AIFF
Firefly Neuroscience, INC
NASDAQ
10-Q: Firefly Neuroscience Reports Second Quarter 2024 Results Following Merger, Focuses on BNA Platform Commercialization
Sentiment:
Quarterly Report
19 August 2024 5:17 PM
Firefly Neuroscience, formerly WaveDancer, reported its second quarter 2024 results, highlighting a strategic shift towards commercializing its Brain Network Analytics (BNA) platform after a recent merger.
Worse than expected
The company's operating loss increased compared to the same period last year, primarily due to the absence of a litigation settlement gain that occurred in the prior year.
The company's revenue decreased compared to the same period last year, indicating a decline in business activity.
The company's cash position is weak, and it is dependent on raising additional capital to continue operations.
Capital raise
The company is negotiating further funding with existing and new investors to raise additional capital.
On July 26, 2024, Firefly 2023 entered into a securities purchase agreement for a private placement of shares and warrants for gross proceeds of approximately $3.5 million.
The private placement closed on August 12, 2024, substantially contemporaneous with the consummation of the Merger.
Summary
- Firefly Neuroscience, formerly WaveDancer, reported a net loss of $389,697 for the three months ended June 30, 2024, and a net loss of $1,063,647 for the six months ended June 30, 2024.
- The company's revenue for the three months ended June 30, 2024, was $1,903,602, a decrease from $2,024,622 in the same period last year.
- Revenue for the six months ended June 30, 2024, was $3,818,975, down from $4,184,745 in the prior year period.
- The company's operating loss from continuing operations was $382,070 for the three months ended June 30, 2024, compared to an operating income of $493,116 in the same period last year.
- The operating loss from continuing operations was $1,056,041 for the six months ended June 30, 2024, compared to a loss of $461,614 in the same period last year.
- The company completed a merger with Firefly Neuroscience 2023 on August 12, 2024, and changed its name from WaveDancer, Inc.
- The company's cash and cash equivalents were $244,137 as of June 30, 2024, and it had a net working capital deficit of $746,040.
- The company's line of credit of $300,000 expired on July 16, 2024, and was repaid in full on August 12, 2024, upon the close of the merger.
- The company estimates that its operating activities may use $1.0 million to $1.5 million of cash over the next twelve months.
- The company is focused on commercializing its Brain Network Analytics (BNA) platform, which is an FDA-cleared software for diagnosing mental illnesses and neurological disorders.
Sentiment
Score: 4
Explanation: The document presents a mixed picture. While the merger and focus on the BNA platform are positive, the financial results are weak, with significant losses, declining revenue, and a precarious cash position. The company's future is highly dependent on successful commercialization and additional funding.
Highlights
- Firefly Neuroscience completed a merger with Firefly Neuroscience 2023 on August 12, 2024, and changed its name from WaveDancer, Inc.
- The company's Brain Network Analytics (BNA) platform is FDA-cleared and is being prepared for commercial launch.
- The company's revenue decreased to $1,903,602 for the three months ended June 30, 2024, and $3,818,975 for the six months ended June 30, 2024.
- The company reported an operating loss of $382,070 for the three months ended June 30, 2024, and $1,056,041 for the six months ended June 30, 2024.
- The company had a net working capital deficit of $746,040 and cash and cash equivalents of $244,137 as of June 30, 2024.
- The company's line of credit expired on July 16, 2024, and was repaid in full on August 12, 2024, upon the close of the merger.
- The company estimates that its operating activities may use $1.0 million to $1.5 million of cash over the next twelve months.
Positives
- The company has completed a merger with Firefly Neuroscience 2023, which is expected to bring a new focus on the BNA platform.
- The company's BNA platform is FDA-cleared and ready for commercial launch.
- The company is taking cost control measures to reduce operational cash burn.
- The company is negotiating further funding with existing and new investors to raise additional capital.
- The company is commercializing its product to generate recurring sales.
Negatives
- The company reported a net loss of $389,697 for the three months ended June 30, 2024, and a net loss of $1,063,647 for the six months ended June 30, 2024.
- The company's revenue decreased to $1,903,602 for the three months ended June 30, 2024, and $3,818,975 for the six months ended June 30, 2024.
- The company had a net working capital deficit of $746,040 as of June 30, 2024.
- The company's line of credit expired on July 16, 2024, and was repaid in full on August 12, 2024, upon the close of the merger.
- The company's operating activities may use $1.0 million to $1.5 million of cash over the next twelve months.
Risks
- The company has a history of operating losses and negative cash flow.
- The company's ability to continue as a going concern is dependent on raising additional capital and generating revenue from its BNA platform.
- The company's line of credit expired on July 16, 2024, and was repaid in full on August 12, 2024, upon the close of the merger.
- The company's operating activities may use $1.0 million to $1.5 million of cash over the next twelve months.
- The company may not be able to obtain additional financing on favorable terms, or at all.
- The company's ability to achieve profitability depends on the successful commercialization of its BNA platform.
Future Outlook
The company expects to incur negative cash flows from operations as it continues to invest in sales, marketing, and research and development of its BNA platform. The company's ability to achieve profitability depends on the successful commercialization of its BNA platform.
Management Comments
- Management of the Company has a reasonable expectation that the Company can continue raising additional equity capital to continue in operational existence for the foreseeable future.
- The company is focused on commercializing its Brain Network Analytics (BNA) platform, which is an FDA-cleared software for diagnosing mental illnesses and neurological disorders.
Industry Context
The company is operating in the growing field of AI-driven healthcare solutions, specifically targeting mental illnesses and neurological disorders. The BNA platform aims to address the limitations of traditional EEG interpretation, which could position the company well in the market if commercialization is successful.
Comparison to Industry Standards
- The company's financial performance is weak compared to industry standards, with significant operating losses and a net working capital deficit.
- The company's revenue is declining, which is not typical for a company in the growth phase of a new technology.
- The company's reliance on government contracts and subcontracts presents a risk of revenue concentration.
- The company's cash position is weak, and it is dependent on raising additional capital to continue operations.
- The company's BNA platform is a unique offering in the market, but its commercial success is not yet proven.
Stakeholder Impact
- Shareholders face significant risk due to the company's financial instability and dependence on future funding.
- Employees may be impacted by cost control measures and potential restructuring.
- Customers may benefit from the BNA platform if it is successfully commercialized.
- Suppliers and creditors face risk due to the company's financial instability.
Next Steps
- The company will focus on commercializing its BNA platform.
- The company will continue to negotiate further funding with existing and new investors.
- The company will take various cost control measures to reduce the operational cash burn.
- The company will continue research and development of its next generation BNA Platform.
Key Dates
- 2021-12: WaveDancer, Inc. converted from a Virginia corporation to a Delaware corporation.
- 2023-03-17: The company sold 75.1% of the equity of its Gray Matters, Inc. subsidiary (GMI) to Gray Matters Data Corporation (GMDC).
- 2023-08-09: The company sold its remaining equity interest in GMDC.
- 2023-11-15: The company entered into an Agreement and Plan of Merger with Firefly Neuroscience 2023, Inc.
- 2024-01-12: Amendment No. 1 to the Merger Agreement was executed.
- 2024-06-17: Amendment No. 2 to the Merger Agreement was executed.
- 2024-06-30: End of the quarterly period for this report.
- 2024-07-16: The company's line of credit expired.
- 2024-07-23: Firefly 2023 advanced $75,000 cash in working capital to WaveDancer under a letter agreement.
- 2024-07-26: Firefly 2023 entered into a securities purchase agreement for a private placement.
- 2024-08-12: The company completed its merger with Firefly Neuroscience 2023, changed its name, and completed a reverse stock split.
- 2024-08-15: Number of shares outstanding by each class of common stock.
- 2024-08-19: Date of this report.
Keywords
Firefly Neuroscience, Brain Network Analytics, BNA Platform, Merger, WaveDancer, Neuroscience, Mental Illness, Neurological Disorders, FDA-cleared, AI, EEG, Commercialization, Financial Results, Operating Loss, Revenue
AIFF
Firefly Neuroscience, INC
NASDAQ
Sector: TBD
Filings with Classifications
Worse than expected
3 April 2025 6:01 AM
Annual Report (Form 10-K)
- The company's revenue decreased significantly compared to the previous year.
- The company's operating expenses increased substantially.
- The company's auditor expressed substantial doubt about its ability to continue as a going concern.
Capital raise
3 April 2025 6:01 AM
Annual Report (Form 10-K)
- The company is actively pursuing additional capital through equity or debt financings.
- The company entered into an ELOC Purchase Agreement with Arena, pursuant to which Arena has committed to purchase up to $10 million of the company's common stock.
- The company completed a private placement of units for $547,737 on March 28, 2025.
Capital raise
14 February 2025 4:49 PM
8-K Filing
- The document references the issuance of common stock pursuant to purchase agreements with Helena Special Opportunities LLC and Arena Business Solutions Global SPC II, Ltd.
- The issuance includes the conversion of a convertible note and the exercise of a warrant issued to Helena.
Capital raise
7 February 2025 4:50 PM
S-1 Filing
- The company may receive proceeds from the cash exercise of the December 2024 Warrant.
- The company may receive up to US$10,000,000 in aggregate gross proceeds under the ELOC Purchase Agreement from sales of its Common Stock it may elect to make to Arena pursuant to the ELOC Purchase Agreement after the date of this prospectus.
Capital raise
29 January 2025 6:19 AM
Registration Statement Amendment
- The company has entered into an equity line of credit agreement with Arena Business Solutions Global SPC II, Ltd, which allows the company to direct Arena to purchase up to $10,000,000 in shares of common stock.
- The company has also issued a convertible promissory note to Helena Special Opportunities LLC in the principal amount of $2,400,000.
Capital raise
21 January 2025 9:10 AM
Proxy Statement
- The company is seeking approval to issue more than 20% of its common stock to Helena Special Opportunities LLC, including upon conversion of a convertible note and exercise of a warrant.
- The company is also seeking approval to issue more than 20% of its common stock to Arena Business Solutions Global SPC II, Ltd, under a Purchase Agreement.
- The company entered into a Securities Purchase Agreement with Helena for a convertible promissory note of $2,400,000, including a $360,000 original issue discount, and a warrant to purchase 800,000 shares at $4.00 per share.
- The company also entered into a Purchase Agreement with Arena for an equity line of credit of up to $10,000,000, with a commitment fee of $300,000.
Capital raise
23 December 2024 4:30 PM
Financing Announcement
- The company has secured a $2.4 million convertible note from Helena Special Opportunities LLC.
- The company has also entered into a $10 million equity line of credit agreement with Arena Business Solutions Global SPC II, Ltd.
Worse than expected
4 December 2024 6:16 AM
S-1/A Filing
- The company has a negative stockholders equity of $2,776,000 as of September 30, 2024.
- The company has incurred significant losses from operations.
- The company's financial statement footnotes include disclosure regarding the substantial doubt about its ability to continue as a going concern.
Capital raise
4 December 2024 6:16 AM
S-1/A Filing
- The company has raised approximately $3.5 million in a private placement.
- The company has raised $3,039,000 in a Series C financing.
- The company expects to receive proceeds from the exercise of warrants.
- The company may need to raise additional capital in the future.
Capital raise
14 November 2024 5:26 PM
Quarterly Report
- The company has been negotiating further funding with existing and new investors to raise additional capital.
- The company completed a private placement transaction (the PIPE) on August 12, 2024, raising approximately $3.5 million.
- The company issued 86,953 Series C Units and received aggregate gross proceeds of $1,070 during the nine months period ended September 30, 2024.
Worse than expected
14 November 2024 5:26 PM
Quarterly Report
- The company's net loss increased significantly compared to the same periods in the previous year.
- The company's revenue decreased significantly for the nine months ended September 30, 2024, compared to the same period in 2023.
- The company's operating expenses increased substantially due to the merger and related costs.
Capital raise
27 September 2024 6:22 AM
S-1 Filing
- The company may be unable to raise additional capital, which could harm its ability to compete.
- The company expects to expend significant capital to launch its commercialization program for the BNA Platform, build its brand, and continue to improve its product offerings.
Worse than expected
27 September 2024 6:22 AM
S-1 Filing
- The company is in the development stage with minimum revenues and has no operating history in the broad commercialization of medical devices or platforms for consumer use.
- The financial statement footnotes include disclosure regarding the substantial doubt about the company's ability to continue as a going concern.
Worse than expected
16 September 2024 9:11 AM
8-K/A Amendment
- The company's net loss of $2.603 million in 2023 and $3.904 million in 2022 is worse than expected.
- The auditor's report expressing substantial doubt about the company's ability to continue as a going concern is worse than expected.
Capital raise
16 September 2024 9:11 AM
8-K/A Amendment
- The company completed a private placement on August 12, 2024, raising approximately $3.5 million.
- The company is negotiating further funding with existing and new investors to raise additional capital.
Capital raise
20 August 2024 6:01 AM
Corporate Governance Update
- The Executive Chairman's performance bonus is directly tied to the success of a capital raise.
- The document mentions a 'Successful Financing' as a condition for the performance bonus, indicating a potential capital raise is being planned.
Capital raise
19 August 2024 5:17 PM
Quarterly Report
- The company is negotiating further funding with existing and new investors to raise additional capital.
- On July 26, 2024, Firefly 2023 entered into a securities purchase agreement for a private placement of shares and warrants for gross proceeds of approximately $3.5 million.
- The private placement closed on August 12, 2024, substantially contemporaneous with the consummation of the Merger.
Worse than expected
19 August 2024 5:17 PM
Quarterly Report
- The company's operating loss increased compared to the same period last year, primarily due to the absence of a litigation settlement gain that occurred in the prior year.
- The company's revenue decreased compared to the same period last year, indicating a decline in business activity.
- The company's cash position is weak, and it is dependent on raising additional capital to continue operations.
Capital raise
14 August 2024 5:24 PM
8-K Filing
- The company completed a private placement on August 12, 2024, raising approximately $3.5 million in gross proceeds.
- The company issued 3,069,287 shares of common stock and pre-funded warrants to purchase up to 4,849,265 shares of common stock.
- The company also issued warrants to purchase up to 7,918,552 shares of common stock in the private placement.
- The company may need to raise additional capital in the future to support its operations.
Worse than expected
14 August 2024 5:24 PM
8-K Filing
- The company's revenue was significantly lower than the previous year, indicating a decline in sales.
- The company's net losses increased substantially compared to the previous year, indicating a worsening financial situation.
- The company's operating expenses increased significantly, further contributing to the increased losses.
Capital raise
12 August 2024 4:50 PM
Merger Announcement
- A private placement offering with certain institutional investors of common stock (or common stock equivalents) and five-year common stock purchase warrants closed substantially contemporaneously with the merger.
- The gross proceeds to the Company from the offering were approximately $3.5 million, before deducting offering expenses payable by the Company.
Better than expected
12 August 2024 4:50 PM
Merger Announcement
- The merger provides Firefly with access to public markets and additional capital, which is better than the company's previous position.
Capital raise
29 July 2024 9:22 AM
Merger Financing Announcement
- The company is raising approximately $3.5 million through a private placement.
- The private placement involves the issuance of common stock or pre-funded warrants and warrants to purchase common stock.
- The purchase price is $0.442 per share and accompanying warrant, or $0.4419 per pre-funded warrant.
Capital raise
21 June 2024 6:13 AM
Merger Amendment
- Parent anticipates issuing shares and warrants in consideration of funds the Company intends to raise to consummate the Merger.
- The Company intends to raise funds to complete the merger.
Delay expected
21 June 2024 6:13 AM
Merger Amendment
- The merger deadline has been extended from the original date to July 15, 2024, with a possible further extension to August 15, 2024.
Delay expected
13 June 2024 12:39 PM
Debt Agreement
- The maturity date of the loan was extended from May 16, 2024, to July 16, 2024.
Worse than expected
22 May 2024 4:00 PM
8-K Filing
- The resignation of an auditor is generally viewed negatively by the market.
- The going concern qualification in previous audit reports indicates potential financial instability.
Capital raise
14 May 2024 4:00 PM
Quarterly Report
- The company may need to raise additional capital if the merger with Firefly does not close.
- The company is considering raising capital through private placement, which could be highly dilutive.
Worse than expected
14 May 2024 4:00 PM
Quarterly Report
- The company's revenue decreased by 11.3% year-over-year, indicating a decline in business activity.
- The company has a net working capital deficit and is facing potential liquidity issues.
- The company's line of credit is expiring, and there is no guarantee of an extension.
Capital raise
20 March 2024 5:40 PM
Merger Announcement
- The closing of the merger is contingent upon Firefly being listed on the Nasdaq Stock Market.
- Nasdaq listing requires Firefly to raise additional capital.
Capital raise
20 March 2024 1:20 PM
Annual Results
- The company needs to raise between $0.8 million and $1.1 million to complete the merger with Firefly Neuroscience, Inc.
- The company intends to conduct a private placement to raise the required capital.
- The funding of the private placement is contingent on the merger closing.
Worse than expected
20 March 2024 1:20 PM
Annual Results
- The company's revenue declined significantly, indicating worse than expected performance.
- The company's working capital is in deficit, indicating worse than expected financial health.
- The company's need to raise additional capital to complete the merger indicates worse than expected financial stability.
Better than expected
8 March 2024 4:50 PM
Press Release
- The BNA platform shows better than expected results in treatment adherence.
- The BNA platform shows better than expected results in medication optimization.
- The BNA platform shows better than expected results in antidepressant response rates.
- The BNA platform shows better than expected results in reducing treatment resistance.
Better than expected
8 March 2024 4:50 PM
Press Release
- The BNA platform demonstrated better than expected results in treatment adherence, medication management, and overall patient functioning.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.