10-Q: RetinalGenix Q3 Net Loss Narrows Amid Funding Woes

RetinalGenix Technologies Inc. reported a reduced net loss for Q3 2025, but faces significant liquidity challenges and a going concern warning, necessitating substantial additional capital.

Summary

• Net loss for the three months ended September 30, 2025, was $(568,791), an improvement from $(644,291) in the prior year period.
• Net loss for the nine months ended September 30, 2025, was $(1,805,468), significantly lower than $(3,453,800) for the same period in 2024.
• The company has generated no revenue since its inception.
• Cash balance as of September 30, 2025, was $92, down from $6,060 at December 31, 2024.
• Total liabilities were approximately $2,179,731 at September 30, 2025.
• Accumulated deficit reached approximately $17,235,490 at September 30, 2025.
• Research and development expenses decreased by 80% for the three months and 82% for the nine months ended September 30, 2025, primarily due to a lack of funds.
• General and administrative expenses increased by 11% for the three months and 6% for the nine months ended September 30, 2025.
• The company is developing technologies for ophthalmic and systemic diseases, including the RetinalCam device, DNA/GPS pharmacogenetic mapping, RTG-2023 for dry AMD, and RTG-2024 for Alzheimer's.
• An IRB study for wet macular degeneration is underway, with anticipated expansion to multistate physicians in winter 2026 and initial analysis by H1 2026.
• Management concluded that disclosure controls and procedures were ineffective as of September 30, 2025, due to a material weakness in internal control over financial reporting related to a lack of segregation of duties.
• The company requires approximately $6,000,000 in additional operating capital to complete product development and build infrastructure.
• Substantial doubt exists about the company's ability to continue as a going concern, as it lacks adequate resources to fund operations beyond November 2025.

Sentiment

Score: 2

Explanation: The company faces critical liquidity challenges with only $92 in cash, a going concern warning, and a material weakness in internal controls. While net losses decreased, this was partly due to reduced R&D spending caused by a lack of funds, which is a negative for future growth. The need for substantial capital is urgent and uncertain.

Positives

• Net loss significantly decreased for both the three-month ($(568,791) vs. $(644,291)) and nine-month ($(1,805,468) vs. $(3,453,800)) periods ended September 30, 2025, compared to the prior year.
• Progress is being made on the IRB study for wet macular degeneration, with expansion anticipated in winter 2026 and initial analysis by H1 2026.
• The company continues planning for pharmaceutical clinical studies for RTG-2023 (dry AMD) and RTG-2024 (Alzheimer's syndrome dementia).
• Successfully collected $150,000 from a stock subscription receivable in January 2025.
• Raised $186,000 from the sale of common stock during the nine months ended September 30, 2025, and an additional $27,000 post-period.
• The Delaware Court of Chancery voided and cancelled 3,000,000 shares of Series F preferred stock issued to Halo and Gerrans, resolving a long-standing equity dispute.

Negatives

• The company has generated no revenue since its inception.
• Cash balance is critically low at $92 as of September 30, 2025, expected to fund operations for only a few days.
• Accumulated deficit has grown to approximately $17,235,490.
• Substantial doubt exists about the company's ability to continue as a going concern due to insufficient funding.
• Heavy reliance on related parties for financing, with $539,052 owed to Sanovas and $547,148 owed to other related parties as of September 30, 2025.
• Research and development expenses were significantly cut due to a lack of funds, potentially hindering product development.
• Management concluded that disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting (lack of segregation of duties).
• The company needs approximately $6,000,000 in additional capital but has no assurance of obtaining it on favorable terms or at all.
• The Pre-funded Warrant held by Sanovas Ophthalmology cannot be exercised prior to February 1, 2030, or the third anniversary of uplisting to Nasdaq/NYSE American, limiting immediate capital from this source.

Risks

• The company has generated no revenue from commercial sales to date and its future profitability is uncertain, with an expectation to operate at a net loss for at least the next several years.
• There is substantial doubt about the company's ability to continue as a going concern, with cash of $92 and liabilities of $2,179,731 as of September 30, 2025, and inadequate resources to fund operations beyond November 2025.
• There is no guarantee that additional financing will be available when needed, on favorable terms, or at all, which could force delays, reductions, or termination of product development or commercialization efforts.
• Failure to maintain effective internal control over financial reporting in accordance with Section 404 of Sarbanes-Oxley could cause financial reports to be inaccurate, as management concluded disclosure controls and procedures were ineffective due to a material weakness in segregation of duties.
• There is no assurance that products under development will be cleared for sale in the U.S. or elsewhere, or that if cleared, they will be successfully commercialized.
• The company is heavily reliant on Sanovas for a significant portion of its operating expenses, creating a dependency.
• The duration, costs, and timing of future clinical trials and product development are uncertain and depend on various factors, including regulatory approvals and the probability of success.
• The company expects increased expenses associated with operating as a public company, including legal, accounting, investor relations, and compliance costs.
• If the company cannot continue as a viable entity, stockholders may lose some or all of their investment.

Future Outlook

The company anticipates continued operating losses and negative cash flows for at least the next several years. It expects to need approximately $6,000,000 in additional operating capital to complete product design and testing for RetinalCam, develop and expand DNA/GPS genetic mapping software, and build infrastructure for sustained growth. Funding is expected to come from equity and debt securities sales and/or strategic partnerships, but there is no assurance of availability on favorable terms. The company does not expect to generate revenue from product sales until RetinalGenix and RetinalCam development is complete and regulatory approval for RetinalGenix is obtained. An expansion of the IRB study to multistate physicians is anticipated in winter 2026, with initial analysis by the first half of 2026, which will inform clinical trial plans.

Management Comments

• "We anticipate an expansion of the IRB to multistate physicians in the winter of 2026 and the initial analysis by the first half of 2026, which will inform its clinical trial plans."
• "We continue to make progress in our planning/and guidance to move forward, via our contracted clinical resource organization, to conduct pharmaceutical clinical studies for our two products: RTG-2023 for the treatment of dry age-related macular degeneration (dry AMD); and RTG-2024 for the treatment of Alzheimers syndrome dementia."
• "As of the date of this report, the Company does not have adequate resources to fund its operations through December 2026 without considering any potential future milestone payments that it may receive under any new collaborations that it may enter into in the future or any future capital raising transactions."
• "We do not know whether additional financing will be available when needed, whether it will be available on favorable terms, or if it will be available at all."
• "Management is actively engaged in the planning for, and implementation of, remediation efforts to address our material weakness and improve our internal control over financial reporting and disclosure controls and procedures."
• "We hope to complete the implementation, remediation and test of the new procedures at the end of 2025 and beginning of 2026, as resources permit us to spend time and money on building finance infrastructure."

Industry Context

RetinalGenix operates in the highly specialized and capital-intensive ophthalmic and neurodegenerative disease sectors, focusing on early detection, monitoring, and treatment. The development of portable home screening devices like RetinalCam aligns with broader trends in telehealth and remote patient monitoring, driven by an aging population and increasing prevalence of chronic diseases like diabetes and AMD. The use of pharmacogenetic mapping (DNA/GPS) for personalized medicine and drug repurposing is a cutting-edge approach, reflecting the industry's shift towards precision medicine. However, the company's pre-revenue status and significant funding challenges are common for early-stage biotech firms, which often rely on substantial capital raises and strategic partnerships to advance products through lengthy and expensive clinical development and regulatory approval processes. The focus on Alzheimer's (RTG-2024) also places it in a high-risk, high-reward area with immense unmet medical need.

Comparison to Industry Standards

• Direct comparisons to specific comparable companies or projects are not provided within the filing.
• The company's pre-revenue status and accumulated deficit are typical for early-stage biotechnology and medical device companies engaged in extensive research and development before commercialization.
• The significant reduction in R&D spending due to lack of funds is a deviation from industry standards for companies actively pursuing product development, potentially indicating a slowdown in progress compared to better-funded peers.
• The reliance on related-party financing is common for very early-stage companies but can be a red flag if it persists without a clear path to independent funding, unlike more mature biotech firms that typically secure venture capital or public market funding rounds.
• The identified material weakness in internal controls (lack of segregation of duties) is below industry best practices for public companies, regardless of size, and requires urgent remediation to meet regulatory standards.

Management Changes

Corporate Governance

Legal Proceedings

• The company received a claim against it relating to a former indirect vendor, which it believes is without merit and intends to vigorously defend. The company does not believe the claim would have a material impact on its financial condition.
• The Delaware Action against Lawrence Gerrans and Halo Management LLC was resolved on April 2, 2024, with the court voiding and cancelling the Series F preferred stock.

Related Party Transactions

• Sanovas Ophthalmology, a majority-owned subsidiary of Sanovas Inc., formed the company and sublicensed technology to it.
• Jerry Katzman, the company's CEO, is also a director and CEO of Sanovas.
• Sanovas pays expenses on behalf of the company and allocates costs, including approximately $496,125 for the nine months ended September 30, 2025.
• Balance due to Sanovas was $539,052 as of September 30, 2025.
• In December 2024, the company issued 296,000 shares of common stock to Sanovas to offset $666,000 due for expenses.
• An officer of the company, a shareholder, and other related parties advanced funds or paid expenses, totaling $547,148 as of September 30, 2025.
• Shareholders notes payable of $49,000 remained outstanding as of September 30, 2025, with an informally extended maturity date to December 31, 2026.
• The company entered into an exchange agreement with Sanovas Ophthalmology for a pre-funded warrant to purchase 28,014,540 shares of common stock, exercisable earliest February 1, 2030, or 3 years after uplisting.

Stakeholder Impact

• Shareholders face significant risk of investment loss due to going concern doubt, critical liquidity issues, and the need for substantial future capital raises which could dilute existing holdings. The resolution of the Series F preferred stock dispute is positive for clarity.
• Employees (Management) have compensation that includes stock-based awards, aligning interests with equity performance, but the company's financial instability poses job security risks.
• Future customers for RetinalCam and DNA/GPS test kits may face delays in product availability if funding issues persist and development is stalled.
• Suppliers/Vendors, particularly related parties, have outstanding payables, indicating potential payment risks.
• Creditors, especially related party creditors, have their ability to recover funds tied to the company's ability to raise capital and achieve profitability.

Next Steps

• Expand the IRB study to multistate physicians in winter 2026.
• Conduct initial analysis of the IRB study by the first half of 2026 to inform clinical trial plans.
• Move forward with pharmaceutical clinical studies for RTG-2023 (dry AMD) and RTG-2024 (Alzheimer's syndrome dementia).
• Raise approximately $6,000,000 in additional operating capital.
• Complete product design and testing for RetinalCam.
• Complete development and expansion of software tools for DNA/GPS genetic mapping technology and prepare consumer laboratory developed test kits.
• Build infrastructure for sustained growth.
• Remediate material weakness in internal control over financial reporting, with implementation and testing hoped for by end of 2025 and beginning of 2026.
• Potentially up-list to Nasdaq exchange.

Key Dates

Recommendation

The company is in a precarious financial position with only $92 in cash, an accumulated deficit exceeding $17 million, and an explicit "going concern" warning. It is pre-revenue and heavily reliant on related-party financing, which is unsustainable. The significant reduction in R&D spending due to lack of funds directly impairs its core mission and future prospects. Furthermore, the identified material weakness in internal controls raises governance concerns. While net losses decreased, this improvement is overshadowed by the severe liquidity crisis and the urgent, uncertain need for $6 million in additional capital. The risks of further dilution, operational delays, or even cessation of operations are extremely high, making the stock a strong sell for any investor.

Keywords

Ophthalmic technology, Retinal disease, Diabetic retinopathy, Maculopathy, Age-related macular degeneration (AMD), RetinalCam, DNA/GPS, Pharmacogenetics, Alzheimer's syndrome dementia, RTG-2023, RTG-2024, Medical device development, Clinical trials, Biotechnology, SEC filing, 10-Q, Going concern, Liquidity, Capital raise, Internal controls