative information with respect to valuation methodology and significant unobservable inputs used for the Company’s convertible debt that is categorized within Level 3 of the fair value hierarchy included the discount rate and expected financing date. The other factors used in the calculation of fair value are contractual terms of the convertible note and promissory note instruments.

The following table sets forth the financial liabilities, measured at fair value, by level within the fair value hierarchy as of September 30, 2025, and December 31, 2024

	September 30,		December 31,
	2025		2024
Level 3
Convertible debt	$	-	$	3,589,410

Basic and diluted net loss per common share

Net loss per share information is determined using the two-class method, which includes the weighted average number of shares of common stock outstanding during the period and other securities that participate in dividends (a “participating security”). The Company considered its Preferred Stock to be participating securities because the shares included rights to participate in dividends with the common stock.

Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The net loss attributable to common stockholders is calculated by adjusting the net loss of the Company for the accretion on the Preferred Stock. Net losses are not allocated to preferred stockholders as they do not have an obligation to share in the Company’s net losses. In periods with net income attributable to common stockholders, the Company would allocate net income first to preferred stockholders based on dividend rights under the Company’s certificate of incorporation and then to preferred and common stockholders based on ownership interests. Diluted net loss per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2) the if-converted method.

During the nine months ended September 30, 2025, and 2024, diluted earnings per common share is the same as basic earnings per common share because, as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise of all outstanding stock options would have an anti-dilutive effect. The number of shares potentially issuable upon conversion of the debt is not currently calculable and would be anti-dilutive.

The dilutive shares as of September 30, 2025 and 2024, not included in the dilutive loss per share calculation, are as follows:

	September 30,		September 30,
	2025		2024
Stock options		2,763,181		294
Warrants		817		-
Preferred stock		-		3,076
Shares that are subject to put call option agreement for certain entitled VHI shares		1,715,339		-
		4,479,337		3,370

Post Employment benefits

The Subsidiary in India has a defined benefit gratuity scheme for its employees in India. This gratuity scheme provides for lump sum payment in accordance with the provisions of the Payment of Gratuity Act, 1972 to vested employees at retirement or death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service or part thereof in excess of three months subject to a limit of INR 2,000,000 (equivalent to approximately $ 24,000). Vesting occurs upon completion of 5 years of continuous service.

Accumulated compensated absences, which are expected to be encashed within 12 months from end of the year, are treated as short-term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement at the end of the year. Actuarial gains or losses are recognized in the Condensed Consolidated Statement of Operations and Comprehensive Loss in the year in which they arise.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the FASB and are early adopted by the Company or adopted as of the specified effective date. There were no recent accounting pronouncements that impacted the Company or are expected to have a significant effect on its consolidated financial statements.

3.	Other current assets

Other current assets consist of the following:

	September 30,		December 31,
	2025		2024
Advances to suppliers	$	7,057	$	12,134
Other receivables		70,056		48,648
Others		15,281		16,612
Total other current assets		92,394		77,394
Prepaid expenses		214,850		9,039
Total	$	307,244	$	86,433

Prepaid expenses consist primarily of prepaid directors’ and officers’ insurance.

4.	Property and equipment, net

Property and equipment, net consist of the following:

	September 30,			December 31,
	2025			2024
Buildings and Improvement	$	124,152		$	128,778
Computer and office equipment		52,742			52,412
Furniture & fixtures		13,683			13,865
Laboratory equipment		397,043			411,840
Total		587,620			606,895
Accumulated depreciation		(537,452	)		(547,716	)
Net fixed assets	$	50,168		$	59,179

Depreciation expense was $9,297 and $13,483 for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense was $2,806 and $4,427 for the three months ended September 30, 2025 and 2024, respectively.

5.	Goods and services tax and other credits receivable

The Company’s balance of goods and services tax and other credits receivable from government authorities as of September 30, 2025, and December 31, 2024, consists of the following:

	September 30,		December 31,
	2025		2024
Tax deducted at source and tax collected at source receivable	$	15,999	$	3,283
Input goods and service tax credit		590,915		643,475
	$	606,914	$	646,758

6.	Accounts payable and accrued expenses

Accounts payable and accrued expenses as of September 30, 2025, and December 31, 2024 consist of the following:

	September 30,		December 31,
	2025		2024
Accounts payable	$	1,654,373	$	501,921
Accrued expenses		249,190		463,686
	$	1,903,563	$	965,607

7.	Salary and post-employment benefits payable

Salary and post-employment benefits payable as of September 30, 2025, and December 31, 2024, consist of the following:

	September 30,		December 31,
	2025		2024
Salaries payable	$	748,789	$	777,578
Accrued leave encashment (note 13)		78,223		72,768
Accrued gratuity plan (note 13)		79,927		69,094
	$	906,939	$	919,440

In June 2024, an officer and a director of the Company agreed to forgo accrued salaries and consulting fees payable of $1,115,232 in exchange for the issuance of stock options for the purchase of 129 shares of common stock (see Note 10). The Company accounted for this debt extinguishment as a capital contribution since the liability was with related parties. Accordingly, the difference between the liability extinguished of $1,115,232 and the fair value of the stock options issued ($379,950) of $ 735,282 is considered a capital contribution.

8.	Convertible debt and Promissory Notes- ReShape

Convertible Debt

Commencing in October 2020 through February 2024, the Company began raising money through the issuance of a compulsorily convertible promissory note (the “Promissory Note”) pursuant to a Subscription Agreement (the “Subscription Agreement”). The Promissory Note was issued as part of a private placement (the “Offering”) for the sale of up to $1,982,000 ) of secured convertible promissory notes (collectively, the “Promissory Notes”) for a period of three years of maturity. The Promissory Notes bear interest at a rate of eight percent (8%) per annum, on a non-compounding basis, and are due and payable on the earlier of (i) the date upon which the Promissory Notes are converted into equity securities of the Company, or (ii) at maturity in three (3) years (“Maturity Date”). Significant conversion terms of the Promissory Notes are as follows:

a) In the event that the Company issues and sells shares of its equity securities (“Equity Securities”) to investors (the “Investors”) prior to the Maturity Date in an equity financing with total proceeds to the Company of not less than $10,000,000 (excluding the conversion of the Promissory Notes or other convertible securities issued for capital raising purposes (e.g., Simple Agreements for Future Equity) (a “Qualified Financing”), then the outstanding principal amount of this Note and any unpaid accrued interest shall automatically convert in whole without any further action by the Holder into Equity Securities sold in the Qualified Financing at a conversion price equal to the cash price per share paid for Equity Securities by the Investors in the Qualified Financing multiplied by 0.75 in some notes or 0.8 in some other notes; provided, that if such Qualified Financing is also a Deemed Liquidation Event (as defined in VTI’s Certificate of Incorporation, as amended, restated, and otherwise in effect from time to time, the (“Certificate of Incorporation”), shall govern with respect to the conversion of this Note. The issuance of Equity Securities upon the conversion of this Note shall be upon and subject to the same terms and conditions applicable to Equity Securities sold in the Qualified Financing. Notwithstanding the foregoing, if the conversion price of the Notes as determined pursuant to the foregoing (the “Conversion Price”) is less than the price per share at which Equity Securities are issued in the Qualified Financing, the Company may, solely at its option, elect to convert the Promissory Note into shares of a newly created series of preferred stock having the identical rights, privileges, preferences and restrictions as Equity Securities issued in the Qualified Financing, and otherwise on the same terms and conditions, other than with respect to (if applicable): (i) the per share liquidation preference and the conversion price for purposes of price-based anti-dilution protection, which will equal the Conversion Price; and (ii) the per share dividend, which will be the same percentage of the Conversion Price as applied to determine the per share dividends of the Investors in the Qualified Financing relative to the purchase price paid by the Investors. For the avoidance of doubt, such newly created series of preferred stock described in the preceding sentence shall be pari passu with the Equity Securities issued in the Qualified Financing.

b) If the Company consummates a transaction that is a Deemed Liquidation Event (as defined in the Certificate of Incorporation) while the Promissory Note remains outstanding, then the outstanding principal amount of the Promissory Note and any unpaid accrued interest shall, immediately prior to the closing of such Deemed Liquidation Event, automatically convert in whole without any further action by the holder of the Promissory Note into shares of a newly created series of preferred stock (“New Senior Preferred Stock”) at a conversion price equal to the Original Issue Price (as defined in the Certificate of Incorporation) for the most senior series of preferred stock of the Company outstanding at such time (the “New Senior Preferred Conversion Price”). The New Senior Preferred Stock shall have the identical rights, privileges, preferences and restrictions as the most senior series of preferred stock of the Company outstanding at the time of such conversion, other than with respect to: (i) the per share liquidation preference, which shall be equal to two (2) times in some notes three (3) times in the other notes the New Senior Preferred Conversion Price; (ii) the conversion price for purposes of price-based anti-dilution protection, which will equal the New Senior Preferred Conversion Price; and (iii) the per share dividend, which will be the same percentage of the New Senior Preferred Conversion Price as applied to determine the per share dividends of the holders of the most senior series of preferred stock of the Company outstanding at such time relative to the Original Issue Price for such shares. For the avoidance of doubt, the New Senior Preferred Stock shall be senior to the most senior series of preferred stock of the Company outstanding at such time and shall be pari passu with all other securities into which compulsory convertible notes issued by the Company convert.

c) If the Promissory Note has not otherwise been converted pursuant to the above, then, effective as of the Maturity Date, all outstanding principal and accrued and unpaid interest under the Promissory Note shall be automatically converted into Series D Preferred Stock, at a conversion price equal to the New Senior Preferred Conversion Price.

During 2023 and through September 2025, certain of the Promissory Notes reached their maturity date and were extended by an additional year. In connection with such extension, the conversion rate was amended from 0.80 to 0.75, and the liquidation preference was amended from three times to two times. All other terms remained the same. The Company accounted for such extension as a modification of the debt instrument. In August 2024, two of the Promissory Notes with an aggregate principal plus accrued interest of $ 434,077 were converted into 22 shares of Series D Preferred stock at $19,450 per share. All other noteholders whose Promissory Notes reached their initial maturity date agreed to the extension terms as noted above.

In July 2024, the Company began offering investors the opportunity to participate in a private placement offering, providing the investors the right to purchase shares of its common stock, bridge notes and warrants and other equity rights in VTI and VTL, some of which are dependent upon the completion of the Merger (the “Concurrent Financing”). An aggregate of 34 investors agreed to participate in such Concurrent Financing through the date of the Merger, for an aggregate of approximately $7.3 million, of which approximately $ 659,542 was received before closing of the Merger, in the form of bridge notes in VTI and VTL (the “Bridge Notes”). The Bridge Notes had similar terms to the Promissory Notes, except for a one-year term and were convertible at a 30% discount to the Merger valuation.

The fair value amount of the Promissory Notes and Bridge Notes and accrued interest is summarized as follows:

	September 30,		December 31,
	2025		2024
Current portion
Conversion rate at 70% of Merger Valuation	$	-	$	487,206
Conversion rate at 75% of Qualified Financing		-		3,102,204

Total	$	-	$	3,589,410

The Company has elected to record the Promissory Notes and Bridge Notes at fair value. Changes in the fair value of the Convertible Notes for the nine months ended September 30, 2025 and 2024 are summarized as follows:

	Nine months ended		Nine months ended
	September 30, 2025		September 30, 2024
Balance, beginning of the period	$	3,589,410	$	2,930,888
Additional notes issued

SEC Form 10-Q filed by Vyome Holdings Inc.