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: June 30, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) of
the Securities Exchange Act of 1934

For the transition period from to _______ to _______

Commission File Number: 001-42589

Solésence, Inc.

(Exact name of registrant as specified in its charter)

Delaware	36-3687863
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1319 Marquette Drive, Romeoville, Illinois 60446

(Address of principal executive offices, and zip code)

Registrant’s telephone number, including area code: (630) 771-6708

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value per share		SLSN		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 and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post 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 “accelerated filer”, “large 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 August 19, 2026, there were 70,647,045 shares outstanding of common stock, par value $.01, of the registrant.

SOLÉSENCE, INC.

QUARTER ENDED JUNE 30, 2026

INDEX

			Page
PART I – FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
		Consolidated Balance Sheets (Unaudited Consolidated Condensed) as of June 30, 2026, and December 31, 2025	3
		Consolidated Statements of Operations (Unaudited Consolidated Condensed) for the three and six months ended June 30, 2026, and 2025	4
		Consolidated Statements of Shareholders’ Equity (Unaudited Consolidated Condensed) for the three and six months ended June 30, 2026, and 2025	5
		Consolidated Statements of Cash Flows (Unaudited Consolidated Condensed) for the six months ended June 30, 2026, and 2025	6
		Notes to Unaudited Consolidated Condensed Financial Statements	7
		Independent Accountant Review Not Complete	15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
	Item 4.	Controls and Procedures	18
		PART II – OTHER INFORMATION	19
	Item 1.	Legal Proceedings	19
	Item 1A.	Risk Factors	19
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
	Item 3.	Defaults Upon Senior Securities	19
	Item 4.	Mine Safety Disclosures	19
	Item 5.	Other Information	19
	Item 6.	Exhibits	20
		SIGNATURES	21

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SOLÉSENCE, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited Consolidated Condensed)

(Not Reviewed)


	As of
	June 30, 2026			December 31, 2025
	(in thousands except share and per share data)
ASSETS
Current assets:
Cash	$	1,046		$	1,288
Trade accounts receivable		10,240			7,642
Allowance for credit losses		(895	)		(806	)
Trade accounts receivable, net		9,345			6,836
Inventories, net		12,957			14,963
Prepaid expenses and other current assets		1,922			2,141
Total current assets		25,270			25,228

Equipment and leasehold improvements, net		14,794			14,329
Operating leases, right of use		6,337			6,913
Other assets, net		36			37
Total assets	$	46,437		$	46,507
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Line of credit – accounts receivable, related party	$	3,787		$	4,767
Current portion of line of credit, inventory, related party		9,500			—
Current portion of debt, related parties		1,000			—
Current portion of operating lease obligations		1,343			1,255
Accounts payable		4,968			4,098
Deferred revenue		1,937			930
Accrued expenses		3,478			2,879
Total current liabilities		26,013			13,929

Long-term portion of operating lease obligations		7,070			7,798
Long-term line of credit – inventory, related party		—			9,500
Long-term debt, related party		—			1,000
Asset retirement obligations		200			194
Total long-term liabilities		7,270			18,492

Stockholders’ equity:
Preferred stock, $.01 par value, 24,088 shares authorized, and no shares issued and outstanding		—			—
Common stock, $.01 par value, 95,000,000 shares authorized; 70,647,045 and 70,614,045 shares issued and outstanding on June 30, 2026 and December 31, 2025, respectively		706			706
Additional paid-in capital		115,754			115,566
Accumulated deficit		(103,306	)		(102,186	)
Total stockholders’ equity		13,154			14,086
Total liabilities and stockholders’ equity	$	46,437		$	46,507

(See accompanying Notes to Consolidated Financial Statements)

SOLÉSENCE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited Consolidated Condensed)

(Not Reviewed)


	Three months ended June 30,					Six months ended June 30,
	2026			2025		2026			2025
Revenue:
Product revenue	$	15,286		$	20,261	$	28,205			$	34,836
Other revenue		46			98		85				148
Total revenue		15,332			20,359		28,290				34,984

Operating expense:
Cost of revenue		10,584			13,916		20,400				24,895
Gross profit		4,748			6,443		7,890				10,089

Research and development expense		947			955		1,990				1,973
Selling, general and administrative expense		3,680			3,012		6,479				5,120
Net income (loss) from operations		121			2,476		(579	)			2,996
Interest expense, net		279			87		543				263
Other income, net		—			1,234		2				1,234
Net income (loss) before provision for income taxes		(158	)		3,623		(1,120	)			3,967
Provision for income taxes		—			390		—				390

Net income (loss)	$	(158	)	$	3,233	$	(1,120	)		$	3,577

Net income (loss) per share-basic	$	(0.00	)	$	0.04	$	(0.02	)		$	0.05

Weighted average number of basic common shares outstanding		70,637,199			70,200,039		70,631,380				70,151,928

Net income (loss) per share-diluted	$	(0.00	)	$	0.04	$	(0.02	)		$	0.05

Weighted average number of diluted common shares outstanding		70,637,199			72,580,679		70,631,380				72,497,929

SOLÉSENCE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited Consolidated Condensed)

(in thousands except share data)

(Not Reviewed)


	Preferred Stock				Common Stock				Additional Paid-in		Accumulated
Description	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance on December 31, 2024		—	$	—		70,103,279	$	700	$	114,674	$	(105,021	)	$	10,353
Issuance of shares and stock option exercises		—		—		—		—		3		—			3
Stock-based compensation		—		—		—		—		127		—			127
Net (loss) for the three months ended March 31, 2025		—		—		—		—		—		343			343
Balance on March 31, 2025		—	$	—		70,103,279		700		114,804		(104,678	)		10,826

Issuance of shares and stock option exercises		—		—		378,666		4		241		—			245
Stock-based compensation		—		—		—		—		120		—			120
Net income for the three months ended June 30, 2025		—		—		—		—		—		3,233			3,233
Balance on June 30, 2025		—	$	—		70,481,945	$	704	$	115,165	$	(102,186	)	$	14,424

Balance on December 31, 2025		—	$	—		70,614,045	$	706	$	115,566	$	(102,186	)	$	14,086
Issuance of shares and stock option exercises		—		—		18,400		—		16		—			16
Stock-based compensation		—		—		—		—		83		—			83
Net loss for the three months ended March 31, 2026		—		—		—		—		—		(962	)		(962	)
Balance on March 31, 2026		—	$	—		70,632,445		706		115,665		(103,148	)		13,223

Issuance of shares and stock option exercises		—		—		14,600		—		10		—			10
Stock-based compensation		—		—		—		—		79		—			79
Net (loss) for the three months ended June 30, 2026		—		—		—		—		—		(158	)		(158	)
Balance on June 30, 2026		—	$	—		70,647,045	$	706	$	115,754	$	(103,306	)	$	13,154

SOLÉSENCE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited Consolidated Condensed)

(Not Reviewed)


	Six months ended June 30,
	2026			2025
	(in thousands)
Operating activities:
Net income (loss)	$	(1,120	)	$	3,577
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		636			451
Stock-based compensation		162			247
Changes in assets and liabilities related to operations:
Trade accounts receivable, net		(2,509	)		(6,180	)
Inventories, net		2,006			(395	)
Prepaid expenses and other assets		219			(978	)
Accounts payable		766			(2,202	)
Accrued expenses		605			1,301
Deferred revenue		1,007			(3,402	)
Change in right of use asset and lease liability, net		(64	)		(294	)
Net cash provided by (used in) operating activities		1,708			(7,875	)

Investing activities:
Acquisition of equipment and leasehold improvements		(997	)		(1,275	)
Net cash used in investing activities		(997	)		(1,275	)

Financing activities:
Proceeds from line of credit - inventory, related party		—			5,500
Proceeds from line of credit – accounts receivable, related party		—			6,099
Payments to line of credit – accounts receivable, related party		(980	)		—
Proceeds from issuance of stock and exercise of stock options		27			250
Net cash (used in) provided by financing activities		(953	)		11,849
(Decrease) increase in cash		(242	)		2,699
Cash at beginning of period		1,288			1,409
Cash at end of period	$	1,046		$	4,108

Supplemental cash flow information:
Cash paid for interest	$	452		$	354
Income taxes paid	$	—		$	325

Supplemental non-cash investing and financing activities:
Accounts payable incurred for the purchase of equipment and leasehold improvements	$	104		$	499

SOLÉSENCE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited Consolidated Condensed)

(Not Reviewed)

(In thousands, except share and per share data or as otherwise noted herein)

(1) Basis of Presentation

The accompanying unaudited consolidated condensed interim financial statements of Solésence, Inc. (“Solésence”, “Company”, “we”, “our”, or “us”) reflect all adjustments (consisting of normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of our financial position and operating results for the interim periods presented. All statements include the results from both Solésence, Inc. and our wholly-owned subsidiary, Solésence, LLC. Operating results for the three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

These financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission.

(2) Description of Business

Solésence, Inc. (“Solésence”, “Company”, “we”, “our”, or “us”) is a science- and technology-driven consumer health company which, along with its wholly owned subsidiary, Solésence, LLC (our “Solésence beauty science subsidiary”), is focused across beauty and health care markets.  Our skin health products are built on a platform of vertically-integrated, proprietary technologies with global patent protection, and currently comprise the majority of our business and drive our forward growth strategy.  Through working with selected customers (“clients,” “brand partners”), we offer skin health and beauty products infused with SPF protection and other key health claims as fully finished goods for sun care, skin care, color cosmetics, and scalp applications.

Our expertise in materials engineering enables us to create technologies that enhance protection against UV and environmental damage, quench free radicals that compromise skin health, and reduce the inflammatory response in human skin. While a few legacy products remain that are no longer considered strategic, all products, including with medical diagnostics, fall into the advanced materials product category.

We target markets primarily related to beauty and consumer health where we believe our Solésence^® products offer practical and competitive solutions. We work closely with customers in these target markets to identify material and performance requirements that consumers prefer.

During 2015 we were granted a patent on a new type of particle surface treatment (coating) — now called Active Stress Defense™ Technology — which became the cornerstone of our new product development in personal care, with first revenue recognized during 2016. Active Stress Defense™ now refers to a suite of proprietary technologies — Original Active Stress Defense™ and Kleair™ — which optimize zinc oxide, improving both its performance and aesthetics, to reimagine the consumer experience of skin health centered and SPF-infused beauty. As of 2026, our technology suite now also includes Blüm™, which reduces free radicals from HEV (blue) light; Chromalüm™, which works synergistically with the Active Stress Defense™ suite to enable state-of-the-art blue light protection and high sheer formulas; and WHSPR™, which maximizes allantoin’s soothing benefits in previously inaccessible product formats across skincare, sun care, makeup, and scalp care.

Our ongoing innovation efforts include new IP in areas that advance environmental protection, align with market needs, and complement our existing technologies. Through the creation of our Solésence beauty science subsidiary, we utilize our technology suite in the manufacture and sale of fully developed solutions to targeted customers in the skin care industry, typically in prestige skin care and cosmetics markets, in addition to the ingredients we have traditionally sold in the personal care area.

Although our primary strategic focus has been the North American market, we currently sell products to customers overseas. As part of our announced strategic initiative, Transform and Transcend, we have been working to expand our reach within foreign markets.

On April 8, 2025, the Company’s securities were uplisted to Nasdaq trading under the symbol SLSN. Prior to listing on Nasdaq our common stock traded on the OTCQB marketplace under the symbol NANX.

While product sales comprise the majority of our revenue, we also recognize revenue from other sources from time to time. These activities are not expected to drive the long-term growth of the business. For this reason, we classify such revenue as “other revenue” in our Consolidated Statements of Operations, as it does not represent revenue directly from the sale of our products.

Under SEC Release 33-10513; 34-83550, Amendments to Smaller Reporting Company Definition, the Company qualifies as a smaller reporting company and accordingly, it has scaled some of its disclosures of financial and non-financial information in this quarterly report. The Company will continue to determine whether to provide additional scaled disclosures of financial or non-financial information in future quarterly reports, annual reports and/or proxy statements if it remains a smaller reporting company under SEC rules.

(3) Revenues and Other Income

Revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration we expect to receive in exchange for those goods. When our ingredients and finished products are shipped, with control being transferred at the shipping point, this is the point in time at which we recognize the related revenue.

We generally expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses. Customers’ deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned.

Contract balances at June 30, 2026, December 31, 2025, and December 31, 2024 are as follows:

	Accounts Receivable		Contract Liabilities
Balance, December 31, 2024	$	5,655	$	5,571
Balance, December 31, 2025		7,642		930
Balance, June 30, 2026	$	10,240		1,937

Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period was $306 and $4,206 for the three months ended June 30, 2026 and 2025, respectively, and $630 and $7,498 for the six months ended June 30, 2026 and 2025, respectively.

As part of the sales process, it is common for the Company to receive customer deposits. These deposits are typically held for less than a year and do not result in a financing component to the sales. The customer deposits are recognized as revenue when the Company ships the finished goods to the customer. Revenue is recognized when the goods are shipped.

The Company will for some customers arrange for the shipping of the finished goods. Revenues and costs associated with the shipment of the finished goods are recorded separately within product revenue and cost of revenue, respectively, on the consolidated statement of operations. With regard to revenue recognition, shipping activities that occur prior to the customers’ obtaining control of the goods are not a promised service to the customer, but rather activities to fulfill the Company’s promise to transfer the goods. As such, these activities are not deemed a performance obligation requiring allocation of the transaction price. Similarly, shipping activities that occur after the customers’ obtaining control of the goods are, as a matter of policy, also not a promised service to the customer, but rather an activity to fulfill the Company’s promise to transfer the goods.

Other revenue typically includes fees that our customers pay for various required laboratory tests, and may also include revenue from technology license fees and paid development projects. Technology license fees and paid development projects are recognized over time when the obligations under the agreed upon contractual arrangements are performed on our part. Other revenue recognized over time was $46 and $98 for the three months ended June 30, 2026 and 2025, respectively, and $85 and $148 for the six months ended June 30, 2026 and 2025, respectively.

Accounts receivable are carried at the original invoice amount, less an allowance for expected credit losses. We estimate the allowance for credit losses based on a review of outstanding receivables, including the age of the receivables, historical collection experience, specific customer collectability considerations, current conditions, and other relevant factors. In estimating expected credit losses for current trade receivables arising from contracts with customers, we have elected the practical expedient under ASU 2025-05 and assume that current conditions as of the balance sheet date do not change over the remaining life of the receivables. Receivables are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. Our typical credit terms are between thirty and sixty days from shipment and invoicing.

	June 30, 2026			December 31, 2025
Balance, beginning	$	806		$	786
Current period provisions		116			836
Write offs		(27	)		(816	)
Balance, ending	$	895		$	806

(4) Earnings per Share

Options to purchase 1,074,074 and 1,082,666 shares of common stock that were outstanding as of June 30, 2026 were included in the computation of diluted earnings per share for the three and six months ended June 30, 2026, respectively. Options to purchase approximately 2,348,780 and 2,345,901 shares of common stock that were outstanding as of June 30, 2025 were included in the computation of diluted earnings per share for the three and six months ended June 30, 2025, respectively.

Earnings applicable to common stock and common stock shares used in the calculation of basic and diluted earnings per share are as follows:


	Three months ended June 30,					Six months ended June 30,
	2026			2025		2026			2025

Numerator: (in Thousands)
Net income (loss)		(158	)	$	3,233		(1,120	)	$	3,577

Denominator:
Weighted average number of basic shares outstanding		70,637,199			70,200,039		70,631,380			70,151,928
Weighted average additional shares assuming conversion of in-the-money stock options to common shares and assumed repurchase of common shares by the Company		—			2,380,640		—			2,346,001
Weighted average number of diluted common shares outstanding		70,637,199			72,580,679		70,631,380			72,497,929

Basic earnings per common share: