Dermata Therapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, were $74,000, compared to $0 in the same period in 2025.
• Cost of sales for the quarter was $34,000, resulting in a gross profit of $40,000 and an approximate 54% gross profit margin.
• Research and development expenses were $0.1 million for the quarter, a decrease from $0.5 million in the quarter ended September 30, 2025.
• Selling, general and administrative (SG&A) expenses were $2.8 million for the quarter, an increase from $1.3 million in the prior year period.
• Net loss for the quarter was $2.8 million, compared to a net loss of $1.7 million in the quarter ended September 30, 2025.
• Net loss per share (basic and diluted) was $0.55 for the quarter, compared to $1.65 in the prior year period.
• As of September 30, 2026, the Company held $5.0 million in cash, cash equivalents, and restricted cash, down from $7.5 million as of December 31, 2025.
• Cash used in operations for the nine months ended September 30, 2026, was $7.6 million, offset by $2.0 million in net proceeds from ATM financing and $3.2 million in net proceeds from an August 2026 financing transaction.
• Total assets were $6.6 million as of September 30, 2026, compared to $7.9 million as of December 31, 2025.
• Total liabilities were $2.7 million as of September 30, 2026, compared to $1.6 million as of December 31, 2025.

Guidance and Future Outlook:

• The Company expects its current cash resources to be sufficient to fund operations into the first quarter of 2027.
• Dermata expects to launch its second commercial product, Tome Clearing Treatment, in the first half of 2027, subject to successful development and commercialization activities.
• Future priorities include increasing brand awareness, converting consumer interest into sales, expanding distribution opportunities, and building a broader product portfolio powered by Bioneedle technology.

Business Segments and Product Lines:

• The Company launched its first commercial product, Tome Foundational Treatment, on August 25, 2026, generating its first product revenue through a direct-to-consumer website.
• Approximately 30% of orders for Tome Foundational Treatment were generated via subscriptions.
• Tome Foundational Treatment is a once-weekly skin renewal treatment powered by Bioneedle technology (100% freshwater sponge) designed to improve skin tone, texture, fine lines, and dark spots.
• Enrollment for the first participant in a clinical trial for Tome Clearing Treatment, a second planned product for acne treatment combining salicylic acid with Bioneedle technology, began in October 2026.
• The Company is expanding distribution opportunities to include professional skincare channels, such as aestheticians and dermatologists.

Market and Competitive Landscape:

• The Company positions Tome Foundational Treatment as "Studied Skincare," supported by positive topline results from a cosmetic clinical study involving 31 participants over four weeks.
• The clinical study demonstrated that more than 71% of participants were graded as having overall improvement in skin appearance after just one treatment.
• Dermata is focusing on the premium skincare market, utilizing digital marketing, social media, and editorial outreach to build brand awareness.

Risks and Challenges:

• Forward-looking statements regarding product launches, revenue generation, and cash runway are subject to risks including product development success, commercialization timing, and market acceptance.
• The Company faces ongoing litigation and new trademark costs, which contributed to an $0.8 million increase in legal fees during the quarter.
• The transition from a development-stage company to a commercial entity involves significant commercialization activities and capital allocation decisions.

Management Commentary and Tone:

• Gerry Proehl, Chairman, President, and CEO, described the third quarter as a "transformational time" marking the transition from a development-stage pharmaceutical company to a revenue-generating commercial skincare business.
• Management expressed excitement about early interest in Tome Foundational Treatment and believes the subscription model will establish a foundation for a scalable business with recurring revenue.
• The tone indicates confidence in the differentiated skincare technology and the strategy to build a multi-product business with multiple revenue streams.

Other Key Points:

• The Company raised approximately $5.2 million in net proceeds through ATM financing ($2.0 million) and an August 2026 financing transaction ($3.2 million).
• SG&A expense increases were driven by a $0.5 million increase in compensation due to reallocation of employee duties from R&D to commercialization, a $0.2 million increase in marketing expenses, and $0.8 million in legal fees.
• R&D expenses decreased by $0.4 million due to the reallocation of employee duties to focus on the commercial launch.
• The Company's Bioneedle technology consists of 100% freshwater sponge that is wild harvested and minimally processed into a fine, purified powder.