Acurx Pharmaceuticals, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2024 included in the Annual Report on Form 10-K (the “2024 Annual Report”) and filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2025. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Overview We are a late-stage biopharmaceutical company focused on developing a new class of small molecule antibiotics for difficult-to-treat bacterial infections. Our approach is to develop antibiotic candidates with a Gram-positive selective spectrum (“GPSS®”) that block the active site of the Gram positive specific bacterial enzyme deoxyribonucleic acid (“DNA”) polymerase IIIC (“pol IIIC”), inhibiting DNA replication and leading to Gram-positive bacterial cell death. Our research and development (“R&D”) pipeline includes antibiotic product candidates that target Gram-positive bacteria, including Clostridioides difficile , methicillin-resistant Staphylococcus aureus (“MRSA”), vancomycin resistant Enterococcus (“VRE”) and drug-resistant Streptococcus pneumoniae (“DRSP”). These bacterial targets are listed as priority pathogens by the World Health Organization (“WHO”), the United States (“U.S.”) Centers for Disease Control and Prevention (“CDC”) and the U.S. Food and Drug Administration (“FDA”). Priority pathogens are those which require new antibiotics to address the worldwide crisis of Antimicrobial Resistance (“AMR”) as identified by the WHO, CDC and FDA. Our Market Opportunity The CDC estimates that, in the U.S., antibiotic-resistant pathogens infect one individual every 11 seconds and result in one death every 15 minutes. According to the WHO Fact Sheet (November 2023), AMR is one of the top global public health and development threats. It is estimated that bacterial AMR was directly responsible for 1.27 million global deaths in 2019 and contributed to 4.95 million deaths. Furthermore, the world faces an antibiotics pipeline and access crisis. There is an inadequate research and development pipeline in the face of rising levels of resistance, and urgent need for additional measures to ensure equitable access to new and existing vaccines, diagnostics and medicines. We believe we are developing the first DNA pol IIIC inhibitor to enter Phase 3 clinical trials and our Phase 2 clinical trial has provided positive clinical trial results for our lead pol IIIC antibiotic candidate. Pol IIIC is the primary catalyst for DNA replication of several Gram-positive bacterial cells. Our research and development pipeline includes clinical stage and early-stage antibiotic candidates that target Gram-positive bacteria for oral and/or parenteral treatment of infections caused by Clostridioides difficile (“C. difficile”), Enterococcus (including VRE), Staphylococcus (including MRSA), and Streptococcus (including antibiotic resistant strains). Pol IIIC is required for the replication of DNA in certain Gram-positive bacterial species. By blocking this enzyme, our antibiotic candidates are believed to be bactericidal and inhibit proliferation of several common Gram-positive bacterial pathogens, including both sensitive and resistant C. difficile , MRSA, vancomycin-resistant Enterococcus, penicillin-resistant Streptococcus pneumonia (“PRSP”) and other resistant bacteria. We expect to partner with a fully-integrated pharmaceutical company for late-stage clinical trials and commercialization or conduct Phase 3 clinical trials prior to such partnership and continue to review partnership opportunities on an ongoing basis up to FDA approval. 20 Table of Contents Our lead antibiotic candidate, ibezapolstat (formerly named ACX-362E), has a novel mechanism of action that targets the pol IIIC enzyme, a previously unexploited scientific target. A Phase 2 clinical trial, comprised of a Phase 2a segment and a Phase 2b segment, provided data that demonstrates positive clinical trial results for our lead antibiotic candidate and demonstrates pol IIIC as an appropriate bacterial target. Our Lead Product Candidate Currently available antibiotics used to treat C . difficile infections (“CDI”) utilize other mechanisms of action. We believe ibezapolstat is the first antibiotic candidate in late-stage clinical trials to work by blocking the DNA pol IIIC enzyme in C. difficile . This enzyme is necessary for replication of the DNA of certain Gram-positive bacteria, like C. difficile . Our Other Candidates We also have an early-stage pipeline of antibiotic product candidates with the same previously unexploited mechanism of action, which has established proof of concept in animal studies. This pipeline includes ACX-375C, a potential oral and parenteral treatment targeting Gram-positive bacteria, including MRSA, VRE and PRSP. We continue to evaluate strategic transactions for the Company, including a partner for the further development and potential commercialization of our lead antibiotic candidate, ibezapolstat, as well as a potential sale, merger, third-party licensing arrangement or other strategic transaction. At this time, we have no commitments from potential partners or others to provide the Company with capital. Recent Developments On August 4, 2025, we effected a 1-for-20 reverse stock split of our issued and outstanding shares of common stock, and as a result of the reverse-stock-split, on August 26, 2025, we regained compliance with the minimum bid price requirement of $1.00 per share under Nasdaq Listing Rule 5550(a)(2). In addition, we met the minimum stockholders’ equity threshold of $2.5 million under Listing Rule 5550(b)(1). We are now in full compliance with all Nasdaq continued listing requirements and our common stock will remain listed and traded on the Nasdaq Stock Market. At our special meeting of stockholders, held on September 16, 2025, our stockholders approved an amendment (the “Amendment”) to our Certificate of Incorporation, as amended, to increase the total number of authorized shares of our common stock from 200,000,000 to 250,000,000. On September 22, 2025, we filed the Amendment with the Secretary of State of the State of Delaware with immediate effect. Equity Line of Credit Purchase Agreement On May 8, 2025, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $12.0 million in shares of our common stock. Concurrently with the execution of the Purchase Agreement on May 8, 2025, we also entered into a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park, relating to the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the offer and sale of the securities that have been and may be issued and sold by us to Lincoln Park, from time to time in our sole discretion, from and after the date of this report, under the Purchase Agreement and to take such other specified actions to maintain such registration under the Securities Act. Under the terms and subject to the conditions of the Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $12.0 million in shares of our common stock. Such sales of our common stock, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 24-month period commencing on May 29, 2025, which was the date the conditions set forth in the Purchase Agreement were satisfied (the “Commencement Date”). Sales of shares of our common stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of our common stock and our 21 Table of Contents determination as to the appropriate sources of funding for our operations. We expect that any proceeds we receive from such sales will be used for working capital and general corporate purposes. In connection with entering into the Purchase Agreement, on May 8, 2025, we issued 44,963 shares of our common stock to Lincoln Park in consideration for its commitment to purchase shares under the Purchase Agreement. As of the period ended September 30, 2025, we sold 393,532 shares of our common stock under the Purchase Agreement at a weighted-average price of $6.18 per share, raising $2.4 million of gross proceeds and net proceeds of $2.3 million after deducting related fees and expenses. As of November 11, 2025, total sales under the Purchase agreement is approximately $3.0 million out of $12 million. Warrant Inducement Agreement On June 17, 2025, we entered into a warrant inducement agreement (the “Letter Agreement”) with a certain holder (the “Holder”) of existing (i) Series A warrants to purchase 61,538 shares of common stock, (ii) Series B warrants to purchase 27,400 shares of common stock, (iii) Series C warrants to purchase 66,667 shares of common stock, and (iv) Series D warrants to purchase 66,667 shares of common stock (together, the “Existing Warrants”). Pursuant to the Letter Agreement, the Holder exercised for cash its Existing Warrants to purchase an aggregate of 222,272 shares of common stock, at a reduced exercised price of $12.00 per share, in consideration for our agreement to issue (i) Series G-1 warrants (the “Series G-1 Warrants”) to purchase up to an aggregate of 311,180 shares of common stock (the “Series G-1 Warrant Shares”) and (ii) Series G-2 warrants (the “Series G-2 Warrants” and, together with the Series G-1 Warrants, the “Series G Warrants”) to purchase up to an aggregate of 133,363 shares of common stock, each at an exercise price of $8.50 per share. Pursuant to the engagement letter entered into with H.C. Wainwright & Co., LLC (“Wainwright”) in connection with prior financings by the Company and as previously disclosed in the Company’s prior filings with the U.S. Securities and Exchange Commission (the “SEC”), the Company paid a fee to Wainwright equal to 7.0% of the gross proceeds from the transactions contemplated by the Letter Agreement and issued to Wainwright and its designees warrants (“Wainwright Warrants”) to purchase up to an aggregate of 13,336 shares of common stock, which have the same terms as the Series G Warrants, except that they have an exercise price of $15.00 per share. The Company received net proceeds of approximately $2.5 million from the exercise of the Existing Warrants by the Holder, after deducting offering fees and other expenses payable by the Company in connection with the transaction. The Company expects to use the net proceeds of these transactions for general corporate and working capital purposes. The closing of the transactions contemplated by the Letter Agreement occurred on June 20, 2025 (the “Closing Date”). Nasdaq Minimum Stockholders’ Equity Requirement On March 25, 2025, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we are not in compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market (the “Notice”) based on the information provided in our Annual Report on Form 10-K for the year ended December 31, 2024. Nasdaq Listing Rule 5550(b)(1) requires that companies listed on The Nasdaq Capital Market with a market value of listed securities of less than $35,000,000 and annual net income of less than $500,000 maintain stockholders’ equity of at least $2,500,000 (the "Stockholders’ Equity Requirement”). In accordance with Nasdaq rules, we were provided 45 calendar days to submit a plan to regain compliance with the Stockholders’ Equity Requirement (the "Compliance Plan”). We submitted the Compliance Plan on May 9, 2025. If the Compliance Plan is determined to be acceptable to the Staff, the Staff would have the discretion to grant the Company an extension of 180 calendar days from the date of the Notice to regain compliance with the Stockholders’ Equity Requirement. There can be no assurance that the Compliance Plan will be accepted or that, if it is, we will be able to regain compliance. The Notice has no immediate effect on our continued listing on The Nasdaq Capital Market, subject to our compliance with other continued listing requirements. If the Staff does not accept the Compliance Plan, the Staff will provide written notification to us that the Compliance Plan has been rejected and that our common stock is subject to delisting. At that time, we may appeal the Staff’s determination to a Nasdaq Hearing Panel. On August 26, 2025, we received a letter from Nasdaq notifying us that we regained compliance with Nasdaq Listing Rule 5550(b)(1). 22 Table of Contents ​ Nasdaq Minimum Bid Price Requirement On February 24, 2025, we received a letter from The Nasdaq Stock Market notifying us that for the preceding 31 consecutive business days, our common stock did not maintain a minimum closing bid price of $1.00 per share as required by Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The notice has no immediate effect on the listing or trading of our common stock, and the common stock will continue to trade on The Nasdaq Capital Market under the symbol “ACXP” at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have a grace period of 180 calendar days, or until August 25, 2025, to regain compliance with Nasdaq Listing Rule 5550(a)(2). Compliance can be achieved automatically and without further action if the closing bid price of our common stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period, in which case Nasdaq will notify us of our compliance and the matter will be closed. If, however, we do not achieve compliance with the Minimum Bid Price Requirement by August 25, 2025, we may be eligible for additional time to comply. In order to be eligible for such additional time, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify Nasdaq in writing of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. However, if it appears to Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq Hearing Panel. We intend to actively monitor the bid price of our common stock and will consider available options to regain compliance with the Minimum Bid Price Requirement. However, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement or that Nasdaq will grant us a further extension of time to regain compliance, if applicable. On August 26, 2025, we received a letter from the Nasdaq notifying us that we regained compliance with Nasdaq Listing Rule 5550(a)(2). Effects of Coronavirus (COVID-19) on Our Business Public health crises such as pandemics or similar outbreaks could adversely impact our business. Notably, the COVID-19 pandemic continues to evolve. The extent to which COVID-19 impacts our operations or those of our collaborators, vendors, contractors, suppliers, clinical trial sites and other material business relations and governmental agencies will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate duration of the outbreak, new information that will emerge concerning the severity of the virus and the actions to contain it or treat its impact, among others. While the potential economic impact brought by, and the ultimate duration of, the COVID-19 pandemic, have been, and continue to be, difficult to assess or predict, the spread of COVID-19 has caused a broad impact globally. The extent to which the COVID-19 pandemic may impact our business continues to be highly uncertain and cannot be predicted with confidence. ​ Components of our Results of Operations Revenue We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all. Research and Development Expenses To date, our research and development expenses have related primarily to development of ibezapolstat, preclinical studies and other preclinical activities related to our portfolio. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. 23 Table of Contents Research and development expenses include: ● external research and development expenses incurred under agreements with contract research organizations (“CROs”) and consultants to conduct our preclinical, toxicology and other preclinical studies; ● laboratory supplies; ● costs related to manufacturing product candidates, including fees paid to third-party manufacturers and raw material suppliers; ● license fees and research funding; and ● facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance, equipment and other supplies. Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors. We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party service providers to assist us with the execution of our clinical trials. We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of our product candidates and seek to discover and develop new product candidates. Due to the inherently unpredictable nature of preclinical and clinical development, we cannot determine with certainty the timing of the initiation, duration or costs of future clinical trials and preclinical studies of product candidates. Clinical and preclinical development timelines, the probability of success and the amount of development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential. In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. Our future clinical development costs may vary significantly based on factors such as: ● per-patient trial costs; ● the number of trials required for regulatory approval; ● the number of sites included in the trials; ● the countries in which the trials are conducted; ● the length of time required to enroll eligible patients; ● the number of patients that participate in the trials; ● the number of doses that patients receive; ● the drop-out or discontinuation rates of patients; ● potential additional safety monitoring requested by regulatory agencies; ● the duration of patient participation in the trials and follow-up; ● the phase of development of the product candidate; and 24 Table of Contents ● the efficacy and safety profile of the product candidate. General and Administrative Expenses General and administrative expenses consist primarily of salaries and employee-related costs, including share-based compensation, for personnel in our executive, finance and other administrative functions. Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs. We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities, pre-commercialization and, if any product candidates receive marketing approval, commercialization activities. We also anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company. Results of Operations Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024 The following table presents a summary of the changes in our results of operations for the three months ended September 30, 2025 compared with the three months ended September 30, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ September 30, ​ Percentage ​ ​ 2025 2024 Change ​ ​ (in thousands) ​ ​ OPERATING EXPENSES: ​ ​ ​ Research and Development ​ $ 430 ​ $ 1,198 (64) % General and Administrative ​ 1,599 ​ 1,628 (2) % TOTAL OPERATING EXPENSES ​ 2,029 ​ 2,826 (28) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING LOSS ​ ​ (2,029) ​ ​ (2,826) ​ (28) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Income ​ ​ 36 ​ ​ 5 ​ 620 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ (1,993) ​ $ (2,821) (29) % ​ Research and Development Expenses Research and development expenses were $0.4 million for the three months ended September 30, 2025 and $1.2 million for the three months ended September 30, 2024, a decrease of $0.8 million due to $0.1 million decrease in manufacturing related costs and $0.7 million decrease in consulting fees as the prior year had higher expenses related to Phase 2b and Phase 3 preparation costs. General and Administrative Expenses General and administrative expenses were $1.6 million for the three months ended September 30, 2025 and $1.6 million for the three months ended September 30, 2024. The expenses remained consistent as $0.2 million decrease in compensation related costs were offset by $0.1 million increase in legal fees. Net Loss Net loss was $2.0 million for the three months ended September 30, 2025, and $2.8 million for the three months ended September 30, 2024, a decrease of $0.8 million, due to the reasons stated above. 25 Table of Contents Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ Percentage ​ ​ 2025 2024 Change ​ ​ (in thousands) ​ ​ OPERATING EXPENSES: ​ ​ ​ Research and Development ​ $ 1,553 ​ $ 4,579 (66) % General and Administrative ​ 4,922 ​ 6,751 (27) % TOTAL OPERATING EXPENSES ​ 6,475 ​ 11,330 (43) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING LOSS ​ ​ (6,475) ​ ​ (11,330) ​ (43) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Income ​ ​ 87 ​ ​ 8 ​ 988 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ $ (6,388) ​ $ (11,322) (44) % ​ Research and Development Expenses Research and development expenses were $1.6 million for the nine months ended September 30, 2025 and $4.6 million for the nine months ended September 30, 2024, a decrease of $3.0 million due to $0.7 million decrease in manufacturing related costs and $2.3 million decrease in consulting fees as the prior year had higher expenses related to Phase 2b and Phase 3 preparation costs. General and Administrative Expenses General and administrative expenses were $4.9 million for the nine months ended September 30, 2025 and $6.8 million for the nine months ended September 30, 2024, a decrease of $1.9 million. The decrease was primarily due to $0.6 million decrease in professional fees and $1.3 million decrease in share-based compensation related costs. Net Loss Net loss was $6.4 million for the nine months ended September 30, 2025, and $11.3 million for the nine months ended September 30, 2024, a decrease of $4.9 million, due to the reasons stated above. Liquidity and Capital Resources Overview Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $73.7 million as of September 30, 2025. We have funded our operations primarily from equity issuances. We received net proceeds of approximately $12.9 million from equity financings closed between March 2018 and October 2020. On June 29, 2021, we completed our IPO resulting in net proceeds of approximately $14.8 million after deducting underwriter discounts of $1.4 million and offering costs of approximately $1.1 million. On July 27, 2022, we completed a registered direct offering and concurrent private placement resulting in net proceeds of approximately $3.7 million after deducting placement agents fees of $0.3 million and offering costs of $0.2 million. On May 18, 2023, we completed a registered direct offering and a concurrent private placement resulting in net proceeds of approximately $3.5 million after deducting placement agents fee of $0.2 million and offering costs of $0.2 million. On November 15, 2023, we entered into a Sales Agreement and established the ATM Program, pursuant to which we may offer and sell, from time to time, through A.G.P./Alliance Global Partners, as sales agent, shares of our common stock having an aggregate offering price of up to $17.0 million. Under the ATM Program, we raised net proceeds of approximately $ 8.8 million after deducting sales agent commissions and other related expenses of $0.4 million. As of January 6, 2025, we suspended the ATM Program. In January 2025, we completed a registered direct offering and concurrent private placement for net proceeds of $2.1 million after deducting placement agent fees and offering expenses. In March 2025, we completed a registered direct offering and concurrent private placement for net proceeds of $0.9 million after deducting placement agent fees and offering expenses. On May 8, 2025, we entered 26 Table of Contents into the ELOC with Lincoln Park, pursuant to which Lincoln Park committed to purchase up to $12.0 million in shares of our common stock. Under the ELOC, we raised net proceeds of approximately $2.3 million after deducting related fees and expenses as of September 30, 2025. On June 17, 2025, we entered into a warrant inducement agreement with existing warrant holders, receiving net proceeds of approximately $2.5 million after deducting fees and transaction expenses. Based upon our lack of revenue expected for the foreseeable future, and because of numerous risks and uncertainties associated with the research, development and future commercialization of our product candidates, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures associated with our anticipated clinical trials and development activities. As of September 30, 2025, we had working capital of $3.6 million, consisting primarily of $5.9 million of cash and $0.2 million of prepaid expenses and other receivable, offset by approximately $2.5 million of accounts payable and accrued expenses. The following table sets forth selected cash flow information for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ 2025 2024 ​ ​ (in thousands) Net cash provided by (used in): ​ ​ Operating activities ​ $ (5,603) ​ $ (8,133) Financing activities ​ 7,803 ​ 6,421 Net increase (decrease) in cash ​ $ 2,200 ​ $ (1,712) ​ ​ Net Cash Used in Operating Activities Net cash used in operating activities was $5.6 million for the nine months ended September 30, 2025. The net loss was greater than the net cash used in operating activities by $0.8 million, primarily attributable to share-based compensation and share-based vendor payments of $1.2 million offset by decrease in accounts payable and accrued expenses of $0.4 million. Net cash used in operating activities was $8.1 million for the nine months ended September 30, 2024. The net loss was greater than the net cash used in operating activities by $3.2 million, primarily attributable to share-based compensation and share-based vendor payments of $2.9 million and increase in accounts payable and accrued expenses of $0.3 million. Net Cash Provided by Financing Activities Net cash provided from financing activities was $7.8 million for the nine months ended September 30, 2025, which was attributable to the net proceeds from the January and March Registered Direct Offerings, 2025 warrant exercise and sales related to the equity line of credit purchase agreement. Net cash provided from financing activities was $6.4 million for the nine months ended September 30, 2024, which was primarily attributable to the ATM Program. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and share-based compensation. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions. 27 Table of Contents While our significant accounting policies are described in more detail in Note 2, “Summary of Significant Accounting Policies,” we believe the following accounting policies and estimates to be most critical to the preparation of our financial statements. Research and Development We expense research and development costs when incurred. At times, we may make cash advances for future research and development services. These amounts are deferred and expensed in the period the services are provided. Costs for certain research and development activities, such as the provision of services for clinical trial activity, are estimated based on an evaluation of the progress to completion of specific tasks which may use data such as subject enrollment, clinical site activations or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as applicable. The estimates are adjusted to reflect the best information available at the time of the financial statement issuance. Although we do not expect our estimates to be materially different from amounts actually incurred, our estimate of the status and timing of services performed relative to the actual status and timing of services performed may vary. Share-Based Compensation We account for the cost of services performed by employees, directors and consultants received in exchange for an award of the Company’s common stock or stock options, based on the grant-date fair value of the award. We recognize compensation expense based on the requisite service period. Compensation expense associated with stock option awards is recognized over the requisite service period based on the fair value of the option at the grant date determined based on the Black-Scholes option pricing model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. Our employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for our stock options and very little historical experience with our stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities. We will continue to analyze the expected stock price volatility and will adjust our Black-Scholes option pricing assumptions as appropriate. Any changes in the foregoing Black-Scholes assumptions, or if we were to elect to utilize an alternative method for valuing stock options granted to employees, officers and directors, could potentially impact our stock-based compensation expense and our results of operations. Share-Based Payments to Vendors We account for the cost of services performed by vendors in exchange for an award of our common stock or stock options, based on the grant-date fair value of the award or the fair value of the services rendered, whichever is more readily determinable. We also use Black-Scholes option pricing model for the purpose of estimating the fair value of options and warrants. Changes in our Black-Scholes assumptions, or if we were to utilize an alternative method for valuing options or warrants issued to our vendors, could impact our expense and our results of operations. Other Company Information Emerging Growth Company Status We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, companies have extended transition periods available for complying with new or revised accounting standards. We have elected this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, we are entitled to rely on certain exemptions as an emerging growth company; we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b), (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the 28 Table of Contents auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items. These exemptions will apply for a period of five years following the completion of our IPO or until we no longer meet the requirements of being an emerging growth company, whichever is earlier. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, and we currently believe that it will not have a material impact on our disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , to improve transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income Statement. The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the effect of this pronouncement on our disclosures. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ As a smaller reporting company, we are not required to provide the information required by this Item.