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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-12 · 67 added, 22 removed, 180 unchanged (33% of the section changed)

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 consolidated 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.

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.

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Recent Developments

Entry into a Material Definitive 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, $0.001 par value per share.

On July 31, 2025, we filed a Certificate of Amendment to our Certificate of Incorporation (the “Charter Amendment”), with the Secretary of State of the State of Delaware to effect a 1-for-20 reverse stock split (the “Reverse Stock Split”) of our common stock, effective August 4, 2025 at :4:01 p.m., Eastern Time (the “Effective Time”) and our shares of common stock began trading on a split-adjusted basis on The Nasdaq Capital Market at the commencement of trading on August 5, 2025, under our existing trading symbol “ACXP”.

As previously reported, the Reverse Stock Split was approved by our stockholders at our annual meeting of stockholders held on July 17, 2025, at a ratio ranging from any whole number between 1-for-10 and 1-for-30, as determined by our board of directors in its discretion.

On July 17, 2025, the board of directors approved a ratio of 1-for-20 for the Reverse Stock Split.

The Charter Amendment provides that at the Effective Time, every 20 shares of our issued and outstanding shares of common stock immediately prior to the Effective Time, were automatically converted, without any action on the part of the holder thereof, into one share of common stock.

The number of authorized shares of common stock and the par value of each share of common stock remained unchanged.

No fractional shares were issued as a result of the Reverse Stock Split.

Stockholders who otherwise would have been entitled to receive a fractional share in connection with the Reverse Stock Split received a cash payment in lieu thereof.

The Company has adjusted the presentation of all periods covered by the condensed interim financial statements contained herein to give retroactive effect to the Reverse Stock Split, including adjustments to net loss per share and other per share of common stock amounts.

On August 4, 2025, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common stock.

The Company accounted for the reverse stock split on a retrospective basis pursuant to ASC 260, Earnings Per Share .

All issued and outstanding common stock, common stock warrants, stock option awards, exercise prices and per share data have been adjusted in these condensed interim financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented.

Authorized common stock was not adjusted as result of the reverse stock split.

Equity Line of Credit Purchase Agreement

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.

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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 June 30, 2025, we sold 72,000 shares of our common stock under the Purchase Agreement at a weighted-average price of $9.85 per share, raising $0.7 million of gross proceeds and net proceeds of $0.6 million after deducting related fees and expenses.

As of August 8, 2025, total sales under the Purchase agreement is approximately $1.6 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

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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 hearings panel.

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.

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Results of Operations

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2025 compared with the three months ended March 31, 2024:

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

The following table presents a summary of the changes in our results of operations for the three months ended June 30, 2025 compared with the three months ended June 30, 2024:

Three Months Ended

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TOTAL OPERATING EXPENSES

OPERATING LOSS

Interest Income

Research and Development Expenses

Research and development expenses were $0.6 million for the three months ended March 31, 2025 and $1.6 million for the three months ended March 31, 2024, a decrease of $1.0 million due to $0.4 million decrease in manufacturing related costs and $0.6 million decrease in consulting fees as a result of clinical trial related expenses in the prior year.

Research and development expenses were $0.5 million for the three months ended June 30, 2025 and $1.8 million for the three months ended June 30, 2024, a decrease of $1.3 million due to $0.3 million decrease in manufacturing related costs and $1.0 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 March 31, 2025 and $2.8 million for the three months ended March 31, 2024, a decrease of $1.2 million.

The decrease was primarily due to $0.7 million decrease in professional fees as a result of lower consulting expenses and $0.6 million decrease in share-based compensation related costs.

Net loss was $2.1 million for the three months ended March 31, 2025, and $4.4 million for the three months ended March 31, 2024, a decrease of $2.3 million, due to the reasons stated above.

General and administrative expenses were $1.7 million for the three months ended June 30, 2025 and $2.3 million for the three months ended June 30, 2024, a decrease of $0.6 million.

The decrease was primarily due to $0.7 million decrease in share-based compensation related costs offset by $0.1 million increase in professional fees.

Net loss was $2.2 million for the three months ended June 30, 2025, and $4.1 million for the three months ended June 30, 2024, a decrease of $1.9 million, due to the reasons stated above.

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Six Months Ended

(in thousands)

OPERATING EXPENSES:

Research and Development

General and Administrative

TOTAL OPERATING EXPENSES

OPERATING LOSS

Interest Income

Research and Development Expenses

Research and development expenses were $1.1 million for the six months ended June 30, 2025 and $3.4 million for the six months ended June 30, 2024, a decrease of $2.3 million due to $0.6 million decrease in manufacturing related costs and $1.7 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 $3.3 million for the six months ended June 30, 2025 and $5.1 million for the six months ended June 30, 2024, a decrease of $1.8 million.

The decrease was primarily due to $0.6 million decrease in professional fees and $1.2 million decrease in share-based compensation related costs.

Net loss was $4.4 million for the six months ended June 30, 2025, and $8.5 million for the six months ended June 30, 2024, a decrease of $4.1 million, due to the reasons stated above.

Liquidity and Capital Resources

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $69.5 million as of March 31, 2025.

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $71.7 million as of June 30, 2025.

We have funded our operations primarily from equity issuances.

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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

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 $0.6 million after deducting related fees and expenses.

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 March 31, 2025, we had working capital of $2.3 million, consisting primarily of $4.6 million of cash and $0.2 million of prepaid expenses, offset by approximately $2.5 million of accounts payable and accrued expenses.

As of June 30, 2025, we had working capital of $3.6 million, consisting primarily of $6.1 million of cash and $0.1 million of prepaid expenses and other receivable, offset by approximately $2.6 million of accounts payable and accrued expenses.

The following table sets forth selected cash flow information for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

Net cash (used in)/provided by:

Net cash provided by (used in):

Operating activities

Financing activities

Net increase in cash

Net increase (decrease) in cash

Net Cash Used in Operating Activities

Net cash used in operating activities was $2.1 million for the three months ended March 31, 2025.

Net cash used in operating activities was $3.7 million for the six months ended June 30, 2025.

The net loss was greater than the net cash used in operating activities by $0.7 million, primarily attributable to share-based compensation and share-based vendor payments of $0.9 million offset by decrease in accounts payable and accrued expenses of $0.2 million.

Net cash used in operating activities was $3.1 million for the three months ended March 31, 2024.

Net cash used in operating activities was $5.9 million for the six months ended June 30, 2024.

The net loss was greater than the net cash used in operating activities by $2.6 million, primarily attributable to share-based compensation and share-based vendor payments of $2.4 million.

Net Cash Provided by Financing Activities

Net cash provided from financing activities was $3.0 million for the three months ended March 31, 2025, which was primarily attributable to the net proceeds from the January and March Registered Direct Offerings.

Net cash provided from financing activities was $4.5 million for the three months ended March 31, 2024, which was primarily attributable to the ATM Program.

Net cash provided from financing activities was $6.1 million for the six months ended June 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 $4.8 million for the six months ended June 30, 2024, which was primarily attributable to the ATM Program.

Critical Accounting Policies and Estimates

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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.

also use Black-Scholes option pricing model for the purpose of estimating the fair value of options and warrants.

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.

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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 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.

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.

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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, we currently believe that it will not have a material impact on our disclosures.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis