Financial Analysis

9. COMMITMENTS AND CONTINGENCIES Leases On July 2, 2024, the Company entered into a new operating lease (the Woburn Lease) of office space in Woburn, Massachusetts (the Woburn Premises) for a term of five years and two months, commencing on September 1, 2024, and terminating on October 30, 2029. The Company has a one-time option to extend the term of the Woburn Lease for one additional term of five years, provided that the Company is not in arrears in any payment of rent, the payment of any outstanding invoice, or otherwise in default. On June 28, 2024, the Company exercised a termination option included in the lease agreement of its former office space in Lexington, Massachusetts, and terminated the lease effective August 31, 2024. Right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. The Company used the interest rate of 8% stated in the lease agreement to discount its real estate lease liabilities. There are no material residual guarantees associated with any of the Companys leases, and there are no significant restrictions or covenants included in the Companys lease agreements. There was no sublease rental income for the year ended December 31, 2025, and the Company is not the lessor in any lea …

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7. DEBT FINANCING On September 19, 2024, the Company entered into a note purchase agreement (the Note Purchase Agreement) with a lender (the Lender). Pursuant to the provisions of the Purchase Agreement, the Lender agreed to provide a loan to the Company in the amount of $1,000,000 (the Loan) and the Company agreed to issue to the Lender a promissory note in the principal amount of $1,000,000 payable within 12 months after the date of issuance, with interest accruing and payable at a rate of 18% per annum (the Note). The Note Purchase Agreement contains customary representations and warranties and obligates the Lender to provide an additional loan to the Company, in the form of a revolving line of credit of up to $1,000,000, upon our initial filing of a Registration Statement for an underwritten or best-efforts public offering for gross proceeds of at least $5,000,000. On September 25, 2024, the Company and the Lender closed the transactions described in the Note Purchase Agreement, the Lender provided funds to the Company in the net amount of $959,980 and the Company issued the Note to the Lender in the principal amount of $1,000,000. WestPark Capital, Inc. (WestPark) served as the placement agent in connection with the Loan and was paid a placement agent fee in the amount of $40,020 for its services. Debt issuance costs related to the Note totaled $140,020 which comprised of placement agent fee of $40,020 and legal costs of $100,000. The debt issuance cost will be amortized …

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The following table summarizes the Companys revenue for the years ended December 31, 2025 and 2024: Years ended December 31, 2025 2024 Specimens - contracts with customers $ 1,735,000 $ 9,104,950 Shipping and other 193,998 186,165 Revenue $ 1,928,998 $ 9,291,115 …

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11. STOCK-BASED COMPENSATION Stock Incentive Plans 2021 Plan In March 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan, which was subsequently amended in June 2021 and then on May 25, 2022 (the 2021 Plan). The 2021 Plan was adopted to enhance the Companys ability to attract, retain and motivate employees, officers, directors, consultants, and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, RSUs and other stock-based awards. The Companys board of directors, or any committee to which the board of directors delegates such authority, has the sole discretion in administering, interpreting, amending, or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to 30,400 shares of the Companys common stock, and the 2021 Plan was made effective with the completion of the IPO. On May 24, 2023, at the Companys annual meeting of stockholders, the stockholders approved an amendment to the 2021 Plan to increase the number of shares under the 2021 Plan from 30,400 shares of common stock to 93,475 shares of common stock. During the years ended December 31, 2025 and 2024, Nil and 5,521 equity awards were granted under the 2021 Plan, respectively. As of December 31, 2025, there were 73,180 shares of common stock available for future grants under the 2021 Plan. 2013 Plan The iSpecimen Inc. 2013 Stock Incentive Plan (the 2013 Plan) was adopted on Apr …

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8. FAIR VALUE MEASUREMENTS As of December 31, 2025 and 2024, the Company did not have any assets or liabilities measured at fair value on a recurring basis.

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12. INCOME TAXES There was no provision for income taxes for the years ended December 31, 2025 and 2024 due to the Companys operating losses and a full valuation allowance on deferred tax assets. The Company completed research and development studies covering all tax years currently under the applicable statute of limitations. Significant components of the Companys deferred tax assets and liabilities as of December 31 are as follows: 2025 2024 Deferred tax assets: Operating loss carryforwards $ 17,786,885 $ 15,387,300 Research and development tax credit 2,220,972 2,155,100 Other 892,216 868,700 Total deferred tax assets 20,900,073 18,411,100 Deferred tax liability: Other (73,500 ) (80,500 ) Intangibles (59,400 ) (124,800 ) Total deferred tax liabilities (132,900 ) (205,300 ) Net deferred tax assets before valuation allowance 20,767,173 18,205,800 Valuation allowance (20,767,173 ) (18,205,800 ) Net deferred tax asset $ $ The Company has provided a valuation allowance against the deferred tax assets as it has incurred significant losses since its inception. Management currently believes that it is more likely than not that the deferred tax assets will not be realized in the future. The change in the valuation allowance during 2024 was an increase of $3,044,600. As of December 31, 2025 and December 31, 2024, the Company had federal net operating loss carryforwards of approximately $72,600,000 and $62,300,000, respectively, of which approximately $13,000,000 expires at various pe …

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Recently Adopted Accounting Standards In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entitys Own Equity (ASU 2020-06), which simplifies an issuers accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance. This update will be effective for the Companys fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company adopted this standard as of January 1, 2024. ASU 2020-06 did not have a material impact on the Companys financial statements. In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (ASU 2023-07), which provides amendments to improve reportable segment disclosures requirements. ASU 2023-07 expands public entities segment disclosures by requiring disclosure of significa …

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13. SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, which is our Chief Executive Officer , in deciding how to allocate resources and in assessing performance. We manage our business globally within one operating segment in accordance with ASC Topic 280, Segment Reporting (ASC 280). Segment information is consistent with how management reviews the business, makes investing and resource allocation decisions and assesses operating performance. The Company has one reportable segment biospecimens. The Company derive its revenue by procuring specimens from its healthcare provider network and then distributing these annotated biospecimens to its research client base. Set out below is information about the assets and liabilities as at December 31, 2025 and 2024 and profit or loss from each segment for the year ended December 31, 2025 and 2024. December 31, 2025 December 31, 2024 Financial statement line item: Reportable segment assets $ 9,531,410 $ 9,350,230 Reportable segment liabilities 6,443,179 6,039,222 Year Ended December 31, 2025 2024 Financial statement line item: Revenues from external customers $ 1,928,998 $ 9,291,115 Less: Cost of revenue, excluding amortization 1,713,333 5,111,157 Technology expenses, excluding amortization 688,942 1,493,310 Sales and marketing expenses 2,295,501 4,945,269 Supply development …

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the Companys financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the deferred tax valuation allowances, revenue recognition, stock-based compensation, allowance for doubtful accounts, accrued expenses, and the useful lives of internally developed software and sequenced data. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. Concentrations of Credit Risk - Suppliers For the year ended December 31, 2025, no supplier accounted for 10% of the Companys total purchases (cost of revenues). For the year ended December 31, 2024, one supplier (Supplier B) accounted for approximately 11.32% of the Companys total purchases (cost of revenues). No other supplier accounted for 10% or more of total purchases (cost of revenues) in either 2025 or 2024. The Company sources certain specimen types and related services from a limited number of suppliers. The loss of any of the significant suppliers described above, or a disruption or reduction in the volume of specimens or services they provide, could adversely affect the Companys ability to fulfill customer …

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10. STOCKHOLDERS EQUITY The Companys authorized capital is 250,000,000 shares, of which (1) 200,000,000 shares are common stock, par value $0.0001 per share and (2) 50,000,000 shares are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Companys board of directors, be issued in one or more series. Reverse Stock Split On August 19, 2024, the Companys board of directors approved a one-for-twenty (1:20) reverse stock split of the Companys issued and outstanding shares of common stock. On September 13, 2024, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Companys Certificate of Incorporation to effect the Reverse Stock Split. The Reverse Stock Split became effective on September 13, 2024, and the Companys common stock began trading on a split-adjusted basis on Nasdaq on September 16, 2024. Preferred Stock On December 30, 2025, the Company and the Purchasers have entered into the Agreement pursuant to which the Purchasers have agreed to purchase an aggregate of 6,875 shares of Series C Convertible Preferred Stock of the Company (the Series C Preferred Shares) for an aggregate purchase price of $800 per Series C Preferred Share for aggregate gross proceeds of $5,500,000.00. The Series C Preferred Shares are convertible into shares of common stock, par value $0.0001 per share (the Common Stock). Pursuant to that certain Placement Agency Agreement, dated as of December 30, 2025, by and betw …

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14. SUBSEQUENT EVENT On February 15, 2026, the Company signed a settlement agreement pursuant to the existing legal matter with EGS. On or around November 14, 2024, EGS initiated a claim against the Company for $425,684 arising from a breach of contract, and compensation on a quantum meruit basis amongst other things. Per Agreement, the parties agreed to a $200,000 settlement in full satisfaction of all claims.

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