Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Controls Over Financial Reporting
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in “Internal Control-Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that, as of December 31, 2025, our internal control over financial reporting was effective.
Attestation Report of the Registered Public Accounting Firm
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting as we are a “smaller reporting company” and “non-accelerated filer” as defined under SEC rules.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B. Other Information
Insider Trading Arrangements
(a) On February 3, 2026 , Vimal Mehta , Chief Executive Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 199,032 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2027 .
(b) On February 3, 2026 , Richard Steinhart , Chief Financial Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 70,000 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2027 .
(c) On February 3, 2026 , Javier Rodriguez , Senior Vice President, Chief Legal Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 70,000 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2027 .
(d) On February 3, 2026 , Frank Yocca , Chief Scientific Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 70,000 shares of the Company’s common stock to cover taxes due in connection with the vesting of restricted stock units until December 31, 2027 .
Ninth Amendment to Credit Agreement; Company Warrants; and Registration Rights Agreement
On March 27, 2026, we entered into the Ninth Amendment to Credit Agreement and Guaranty (the “Ninth Amendment”), which amended the Credit Agreement and Guaranty, dated April 19, 2022, as amended (the “Credit Agreement”), by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent.
Pursuant to the Ninth Amendment, the Lenders agreed to (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2025 will not contain a “going concern” or similar qualification, and (ii) reduce the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $12.50 million from and after March 31, 2026 (instead of $15.0 million).
The Ninth Amendment’s effectiveness is subject to various customary conditions precedent, as well as conditions subsequent requiring the Company to:
● on or before March 31, 2026, make a one-time prepayment of the principal amount of $2.50 million, together with accrued and unpaid interest thereon;
● on April 15, 2026, either (i) pay to the Lenders an amendment fee in cash in an amount equal to approximately $2.0 million or (ii) grant new warrants to the Lenders to purchase 1,353,729 shares of common stock of the Company, at an exercise price of $0.01 per share (the “New Warrants”); and
● in connection with the receipt by the Company of any gross cash proceeds following the effective date of the Ninth Amendment from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions, (iii) the issuance of the Company’s subordinated debt and/or (iv) sales by the Company of its assets, in each case ((i) through (iv)), in transactions permitted under the Credit Agreement, make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith; provided, that the foregoing requirement will not apply (A) with respect to the first $2.50 million in the aggregate of proceeds raised from Capital Raise Activities and (B) once the aggregate principal amount of the Loans prepaid pursuant to one or more Capital Raise Prepayments equals $2.50 million.
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On the date of issuance of the New Warrants, if applicable, we agreed to amend and restate its Third Amended and Restated Registration Rights Agreement with the Lenders, dated November 25, 2024. Pursuant to such amendment and restatement (the “Fourth Amended and Restated Registration Rights Agreement”), we will agree to register the shares of common stock issuable under the New Warrants, in addition to all warrants previously issued to the Lenders, for resale.
Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
INFORMATION ABOUT OUR DIRECTORS & EXECUTIVE OFFICERS
The following information with respect to our Board of Directors (the “Board”) and executive officers is presented as of March 27, 2026:
Name
Age
Position at BioXcel
Vimal Mehta, Ph.D.
65
Chief Executive Officer and President, and Director
Richard Steinhart
68
Senior Vice President and Chief Financial Officer
Frank Yocca, Ph.D.
70
Senior Vice President and Chief Scientific Officer
Javier Rodriguez
54
Senior Vice President, Chief Legal Officer and Corporate Secretary
Peter Mueller, Ph.D.
69
Chairman of the Board
June Bray
70
Director
Sandeep Laumas, M.D.
57
Director
Michael Miller
68
Director
Michael Votruba, M.D.
60
Director
David Mack
55
Director
Rajiv Patni, M.D.
60
Director
Business Experience and Background of Directors and Executive Officers
Vimal Mehta, Ph.D. co-founded the Company and has served as a member of our Board since April 2017 and as our Chief Executive Officer and President since May 2017. Dr. Mehta also served as our Corporate Secretary from May 2017 to February 2021. He is also the co-founder of BioXcel Corporation (now BioXcel LLC) and, following its inception in 2005 until March 2023, served as its Chairman of the Board and Chief Executive Officer. Dr. Mehta holds a Ph.D. in Chemistry from the University of Delhi, India and completed a Post-Doctoral Fellowship in Chemistry at the University of Montpellier, France. During the length of his career, Dr. Mehta has garnered a deep understanding of the biopharma and healthcare ecosystem and has been actively involved in diverse global value generating initiatives encompassing corporate strategy and planning, global business development, and corporate fundraising. As our co-founder, he has helped shape our strategic and business trajectory which the Board believes qualifies him to serve as a director of our Company.
Richard I. Steinhart has served as our Senior Vice President and Chief Financial Officer since March 2018. From October 2017 to March 2018, Mr. Steinhart served as our Vice President and Chief Financial Officer. From October 2015 to June 2017, he was Vice President and CFO at Remedy Pharmaceuticals, Inc. From January 2014 to September 2015 Mr. Steinhart worked as a financial and strategic consultant to the biotechnology and medical device industries. From April 2006 through December 2013, Mr. Steinhart was employed by MELA Sciences, Inc., as their Vice President, Finance and Chief Financial Officer, Treasurer and Secretary from April 2006 to April 2012 and as Sr. Vice President, Finance and Chief Financial Officer from April 2012 to December 2013. From May 1992 until joining MELA Sciences, Mr. Steinhart was a Managing Director of Forest Street Capital/SAE Ventures, a boutique investment banking, venture capital, and management consulting firm focused on healthcare and technology companies. Prior to Forest Street Capital/SAE Ventures, he was Vice President and Chief Financial Officer of Emisphere Technologies, Inc. Mr. Steinhart’s other experience includes seven years at CW Group, Inc., a venture capital firm focused on medical technology and biopharmaceutical companies, where he was a General Partner and Chief Financial Officer. Mr. Steinhart is a member of the Board of Directors of Actinium Pharmaceuticals, Inc., a position he assumed in November 2013, and Atossa Genetics, Inc., where he began his service in March 2014. Mr. Steinhart serves as the Chairman of the Audit Committee at Actinium Pharmaceuticals, where he also sits on the Corporate Governance Committees. Mr. Steinhart serves as the Chairman of Atossa Genetics Audit Committee and is a member of its Audit Committee and Compensation Committee. He holds B.B.A. and M.B.A. degrees from Pace University and is a Certified Public Accountant (inactive).
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Frank D. Yocca, Ph.D. has served as our Executive Vice President and Chief Scientific Officer since December 2023. From March 2018 to December 2023, he served as our Senior Vice President and Chief Medical Officer. From June 2017 to March 2018, Dr. Yocca served as our Vice President and Chief Scientific Officer. From April 2015 to April 2017, he was Senior Vice President, CNS R&D of BioXcel. From 2005 to 2015, Dr. Yocca held multiple leadership roles at AstraZeneca plc, including Vice President, Strategy and Externalization, Neuroscience Virtual Innovative Medicine Unit (iMed) (2011-2015), Vice President and Head, Strategy Unit, CNS and Pain Innovative Medicine Unit (iMed) (2010 to 2011) and Vice President and Head, CNS Pain Discovery (2005 to 2010). Prior to this, he was Executive Director at the Bristol Myers Squibb Pharmaceutical Research Institute from 1984 to 2004 where he served concurrent leadership responsibilities within the Neuroscience Clinical Group for Early and Late Clinical Development Studies. Prior to this, Dr. Yocca served as Executive Director, Neuroscience Discovery from 1997 to 2003, where he was a collaborator in the development and implementation of corporate strategic plans and leader for the Neuroscience Biology Department in the discovery of psychiatry and Alzheimer’s clinical candidates. He was a core member of the Abilify Product Development and Commercialization Team from 1999 to 2002 and a core member of the Early and Late Discovery and Development Teams from 1984 to 2001. Dr. Yocca holds a B.S. in biochemistry from Manhattan College and an M.S. in pharmacology and a Ph.D. in neuropharmacology from St. John’s University.
Javier Rodriguez has served as our Senior Vice President and Chief Legal Officer and Corporate Secretary since January 2021. Mr. Rodriguez has over 20 years of extensive strategic and legal experience within the biopharmaceutical industry and has broad leadership experience managing legal, compliance, corporate governance, intellectual property, data privacy, and government affairs professionals. Prior to joining BioXcel Therapeutics, he was Chief Legal Officer at Indivior PLC (LSE: INDV), a global pharmaceuticals company with operations in over 40 countries, from December 2014 to December 2020, where he oversaw all legal affairs, data privacy compliance, and corporate governance matters. Before taking on his role at Indivior, Mr. Rodriguez was General Counsel at Reckitt Benckiser Pharmaceuticals Inc. where he played a key leadership role in negotiating and successfully effectuating the demerger and spin-off of the organization in 2014, which included closing a $750 million secured term loan and $50 million revolving credit facility to fund on-going operations of the demerged entity. Earlier in his career, Mr. Rodriguez held roles of increasing responsibility at Reckitt Benckiser LLC, Bayer Healthcare Pharmaceuticals, Inc. and Berlex, Inc. He began his legal career in 2000 as a litigation associate at Thelen Reid & Priest, LLP in New York City. He holds a B.S. in Civil Engineering from Rutgers University, a M.S.E. in Structural Engineering from the University of Michigan and a J.D. from the University of Pennsylvania.
Peter Mueller, Ph.D. has served as a director of our Company since April 2017 and Chairman of the Board since August 2017. With over 30 years of global pharma and biotech experience, Dr. Mueller is currently the President of the Mueller Health Foundation, a private foundation tackling globally lethal infectious diseases such as tuberculosis by addressing latency and the ever-growing challenges of antimicrobial resistance. From 2014 to 2016, he was President of R&D and Chief Scientific Officer of Axcella Health, a biotechnology company. From 2003 to 2014, Dr. Mueller served as Executive Vice President Global Research and Development & Chief Scientific Officer for Vertex Pharmaceuticals, Incorporated, a biotechnology company. He was involved in the development of Incivek (2011), Kalydeco (2012), and Orkambi (2014). Prior to his tenure at Vertex, he served as Senior Vice President, Research and Development, for Boehringer Ingelheim Pharmaceuticals, Inc. overseeing global research programs (immunology, inflammation, cardiovascular diseases and gene therapy) and the development of all drug candidates of the company’s worldwide portfolio in North and South America, Canada and Japan, beginning in 1997. He was involved in the development of Spiriva, Combivent, Atrovent and Viramune. Dr. Mueller received both an undergraduate degree and a Ph.D. in Chemistry at the Albert Einstein University of Ulm, Germany, where he also holds a Professorship in Theoretical Organic Chemistry. He completed fellowships in Quantum Pharmacology at Oxford University and in Biophysics at Rochester University. He is a member of various scientific and political societies and currently serves on the Board of the US-India Chamber of Commerce Biotech. He also serves as chairman of the Scientific Advisory Board of BioXcel LLC and is an advisor to the University of Iowa Center for Bioanalysis and Bioprocessing. We believe that Dr. Mueller’s extensive experience in the life sciences industry as a scientist and executive qualifies him to serve as a director of our Company.
June Bray has served as a director of our Company since March 2021. She previously served as Senior Vice President, Global Regulatory Affairs and Medical Writing of Allergan, Inc., a pharmaceutical company, from 2008 to 2020, where she was in charge of global regulatory strategies for development projects and lifecycle management for all therapeutic areas. From 2006 to 2008, Ms. Bray was Vice President, Regulatory Affairs at Organon & Co. (prior to its
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merger with Merck & Co.), where she led departments responsible for regulatory activities for development and marketed products and, from 1980 to 2006, Ms. Bray served in various capacities at Berlex Laboratories, Inc., most recently as Vice President, Global Regulatory Affairs for Specialized Therapeutics/Oncology, a position she held from 2003 to 2006. Ms. Bray has served on the Board of Quince Therapeutics, Inc. since June 2022. Ms. Bray holds an M.B.A. from Fairleigh Dickinson University and a B.S. from the University of Rhode Island. We believe that Ms. Bray’s extensive experience in developing global regulatory strategies for product candidates qualifies her to serve as a director of our Company.
Sandeep Laumas, M.D. has served as a director of our Company since September 2017. Since June 2020, Dr. Laumas has served as Chief Business Officer and Chief Financial Officer of Instil Bio Inc. He served as a Director of BioXcel Corporation from May 2013 to August 2017. Dr. Laumas served as a director of 9 Meters BioPharma, Inc. (formerly Innovate Biopharmaceuticals Inc.), a biopharma company, from January 2014 to June 2021, including serving as the Executive Chairman from 2014 to April 2020, and as its Chief Executive Officer from February 2019 to April 2020. Dr. Laumas has served as a director of Unicycive Therapeutics Inc. since January 2018. He began his career at Goldman Sachs & Co. in New York in the Investment Banking Division. Dr. Laumas then joined Balyasny Asset Management in New York and later moved to North Sound Capital as a Managing Director responsible for global healthcare investments. He has been investing in healthcare via investment vehicles, Bearing Circle Capital. Dr. Laumas has served as a director of Parkway Holdings Ltd. (IHH Healthcare) and SRL Ltd. Dr. Laumas received his A.B. in Chemistry from Cornell University in 1990, M.D. from Albany Medical College in 1995 with a research gap year at the Dana-Farber Cancer Institute and completed his medical internship in 1996 from the Yale University School of Medicine. Dr. Laumas has a novel industry perspective, particularly in both public and private investments and financial transactions in the healthcare arena, which we believe qualifies him to serve as a director of our Company.
Michael Miller has served as a director of our Company since June 2022. He has served as an advisor to several biopharmaceutical companies, including Concarlo Therapeutics since June 2022 and Rigel Pharmaceuticals, Inc. since January 2022. Prior to that, he served as Executive Vice President, Commercial of Jazz Pharmaceuticals plc from March 2014 to August 2020. Since May 2018, Mr. Miller has served on the Board of Puma Biotechnology Inc., where he also serves on the Compensation Committee. Mr. Miller has also served on the Board of Directors of Rigel Pharmaceuticals, Inc. since February 2026. Mr. Miller received his B.S. from the University of San Francisco and his M.B.A. from San Francisco State University. The Board believes that Mr. Miller’s extensive experience at commercial pharmaceutical and public companies will provide valuable contributions to the Board.
Michal Votruba, M.D., has served as a director of our Company since March 2019. Since 2013, Dr. Votruba has been a Director of the Gradus/RSJ Life Sciences Fund, the largest dedicated fund in Central Europe with a portfolio of companies in Europe and the United States. Dr. Votruba served as a director of Mynd Analytics, Inc., a telebehavioral health services company, from July 2015 to 2019, and served as a director of Telemynd, Inc., successor to Mynd Analytics, since 2019. Since 2010, he has served as a member of the board of PrimeCell Therapeutics as the Director of Global Business Development overseeing the expansion of the largest regenerative medicine company operating in Central Europe. In 2009, the Czech Academy of Sciences solicited Dr. Votruba’s expertise for the first successful privatization project of the Institute of Experimental Medicine in Prague: the newly created protocol established a precedent for future privatization projects in the Czech Republic. Dr. Votruba earned his M.D. from the Medical Faculty of Charles University in Prague in 1989. Shortly thereafter, he emigrated from Czechoslovakia and developed his professional career in Canada and the USA. Since 2005, Dr. Votruba combined his theoretical and clinical experience in the field of Competitive Intelligence serving the global pharmaceutical industry for eight years as an industry analyst advising senior leaders of companies including Amgen, Novartis, Eli Lilly, Allergan, EMD, Serono and Sanofi. Dr. Votruba brings valuable expertise to the Board as a clinical psychiatrist and broad experience in the international marketing of innovative medical technologies.
David Mack has more than 25 years of experience as a lawyer, director, and investor. He served as a director of of our Company since November 2024. He has extensive experience in leading transactions as well as deep knowledge of complex restructuring and litigation. He has previously served (or serves) on the boards of TerraForm Global, Inc. (NSDQ: GLBL), Speedcast International Limited (ASX: SDA) and Intelsat S.A., among others. He started his career in Sydney as a lawyer with Mallesons Stephen Jaques and then worked for Linklaters LLP in London. In 2000, he moved to the US, where he worked at Simpson Thacher & Bartlett, LLP followed by Perry Capital LLC. He has a BA and an LLB (Hons) from the University of Sydney. In connection with his appointment, Mr. Mack was also appointed to the
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Compensation Committee, effective with his commencement of service, as well as the newly formed Capital Raising Committee. We believe that Mr. Mack is qualified to serve as a director of our Company because of his extensive experience working on strategic transactions.
Dr. Rajiv Patni Since September 2024, Dr. Patni has served as the Chief Executive Officer of Judo Bio, a biopharmaceutical development company focused on pioneering oligonucleotide medicines delivered to the kidney. He previously served as Chief Research and Development Officer at Reata Pharmaceuticals, a commercial-stage company acquired by Biogen and he is currently serving as a board member of Quince Therapeutics, Inc. (Nasdaq: QNCX). Previously, Dr. Patni also served as Chief Medical Officer at several public, commercial-stage biopharmaceutical companies - Global Blood Therapeutics, Portola Pharmaceuticals, and Adamas Pharmaceuticals, until their acquisitions by larger companies. Earlier in his career, Dr. Patni held roles of increasing responsibility at Pfizer, Roche, and Actelion. Dr. Patni received his M.D. from the Icahn School of Medicine at Mount Sinai in New York City as part of an accelerated B.S./M.D. program. He completed an internal medicine residency and adult cardiology fellowship at the Albert Einstein College of Medicine, also in New York City, where he continued as an attending physician-scientist before joining the biopharmaceutical industry. We believe that Dr. Patni’s extensive experience in biopharmaceutical product development will provide valuable contributions to the Board.
Board and Committee Information
During fiscal 2025, our Board of Directors met 14 times, the audit committee met four times, the capital raise committee met 11 times, and the compensation committee met two times. In 2025, each of our incumbent directors attended at least 75% of the meetings of the Board and committees on which he or she then served as a member.
Executive sessions, which are meetings of the non-management members of the Board, are regularly scheduled throughout the year. In addition, at least twice per year, the independent directors meet in a private session that excludes management and any non-independent directors. The Chair of the Board presides at each of these meetings and, in his absence, the non-management and independent directors in attendance, as applicable, determine which member will preside at such session.
Board Leadership Structure
Our Corporate Governance Guidelines provide our Board with flexibility to combine or separate the positions of Chairperson of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure would be in the best interests of the Company and its stockholders. If the Chairperson of the Board is a member of management or does not otherwise qualify as independent, our Corporate Governance Guidelines provide for the appointment by the independent directors of a lead independent director (the “Lead Director”). The Lead Director’s responsibilities include, but are not limited to: presiding over all meetings of the Board at which the Chairperson of the Board is not present, including any executive sessions of the independent directors; approving Board meeting schedules and agendas; and acting as the liaison between the independent directors and the Chief Executive Officer and Chairperson of the Board. Our Corporate Governance Guidelines provide that, at such times as the Chairperson of the Board qualifies as independent, the Chairperson of the Board will serve as Lead Director.
The positions of our Chair of the Board and our Chief Executive Officer are currently served by two separate persons. Dr. Mueller serves as Chairman of the Board, and Dr. Mehta serves as our Chief Executive Officer. In his capacity as the independent Board Chair, Dr. Mueller performs the functions of the Lead Director.
The Board believes that our current leadership structure of Chief Executive Officer and Chair of the Board being held by two separate individuals is in the best interests of the Company and its stockholders and strikes the appropriate balance between the Chief Executive Officer and President’s responsibility for the strategic direction, day-to day-leadership and performance of our Company and the Chair of the Board’s responsibility to guide overall strategic direction of our Company and provide oversight of our corporate governance and guidance to our Chief Executive Officer and President and to set the agenda for and preside over Board meetings. We recognize that different leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. Accordingly, the Board will continue to periodically review our leadership structure and make such changes in the future as it deems appropriate and in the best interests of the Company and its stockholders.
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Board Committees
Our Board has three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee, each of which has the composition and the responsibilities described below. In addition, from time to time, special committees may be established under the direction of our Board when necessary to address specific issues. Each of the audit committee, the compensation committee and the nominating and corporate governance committee operates under a written charter which are available in the “Governance - Governance Documents” section of the “Investors” page of our website located at www.bioxceltherapeutics.com .
Nominating and
Corporate
Audit
Compensation
Governance
Committee
Committee
Committee
June Bray
–—
–—
X
Sandeep Laumas, M.D.
Chair
X
X
Peter Mueller, Ph.D.
X
Chair
Chair
Michael Miller
X
–—
–—
Michal Votruba, M.D.
X
–—
–—
David Mack
–—
X
–—
Rajiv Patni
–—
–—
–—
Audit Committee
Our audit committee is responsible for, among other things:
● appointing, approving the compensation of, and assessing the independence of, our registered public accounting firm;
● overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;
● reviewing and discussing our annual and quarterly financial statements and related disclosures with management and our independent registered public accounting firm;
● considering whether to recommend to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K;
● coordinating our Board’s oversight of our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;
● discussing our risk assessment and risk management policies, and overseeing management of our financial risks, cybersecurity risks, information security risks, and, as necessary or advisable, such other material risks facing the Company;
● meeting independently with our internal auditors, if any, independent registered public accounting firm and management;
● reviewing on a periodic basis our investment policy;
● reviewing and approving or ratifying any related person transactions;
● pre-approving all audit and non-audit services provided to us by our independent auditor (other than those provided pursuant to appropriate preapproval policies established by the committee or exempt from such requirement under SEC rules);
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● establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
● preparing the audit committee report required by SEC rules.
The current members of our audit committee are Peter Mueller, Sandeep Laumas, Michael Miller and Michal Votruba, with Dr. Laumas serving as chair. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations. Our Board has affirmatively determined that each member of our audit committee qualifies as “independent” under Nasdaq’s additional standards applicable to audit committee members and Rule 10A-3 of the Exchange Act applicable to audit committee members. In addition, our Board has determined that each of Dr. Laumas, Mr. Miller, Dr. Mueller, and Dr. Votruba qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee
Our compensation committee is responsible for, among other things:
● reviewing and approving, or recommending for approval by the board of directors, the compensation of our Chief Executive Officer and our other executive officers;
● reviewing and approving or make recommendations to the Board regarding the Company’s incentive compensation plans and equity-based plans and arrangements;
● overseeing and administering our incentive compensation and equity-based plans and arrangement;
● periodically reviewing and making recommendations to our board of directors with respect to director compensation;
● reviewing and discussing annually with management our “Compensation Discussion and Analysis,” to the extent required;
● preparing the annual compensation committee report required by SEC rules, to the extent required;
● reviewing and discussing the results of the most recent stockholder advisory vote on executive compensation, and reviewing and recommending to our board of directors for approval the frequency with which we should conduct such votes, to the extent required; and
● overseeing the Company’s programs and policies as may be applicable, regarding talent management (including retention, development and training) and diversity and inclusion.
The current members of our compensation committee are Peter Mueller, Ph.D., Sandeep Laumas, M.D., and David Mack, with Dr. Mueller serving as chair. Our Board has determined that each member of our compensation committee qualifies as “independent” under Nasdaq’s additional standards applicable to compensation committee members and is a “non-employee director” as defined in Section 16b-3 of the Exchange Act.
The compensation committee generally considers the Chief Executive Officer’s recommendations when making decisions regarding the compensation of non-employee directors and executive officers (other than the Chief Executive Officer). Pursuant to the compensation committee’s charter, the compensation committee has the authority to retain or obtain the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities. Before selecting any such consultant, counsel or advisor, the compensation committee reviews and considers the independence of such consultant, counsel or advisor in accordance with applicable Nasdaq rules. We must provide appropriate funding for payment of reasonable compensation to any advisor retained by the compensation committee.
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Compensation Consultants
The compensation committee has the authority under its charter to retain outside consultants or advisors, as it deems necessary or advisable. In accordance with this authority, the compensation committee.
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee is responsible for, among other things:
● identifying individuals qualified to become members of our Board;
● recommending to our Board the persons to be nominated for election as directors and to each committee of the Board;
● developing and recommending to our Board corporate governance guidelines, and reviewing and recommending to our board of directors proposed changes to our corporate governance guidelines from time to time;
● reviewing and making recommendations to the Board in connection with a director’s notification of a change in employment or other circumstances; and
● overseeing a periodic evaluation of our Board.
The current members of our nominating and corporate governance committee are June Bray, Sandeep Laumas and Peter Mueller, with Peter Mueller serving as chair. Our Board has determined that each of Ms. Bray and Drs. Laumas and Mueller qualifies as “independent” under applicable Nasdaq rules applicable to nominating and corporate governance committee members.
Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of our Code of Business Conduct and Ethics is available under the “Governance - Governance Documents” section of the Investors page of our website located at www.bioxceltherapeutics.com , or by writing to our Corporate Secretary at our offices at 555 Long Wharf Drive, New Haven, CT 06511. We intend to make any required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our website rather than by filing a Current Report on Form 8-K.
Insider Trading Policy
We maintain an Insider Trading Compliance Policy governing the purchase, sale, and other disposition of Company securities that is applicable to all of our directors, officers and employees. We believe our Insider Trading Compliance Policy and procedures are reasonably designed to promote compliance with insider trading laws. A copy of our Insider Trading Compliance Policy is filed hereto as Exhibit 19.1.
The policy additionally prohibits our directors, officers and employees from purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds, or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. All such transactions involving our equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly, are prohibited.
Compensation Recovery Policy (Clawback Policy)
In 2023, we adopted a compensation recovery, or “clawback,” policy (the “Clawback Policy”) in accordance with the Nasdaq listing standards and Exchange Act Rule 10D-1. The Clawback Policy provides for the mandatory recovery (subject to limited exceptions) from current and former officers of incentive-based compensation that was erroneously
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received during the three years preceding the date that the Company is required to prepare an accounting restatement. The Clawback Policy is overseen and administered by the Compensation Committee. The full text of the Clawback Policy was included as Exhibit 97 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 22, 2024.
Interested Persons’ Communications with the Board
To help foster input and insight from the Company’s stockholders and other interested parties (collectively, “Interested Parties”), Interested Parties may communicate with, or otherwise make his or her concerns known directly to, the Chairperson of the Board, the lead director, if any, any chairperson of a Board committee, or the non-management or independent members of the Board, by addressing such communications to the intended recipient by name or position in care of: BioXcel Therapeutics, Inc., Attn: Chief Legal Officer, 555 Long Wharf Drive, New Haven, Connecticut 06511. The Chief Legal Officer will forward such communications to the appropriate party.
Item 11. Executive Compensation
The following is a discussion of the compensation arrangements of our named executive officers (“NEOs”). As a smaller reporting company, we are not required to include a Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure requirements applicable to smaller reporting companies.
Our NEOs include our principal executive officer and our two most highly compensated executive officers, other than our principal executive officer, for the fiscal year ended December 31, 2025. These NEOs and their positions are:
● Vimal Mehta, Ph.D., our Chief Executive Officer and President;
● Javier Rodriquez, our Senior Vice President, Chief Legal Officer and Secretary; and
● Richard Steinhart, our Senior Vice President and Chief Financial Officer.
Summary Compensation Table
The following table shows information regarding the compensation of our NEOs for the years presented.
Non-Equity
Stock
Option
Incentive Plan
All Other
Salary
Awards
Awards
Compensation
Compensation
Total
Name and Principal Position
Year
($)
($)(1)
($)(1)
($)
($)(2)
($)
Vimal Mehta, Ph.D.
2025
706,558
—
256,290
—
8,750
971,598
Chief Executive Officer
2024
1,001,570
—
101,250
—
16,425
1,119,245
Javier Rodriguez
2025
423,833
—
—
—
8,750
432,583
Senior VP and Chief Legal Officer
2024
423,833
12,000
30,375
—
8,625
474,833
Richard Steinhart
2025
289,800
—
104,846
—
—
394,646
Senior VP and Chief Financial Officer
2024
409,872
12,000
30,375
—
4,128
456,375
(1) The amounts reported represent the grant date fair value of restricted stock units and stock options granted to our NEOs as computed in accordance with Accounting Standards Codification 718, Compensation - Stock Compensation (ASC 718). Note that the amounts reported in these columns reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by our NEOs from the awards. We provided information regarding the assumptions used to calculate the value of the restricted stock units and stock options in Note 12 to our financial statements included herein.
(2)
The amounts reported for 2025 represent 401(k) matching contributions of ($8,750) for each named executive officer other than Mr. Steinhart. No bonus was paid for the year 2025.
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Narrative to Summary Compensation Table
2025 Salaries
Our NEOs receive a base salary to compensate them for services rendered to the Company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The base salaries of our NEOs are reviewed from time to time and adjusted when our Board or compensation committee determines an adjustment is appropriate. In 2025, the compensation committee determined it was in the best interest of the Company and Company’s stockholders to reduce the salaries of Dr. Mehta and Mr. Steinhart as shown in the Summary Compensation Table above.
2025 Equity Awards
During 2025, we awarded stock options and time-based restricted stock units to our NEOs as the long-term incentive component of our executive compensation program. We typically grant equity awards at such times as our Board determines appropriate. The following table sets forth the equity awards we granted to our NEOs during 2025:
2025 Equity Awards Granted (#)
Name
Options
RSUs
PSUs
Vimal Mehta, Ph.D.
41,250
18,000
—
Javier Rodriguez
—
9,000
—
Richard Steinhart
16,875
9,000
—
The options were granted with exercise prices equal to the fair market value of our common stock on the date of grant. The stock options generally vest and becomes exercisable as to 50% of the total number of shares underlying the option on each of the first and second anniversaries of the date of grant and the remaining become fully vested on the second anniversary of the date of the grant, subject, in each case, to the holder’s continued service through the applicable vesting date. The time-based restricted stock units generally vest fully on the nine-month anniversary of the date of the grant, subject, in each case, to the holder’s continued service through the applicable vesting date.
Refer to the “Outstanding Equity Awards at Year End” table below for additional information regarding the equity awards granted to our NEOs during 2025.
2025 Annual Bonuses
We offer our NEOs the opportunity to earn discretionary annual cash bonuses to compensate them for attaining company and individual performance goals. Each NEO’s target bonus opportunity is expressed as a percentage of annual base salary. Pursuant to the Fifth Amendment to the Credit Agreement, we are restricted from paying cash bonuses to our employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.
The performance goals for annual bonuses are reviewed and approved annually by the compensation committee. For 2025, the annual bonus metrics established by the compensation committee were based on the achievement of certain company performance goals, as well as an assessment of individual performance. In early 2026 the Board approved retention bonuses for the NEOs.
Other Elements of Compensation
Our NEOs are eligible to participate in our employee benefit plans and programs, which generally include medical, dental and vision benefits, and life, short-term, and long-term disability insurance to the same extent as our other full-time employees generally, subject to the terms and eligibility requirements of those plans.
We maintain a 401(k) defined contribution plan (the “401(k) Plan”), for the benefit of our employees who satisfy certain eligibility requirements. Our NEOs are eligible to participate in the 401(k) Plan on the same terms as other full-
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time employees. In 2024, we matched employee contributions to the 401(k) Plan up to 50% of the first 5% of eligible compensation.
The amounts paid pursuant to these arrangements are set forth in the Summary Compensation Table in the column entitled “All Other Compensation.”
In response to Item 402(x)(1) of Regulation S-K, the Company does not currently grant new awards of stock options, stock appreciation rights, or similar option-like instruments within four business days before or one business day after the release of a Form 10-Q, 10-K, or 8-K that discloses material nonpublic information (MNPI). Accordingly, the Company has no specific policy or practice on the timing of awards of such options in relation to the disclosure of MNPI by the Company.
Outstanding Equity Awards at Year End
The following table sets forth all outstanding equity awards held by each of the NEOs as of December 31, 2025.
Equity
Incentive
Equity
Plan
Incentive
Awards:
Plan
Market or
Awards:
Payout
Number of
Value of
Market
Unearned
Unearned
Number of
Value of
Shares,
Shares,
Shares or
Shares or
Units of
Units or
Number of
Number of
Units of
Units or
Other
Other
Securities
Securities
Stock
Stock
Rights
Rights
Underlying
Underlying
Option
That
That
That
That
Vesting
Unexercised
Unexercised
Exercise
Option
Have Not
Have Not
Have Not
Have Not
Commencement
Options (#)
Options (#)
Price
Expiration
Vested
Vested
Vested
Vested
Name
Date
Exercisable
Unexercisable
($)
Date
(#)
($)(1)
(#)
($)(1)
Vimal Mehta, Ph.D.
08/23/2017
18,376
—
6.56
08/23/2027
—
—
—
—
05/23/2019
11,732
—
160.64
05/23/2029
—
—
—
—
05/26/2020
15,625
—
735.84
05/25/2030
—
—
—
—
03/25/2021
15,625
—
658.72
03/25/2031
—
—
—
—
03/14/2022
(2)
9,787
651
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
164
$
262
—
—
03/15/2023
(3)
7,216
3,285
313.60
03/15/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
1,095
$
1,752
—
—
07/22/2024
(6)
3,125
3,125
19.20
07/22/2034
—
—
—
—
01/07/2025
41,250
—
7.54
01/07/2035
—
—
—
—
08/01/2025
(7)
—
—
—
—
18,000
$
28,800
—
—
Javier Rodriquez
02/22/2021
2,001
—
878.40
02/22/2031
—
—
—
—
08/16/2021
626
—
381.44
08/16/2031
—
—
—
—
03/14/2022
(2)
1,955
131
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
33
$
53
—
—
03/15/2023
(3)
1,373
628
313.60
03/15/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
178
$
285
—
—
07/22/2024
(6)
937
938
19.20
07/22/2034
—
—
—
—
08/01/2025
(7)
—
—
—
—
9,000
$
14,400
—
—
Richard Steinhart
10/02/2017
5,010
—
88.80
10/02/2027
—
—
—
—
03/12/2018
2,016
—
176.00
03/12/2028
—
—
—
—
05/26/2020
3,438
—
735.84
05/25/2030
—
—
—
—
03/25/2021
1,251
—
658.72
03/25/2031
—
—
—
—
03/14/2022
(2)
1,954
131
244.96
03/14/2032
—
—
—
—
03/14/2022
(4)
—
—
—
—
33
$
53
—
—
03/15/2023
(3)
1,373
628
313.60
03/15/2033
—
—
—
—
03/15/2023
(5)
—
—
—
—
178
$
285
—
—
07/22/2024
(6)
937
938
19.20
07/22/2034
—
—
—
—
01/07/2025
16,875
—
7.54
01/07/2035
—
—
—
—
08/01/2025
(7)
—
—
—
—
9,000
$
14,400
—
—
(1)
The amounts shown are based on the closing price of our common stock on December 31, 2025 of $1.60 per share. For the restricted stock units in Employee Holdings, the amount shown is based on the fair market value of such awards as of December 31, 2025.
(2)
The unvested portion of the option vests in substantially equal monthly installments until the fourth anniversary of the vesting commencement date.
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(3)
The option vests as to 25% of the shares on the first anniversary of the vesting commencement date and in substantially equal monthly installments thereafter until the fourth anniversary of the vesting commencement date.
(4)
The RSUs vest in substantially equal quarterly installments until the fourth anniversary of the vesting commencement date
(5)
The RSUs vest as to 25% of the shares on the first anniversary of the vesting commencement date and in substantially equal quarterly installments thereafter until the fourth anniversary of the vesting commencement date.
(6)
The option vests as to 50% of the shares on each of the first and second anniversaries of the grant date.
(7)
The RSUs vest on the nine-month anniversary of the grant date.
Employment Arrangements - 2025
We have entered into employment agreements with each of our NEOs that set forth the terms and conditions of each executive’s employment with us. All descriptions of the employment agreements herein describe the agreements in effect as of December 31, 2025, and do not reflect subsequent amendments.
Each employment agreement establishes an annual base salary and target bonus opportunity for each NEO. The amounts in effect during 2025 are described above under the headings “2025 Salaries” and “2025 Annual Bonuses.” The NEOs are eligible to participate in our employee benefit plans and programs for which the NEO is eligible, subject to the terms and conditions of such plans and programs.
During 2025, in the event that an NEO was terminated by us without cause, or by the executive for good reason, subject to the NEO’s timely execution and non-revocation of a release of claims in our favor, the executive would have been eligible to receive (i) a pro-rated portion of the executive’s annual bonus for the year of termination; (ii) base salary continuation for 24 months for Dr. Mehta, 6 months for Mr. Rodriguez and Mr. Steinhart; and (iii) reimbursement for COBRA premium payments for the applicable severance period. In addition, Dr. Mehta would be entitled to vesting of 50% of any unvested equity awards held by him immediately prior to his termination. The Company must provide an NEO 30 days’ notice in the event we terminate such NEO without cause.
The employment agreements also provide that, in the event an NEO’s employment is terminated by us without cause or by the NEO for good reason, in either case, within 6 months prior to or 12 months after a change in control, then, subject to the NEO’s timely execution and non-revocation of a release of claims in our favor, the NEO will be entitled to a lump sum payment equal to 6 months of base salary (or 24 months of base salary for Dr. Mehta), which payment is in addition to the severance payments and benefits described above.
The employment agreements generally define “cause” as, subject to certain notice and cure rights, the NEO’s (i) material breach or material default of the employment agreement or any other agreement between us and the NEO, or repeated failure to follow the direction of the Company or our Board, as applicable; (ii) gross negligence, willful misfeasance or breach of fiduciary duty to us or our affiliates; (iii) commission of an act or omission involving fraud, embezzlement, misappropriation or dishonesty in connection with NEO’s duties to us or our affiliates, or, for Mr. Rodriguez or Mr. Steinhart, that is otherwise likely to be materially injurious to the business or reputation of the Company or our affiliates; or (iv) conviction of, indictment for, or pleading guilty or nolo contendere to, any felony or other crime involving fraud or moral turpitude.
The employment agreements generally define “good reason” as, subject to certain notice and cure rights, the occurrence of any of the following (without the NEO’s express written consent): (i) a significant reduction of the NEO’s duties, position or responsibilities, or the removal of the NEO from such position, duties or responsibilities; (ii) for Dr. Mehta and Mr. Rodriguez only, the relocation of the NEO by more than 25 miles; or (iii) any action or inaction that constitutes a material breach by us or any of our successors of its obligations to the NEO under the employment agreement (or for Dr. Mehta, any other agreement between us and Dr. Mehta).
The employment agreements also contain covenants prohibiting the NEOs from competing with us or soliciting our suppliers, employees or customers during employment and for a period of one year following termination.
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Non-Employee Director Compensation
The non-employee members of our Board are eligible to receive compensation for their service on our Board. Under our director compensation program, during 2025 each non-employee director was eligible to receive an option to purchase 17,000 shares of common stock upon such director’s initial election or appointment to the Board. These options were issued to non-employee directors in January 2026. The options granted to our non-employee directors have an exercise price equal to the fair market value of our common stock on the date of grant and expire not later than ten years after the date of grant. The stock options granted upon a director’s initial election or appointment vest in three substantially equal annual installments following the date of grant. The stock options granted annually to directors vest in a single installment on the earlier of the day before the next annual meeting or the first anniversary of the date of grant. In addition, all unvested stock options vest in full upon the occurrence of a change in control.
In addition, our non-employee directors were eligible to receive cash retainers for service on our Board and committees of our Board during 2025 as set forth in the table below.
Position
Amount
Base Board Fee
$
60,000
Chair of Board or Lead Independent Director
$
35,000
Chair of Audit Committee
$
20,000
Chair of Compensation Committee
$
15,000
Chair of Nominating and Corporate Governance Committee
$
10,000
Member of Audit Committee (non-Chair)
$
10,000
Member of Compensation Committee (non-Chair)
$
7,500
Member of Nominating and Corporate Governance Committee (non-Chair)
$
5,000
Director fees under the program are payable in arrears in four equal quarterly installments not later than the fifteenth day following the final day of each calendar quarter, provided that the amount of each payment will be prorated for any portion of a quarter that a director is not serving on our board.
We also reimburse all of our non-employee directors for all reasonable and customary business expenses in accordance with company policy.
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Director Compensation Table
The following table sets forth information for the year ended December 31, 2025 regarding the compensation awarded to, earned by or paid to our non-employee directors:
Fees Earned or
Paid in Cash
Option Awards
Stock Awards
Total
Name
($)
($) (1)
($)
($)
Peter Mueller, Ph.D. (2)
$
130,000
$
—
(2)
$
—
$
130,000
Sandeep Laumas, M.D. (3)
$
92,500
$
—
(3)
$
—
$
92,500
Michal Votruba, M.D. (4)
$
70,000
$
—
(4)
$
—
$
70,000
June Bray (5)
$
65,000
$
—
(5)
$
—
$
65,000
Michael Miller (6)
$
70,000
$
—
(6)
$
—
$
70,000
David Mack
$
65,625
$
—
$
—
$
65,625
Rajiv Patni (7)
$
57,500
$
12,991
(7)
$
—
$
70,491
(1)
The amounts reported represent the grant date fair value of stock options granted to our non-employee directors as computed in accordance with ASC 718. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be received by the recipients from the options. We provide information regarding the assumptions used to calculate the value of the option awards in Note 12 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
(2)
As of December 31, 2025, Dr. Mueller held options to purchase an aggregate of 16,667 shares of our common stock, all of which were exercisable.
(3)
As of December 31, 2025, Dr. Laumas held options to purchase an aggregate of 14,028 shares of our common stock, all of which were exercisable.
(4)
As of December 31, 2025, Dr. Votruba held options to purchase an aggregate of 6,265 shares of our common stock, all of which were exercisable.
(5)
As of December 31, 2025, Ms. Bray held options to purchase an aggregate of 5,013 shares of our common stock, all of which were exercisable.
(6)
As of December 31, 2025, Mr. Miller held options to purchase an aggregate of 4,001 shares of our common stock, all of which were exercisable.
(7)
As of December 31, 2025, Mr. Patni held options to purchase an aggregate of 1,854 shares of our common stock, all of which were exercisable.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information relating to the beneficial ownership of our common stock as of March 26, 2026 by:
● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding shares of common stock;
● each of our directors;
● each of our named executive officers for 2025; and
● all of our current directors and executive officers as a group.
The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC. Under these rules, a person is deemed to be a “beneficial” owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. Except as indicated in the footnotes below, we believe, based on the information furnished to us, that the individuals and entities named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them, subject to any applicable community property laws.
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The percentage of shares beneficially owned is computed on the basis of 27,074,586 shares of our common stock outstanding as of March 26, 2026. Shares of our common stock that a person has the right to acquire within 60 days of March 26, 2026 are deemed outstanding for purposes of computing the percentage ownership of the person holding such rights, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all directors and executive officers as a group. Unless otherwise indicated below, the address for each beneficial owner listed is c/o 555 Long Wharf Drive, New Haven, CT 06511.
Number of Shares
Percentage of Shares
Name of Beneficial Owner
Beneficially Owned
Beneficially Owned
Holders of more than 5%:
Millenium Management LLC (1)
1,835,192
6.78
%
Armistice Capital Master Fund Ltd. (2)
2,704,751
9.99
%
Named executive officers and directors:
Vimal Mehta, Ph.D. (3)
693,967
2.6
%
Javier Rodriguez (4)
40,594
*
Richard Steinhart (5)
66,338
*
June Bray (6)
5,013
*
Sandeep Laumas, M.D. (7)
14,028
*
Michael Miller (8)
4,001
*
Peter Mueller, Ph.D. (9)
28,354
*
Michal Votruba, M.D. (10)
17,788
*
David Mack (11)
20,318
*
Rajiv Patni (12)
1,854
*
All executive officers and directors as a group (11 individuals) (13)
956,618
3.5
%
* Represents less than 1%.
(1)
Based on a Schedule 13G/A filed on February 6, 2024 by Integrated Core Strategies (US) LLC, Millenium Management LLC, Millenium Group Management LLC and Israel A. Englander, with (i) each reporting shared voting and dispositive power over 1,833,717 shares of common stock and (ii) each of Millenium Management LLC, Millenium Group Management LLC and Mr. Englander reporting shared voting and dispositive power over an additional 1,475 shares of common stock. Such shares potentially beneficially owned by Millennium Management LLC, Millennium Group Management LLC and Mr. Englander are held by entities subject to voting control and investment discretion by Millennium Management LLC and/or other investment managers that may be controlled by Millennium Group Management LLC (the managing member of Millennium Management LLC) and Mr. Englander (the sole voting trustee of the managing member of Millennium Group Management LLC). The address for (a) Integrated Cores Strategies (US) LLC is c/o Millennium Management LLC, 399 Park Avenue, New York, NY 10022 and (ii) each of Millenium Management LLC and Millenium Group Management LLC is 399 Park Avenue, New York, NY 10022.
(2)
Based on information known to us, Armistice Capital Master Fund Ltd. also owns warrants to purchase 5,885,868 shares of our common stock that are exercisable within 60 days of March 26, 2026. The warrants to purchase shares of common stock are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (“Master Fund”), and may be deemed to be beneficially owned by: (i) Armistice Capital, LLC (“Armistice Capital”), as the investment manager of Master Fund; and (ii) Steven Boyd, as the Managing Member of Armistice Capital. Armistice Capital has sole voting and dispositive control of the shares reported herein. The address for the stockholder is 510 Madison Avenue, 7th Floor, New York, New York 10022. Warrants held by Armistice Capital are subject to a beneficial ownership limitation of 4.99% or 9.99%, which such limitation restricts the stockholder from exercising that portion of the warrants, as applicable, that would result in the stockholder and its affiliates owning, after exercise, a number of shares of common stock in excess of the beneficial ownership limitation.
(3)
Represents for Dr. Mehta: (i) 21,384 shares of common stock (of which 125 shares are owned jointly with Dr. Mehta’s spouse); (ii) options to purchase 124,482 shares of our common stock that can be exercised within 60 days of March 26, 2026; (iii) 67,758 restricted stock units that vest within 60 days of March 26, 2026, and (iv) 480,343 shares of common stock held by BioXcel LLC as to which Dr. Mehta may be deemed to have beneficial ownership.
(4)
Represents for Mr. Steinhart: (i) 6,645 shares of common stock, (ii) options to purchase 33,193 shares of our common stock that can be exercised within 60 days of March 26, 2026, and (iii) 26,500 restricted stock units that vest within 60 days of March 26, 2026.
(5)
Represents for Mr. Rodriguez: (i) 6,863 shares of common stock, (ii) options to purchase 7,231 shares of our common stock that can be exercised within 60 days of March 26, 2026, and (iii) 26,500 restricted stock units that vest within 60 days of March 26, 2026.
(6)
Represents for Ms. Bray: options to purchase 5,013 shares of our common stock that can be exercised within 60 days of March 26, 2026.
(7)
Represents for Dr. Laumas: options to purchase 14,028 shares of our common stock that can be exercised within 60 days of March 26, 2026.
(8)
Represents for Mr. Miller: options to purchase 4,001 shares of our common stock that can be exercised within 60 days of March 26, 2026.
(9)
Represents for Dr. Mueller: (i) 11,687 shares of common stock held by Dr. Mueller (including shares of our common stock held by the Peter Mueller 2018 Irrevocable Family Trust, as to which Dr. Mueller serves as trustee); and (ii) options to purchase 16,667 shares of our common stock that can be exercised within 60 days of March 26, 2026.
(10)
Represents for Dr. Votruba: 11,523 shares of our common stock held by RSJ Investments SICAV a.s. (“RSJ/Gradus”) and over which Dr. Votruba, an asset manager at RSJ/Gradus, has voting and/or dispositive power. Also includes options to purchase 6,265 shares of our common stock that can be exercised within 60 days of March 26, 2026, which options Dr. Votruba was granted in respect of his service on our Board but as to which he assigned to RSJ/Gradus pursuant to the policies of RSJ/Gradus regarding stock ownership by employees.
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(11)
Represents for Mr. Mack: 20,318 shares of common stock.
(12)
Represents for Mr. Patni: options to purchase 1,854 shares of our common stock that vest within 60 days of March 26, 2026.
(13)
Includes options to purchase 244,077 shares of our common stock that can be exercised within 60 days of March 26, 2026 and 147,258 RSUs that vest within 60 days of March 26, 2026.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides certain information with respect to the Company’s equity compensation plans in effect as of December 31, 2025:
Number of securities
remaining available
Number of securities
for future issuance
to be issued upon
Weighted-average
under equity
exercise of
exercise price of
compensation plans
outstanding options,
outstanding options,
(excluding securities
warrants and rights
warrants and rights
reflected in column (a)) (4)
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders (1)
458,636
(2)
$
202.81
(3)
148,629
Equity compensation plans not approved by security holders
—
—
—
Total
458,636
$
202.81
148,629
(1)
Consists of the BioXcel Therapeutics, Inc. 2017 Incentive Award Plan (the “2017 Plan”), the BioXcel Therapeutics, Inc. 2020 Incentive Award Plan (the “2020 Plan”) and the BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase Plan (the “2020 ESPP”).
(2)
Includes 112,027 outstanding options to purchase shares under the 2017 Plan, 106,632 restricted stock units and 239,977 outstanding options to purchase shares under the 2020 Plan.
(3)
As of December 31, 2025, the weighted-average exercise price of outstanding options under the 2017 Plan was $55.24 and the weighted-average exercise price of outstanding options under the 2020 Plan was $271.70. The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting of outstanding performance-based units and restricted stock units which have no exercise price.
(4)
Includes 42,309 shares available for future issuance under the 2020 Plan and 106,320 shares available for issuance under the 2020 ESPP. Following the effective date of the 2020 Plan, we ceased making grants under the 2017 Plan. To the extent outstanding awards under the 2017 Plan are forfeited or lapse unexercised, the shares of common stock subject to such awards will be available for issuance under the 2020 Plan. The 2020 Plan provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, by an amount equal to the lesser of (i) 4% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as determined by our board of directors (but no more than 625,000 shares may be issued upon the exercise of incentive stock options). The 2020 ESPP provides for an annual increase to the number of shares available for issuance thereunder on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, by an amount equal to the lesser of (i) 1% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as is determined by our board of directors, provided that no more than 31,250 shares of our common stock may be issued under the component of the 2020 ESPP that is intended to qualified under Section 423 of the Code. As of the date of this Annual Report, we have not commenced offering periods under the 2020 ESPP.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Certain Relationships and Related Transactions
March 2024 Registered Direct Offering
On March 27, 2024, we completed a registered direct offering, which resulted in the issuance and sale of (i) 190,913 shares of our common stock, (ii) pre-funded warrants to purchase up to 347,814 shares of our common stock at an exercise price of $0.016 per share and (iii) accompanying warrants to purchase up to 538,728 shares of our common stock at an exercise price of $51.20 per share. The combined offering price of the common stock and accompanying warrants was $46.416 per share and share underlying each accompanying warrant, and the combined offering price of the Armistice pre-funded warrants and accompanying warrants was $46.40 per share underlying each pre-funded warrant and accompanying warrant. The Armistice pre-funded warrants and the accompanying warrants are exercisable at any time after the date of issuance, however, the accompanying warrants will expire on the fifth anniversary of the date of issuance. A holder of Armistice pre-funded warrants will not be entitled to exercise any portion of such Armistice pre-funded warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of
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our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Armistice Pre-Funded Warrants. A holder of Accompanying Warrants will not be entitled to exercise any portion of such Accompanying Warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Accompanying Warrants. In each case, such percentages may be increased by a holder of Armistice Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us. We received net proceeds of approximately $24.9 million from this offering, after deducting offering expenses. The following table sets forth the aggregate number of shares of our common stock and shares of common stock underlying the Armistice Warrants acquired in the offering by holders of more than 5% of our common stock, including entities that became holders of more than 5% of our common stock as a result of the registered direct offering. On November 21, 2024, the exercise price of warrants to purchase 538,728 shares of common stock issued in March 2024 Registered Direct Offering described here was reduced to $9.136 per share.
Shares
Shares
Shares of
Underlying
Underlying
Common
Pre-Funded
Accompanying
Aggregate
Participants
Stock
Warrants
Warrants
Value
Holders of More than 5 % (1)
Armistice Capital Master Fund Ltd.
190,913
347,814
538,728
$
24,999,999.01
(1)
Additional details regarding certain of these stockholders and their equity holdings are provided in this Annual Report under the caption “Stock Ownership - Security Ownership of Certain Beneficial Owners and Management.”
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November 2024 Offering
On November 25, 2024, we completed an offering, which resulted in the issuance and sale to Armistice Capital of (i) 283,854 shares of our common stock, (ii) pre-funded warrants to purchase up to 562,500 shares of our common stock at an exercise price of $0.016 per share and (iii) accompanying warrants to purchase up to 846,355 shares of our common stock at an exercise price of $7.68 per share. The combined offering price of the common stock and accompanying warrants was $7.68 per share and share underlying each accompanying warrant, and the combined offering price of the Armistice pre-funded warrants and accompanying warrants was $7.664 per share underlying each pre-funded warrant and accompanying warrant. The Armistice pre-funded warrants and the accompanying warrants are exercisable at any time after the date of issuance, however, the accompanying warrants will expire on the fifth anniversary of the date of issuance. A holder of Armistice pre-funded warrants will not be entitled to exercise any portion of such Armistice pre-funded warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Armistice pre-funded warrants. A holder of accompanying warrants will not be entitled to exercise any portion of such accompanying warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the accompanying warrants. In each case, such percentages may be increased by a holder of Armistice Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us.
March 2025 Offering
On March 3, 2025, we completed a registered direct offering, which resulted in the issuance to Murchison of (i) 188,383 shares of our common stock, (ii) pre-funded warrants to purchase up to 3,811,617 shares of our common stock at an exercise price of $0.001 per share and (iii) accompanying warrants to purchase up to 4,000,000 shares of our common stock at an exercise price of $4.20 per share. The combined offering price of the common stock and accompanying warrants was $3.50 per share and share underlying each accompanying warrant, and the combined offering price of the Murchison pre-funded warrants and accompanying warrants was $3.499 per share underlying each pre-funded warrant and accompanying warrant. The Murchison pre-funded warrants and the accompanying warrants are exercisable at any time after the date of issuance, however, the accompanying warrants will expire on the fifth anniversary of the date of issuance,
In the March 2025 Offering, we also issued the purchaser option warrants, to purchase up to 4,000,000 shares of common stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to 4,000,000 shares of common stock. The exercise price of the option warrant is $3.50 per underlying share of common stock or $3.499 per underlying pre-funded warrant to purchase one share of common stock and accompanying warrant. The option accompanying warrants have an exercise price per share of common stock equal to $4.20 per share. The option warrants expired on March 18, 2025 without being exercised.
A holder of Murchison pre-funded warrants will not be entitled to exercise any portion of such Murchison pre-funded warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Murchison pre-funded warrants. A holder of accompanying warrants will not be entitled to exercise any portion of such accompanying warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to
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the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the accompanying warrants. In each case, such percentages may be increased by a holder of Murchison Warrants to any other percentage not in excess of 9.99% upon at least 61 days’ prior notice from the holder to us.
March 2026 Offering
On March 11, 2026, we completed the March 2026 Offering with Armistice Capital, which resulted in the issuance and sale of (i) an aggregate of 2,480,294 shares of common stock and accompanying warrants to purchase up to 2,480,294 shares of Common Stock at a combined offering price of $1.739 per Share and accompanying warrant, and (ii) pre-funded warrants to purchase up to 2,020,491 shares of Common Stock and accompanying warrants to purchase up to 2,020,491 shares of Common Stock, at a combined offering price of $1.738 per share underlying the Pre-Funded Warrants and accompanying warrant, which equals the offering price per Share and accompanying warrant less the $0.001 exercise price per share of the Pre-Funded Warrants. The Pre-funded Warrants and the Accompanying Warrants are exercisable at any time after the date of issuance, however, the Accompanying Warrants will expire on the fifth anniversary of the date of issuance. Armistice was not able to exercise any portion of the Pre-Funded Warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 9.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants. Armistice, will not be entitled to exercise any portion of such Accompanying Warrants which, upon giving effect to such exercise, would cause (i) the aggregate number of shares of our common stock beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, or (ii) the combined voting power of our securities beneficially owned by the holder (together with its affiliates) to exceed 4.99% of the combined voting power of all of our securities then outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Accompanying Warrants. In each case, such percentages may be increased by such Pre-Funded Warrants or Accompanying Warrants to any other percentage not in excess of 19.99% upon at least 61 days’ prior notice from the holder to us. We received net proceeds of approximately $7.3 million from the March 2026 Offering, after deducting offering expenses. The following table sets forth the aggregate number of shares of our common stock and shares of common stock underlying the Prefunded Warrants and Accompanying Warrants acquired in the offering by holders of more than 5% of our common stock, including entities that became holders of more than 5% of our common stock as a result of the March 2026 Offering.
Shares
Shares
Shares of
Underlying
Underlying
Common
Pre-Funded
Accompanying
Aggregate
Participants
Stock
Warrants
Warrants
Value
Holders of More than 5 % (1)
Armistice Capital Master Fund Ltd.
2,480,294
2,020,491
4,500,785
$
7,824,844.62
(1)
Additional details regarding certain of these stockholders and their equity holdings are provided in this Annual Report under the caption “Stock Ownership - Security Ownership of Certain Beneficial Owners and Management.”
BioXcel LLC
BioXcel LLC owned approximately 1.8% of the shares of our outstanding common stock as of March 26, 2026. BioXcel LLC is the successor in interest to BioXcel Corporation, our former parent. BioXcel LLC is a subsidiary of, and majority owned and controlled by BioXcel Holdings, Inc. Vimal Mehta and affiliated trusts are significant stockholders of BioXcel Holdings, Inc. Dr. Mehta is also an executive officer and the sole member of the board of managers of BioXcel Holdings, Inc. and an executive officer and one of two managers of BioXcel LLC and BioXcel Holdings, Inc.
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Amended and Restated Asset Contribution Agreement with BioXcel LLC
We entered into an asset contribution agreement, effective June 30, 2017, with BioXcel LLC (formerly BioXcel Corporation), as amended and restated on November 7, 2017, pursuant to which BioXcel LLC contributed to us, and we acquired from BioXcel LLC, all of BioXcel LLC’s rights, title and interest in and to BXCL501, BXCL701, BXCL502 and BXCL702 (collectively, the “Candidates”) and all of the assets and liabilities associated with the Candidates, in consideration for (i) 592,500 shares of our common stock, (ii) $1 million upon completion of our initial public offering (“IPO”), (iii) $500,000 upon the later of the 12 month anniversary of our IPO and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program, (iv) $500,000 upon the later of the 12 month anniversary of our IPO and the first dosing of a patient in the Phase 2 Proof of Concept open label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5 million within 60 days after the achievement of $50 million in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the Candidates or a product derived therefrom. There were no such payments during the years ended December 31, 2023 or 2024 pursuant to such provisions in the Contribution Agreement.
In addition, pursuant to the Contribution Agreement, BioXcel LLC granted us a first right to negotiate exclusive rights to any additional product candidates in the fields of neuroscience and immuno-oncology (the “Option Field”) that BioXcel LLC may identify on its own, excluding the Candidates, and not in connection with BioXcel LLC’s provision of services to us under the Services Agreement as defined and described below. This first right to negotiate an exclusivity period expired on March 12, 2023.
Amended and Restated Separation and Shared Services Agreement
We entered into a separation and shared services agreement, dated June 30, 2017, or the Effective Date, with BioXcel LLC (formerly BioXcel Corporation), as amended and restated thereafter, pursuant to which services provided by BioXcel LLC through its subsidiaries in India and the United States will continue indefinitely, as agreed upon by the parties. These services are primarily for drug discovery, chemical, manufacturing and controls cost and general and administrative support. Service charges recorded under this agreement were $0.6 million and $1.3 million for each of the years ended December 31, 2025 and 2024.
Under the Services Agreement, the Company has an option, exercisable through December 31, 2024, to enter into a collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing EvolverAI. The Company agreed to pay BioXcel LLC $18,000 per month, prorated for any partial month, as applicable, for the period beginning March 13, 2023 and ending December 31, 2024 as consideration for the option. The parties are obligated to negotiate the collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestones shall not exceed $10 million in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestones shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
InveniAI
On September 19, 2023, we, Krishnan Nandabalan, Ph.D., a former member of our Board, InveniAI and Invea Therapeutics, Inc., a wholly-owned subsidiary of BioXcel LLC (“Invea”) and the other parties thereto entered into a non-compete agreement pursuant to which Dr. Nandabalan, InveniAI and Invea agreed not to compete with us and our controlled affiliates in the fields of neuroscience and immuno-oncology for a period of five years from September 19, 2023 and not to solicit employees of the Company or its controlled affiliates for a period of two years from September 19, 2023.
Director and Officer Indemnification and Insurance
We have agreed to indemnify each of our directors and executive officers against certain liabilities, costs and expenses, and have purchased directors’ and officers’ liability insurance.
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Director Independence
Under our Corporate Governance Guidelines and Nasdaq rules, a director is independent if he or she does not have a material or other disqualifying relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities as a director. In addition, the director must meet the bright-line tests for independence set forth by the Nasdaq rules.
Our Board has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board of Directors has determined that none of Ms. Bray, Mr. Miller, Mr. Mack or Drs. Laumas, Mueller, Patni or Votruba, representing seven of our eight current directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors qualifies as “independent” as that term is defined under the Nasdaq rules. In making these determinations, our Board considered the relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the director’s beneficial ownership of our common stock and the relationships of our non-employee directors with certain of our significant stockholders.
Item 14. Principal Accounting Fees and Services
The Audit Committee retained Ernst & Young LLP to audit the Company’s consolidated financial statements for the years ended December 31, 2025 and December 31, 2024.
The table below sets forth the aggregate fees billed to us for services related to the fiscal year ended December 31, 2025 and 2024 by Ernst & Young LLP.
Year Ended
December 31,
2025
2024
Audit Fees (1)
$
921,500
$
946,270
Audit-Related Fees
—
—
Tax Fees
—
—
All Other Fees (2)
2,020
—
Total
$
923,520
$
946,270
(1)
Audit fees consisted of audit services performed in connection with the audit of the Company’s consolidated financial statements, the reviews of the Company’s interim condensed consolidated financial statements, and related services that are normally provided in connection with registration statements. Included in the 2025 and 2024 audit fees are $205,000 and $155,000, respectively, billed in connection with our follow-on offerings.
(2)
All other fees consisted of a subscription fee to Ernst & Young’s U.S. GAAP interpretive guidance and authoritative literature.
Pre-Approval Policies and Procedures
Consistent with SEC policies and guidelines regarding audit independence, the audit committee is responsible for the pre-approval of all audit and permissible non-audit services provided by our independent registered public accounting firm on a case-by-case basis. Our audit committee has established a policy regarding approval of all audit and permissible non-audit services provided by our principal accountants. No non-audit services were performed by our independent registered public accounting firm during the years ended December 31, 2025 and 2024. Our audit committee pre-approves these services by category and service. Our audit committee has pre-approved all of the above-described services.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this report:
(1) Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID: 00042)
F-1
Consolidated Balance Sheets as of December 31, 2025 and 2024
F-3
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024
F-4
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2025 and 2024
F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024
F-6
Notes to C onsolidated Financial Statements
F-7
(2) Financial Statement Schedules:
All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.
(3) Exhibits.
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
3.1
Amended and Restated Certificate of Incorporation
10-Q
001-38410
3.1
08/10/2021
3.2
Certificate of Amendment to the Amended and Restated Certificate of Incorporation
8-K
001-38410
3.1
06/12/2024
3.3
Certificate of Amendment to the Amended and Restated Certificate of Incorporation
8-K
001-38410
3.1
02/06/2025
3.4
Amended and Restated Bylaws
8-K
001-38410
3.2
03/13/2018
4.1
Description of the Registrant’s Securities Registered Under Section 12 of the Exchange Act
*
4.2
Specimen Stock Certificate evidencing the shares of common stock
S-1/A
333-222990
4.2
02/26/2018
4.3
Form of Amended and Restated Warrant Agreement, dated December 5, 2023
8-K
001-38410
4.1
12/06/2023
4.4
Form of Warrant Agreement, dated December 5, 2023
8-K
001-38410
4.2
12/06/2023
4.5
Form of Amended and Restated Warrant Agreement, dated November 25, 2024
*
4.6
Form of Pre-Funded Warrant, dated March 25, 2024
8-K
001-38410
4.1
03/25/2024
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Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
4.7
Form of Accompanying Warrant, dated March 25, 2024
8-K
001-38410
4.2
03/25/2024
4.8
Form of Fifth Amendment Warrant, dated November 21, 2024
8-K
001-38410
4.1
11/21/2024
4.9
Form of Pre-Funded Warrant, dated November 21, 2024
8-K
001-38410
4.1
11/25/2024
4.10
Form of Warrant, dated November 21, 2024
8-K
001-38410
4.2
11/25/2024
4.11
Form of Amended and Restated Fourth Amendment Warrant, dated November 25, 2024
S-3
333-284224
4.3
01/10/2025
4.12
Second Amended and Restated Registration Rights Agreement, between the Company and the parties thereto, dated March 20, 2024.
10-K
001-38410
4.6
03/22/2024
4.13
Form of Third Amended and Restated Registration Rights Agreement, between the Company and the parties thereto, dated November 25, 2024
8-K
001-38410
4.2
11/21/2024
10.1+
Second Amended and Restated Separation and Shared Services Agreement, dated March 6, 2020 , by and between BioXcel Corporation and BioXcel Therapeutics, Inc.
10-K
001-38410
10.2
03/09/2020
10.2#
F irst Amendment to Second Amended and Restated Separation and Shared Services Agreement, dated March 3, 2021, by and between BioXcel LLC and BioXcel Therapeutics Inc .
10-K
001-38410
10.3
03/12/2021
10.3
Second Amendment to Second Amended and Restated Separation and Shared Services Agreement, dated March 3, 2021, by and between BioXcel LLC and BioXcel Therapeutics Inc.
10-Q
001-38410
10.2
05/09/2022
10.4#
Amended and Restated Asset Contribution Agreement, effective November 7, 2017, by and between BioXcel LLC and BioXcel Therapeutics, Inc.
S-1/A
333-222990
10.2
02/12/2018
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Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.5
Lease Agreement, dated as of August 20, 2018, by and between Fusco Harbour Associates, LLC, as Landlord, and BioXcel Therapeutics, Inc., as Tenant
8-K
001-38410
10.1
08/23/2018
10.6
First Amendment, dated August 19, 2020, to Lease Agreement, dated as of August 20, 2018, by and between Fusco Harbour Associates, LLC, as Landlord, and BioXcel Therapeutics, Inc., as Tenant
10-Q
001-38410
10.1
11/12/2020
10.7 @
2017 Equity Incentive Plan
S-1/A
333-222990
10.3
02/12/2018
10.8 @
Form of Incentive Stock Option Agreement under the 2017 Equity Incentive Plan
S-1/A
333-222990
10.4
02/12/2018
10.9 @
Form of Non-Statutory Stock Option Agreement under the 2017 Equity Incentive Plan
S-1/A
333-222990
10.5
02/12/2018
10.10 @
BioXcel Therapeutics, Inc. 2020 Incentive Award Plan and forms of award agreements thereunder
10-Q
001-38410
10.1
08/14/2020
10.11 @
BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase Plan
10-Q
001-38410
10.2
08/14/2020
10.12 @
Form of Indemnification Agreement with directors and executive officers
S-1/A
333-222990
10.6
02/12/2018
10.13 @
Employment Agreement, dated March 7, 2018 by and between BioXcel Therapeutics, Inc. and Vimal Mehta
8-K
001-38410
10.1
03/13/2018
10.13.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Vimal Mehta
8-K
001-38410
10.1
01/08/2025
10.14 @
Employment Agreement, dated February 12, 2018, by and between BioXcel Therapeutics, Inc. and Frank Yocca
S-1/A
333-222990
10.11
02/12/2018
10.14.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Frank Yocca
8-K
001-38410
10.3
01/08/2025
163
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.15 @
Employment Agreement, effective October 2, 2017, by and between BioXcel Therapeutics, Inc. and Richard Steinhart
S-1/A
333-222990
10.12
02/12/2018
10.15.1 @
Amendment to Employment Agreement, dated January 7, 2025 by and between BioXcel Therapeutics, Inc. and Richard Steinhart
8-K
001-38410
10.2
01/08/2025
10.16 @
Employment Agreement, dated June 1, 2018, by and between BioXcel Therapeutics, Inc. and Dr. Vincent O’Neill, M.D.
8-K
001-38410
10.1
06/07/2018
10.17 @
Employment Agreement between Javier Rodriguez and BioXcel Therapeutics, Inc., dated February 15, 2021.
10-K
001-38410
10.19
03/12/2021
10.18 @
Separation Agreement between Matthew Wiley and BioXcel Therapeutics, Inc., dated October 3, 2024.
8-K
001-38410
10.1
10/09/2024
10.18.1 @
Consulting Agreement between Matthew Wiley and BioXcel Therapeutics, Inc. dated October 8, 2024
10-Q
001-38410
10.2
10/09/2024
10.19@
Employment Agreement BioXcel Therapeutics, Inc. and Vincent O’Neill, M.D. dated July 1, 2022
10-Q
001-38410
10.2
05/08/2023
10.20 @
Non-Employee Director Compensation Program
10-Q
001-38410
10.4
08/11/2022
10.21
BioXcel Trademark License Agreement, between the Company and BioXcel LLC
10-Q
001-38410
10.1
05/09/2022
10.22+&
Credit Agreement and Guaranty, by and among BioXcel Therapeutic, Inc., Oaktree Fund Administration, LLC, the Subsidiary Guarantors from time to time party thereto and the Lenders from time to time party thereto, dated April 19, 2022
10-Q
001-38410
10.1
08/11/2022
10.22.1+&
Waiver and First Amendment to Credit Agreement and Guaranty, by and between the Company, the lenders party thereto and Oaktree Fund Administration LLC dated November 13, 2023.
10-Q
001-38410
10.2
11/14/2023
10.22.2&
Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement dated
8-K
001-38410
10.1
02/08/2024
164
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
December 5, 2023, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
10.22.3&
Third Amendment to Credit Agreement and Guaranty dated February 12, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
8-K
001-38410
10.1
02/12/2024
10.22.4
Fourth Amendment to Credit Agreement and Guaranty, dated March 20, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
10-K
001-38410
10.22.4
03/22/2024
10.22.5+&
Fifth Amendment to Credit Agreement and Guaranty, dated November 21, 2024, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
8-K
001-38410
10.1
11/21/2024
10.22.6
Sixth Amendment to Credit Agreement and Guaranty, dated March 4, 2025, to the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto, and Oaktree Fund Administration LLC, as administrative agent (as amended)
*
165
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.22.7
Form of Seventh Amendment to Credit Agreement, dated March 12, 2025, to the Credit Agreement and Guaranty, dated April 19, 2022
*
10.22.8
Form of Eighth Amendment to Credit Agreement, dated April 22, 2025, to the Credit Agreement and Guaranty, dated April 19, 2022
*
10.22.9
Ninth Amendment to Credit Agreement, dated March 27, 2026, to the Credit Agreement and Guaranty, dated April 19, 2022
*
10.23+&
Commercial Supply Agreement, between ARx, LLC and BioXcel Therapeutics, Inc., dated April 1, 2022
10-Q
001-38410
10.3
08/11/2022
10.23.1+&
Amendment No. 1 to Commercial Supply Agreement, between Arx, LLC and BioXcel Therapeutics, Inc. dated July 11, 2024
10-Q
001-38410
10.1
08/06/2024
10.24@
OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC Management Incentive Plan
8-K
001-38410
10.1
08/19/2022
10.25@
Form of Profits Interest Award Agreement under the Management Incentive Plan
8-K
001-38410
10.2
08/19/2022
10.26@
Form of RSU Agreement pursuant to the OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC Management Incentive Plan.
10-Q
001-38410
10.3
05/08/2023
10.27+
Non-Compete Agreement, by and among the Company, Dr. Krishnan Nandabalan, InveniAI LLC, Invea Therapeutics, Inc. and the other parties thereto, dated September 19, 2023.
8-K
001-38410
10.1
09/25/2023
10.28
Form of Accompanying Warrant
8-K
001-38410
4.1
03/11/2026
10.29
Form of Pre-Funded Warrant
8-K
001-38410
4.2
03/11/2026
10.30
Form of Placement Agent Warrant
8-K
001-38410
4.3
03/11/2026
166
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
10.31
Securities Purchase Agreement dated as of March 10, 2026, between BioXcel Therapeutics, Inc. and each purchaser identified therein.
8-K
001-38410
10.1
03/11/2026
10.32
Warrant Amendment Agreement, dated as of March 10, 2026
8-K
001-38410
10.2
03/11/2026
19.1
Insider Trading Policy
*
21.1
Subsidiaries of BioXcel Therapeutics, Inc.
*
23.1
Consent of Ernst & Young LLP
*
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
97.1
Policy for Recovery of Erroneously Awarded Compensation
10-K
001-38410
97.1
03/22/2024
101.INS
Inline eXtensible Business Reporting Language (XBRL) Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
*
101.SCH
Inline XBRL Taxonomy Extension Schema Document
*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
*
167
Table of Contents
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
*
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
@ Indicates a management contract or any compensatory plan, contract or arrangement.
+ Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
# Confidential treatment has been granted for portions omitted from this exhibit and those portions have been separately filed with the Securities and Exchange Commission.
& Annexes, schedules, and certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.
* Filed herewith.
** Furnished herewith.
Item 16. Form 10-K Summary
None
168
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BioXcel Therapeutics, Inc.
Dated: March 27, 2026
By:
/s/ Vimal Mehta
Vimal Mehta, Ph.D.
Chief Executive Officer
(Principal Executive Officer)
Dated: March 27, 2026
By:
/s/ Richard Steinhart
Richard Steinhart
Chief Financial Officer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Vimal Mehta
Vimal Mehta, Ph.D.
Chief Executive Officer and Director (Principal Executive Officer)
March 27, 2026
/s/ Richard Steinhart
Richard Steinhart
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
March 27, 2026
/s/ Peter Mueller
Peter Mueller, Ph.D.
Chairman of the Board of Directors
March 27, 2026
/s/ June Bray
June Bray
Director
March 27, 2026
/s/ Sandeep Laumas
Sandeep Laumas, M.D.
Director
March 27, 2026
/s/ Michael Miller
Michael Miller
Director
March 27, 2026
/s/ Michal Votruba
Michal Votruba
Director
March 27, 2026
/s/ David Mack
David Mack
Director
March 27, 2026
/s/ Rajiv Patni
Rajiv Patni
Director
March 27, 2026
169
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of BioXcel Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BioXcel Therapeutics, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders' (deficit) equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, has used significant cash in operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
F-1
Table of Contents
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the Audit Committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgment. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.
As of December 31, 2023, research and development expenses and accrued research and development expenses includes clinical trial expenses and related accrued clinical trial expenses.
Description of the Matter
How We Addressed the Matter in Our Audit
Clinical trial expense and related accrued clinical trial expenses
As discussed in Note 3 to the consolidated financial statements, at the end of the reporting period, the Company estimates the progress toward completion of the research or development objectives, and depending on the amount and timing of payments to the service providers may record net prepaid or accrued expense for associated research and development costs. As of December 31, 2025, research and development expenses and accrued research and development expenses includes clinical trial expenses and related accrued clinical trial expenses.
Auditing the Company’s clinical trial expenses and related accrued clinical trial expenses was complex because the evidence is accumulated from multiple third-party service providers and in certain circumstances, the nature and amount of services that have been rendered during the reporting period does not correspond to the timing and pattern of vendor invoicing.
To test the clinical trial expenses and accrued clinical trial expenses, our audit procedures included, among others, evaluating the significant assumptions used by management to estimate the clinical trial expenses and testing the accuracy and completeness of the underlying data. To test the significant assumptions, we inspected the Company's contracts with third-party service providers, corroborated the progress of clinical trials and other research and development projects with the Company’s internal personnel that oversee these activities, and obtained information directly from third-party service providers which included the third parties’ estimates of clinical trial costs incurred to date. We also examined invoices received from vendors and cash disbursements made to third-party service providers subsequent to December 31, 2025 to assess the completeness of the recorded accruals.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2021.
Stamford, Connecticut
March 27, 2026
F-2
Table of Contents
BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share amounts)
December 31,
December 31,
2025
2024
ASSETS
Current assets
Cash and cash equivalents
$
28,415
$
29,854
Restricted cash
342
—
Accounts receivable, net
233
131
Inventory
722
679
Prepaid expenses
4,028
5,290
Other current assets
10,945
1,440
Total current assets
44,685
37,394
Property and equipment, net
175
475
Operating lease right-of-use assets
56
382
Other assets
—
87
Total assets
$
44,916
$
38,338
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities
Accounts payable
$
14,701
$
15,990
Accrued expenses
4,341
5,762
Current portion of long-term debt
24,931
—
Due to related parties
138
107
Other current liabilities
9,815
374
Total current liabilities
53,926
22,233
Long-term portion of operating lease liabilities
—
65
Derivative liabilities
1,790
6,633
Long-term debt
84,663
102,508
Total liabilities
140,379
131,439
Commitments and contingencies (Note 18)
Stockholders' (deficit) equity
Preferred stock, $ 0.001 par value, 10,000 shares authorized; no shares issued and outstanding as of December 31, 2025 and December 31, 2024
—
—
Common stock, $ 0.001 par value, 200,000 shares authorized as of December 31, 2025 and December 31, 2024; 22,328 and 3,102 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively
76
49
Additional paid-in-capital
624,555
557,047
Accumulated deficit
( 720,094 )
( 650,197 )
Total stockholders' (deficit) equity
( 95,463 )
( 93,101 )
Total liabilities and stockholders' (deficit) equity
$
44,916
$
38,338
The accompanying notes are an integral part of these consolidated financial statements.
F-3
Table of Contents
BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
Year ended December 31,
2025
2024
Revenues
Product revenue, net
$
642
$
2,266
Operating expenses
Cost of goods sold
164
2,143
Research and development
30,251
30,435
Selling, general and administrative
20,494
34,492
Restructuring costs
194
2,441
Total operating expenses
51,103
69,511
Loss from operations
( 50,461 )
( 67,245 )
Other (income) expense
Interest expense
16,984
15,129
Interest income
( 1,066 )
( 2,602 )
Other (income) expense, net
3,518
( 20,173 )
Net loss
$
( 69,897 )
$
( 59,599 )
Basic and diluted net loss per share attributable to common stockholders
$
( 5.73 )
$
( 23.51 )
Weighted average shares outstanding - basic and diluted
12,208
2,535
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(amounts in thousands)
Additional
Common Stock
Paid in
Accumulated
Shares
Amount
Capital
Deficit
Total
Balance as of January 1, 2024
1,871
$
30
$
534,060
$
( 590,598 )
$
( 56,508 )
Issuance of common stock, net of offering costs
1,209
19
9,907
—
9,926
Stock-based compensation
—
—
6,156
—
6,156
Issuance of stock purchase warrants
—
—
2,540
—
2,540
Repricing of stock purchase warrants
—
—
59
—
59
Issuance of pre-funded stock purchase warrants
—
—
4,379
—
4,379
Vesting of restricted stock units, net of employee tax obligations
22
—
( 54 )
—
( 54 )
Net loss
—
—
—
( 59,599 )
( 59,599 )
Balance as of December 31, 2024
3,102
$
49
$
557,047
$
( 650,197 )
$
( 93,101 )
Issuance of common stock, net of offering costs
19,153
27
55,333
—
55,360
Stock-based compensation
—
—
2,669
—
2,669
Issuance of pre-funded stock purchase warrants
—
—
9,523
—
9,523
Vesting of restricted stock units, net of employee tax obligations
73
—
( 17 )
—
( 17 )
Net loss
—
—
—
( 69,897 )
( 69,897 )
Balance as of December 31, 2025
22,328
$
76
$
624,555
$
( 720,094 )
$
( 95,463 )
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
BIOXCEL THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
Year ended December 31,
2025
2024
OPERATING CASH FLOW ACTIVITIES:
Net loss
$
( 69,897 )
$
( 59,599 )
Reconciliation of net loss to net cash used in operating activities
Depreciation
300
309
Accretion of debt discount and amortization of financing costs
1,652
467
Change in fair value of derivative liabilities
3,505
( 20,180 )
Stock-based compensation expense
2,767
6,156
Payable-in-kind interest on Credit Agreement
5,434
6,543
Operating lease right-of-use assets
326
306
Changes in operating assets and liabilities
Accounts receivable
( 102 )
( 60 )
Inventory
( 43 )
1,312
Prepaid expenses, other current assets and other assets
( 8,156 )
( 1,872 )
Accounts payable, accrued expenses, due to related parties, and other current liabilities
6,973
( 4,327 )
Accrued interest
-
( 736 )
Operating lease liabilities
( 374 )
( 346 )
Net cash used in operating activities
( 57,615 )
( 72,027 )
INVESTING CASH FLOW ACTIVITIES:
Purchases of equipment and leasehold improvements
—
—
Net cash from investing activities
—
—
FINANCING CASH FLOW ACTIVITIES:
Proceeds from issuance of common stock and warrants
58,142
39,688
Payment of principal of Long-term debt
—
( 2,500 )
Offering costs for common stock and warrants issuance
( 1,607 )
( 474 )
Payment of employee tax obligations related to vesting restricted stock units
( 17 )
( 54 )
Net cash provided by financing activities
56,518
36,660
Net decrease in cash, cash equivalents and restricted cash
( 1,097 )
( 35,367 )
Cash, cash equivalents and restricted cash, beginning of the period
29,854
65,221
Cash, cash equivalents and restricted cash, end of the period
$
28,757
$
29,854
Balance sheet reconciliation:
Cash and cash equivalents
$
28,415
29,854
Restricted cash
342
—
Total cash and cash equivalents and restricted cash as presented above
$
28,757
29,854
Supplemental cash flow information:
Issuance of stock purchase warrants
$
—
$
2,540
Repricing of stock purchase warrants
$
—
$
59
Interest paid
$
9,690
$
7,968
Litigation settlement liability and related other current assets (Note 18)
$
9,750
$
—
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Table of Contents
BIOXCEL THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, except per share amounts and where otherwise noted)
Note 1. Nature of the Business
BioXcel Therapeutics, Inc. (“BTI” or the “Company”) is a biopharmaceutical company built on artificial intelligence (“AI”) approaches to develop transformative medicines in neuroscience and immuno-oncology. The Company is focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. BTI developed a proprietary AI platform to reduce therapeutic development costs and potentially accelerate development timelines. The Company’s approach leverages existing approved drugs and/or clinically evaluated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indices. BTI management believes this differentiated approach has proven its potential to reduce the expense and time associated with drug development in diseases with substantial unmet medical needs.
As used in these consolidated financial statements, unless otherwise specified or the context otherwise requires, the terms “BioXcel LLC” refers to the Company’s former parent, BioXcel LLC and, its predecessor, BioXcel Corporation. “OnkosXcel” refers to BTI’s wholly owned subsidiary for its advanced immuno-oncology assets, OnkosXcel Therapeutics, LLC.
On April 6, 2022, BTI announced that the United States (“U.S.”) Food and Drug Administration (“FDA”) approved IGALMI ® (dexmedetomidine or “Dex”) sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults. IGALMI ® is approved to be self-administrated by patients under the supervision of a health care provider. On July 6, 2022, BTI announced that IGALMI ® , was commercially available in doses of 120 and 180 micrograms.
The Company’s most advanced neuroscience clinical development program is BXCL501. In indications other than those approved by the FDA as IGALMI ® , BXCL501 is an investigational proprietary, orally dissolving, film formulation of Dex for the treatment of agitation associated with psychiatric and neurological disorders.
The Company’s advanced immuno-oncology asset, BXCL701, is an investigational, orally administered systemic innate immune activator for the treatment of a rare form of prostate cancer and advanced solid tumors that are refractory or treatment naïve to checkpoint inhibitors.
BTI was incorporated under the laws of the State of Delaware on March 29, 2017. The Company’s principal office is in New Haven, Connecticut.
Note 2. Basis of Presentation
The accompanying consolidated financial statements include those of the Company and its subsidiaries after elimination of all intercompany accounts and transactions and have been prepared in conformity with United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”).
As of December 31, 2025, the Company had cash, cash equivalents and restricted cash of $ 28,757 and an accumulated deficit of $ 720,094 . BTI has incurred substantial net losses and negative cash flows from operating activities in nearly every fiscal period since inception and expects this trend to continue for the foreseeable future. The Company recognized net losses of $ 69,897 and $ 59,599 for the years ended December 31, 2025 and 2024, respectively, and had net cash used in operating activities of $ 57,615 and $ 72,027 for the years ended December 31, 2025 and 2024, respectively.
Under ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management is required at each reporting period to evaluate whether there are conditions and events, considered in the aggregate, that raise substantial
F-7
Table of Contents
doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
The Company’s history of significant losses, its negative cash flows from operations, its current debt obligations, potential near-term increased covenant-driven amortization payments under its Credit Agreement (as defined in Note 9, Debt and Credit Facilities), its limited liquidity resources currently on hand, and its dependence on its ability to obtain additional financing to fund its operations after the current resources are exhausted, about which there can be no certainty, have resulted in management’s assessment that there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months from the issuance date of the financial statements included in this Annual Report on Form 10-K.
This going concern evaluation takes into consideration the potential mitigating effect of management’s Clinical Reprioritization (as defined in Note 4, Restructuring). When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates the substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (i) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (ii) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Generally, to be considered probable of being effectively implemented, the plans need to be approved by the Company’s Board of Directors. The Company’s Clinical Reprioritization was approved by the Board of Directors on August 8, 2023; however, such plans, including the additional restructuring actions taken in the second and third quarters of 2024, will not mitigate the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments that may result from the outcome of this uncertainty. The going concern analysis does not consider possible future amendments to or restructuring of the Credit Agreement (as defined in Note 9, Debt and Credit Facilities) or other potential sources of debt or equity capital.
Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to support the Company’s cost structure and operating plan. Management’s plans to improve the Company’s liquidity and reduce its operating expenses and capital requirements include, among other things, pursuing one or more of the following steps to raise additional capital, none of which can be guaranteed or are entirely within the Company’s control:
• raise funding through the sale of the Company’s equity securities;
• raise funding through third-party investments in or other strategic options for OnkosXcel;
• raise funding through debt financing and/or restructuring of its existing OFA Facilities;
• establish collaborations with potential partners to advance the Company’s product pipeline;
• establish collaborations with potential marketing partners;
• reduce overhead and headcount to focus on core priorities; and/or
• any combination of the foregoing.
If the Company is unable to raise capital when needed or on acceptable terms, or if it is unable to procure collaboration arrangements to advance its programs, the Company would be forced to discontinue some of its operations or develop and implement a plan, beyond its Clinical Reprioritization initiatives, to further extend payables, reduce overhead, scale back or cease some or all of its revised operating plan until sufficient additional capital is raised to support further operations.
F-8
Table of Contents
Note 3. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and notes thereto. Estimates are used in the following areas, among others: revenue recognition, derivative liabilities, stock-based compensation expense, inventory, accrued expenses and income taxes. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates.
Reverse Stock Split
On February 10, 2025, the Company completed a 1-for-16 reverse stock split of its issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each 16 shares of common stock issued and outstanding immediately prior to February 10, 2025 were automatically converted into one share of common stock. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's equity, except to the extent that the Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive a fractional share instead were entitled to receive cash in lieu of such fractional share.
The Reverse Stock Split did not change the par value of the common stock or the authorized number of shares of common stock.
All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. As of December 31, 2025 and 2024, cash equivalents were comprised primarily of money market funds. Cash and cash equivalents held at financial institutions may at times exceed federally insured amounts. BTI management believes it mitigates such risk by investing in or through major financial institutions.
Restricted Cash
Restricted Cash represents cash required to be set aside as collateral under a letter of credit for our annual Directors and Officers (D&O) insurance premiums which are financed and paid over the next three months. The restriction will lapse when the D&O insurance premiums are paid.
Accounts Receivable, Net
Accounts receivable arise from sales of IGALMI ® and represent amounts due from distributors. Payment terms generally range from 30 to 75 days from the date of the sale transaction, and accordingly, do not involve a significant financing component. Receivables from product sales are recorded net of allowances which generally include distribution fees, prompt payment discounts, chargebacks, and credit losses. Allowances for distribution fees, prompt payment discounts and chargebacks are based on contractual terms. The Company estimated the current expected credit losses of its accounts receivable by assessing the risk of loss and available relevant information about collectability, existing contractual payment terms, actual payment patterns of its customers, individual customer circumstances, and reasonable and supportable forecast of economic conditions expected to exist throughout the contractual life of the receivable. Based on its assessment, as of December 31, 2025, the Company determined that an allowance for credit losses was not required.
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Concentrations of Credit Risk
The Company sells IGALMI ® through a drop-ship program under which orders from hospitals and similar health care institutions are processed through wholesalers, but shipments of the product are sent directly to the individual hospitals and similar health care institutions. BTI also contracts directly with intermediaries such as group purchasing organizations (“GPOs”). All trade accounts receivables are due from the distributor that fulfills orders on behalf of the Company. For the years ended December 31, 2025 and 2024, one customer accounted for approximately 8 % and 32 % of the Company’s net product revenue, respectively.
Inventory
Inventory is stated at the lower of cost or net realizable value. Cost of inventory is determined on a first-in, first-out basis.
BTI capitalizes inventory costs associated with the Company’s products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development expense in the Consolidated Statements of Operations.
The Company performs an assessment of the recoverability of capitalized inventory during each reporting period and writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, will be recorded within Cost of goods sold in the Consolidated Statements of Operations. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected, write-downs of inventory may be required.
Property and Equipment
Property and equipment are recorded at cost and depreciated over the shorter of their remaining lease term or their estimated useful life on a straight-line basis as follows:
Equipment
3 - 5 years
Furniture
7 years
Leasehold improvements
Lesser of life of improvement or lease term
Expenditures for maintenance and repairs which do not improve or extend the useful lives of the respective assets are expensed as incurred. When assets are sold or retired, the related cost and accumulated depreciation are removed from their respective accounts and any resulting gain or loss is included within Other (income) expense, net in the Consolidated Statements of Operations.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated from its use and disposition. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and the long-term portion of operating lease liabilities in the Consolidated Balance Sheets.
ROU assets represent BTI’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities
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are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. As BTI’s leases do not provide an implicit rate, it used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any prepaid lease payments made and is reduced by lease incentives. The Company’s leases may include options to extend the lease; such options are included in determining the lease term when it is reasonably certain that BTI will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.
Debt and Detachable Warrants
Detachable warrants are evaluated for classification as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement. In circumstances in which debt is issued with equity-classified warrants, the proceeds from the issuance of debt are first allocated to the debt and then the warrants at their estimated fair values. The portion of the proceeds allocated to the warrants are accounted for as paid-in capital and a debt discount. The remaining proceeds, as further reduced by discounts created by the bifurcation of any embedded derivatives, are allocated to the debt. Detachable warrants classified as derivative liabilities are accounted for as indicated under “ Derivative Assets and Liabilities ” section of this Note and as a debt discount. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation of proceeds to interest expense using the effective interest method over the expected term of the debt instrument. The Company considers whether there are any embedded features in debt instruments that require bifurcation and separately accounts for them as derivative financial instruments.
The Company entered into financing arrangements, the terms of which involve significant assumptions and estimates, including future net product sales, in determining interest expense, amortization period of the debt discount, as well as the classification between current and long-term portions. In estimating future net product sales, the Company assesses prevailing market conditions using various external market data against the Company’s anticipated sales and planned commercial activities. Consequently, the Company imputes interest on the carrying value of the debt and records interest expense using an imputed effective interest rate. The Company reassesses the expected payments during each reporting period and accounts for any changes through an adjustment to the effective interest rate on a prospective basis, with a corresponding impact to the classification of the Company’s current and long-term portions of the debt.
Derivative Assets and Liabilities
Derivative assets and liabilities are recorded on the Company`s Consolidated Balance Sheets at their fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded as other income or expense within Other (income) expense, net in the Consolidated Statements of Operations.
The Company does not use derivative instruments for speculative purposes or to hedge exposures to cash-flow or market risks. Certain financing facilities entered into by the Company include freestanding financial instruments and/or embedded features that require separate accounting as derivative assets and/or liabilities.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
Due to Related Parties
Due to related parties is comprised of amounts contractually owed for various services provided to the Company from related parties, primarily fees owed to the Board of Directors and its committees.
Revenue Recognition
The Company’s revenues consist of product sales of IGALMI ® .
BTI recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue
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recognition, BTI management performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations. The exercise of a material right may be accounted for as a contract modification or as a continuation of the contract for accounting purposes.
The Company assesses whether the goods or services promised within each contract are distinct to identify those that are performance obligations. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such goods and services are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
The Company allocates the transaction price (the amount of consideration it expects to be entitled to from a customer in exchange for the promised goods or services) to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The Company’s estimate of the transaction price for each contract includes all variable consideration to which the Company expects to be entitled.
BTI distributes IGALMI ® in the U.S. through arrangements with a distributor, wholesalers, and GPOs. The distributor and wholesalers help process and fulfill orders from hospitals on the Company’s behalf. The Company believes the hospitals are its customers.
The Company recognizes product revenues, net of consideration payable to customers, as well as variable consideration related to certain allowances and accruals that are determined using either the expected value or most likely amount method, depending on the type of the variable consideration, in its consolidated financial statements at the point in time when control transfers to the customer, which is typically when the product has been delivered to the customer’s location. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company’s only performance obligation identified for IGALMI ® is to deliver the quantity of product ordered to the location specified by the customer’s order. The Company records shipping and handling costs associated with delivery of product to its customers within Selling, general and administrative expenses on its Consolidated Statements of Operations. Under the Company’s current product sales arrangements, BTI does not have contract assets (unbilled receivables), as it generally invoices its customer at the time of revenue recognition.
BTI sells IGALMI ® at wholesale acquisition cost, less any agreed upon discounts and calculates product revenue net of variable consideration and consideration payable to third parties associated with distribution of product. The Company records reserves, based on contractual terms, for the following components of consideration related to product sold during the reporting period. Calculating these amounts involves estimates and judgments, and the Company reviews these estimates quarterly and records any material adjustments in the period they are identified, which affects net product revenue and earnings in the period such variances occur.
Trade Discounts and Allowances
The Company provides the distributor and wholesalers with discounts for prompt payment and pays fees to the distributor, wholesalers and GPOs related to distribution of the product. BTI expects the relevant third parties to earn these discounts and fees, and therefore it deducts such amounts from gross product revenue and accounts receivable at the time it recognizes the related revenue.
Government Rebates
IGALMI ® is eligible for purchase by, or qualifies for reimbursement from, Medicaid and other U.S. government programs that are eligible for rebates on the price they pay for the product. To determine the appropriate amount to
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reserve for these rebates, BTI applies the applicable government discount to these sales, and estimates the portion of total rebates that it anticipates will be claimed. The Company deducts certain government rebates from gross product revenue and accounts receivable at the time it recognizes the related revenue; other government rebates are recognized as an accrued liability at the time BTI recognizes the related revenue.
Chargebacks
BTI provides product discounts to hospitals associated with certain GPOs. The Company estimates the chargebacks that it expects to be obligated to provide based upon the terms of the applicable arrangements. BTI deducts such amounts from gross product revenue and accounts receivable at the time it recognizes the related revenue.
Product Returns
The Company provides contractual return rights to its customers including the right to return product within six months of product expiration and up to 12 months after product expiration, as well as for incorrect shipments, and damaged or defective product, which the Company expects to be rare. Management expects product returns to be minimal, thus BTI recognizes a nominal allowance for product returns at the time of each sale. In the future, if any of these factors and/or the history of product returns changes, the Company will adjust the allowance for product returns.
BTI classifies all fees paid to the distributor, other than those discussed above and those related to warehouse operations, as Selling, general and administrative expenses on its Consolidated Statements of Operations. Fees paid to the distributor for warehouse operations are classified as Cost of goods sold on BTI’s Consolidated Statements of Operations.
Cost of Goods Sold
Cost of goods sold includes the cost of producing and distributing inventories that are related to product revenues during the respective period. Cost of goods sold also includes costs related to excess or obsolete inventory adjustment charges, as well as costs related to warehouse operations paid to distributors.
Stock-Based Compensation
The Company measures and recognizes stock-based compensation expense based on estimated fair value for all share-based awards made to employees, non-employee service providers, and directors, including stock options, BTI restricted stock units (“BTI RSUs”), OnkosXcel profit sharing units (“PSUs”), OnkosXcel restricted stock units (“OnkosXcel RSUs”) and BTI performance stock units (“Performance Units”). The Company’s 2017 Equity Incentive Plan (the “2017 Plan”) became effective in August 2017. The Company’s 2020 Incentive Award Plan (the “2020 Plan”) became effective in May 2020. Following the effective date of the 2020 Plan, the Company ceased granting awards under the 2017 Plan; however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder.
The Company’s stock-based awards are valued at fair value on the date of grant and that fair value is recognized as an expense in the Consolidated Statements of Operations over the requisite service period using the accelerated attribution method. The estimated value of the BTI RSUs and Performance Units is based on the Company’s closing stock price on the grant date. The estimated fair value of OnkosXcel RSUs are based on the OnkosXcel valuation on the grant date. The estimated fair value of stock-options and PSUs was determined using the Black-Scholes pricing model on the date of grant. For awards subject to performance-based vesting conditions, the Company recognizes stock-based compensation expense when the achievement of the performance condition becomes probable.
The Black-Scholes pricing model is affected by the Company’s stock price, as well as assumptions regarding variables including, but not limited to, the strike price of the instrument, the risk-free rate, the expected stock price volatility over the term of the awards and expected term of the awards. The Company has elected to account for forfeitures as they occur, by reversing compensation cost when the award is forfeited.
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Research and Development Costs
Research and development expenses include wages, benefits, non-cash stock-based compensation, facilities, supplies, external services, clinical study, manufacturing costs related to clinical trials and other expenses that are directly related to the Company’s research and development activities. At the end of the reporting period, the Company estimates the progress toward completion of the research or development objectives and, depending on the amount and timing of payments to the service providers may record net prepaid or accrued expense for associated research and development costs. Such estimates are subject to change as additional information becomes available. The Company expenses research and development costs as incurred.
Most of the Company’s service providers invoice BTI monthly in arrears for services performed. The Company estimates its accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to management at that time. BTI management periodically confirms the accuracy of the Company’s estimates with the service providers and makes adjustments if necessary.
Although management does not expect its estimates to be materially different from amounts actually incurred, management’s understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in BTI reporting amounts that are too high or too low in any particular period.
Patent Costs
Costs related to filing and pursuing patent applications are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and are expensed as incurred since recoverability of such expenditures is uncertain.
Fair Value of Financial Instruments
The Company measures certain financial assets and liabilities at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources, or observable inputs, and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances, or unobservable inputs. The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Fair value measurements must be classified and disclosed in one of the following three categories:
● Level 1 : Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
● Level 2 : Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.
● Level 3 : Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk in its assessment of fair value.
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Income Taxes
BTI uses an asset and liability approach for financial accounting and reporting of income taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax basis assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.
U.S. GAAP prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. The Company’s financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts.
The Company does not have any unrecognized tax benefits as of December 31, 2025 and 2024. BTI reviews all tax positions to ensure the tax treatment selected is sustainable based on its technical merits and that the position would be sustained if challenged.
Earnings (Loss) per Share
Earnings (loss) per share (“EPS”) is calculated by dividing net income or loss attributable to common stockholders by the weighted average number of shares of common stock that were outstanding, including pre-funded warrants. Shares of common stock into which the pre-funded warrant may be exercised are considered outstanding for the purposes of computing EPS because the shares may be issued for little or no consideration, are fully vested and are exercisable after the original issuance date. Diluted EPS is calculated by adjusting the weighted average number of shares of common stock that were outstanding for the dilutive effect of common stock equivalents. In periods in which a net loss is recorded, no effect is given to potentially dilutive securities, since the effect would be antidilutive.
Segment Information
The Company operates in a single segment. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker in making decisions regarding resource allocation and assessing performance. To date, the Company’s chief operating decision maker has made such decisions and assessed performance at the Company level as one segment. See Note 19, Segment Information for further information
Recent Accounting Pronouncements
Recently adopted accounting pronouncements
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718) – Scope application of profit interest and similar awards, which clarifies how an entity determines whether a profits interest or similar award is within the scope of Topic 718 or if it is not a share-based payment arrangement and therefore within the scope of other guidance. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company adopted this accounting standard effective January 1, 2025 and its adoption on a prospective basis did not have a significant impact on our financial statements.
In December 2023, the FASB issued ASU 2023-09, Improvements to income tax disclosures, which requires disclosure of disaggregated income taxes paid by jurisdiction, enhances disclosures in the effective tax rate reconciliation and modifies other income tax-related disclosures. The amendments are effective for annual periods beginning after December 15, 2024. The Company adopted this standard in fiscal year 2025 on a prospective basis and included the required disclosures in Note 16, Income Taxes .
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Accounting Pronouncements effective in future periods
In November 2024, the FASB issued ASU 2024-03, Income statement-reporting comprehensive income-expense disaggregation disclosures, which requires public entities to disclose specified information about certain costs and expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the effect of adopting this guidance on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. We are currently evaluating the impact of this amendment and do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements and accompanying notes.
Note 4. Restructuring
On May 8, 2024, the Company took actions as part of its continued efforts to preserve cash and prioritize investment in its core clinical programs. The Company reduced its workforce by approximately 15 % and notified impacted employees on May 8, 2024. All related restructuring costs were paid in the second quarter of 2024.
On September 17, 2024, the Company reduced its workforce by an additional 28 % to extend its cash runway and prioritize clinical development of BXCL501. The Company completed the Clinical Reprioritization in October 2024, paid $ 475 of the related costs during the first quarter of 2025, and paid the remaining $ 128 during the second quarter of 2025.
On April 8, 2025, the Board unanimously approved (i) the payment of a retention bonus to all non-executive employees in the total aggregate amount of $ 1,522 , to be paid in two equal installments and (ii) the issuance of 66 RSUs which fully vest on the one-year anniversary of the grant date. The first installment of the retention bonus was paid on April 30, 2025 and the second installment was paid on September 30, 2025. Each such installment payment is subject to the applicable employee’s continued employment through December 31, 2025.
On September 16, 2025, the Company dissolved its operations in the Czech Republic and paid $ 194 in closure related expenses during the third quarter of 2025.
Note 5. Inventory
Inventory consists of the following:
December 31,
December 31,
2025
2024
Raw materials
$
317
$
506
Work-in-process
368
—
Finished goods
37
173
Total inventory
$
722
$
679
The Company recorded inventory write-downs due to excess inventory of $ 108 and $ 1,980 for the years ended December 31, 2025 and 2024, respectively.
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Note 6. Property and Equipment, net
Property and equipment, net consists of the following:
December 31,
December 31,
2025
2024
Computers and equipment
$
202
$
202
Furniture
575
575
Leasehold improvements
1,200
1,200
Total property and equipment
$
1,977
$
1,977
Accumulated depreciation
( 1,802 )
( 1,502 )
Total property and equipment, net
$
175
$
475
Depreciation expense was $ 300 and $ 309 for the years ended December 31, 2025 and 2024, respectively .
Note 7. Accrued Expenses
Accrued expenses consist of the following:
December 31, 2025
December 31, 2024
Accrued research and development expenses
$
2,546
$
3,107
Accrued compensation and benefits
34
35
Accrued professional fees
1,107
1,604
Accrued taxes
32
91
Other accrued expenses
622
322
Accrued restructuring costs
—
603
Total accrued expenses
$
4,341
$
5,762
Note 8. Transactions with BioXcel LLC
The Company entered into a Separation and Shared Services Agreement with BioXcel LLC that took effect on June 30, 2017, as amended and restated thereafter (the “Services Agreement”), pursuant to which BioXcel LLC had agreed to provide the Company with certain intellectual property prosecution and management and research and development activities.
Under the Services Agreement, the Company had an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI. We agreed to pay BioXcel LLC $ 18 per month from March 13, 2023, to December 31, 2024 in exchange for this option. This option was not exercised. However, BioXcel LLC continues to perform certain administrative services under the terms of the expired contract. We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $ 10,000 in the aggregate and not be payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3 % of the applicable net sales level, and not exceed $ 30,000 in the aggregate. The Company did not exercise our option to renew the agreement for product identification and related services utilizing BioXcel LLC’s EvolverAI. Subsequent to December 31, 2024 no development activity has been carried out by BioXcel LLC and none is contemplated.
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Service charges recorded under the Services Agreement for the years December 31, 2025 and 2024 were as follows:
Year ended December 31,
2025
2024
Research and development
$
474
$
938
Selling, general and administrative
88
392
Total
$
562
$
1,330
There were no service charges due as of December 31, 2025 and December 31, 2024.
Note 9. Debt and Credit Facilities
Debt, net of unamortized discounts and financing costs, consists of the following:
December 31, 2025
December 31, 2024
Credit Agreement and Guaranty
$
102,319
$
102,319
Payable-in-kind ("PIK") interest
9,837
4,403
Total debt liability
$
112,156
$
106,722
Unamortized debt premiums, discounts and issuance costs
( 2,562 )
( 4,214 )
Total debt
$
109,594
$
102,508
Less current portion of debt
( 24,931 )
—
Long-term debt
$
84,663
$
102,508
On April 19, 2022, the Company entered into two strategic financing agreements: (i) a Credit Agreement and Guaranty (the “Credit Agreement”) by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent, and (ii) a Revenue Interest Financing Agreement (the “RIFA”; and together with the Credit Agreement, the “OFA Facilities”) by and among the Company, the purchasers party thereto (the “Purchasers”) and OFA as administrative agent. Under the OFA Facilities, the Lenders and the Purchasers agreed to, in the aggregate between the two OFA Facilities, provide up to $ 260,000 in gross funding to support the Company’s commercial activities of IGALMI ® sublingual film. In addition, the OFA Facilities are intended to support the expansion of clinical development efforts of BXCL501, which includes a Phase 3 program for the acute treatment of agitation in patients with Alzheimer’s disease, and for general corporate purposes. The Lenders and Purchasers are comprised of affiliates of Oaktree Capital Management, L.P. and Qatar Investment Authority.
Waiver and First Amendment to Credit Agreement and Guaranty
On November 13, 2023, the Company, the lenders party to the Credit Agreement and OFA entered into a Waiver and First Amendment to Credit Agreement and Guaranty (the “First Amendment”) that provided for (i) a waiver and a modification to the covenant in the Credit Agreement regarding investments in OnkosXcel and (ii) an agreement among the parties to further revise key financial terms in the Credit Agreement and terminate the RIFA. Pursuant to the First Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $ 30,000 at any time outstanding in OnkosXcel, increased from $ 25,000 at any time outstanding. The First Amendment also waived any defaults or events of default arising under the Credit Agreement due to a breach prior to the date of the First Amendment of the OnkosXcel investment covenant, or a breach of the Company’s obligation to notify OFA of such default. In connection with the First Amendment, the Company paid the Lenders a fee of $ 180 (representing 0.25 % of the loans outstanding under the Credit Agreement on the date of the First Amendment) and agreed to pay to the Lenders an exit fee equal to 0.25 % of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans.
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Second Amendment to Credit Agreement and Guaranty and Termination of the RIFA
On December 5, 2023, (the “Second Amendment Effective Date”), the Company entered into the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement (the “Second Amendment”), which further amended the Credit Agreement. On the Second Amendment Effective Date, the Credit Agreement was amended to provide up to $ 202,319 in senior secured term loans, including the initial Tranche A of $ 70,000 , which was funded on April 28, 2022, and related capitalized interest on Tranche A through the Second Amendment Effective Date in the amount of $ 72,319 . In addition, the $ 30,000 in financing previously provided to the Company under the RIFA on July 8, 2022 was converted to a term loan under the Credit Agreement (the “Tranche A-2 Term Loan”). The RIFA and all commitments for potential future funding thereunder were terminated. In addition, pursuant to the Second Amendment, the Lenders agreed to permit the Company to invest up to a maximum of $ 30,865 at any time outstanding in OnkosXcel, increased from $ 30,000 . In connection with the Second Amendment, the Company agreed to pay to the Lenders an exit fee equal to 0.25 % of the loans under the Credit Agreement repaid upon maturity or prepayment of the loans (which exit fee is in addition to, and not in lieu of, the exit fee provided for by the First Amendment). As of December 31, 2025, there are no remaining unfunded commitments under the Credit Agreement. The blended effective interest rate on the Tranches A-1 and A-2 as of December 31, 2025 was approximately 15.3 %.
The remaining tranches may be borrowed at the Company’s option subject to satisfaction of certain conditions, including regulatory and financial milestones. Tranche B of the Credit Agreement is $ 20,000 and is available upon satisfaction of certain conditions and financial milestones. Tranche B expired on December 31, 2024. Tranche C of the Credit Agreement is $ 30,000 and is available upon satisfaction of certain conditions, including receipt of certain regulatory and financial milestones met on or before December 31, 2025. Tranche D of the Credit Agreement is $ 50,000 and is available upon satisfaction of the Tranche C Term Loans conditions precedent to, and the funding of Tranche C Loans, including specified minimum net sales of the Company attributable to sales of BXCL501 for a trailing twelve consecutive month period, on or before December 31, 2025. Tranches C and D expired on December 31, 2025.
The loans under the Credit Agreement do not amortize and mature on April 19, 2027. The Company may, at its option, no earlier than September 21, 2026 and no later than October 21, 2026, request an extension of the maturity date to April 19, 2028, provided that the Company satisfies certain conditions including receipt of certain regulatory and financial milestones. Borrowings under the Credit Agreement are issued at a 200 -basis point original issue discount and bear interest at a variable annual rate of TERM SOFR (but not less than 2.5 % or more than 5.5 % ) plus 7.5 % , payable quarterly. The rate resets every three months based on the current Term SOFR rate. Of such interest, above 8 % per annum is, at the Company’s option, payable in kind by capitalizing and adding such interest to the outstanding principal amount of loans from the first payment date on which such interest is owed through March 31, 2025, unless, with respect to any payment date, the Company elects to pay all or a portion of such interest in cash. The Company is required to pay a ticking fee equal to 0.75 % per annum on the undrawn amount of the commitments, payable quarterly commencing 120 days after April 22, 2022 through the termination of the commitments, which is expensed as incurred and recognized as interest expense in the Consolidated Statements of Operations. The Company may voluntarily prepay the Credit Agreement at any time subject to a prepayment fee.
The Company’s obligations under the Credit Agreement are guaranteed by BTI’s existing and subsequently acquired or organized subsidiaries, subject to certain exceptions. BTI’s obligations under the Credit Agreement and the related guarantees thereunder are secured, subject to customary permitted liens and other agreed upon exceptions, by (i) a pledge of all of the equity interests of all of the Company’s existing and any future direct subsidiaries, and (ii) a perfected security interest in all of its and the guarantors’ tangible and intangible assets (except that the guarantees provided by the BXCL701 Subsidiaries (as defined below) are unsecured).
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities. The Company must also comply with certain financial covenants, including (i) maintenance of cash or permitted cash equivalent investments in accounts controlled by OFA for the Lenders, of at least (a) initially, $ 15,000 , (b) from and after the funding of the Tranche B loans, $ 20,000 , and (c) from and after the Company’s satisfaction of the funding conditions for the Tranche C loans, $ 15,000 , provided, that the liquidity covenant applicable at any time will be increased upon certain events related to a
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sale of OnkosXcel (up to a maximum amount equal to $ 37,500 ), provided that the minimum liquidity amount will in no event exceed 50 % of the aggregate amount of loans outstanding under the Credit Agreement at any time; and (ii) a minimum revenue test, measured quarterly beginning with the Company’s fiscal quarter ending on December 31, 2024 (such six-month period the “Revenue Covenant Measurement Period”), that requires it and its subsidiaries’ consolidated net revenue for the six consecutive month period ending on the last day of each such fiscal quarter to not be less than a minimum revenue amount specified in the Credit Agreement (such testing date, the “Revenue Covenant Measurement Testing Date” and the covenant described in this clause (ii) the “Revenue Covenant”). The Company’s failure to comply with the financial covenants will result in an event of default, subject to certain cure rights with respect to the Revenue Covenant. If, as of a Revenue Covenant Measurement Testing Date, the Company’s revenue for the applicable Revenue Covenant Measurement Period is less than the minimum revenue amount specified for the applicable period then required under the Revenue Covenant, the Company would have a right to cure such shortfall for a total of three fiscal periods by making a revenue cure payment (which would be treated as prepayments of the loans subject to a prepayment fee) to the Lenders in an amount equal to the difference between such minimum required revenue amount and the Company’s actual revenues for such Revenue Covenant Measurement Period, such payment to not be less than $ 1,000 . If paid, the Company will be deemed to have complied with the Revenue Covenant as of such Revenue Covenant Measurement Testing Date. Any such payment will be applied to the prepayment of the loans under the Credit Agreement.
Notwithstanding the foregoing, the Credit Agreement permits OnkosXcel (together with OnkosXcel Employee Holdings, LLC (“Employee Holdings”), a subsidiary of BTI, and their respective subsidiaries, the “BXCL701 Subsidiaries”) to receive third-party investment or transfer all or substantially all of their assets to an unaffiliated third party, in each case subject to terms and conditions set forth in the Credit Agreement, including the escrow of certain proceeds received by BTI and its subsidiaries (other than the BXCL701 Subsidiaries) in respect of these disposition events and, under circumstances set forth in the Credit Agreement, the mandatory prepayment of such escrowed amounts. The Company’s equity interests in the BXCL701 Subsidiaries have been pledged in support of its obligations under the Credit Agreement, and the BXCL701 Subsidiaries have provided direct guarantees of BTI’s obligations under the Credit Agreement on an unsecured basis. However, the pledge, guarantee and other obligations of the BXCL701 Subsidiaries under the Credit Agreement will be released upon certain agreed upon events, including an initial public offering by the BXCL701 Subsidiaries or the ownership by unaffiliated third parties of at least 20 % of the equity interests in the BXCL701 Subsidiaries.
The Credit Agreement contains events of default that are customary for financings of this type relating to, among other things, payment defaults, breach of covenants, breach of representations and warranties, cross default to material indebtedness, bankruptcy-related defaults, judgment defaults, breach of the financial covenants described above, and the occurrence of certain change of control events. In certain circumstances, events of default are subject to customary cure periods. The Credit Agreement also contains certain regulatory-related events of default, which do not have cure periods. Following an event of default and any applicable cure period, the Lenders will have the right upon notice to terminate any undrawn commitments and may accelerate all amounts outstanding under the Credit Agreement, in addition to other remedies available to them as the Company’s secured creditors.
Waiver and Third and Fourth Amendments to Credit Agreement and Guaranty
On February 12, 2024, the Company entered into the Third Amendment to Credit Agreement and Guaranty (the “Third Amendment”), which amended the Credit Agreement. Pursuant to the Third Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the Company’s independent auditors that contains a “going concern” or like qualification or exception or emphasis of matter of going concern footnote with respect to the Company’s financial statements for the fiscal year ended December 31, 2023 and, as a result, such event shall not be an event of default. As a condition to the effectiveness of the Third Amendment, among other things, the Company shall have received at least $ 40,000 in gross proceeds from a registered public sale of the Company’s common stock, warrants and/or pre-funded warrants on or before February 20, 2024. The Company did not meet this condition and therefore the Third Amendment did not become effective.
On March 20, 2024 (the “Effective Date”), the Company entered into the Fourth Amendment to the Credit Agreement and Guaranty (the “Fourth Amendment”), which amended the Credit Agreement. Pursuant to the Fourth Amendment, the Lenders agreed to waive the covenant that the Company shall not receive a report and opinion from the
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Company’s independent registered public accounting firm that contains a “going concern” or similar qualification with respect to the Company’s financial statements for the year ended December 31, 2023. Accordingly, while the Company’s independent registered public accounting firm’s report contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 contains a “going concern” explanatory paragraph, it does not constitute an event of default under the Credit Agreement.
The Fourth Amendment includes a covenant that the Company will receive, (i) after the Effective Date and on or before April 15, 2024, at least $ 25,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in non-refundable cash consideration from partnering transactions entered into after the Effective Date (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made) and (ii) after the Effective Date and on or before November 30, 2024, at least $ 50,000 (for the avoidance of doubt, inclusive of amounts previously counted toward the preceding clause (i)) in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent (as defined in the Credit Agreement) in its sole discretion ) from partnering transactions entered into after the Effective Date. Failure to perform this covenant would constitute (A) a default under the Credit Agreement and (B) an event of default under the Credit Agreement, subject to a cure period, solely in the case of clause (i) of the preceding sentence, until May 15, 2024. For the avoidance of doubt, failure to perform clause (ii) of the preceding sentence would constitute an immediate event of default under the Credit Agreement without any cure or grace period.
In addition, the Fourth Amendment provides that if the Company has not, after the Effective Date and on or before September 30, 2024, received at least $ 40,000 in gross proceeds from the issuance of its common stock, warrants and/or pre-funded warrants, and/or cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date, the “Minimum Liquidity Amount” (as defined in the Credit Agreement) that the Company is required to maintain at all times will increase to $ 25,000 from $ 15,000 , unless and until the Company has received, after the Effective Date and on or before November 30, 2024, at least $ 50,000 in gross proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants, and/or in cash and/or non-cash consideration (measured at fair market value, as determined by the Administrative Agent in its sole discretion) from partnering transactions entered into after the Effective Date. On March 27, 2024, the Company received $ 25,000 in gross proceeds from the issuance of its common stock, warrants, and pre-funded warrants discussed in Note 11, Common Stock Financing Activities , satisfying the April 15, 2024 covenant requirement of the Fourth Amendment. During the third quarter of 2024, the Company received $ 467 of gross proceeds from the issuance of the Company’s common stock. As of September 30, 2024, the Company had satisfied $ 30,943 of the $ 40,000 required to maintain the Minimum Liquidity Amount and the $ 50,000 gross proceeds requirement. As a result, at September 30, 2024, the Minimum Liquidity Amount increased to $ 25,000 .
Waiver and Fifth Amendment to Credit Agreement and Guaranty
On November 21, 2024, the Company entered into the Fifth Amendment to Credit Agreement and Guaranty and First Amendment to Fourth Amendment to Credit Agreement and Guaranty (the “Fifth Amendment”), which amended the Credit Agreement and Guaranty, dated April 19, 2022, by and among the Company, as the borrower, certain subsidiaries of the Company from time to time party thereto as subsidiary guarantors, the lenders party thereto (the “Lenders”), and Oaktree Fund Administration LLC (“OFA”) as administrative agent (as amended by the Waiver and First Amendment to Credit Agreement and Guaranty, dated as of November 13, 2023, the Second Amendment to Credit Agreement and Guaranty and Termination of Revenue Interest Financing Agreement, dated as of December 5, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2024, and the Fourth Amendment to Credit Agreement and Guaranty, dated as of March 20, 2024 (the “Fourth Amendment”), the “Existing Credit Agreement”).
Pursuant to the Fifth Amendment, the Lenders agreed to, among other things, (i) waive the Credit Agreement’s covenant that the report and opinion the Company will receive from its independent registered public accounting firm with respect to the financial statements for the year ending December 31, 2024 will not contain a “going concern” or similar qualification, (ii) permanently waive the Credit Agreement’s minimum revenue covenant, and (iii) waive the Fourth Amendment’s requirement that the Company raise, after the effective date of the Fourth Amendment and on or
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before November 30, 2024, at least $ 50,000 in gross cash proceeds from the issuance of its common stock, warrants, and/or pre-funded warrants, and/or in cash and/or non-cash consideration from newly entered-into partnering transactions.
The Fifth Amendment includes a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $ 7,000 in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre-funded warrants(“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $ 18,000 in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $ 29,000 in net cash proceeds (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B) (“Raise 3”). The Company has raised sufficient net proceeds to date to satisfy this requirement.
In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $ 7,500 (instead of $ 25,000 ) from and after the closing of Raise 1until March 30, 2025. On March 31, 2025, the minimum liquidity amount increased to $ 10,000 and on September 30, 2025, the minimum liquidity amount increased to $ 15,000 .
In connection with the Fifth Amendment, the Company paid a one-time amortization payment of $ 2,500 principal amount, together with accrued and unpaid interest and a portion of the prepayment fee and other fees payable in December 2024.
The Fifth Amendment also modifies the interest rate of the loans provided under the Credit Agreement from a floating rate of Term SOFR plus 7.50 % per annum, to a fixed rate of 13 % per annum, retroactive to and effective as of September 30, 2024. For the quarterly payment dates ending December 31, 2024, March 31, 2025, and June 30, 2025, the Company will have the ability to make interest payments of up to 10 % per annum “in-kind” by capitalizing and adding such interest to the outstanding principal amount of the loans under the Credit Agreement. In addition, pursuant to the Fifth Amendment, the Company will be required to make quarterly amortization payments equal to 5.0 % of the principal amount of funded loans, together with applicable prepayment fees, beginning on March 31, 2026.
On the effective date of the Fifth Amendment and as a condition to effectiveness thereof, the Company’s wholly owned subsidiaries OnkosXcel Therapeutics, LLC and OnkosXcel Employee Holdings, LLC (collectively, “OnkosXcel”), which previously provided unsecured guarantees of the Company’s obligations under the Credit Agreement, granted security interests in substantially all of their assets to support such obligations.
The Fifth Amendment amends the negative covenants under the Credit Agreement to remove flexibility the Company and its subsidiaries previously had thereunder to undertake various transactions, including, without limitation, with respect to potential dispositions of OnkosXcel or out-licenses by OnkosXcel of its intellectual property.
Pursuant to the Fifth Amendment, the Company committed to appoint a new independent board director (subject to customary background checks, applicable law, confirmation of independence and Nasdaq rules), and to provide the independent director with various privileges and committee memberships on the board of directors of the Company (including the appointment of such director on committee to be formed to focus on capital raising and evaluate strategic options). The Company also agreed to engage an investment banker reasonably acceptable to OFA and the Lenders to assist the Company and its board of directors with evaluating and exploring strategic options.
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The Company also agreed to covenants requiring that the Company’s cash expenditures be monitored by the Lenders according to a board-approved budget provided to the Lenders prior to the signing of the Fifth Amendment, which cash budget will be updated on a bi-weekly basis going forward. The Company will not be permitted to make disbursements for any two-week period in excess of 115 % of the aggregate budgeted amount of disbursements for the applicable period. Finally, pursuant to the Fifth Amendment, the Company is restricted from paying cash bonuses for its employees or executives during the fiscal years 2024 and 2025 without OFA’s consent or increasing the cash compensation for fiscal year 2025 for certain senior officers of the Company from their compensation for fiscal year 2024.
Sixth, Seventh, and Eighth Amendment to Credit Agreement
On March 4, 2025, the Company entered into the Sixth Amendment to our Credit Agreement, which extended the deadline to engage an investment banker. The Company subsequently entered into the Seventh and Eighth Amendments on March 12, 2025 and April 22, 2025, respectively, and collectively, these amendments extended the deadline to July 31, 2025. The Company retained an investment banker prior to July 31, 2025.
As of December 31, 2025, the Company was in compliance with all restrictive and financial covenants under the Credit Agreement.
Warrants and Equity Investment Right
In connection with the closing of the Second Amendment, on the Second Amendment Effective Date, the Company amended and restated the warrants granted to the Lenders on April 19, 2022 to purchase up to 17 shares of the Company’s common stock at an exercise price of $ 320.6 per share (the “Closing Date Warrants”). Pursuant to the amendment and restatement of the Closing Date Warrants, dated December 5, 2023 (the “Amended and Restated Closing Date Warrants”), the exercise price of the Closing Date Warrants has been reduced to $ 58.3232 per share. In addition, the Company granted new warrants to the Lenders to purchase up to 4 shares of the Company’s common stock (the “2023 Warrant Shares”) at an exercise price of $ 58.3232 per share (the “2023 Warrants” and together with the Amended and Restated Closing Date Warrants, the “Warrants”). The Amended and Restated Closing Date Warrants and the 2023 Warrants will expire on April 19, 2029 and may be net exercised at the holders election. In addition, pursuant to the Credit Agreement, the Lenders have the right to purchase shares of the Company’s common stock after the Second Amendment Effective Date, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $ 5,000 at a price per share equal to a 10 % premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). BTI entered into a registration rights agreement (the “Registration Rights Agreement”) with the Lenders and filed a registration statement on Form S-3 to register the shares issuable upon exercise of the Warrants and, if issued, the shares related to the Equity Investment Right, for resale. The maximum shares of the Company’s common stock issuable under the Warrants (including the Closing Date Warrants and the 2023 Warrants) and Lenders’ Equity Investment Right was 366 as of March 31, 2024. On the Second Amendment Effective Date, Company amended and restated its Registration Rights Agreement (the “Amended and Restated Registration Rights Agreement”) with the Lenders, dated April 19, 2022, pursuant to which the Company agreed to register the 2023 Warrant Shares for resale.
As part of the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted warrants to the Lenders to purchase 175 individual limited liability company units (which number of units is not in thousands; referred to herein as the “OnkosXcel Warrants”). The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $ 20,000 . The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $ 20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10 % premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75 % of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150 % of the valuation applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.
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In connection with the closing of the Fourth Amendment discussed below, the Company granted new warrants to the Lenders to purchase up to 6 shares of its common stock (the “2024 Warrant Shares”) at an exercise price of $ 49.1568 per share (the “2024 Warrants”), which represents a 10 % premium over the arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding the Effective Date. The 2024 Warrants will expire on April 19, 2029 and may be net exercised at the holder’s election. On the Effective Date, the Company amended and restated its Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders, originally dated April 19, 2022. Pursuant to the Second Amended and Restated Registration Rights Agreement, the Company agreed to register the 2024 Warrant Shares for resale.
Fifth Amendment Warrants, Registration Rights Agreement and Equity Investment Right Termination
Prior to the Fifth Amendment, pursuant to the Credit Agreement, the Lenders had the right to purchase shares of our common stock, so long as borrowings under the Credit Agreement are outstanding, for a purchase price of $ 5,000 at a price per share equal to a 10 % premium to the volume-weighted average price of the common stock over the 30 trading days prior to the Lenders’ election to proceed with such equity investment (the “Equity Investment Right”). The Equity investment Right was terminated as part of the Fifth Amendment. We entered into a registration rights agreement with the Lenders (as amended and restated in connection with the Second Amendment, the “Amended and Restated Registration Rights Agreement”) and filed registration statements on Form S-3 to register the shares issuable upon exercise of the Closing Date Warrants, 2023 Warrants and the New Warrants for resale. The maximum shares of our common stock issuable under the Closing Date Warrants, the 2023 Warrants and the Lenders’ Equity Investment Right was 366 . On the Effective Date, we further amended and restated the Amended and Restated Registration Rights Agreement (the “Second Amended and Restated Registration Rights Agreement”) with the Lenders. Pursuant to the Second Amended and Restated Registration Rights Agreement, we agreed to register the 2024 Warrant Shares for resale.
In connection with the closing of the Fifth Amendment, the Company agreed to, substantially concurrently with the closing of Raise 1, grant new warrants to the Lenders to purchase an aggregate of 313 shares of common stock on the closing date of the Fifth Amendment, at an exercise price of $ 0.16 per share (the “New Warrants”). During the three months ended June 30, 2025, the Company issued 284 shares of Common Stock in connection with the cashless exercises of the 313 New Warrants.
In addition, the Company agreed to, substantially concurrently with the closing of Raise 1, amend and restate all warrants to purchase stock of the Company issued to the Lenders prior to the effective date of the Fifth Amendment, to revise the exercise price thereunder to an exercise price equal to the lower of (i) the price per share of the common stock of the Company issued in Raise 1 and (ii) arithmetic average of the volume-weighted average price of the Company’s common stock on the Nasdaq Capital Market during the 30 trading days preceding Raise 1 (such existing warrants, as amended and restated, the “Original Warrants”). The Original Warrants provide the Lenders with the right to purchase a total of 28 shares of common stock of the Company, and the exercise prices of $ 58.3232 per share and $ 49.1568 per share were reduced to $ 7.68 per share.
On the date of issuance of the New Warrants, the Company agreed to amend and restate its Second Amended and Restated Registration Rights Agreement with the Lenders, dated March 20, 2024. Pursuant to such amendment and restatement (the “Third Amended and Restated Registration Rights Agreement”), the Company will agree to register the shares of common stock issuable under the New Warrants, in addition to all Original Warrants, for resale.
As part of entering into the Credit Agreement, OnkosXcel, a wholly owned subsidiary of BTI, granted the OnkosXcel Warrants to the Lenders to purchase 175 individual limited liability company units. The strike price of the OnkosXcel Warrants is formulaic based on the value of OnkosXcel at the time of exercise and can only be exercised upon occurrence of an equity related liquidity event for OnkosXcel of at least $ 20,000 . The exercise price per unit of the OnkosXcel Warrants will be set upon the earlier of the closing of the next sale (or series of related sales) by OnkosXcel of equity securities of OnkosXcel with aggregate proceeds of not less than $ 20,000 to unrelated third parties (the “Next Equity Financing”) at an exercise price per unit equal to a 10 % premium over the price per unit of the equity securities sold by OnkosXcel in such Next Equity Financing or, in the event of a sale of OnkosXcel prior to the Next Equity Financing or an initial public offering constituting the Next Equity Financing, the lesser of (x) 75 % of the fair value of the consideration to be paid for a unit upon the consummation of such transaction and (y) 150 % of the valuation
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applicable to the initial profits units issued by OnkosXcel after the closing of the Credit Agreement. The OnkosXcel Warrants are transferable with approval from BTI, which cannot be unreasonably withheld, expire on April 19, 2029, and may be net exercised at the holder’s election.
Maturities of long-term debt are expected to be as follows:
December 31, 2025
2026
$
24,931
2027
$
87,225
Thereafter
$
—
Interest expense was as follows:
Year ended
December 31,
2025
2024
Interest expense
$
15,332
$
14,662
Accretion of debt discount and amortization of financing costs
1,652
467
Total interest expense
$
16,984
$
15,129
Note 10. Derivative Financial Instruments
BTI identified certain freestanding financial instruments and/or embedded features that require separate accounting from the borrowings under the OFA Facilities. This includes the OnkosXcel Warrants and Equity Investment Right held by the Lenders, along with certain put/call options. The OnkosXcel Warrants and Equity Investment Right do not meet certain scope exceptions under U.S. GAAP, primarily because the exercise prices and number of shares of the Company’s common stock issuable under the instruments are variable, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheets. The respective derivative liabilities are recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. As discussed in Note 9, Debt and Credit Facilities , the Equity Investment Right was terminated on November 25, 2024 in connection with the Fifth Amendment to the Credit Agreement. The Company recorded the termination gain of $ 1,263 within Other (income) expense, net in the Company’s Consolidated Statements of Operations for the carrying value of the Equity Investment Right.
With respect to the Purchase Agreement discussed in Note 11, Common Stock Financing Activities , BTI determined that the Accompanying Warrants fail the equity classification criteria and are therefore classified as liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging (“ASC 815”). The Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. We value the Accompanying Warrants using the Black-Scholes option pricing model as discussed in Note 14, Fair measurements .
On November 21, 2024, the exercise price of 534 of the Accompanying Warrants was reduced from $ 51.20 to $ 9.136 per share. As a result of the repricing, the Company recorded the increase in fair value of $ 1,000 as an increase to the carrying value of Derivative liabilities, and as a loss in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. For the years ended December 31, 2025 and 2024, the Company recorded total net gains of $ 1,818 and $ 17,027 , respectively (including the $ 1,000 repricing loss in 2024), in Other (income) expense, net, in the
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Company’s Consolidated Statements of Operations. As of December 31, 2025, the fair value of the Accompanying Warrants was $ 502 .
On November 25, 2024, with respect to the Underwriter Agreement discussed in Note 11, Common Stock Financing Activities , the Company issued additional warrants (the “November 2024 Accompanying Warrants”). The November 2024 Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $ 5,562 and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. For the years ended December 31, 2025 and 2024, the Company recorded total net gains of $ 3,339 and $ 1,289 , respectively, in Other (income) expense, net, in the Company’s Consolidated Statements of Operations. As of December 31, 2025, the fair value of the November 2024 Accompanying Warrants was $ 934 .
On March 3, 2025, with respect to the March 2025 Offering discussed in Note 11, Common Stock Financing Activities , the Company issued additional warrants (the “March 2025 Accompanying Warrants”). The March 2025 Accompanying Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $ 2,831 and are revalued on each balance sheet date until such instruments are settled or expire, with changes in the fair value between reporting periods recorded within Other (income) expense, net in the Company’s Consolidated Statements of Operations. In August 2025, 2,300 of the March 2025 Accompanying Warrants were exercised. In connection with the exercise, the Company remeasured the fair value of the warrant liability, resulting in a recognized net loss of $ 9,920 recorded in Other (income) expense, net in the Company’s Consolidated Statements of Operations. As of December 31, 2025, the fair value of the remaining 1,700 March 2025 Accompanying Warrants was $ 354 . For the year ended December 31, 2025, the Company recorded a net gain of $ 849 for the remaining warrants in Other (income) expense, net, in the Company’s Consolidated Statements of Operations.
In connection with the March 2025 Offering discussed in Note 11, Common Stock Financing Activities , the Company also issued option warrants (the “Option Warrants”). The Option Warrants failed to meet the requirements to be indexed to equity and equity classified, and meet the definition of a derivative instrument. Therefore, these instruments are initially recorded as Derivative liabilities. The respective derivative liabilities were recorded at fair value on the date of issuance in the amount of $ 369 . The Option Warrants expired on March 18, 2025 without being exercised, and the Company recorded a termination gain of $ 369 in Other (income) expense, net, in the Company’s Condensed Consolidated Statements of Operations. As of December 31, 2025, the fair value of the Option Warrants was $ 0 .
Note 11. Common Stock Financing Activities
Jeffries At-the-Market Program
In May 2021, the Company entered into an Open Market Sale Agreement (as amended, supplemented and/or restated from time to time, the “Sale Agreement”) with Jefferies LLC (“Jefferies”) pursuant to which the Company could offer and sell shares of its common stock, having an aggregate offering price of up to $ 100,000 , from time to time, through an “at the market offering” program under which Jefferies will act as sale agent. In November 2023, the Company amended the Sale Agreement to increase the size of the “at the market offering" program to $ 150,000 . On March 26, 2025, the Company and Jefferies terminated that certain Open Market Sales Agreement. There have been no sales of the Company’s common stock under the Sale Agreement for the year ended December 31, 2025. For the year ended December 31, 2024, the Company sold 240 shares of its common stock for a gross amount of $ 7,682 , incurred issuance costs of $ 231 , and received net proceeds of $ 7,451 .
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March 2024 Offering
On March 25, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (collectively, the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to the Purchasers in a registered direct offering (the “Offering”) under an effective shelf registration statement on Form S-3 (File No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission on March 25, 2024 (the “Prospectus Supplement”) an aggregate of 191 shares (the “Shares”) of common stock, par value $ 0.001 per share, and accompanying warrants (the “Accompanying Warrants”) to purchase up to 191 shares of common stock at a combined offering price of $ 46.416 per Share and Accompanying Warrant and pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 348 shares of common stock and Accompanying Warrants to purchase up to 348 shares of common stock, at a combined offering price of $ 46.40 per share underlying each Pre-Funded Warrant and Accompanying Warrant, which equals the offering price per Share and Accompanying Warrant less the $ 0.016 exercise price per share of the Pre-Funded Warrants. The Pre-Funded Warrants and Accompanying Warrants are not listed on the Nasdaq Capital Market or any other securities exchange or trading system and the Company does not intend to list them. On March 27, 2024, The Company received $ 25,000 of gross proceeds from the Offering, incurred issuance costs of $ 248 , and received net proceeds of $ 24,752 .
The Pre-Funded Warrants have an exercise price per share of common stock equal to $ 0.016 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. For the year ended December 31, 2024, all 348 Pre-Funded Warrants were exercised and the same number of shares of common stock were issued in exchange for $ 6 of proceeds received.
The Accompanying Warrants have an exercise price per share of common stock equal to $ 51.20 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Accompanying Warrants will be exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025.
November 2024 Offering
On November 22, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity LLC, as underwriter (the “Underwriter”), in connection with the issuance and sale by the Company in a public offering of (i) 350 shares of the Company’s common stock, and accompanying warrants (the “November 2024 Accompanying Warrants”) to purchase 350 shares of Common Stock, at a combined public offering price of $ 7.68 per share, and, in lieu thereof to certain investors, (ii) pre-funded warrants to purchase 563 shares of Common Stock, and accompanying warrants (the “November 2024 Accompanying Warrants”) to purchase 563 shares of Common Stock, at a combined public offering price of $ 7.664 per pre-funded warrant, which equals the public offering price per share of Common Stock and accompanying warrant less the $ 0.016 exercise price per share of the pre-funded warrants, less underwriting discounts and commissions, pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-275261) and a related prospectus supplement filed with the Securities and Exchange Commission. The Company received net proceeds from the offering of approximately $ 6,128 , after deducting underwriting discounts and commissions and offering expenses of $ 871 . The Company used the net proceeds of the offering to fund the SERENITY At-Home trial, prepare for the initiation of the TRANQUILITY In-Care trial, working capital and general corporate purposes.
The Pre-Funded Warrants have an exercise price per share of common stock equal to $ 0.016 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations,
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reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. The Pre-Funded Warrants meet the equity classification criteria and are therefore classified as equity. For the year ended December 31, 2024, 80 Pre-Funded Warrants were exercised and the same number of shares of common stock were issued in exchange for $ 1 of proceeds received. The remaining 483 Pre-Funded Warrants were exercised and the same number of common stock were issued during the first three months of 2025 in exchange for $ 8 of proceeds received.
The November 2024 Accompanying Warrants have an exercise price per share of common stock equal to $ 7.68 per share. The exercise price and the number of shares of common stock issuable upon exercise of the November 2024 Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The November 2024 Accompanying Warrants are exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The November 2024 Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025.
March 2025 Offering
On March 3, 2025, the Company entered into a purchase agreement (the “March 2025 Offering”) with a purchaser. Pursuant to the March 2025 Offering, the Company agreed to issue and sell to the purchaser and the purchaser agreed to buy in a registered direct offering (i) an aggregate of 188 shares (the “Shares”) of Common Stock at an offering price of $ 3.50 per Share, (ii) Pre-Funded Warrants to purchase up to 3,812 shares of Common Stock, at an offering price of $ 3.499 per share underlying the Pre-Funded Warrants, which equals the offering price per share less the $ 0.001 exercise price per share of the Pre-Funded Warrants, and (iii) an aggregate of 4,000 accompanying warrants (the “March 2025 Accompanying Warrants”) to purchase up to 4,000 shares of Common Stock at an offering price of $ 4.20 per accompanying warrant, pursuant to an effective registration statement on Form S-3 (File No. 333-275261), including the base prospectus included therein, and prospectus supplement filed with the SEC on March 4, 2025. The Company received net proceeds from the offering of approximately $ 12,957 , after deducting underwriting discounts and commissions and offering expenses of $ 1,039 .
The Pre-Funded Warrants have an exercise price per share of common stock equal to $ 0.001 per share. The exercise price and the number of shares of common stock issuable upon exercise of the Pre-Funded Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The Pre-Funded Warrants are exercisable at any time after the date of issuance. The Pre-Funded Warrants meet the equity classification criteria and are therefore classified as equity. For the year ended December 31, 2025, all 3,812 Pre-Funded Warrants were exercised and the same number of common stock were issued in exchange for $ 4 of proceeds received.
The March 2025 Accompanying Warrants have an exercise price per share of common stock equal to $ 4.20 per share. The exercise price and the number of shares of common stock issuable upon exercise of the March 2025 Accompanying Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. The March 2025 Accompanying Warrants will be exercisable at any time after the date of issuance and will expire on the fifth anniversary of the date of issuance. The March 2025 Accompanying Warrants do not meet certain scope exceptions under U.S. GAAP, primarily because they did not meet the requirements to be indexed to equity and equity classified, and the instruments meet the definition of a derivative instrument. Therefore, these instruments are recorded as Derivative liabilities in the Consolidated Balance Sheet as of December 31, 2025. For the year ended December 31, 2025, 2,300 March 2025 Accompanying Warrants were exercised and the same number of common stock were issued in exchange for $ 9,660 of proceeds received.
In the March 2025 Offering, the Company also issued to the purchaser option warrants, to purchase up to 4,000 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase up to 4,000 shares of Common Stock. The exercise price of the Option Warrant is $ 3.50 per underlying share of Common Stock or
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$ 3.499 per underlying pre-funded warrant to purchase one share of Common Stock and accompanying warrant. The option accompanying warrants have an exercise price per share of common stock equal to $ 4.20 per share. The Option Warrants expired on March 18, 2025 without being exercised.
Canaccord At-the-Market Program
On April 3, 2025, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”) to sell shares of the Company’s common stock, par value $ 0.001 per share, with aggregate gross sales proceeds of up to $ 8,135 , from time to time, through an “at the market” equity offering program under which Canaccord will act as sales agent. For the year ended December 31, 2025, the Company sold 4,724 shares of its common stock for a gross amount of $ 8,130 , incurred issuance costs of $ 244 , and received net proceeds of $ 7,886 .
On August 6, 2025, the Company increased the maximum amount of shares that are eligible to be sold pursuant to the Equity Distribution Agreement to allow for the offer and sale of up to $ 3,500 of its common stock. For the year ended December 31, 2025, the Company sold 1,050 shares for gross proceeds of $ 3,500 and received proceeds of $ 3,395 , net of issuance costs of $ 105 . Following the sale of common stock, the Company raised sufficient net proceeds to satisfy the Raise 3 requirement under the Fifth Amendment to the Credit Agreement.
On August 18, 2025, the Company filed a prospectus supplement with the Securities and Exchange Commission for the offer and sale of up to $ 80,000 shares of common stock pursuant to the Equity Distribution Agreement. For the year ended December 31, 2025, the Company sold 6,313 shares for gross proceeds of $ 22,846 and received proceeds of $ 22,389 , net of issuance costs of $ 457 .
Note 12. Stock-Based Compensation
2017 Equity Incentive Plan
The Company’s 2017 Plan became effective in August 2017. Following the effective date of the Company's 2020 Plan, the Company ceased granting awards under the 2017 Plan, however, the terms and conditions of the 2017 Plan continue to govern any outstanding awards granted thereunder.
2020 Incentive Award Plan
The Company’s 2020 Plan was approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020, and unless earlier terminated by the Board of Directors, will remain in effect until March 26, 2030. The 2020 Plan originally authorized for issuance the sum of (i) 57 shares of the Company’s common stock and (ii) 15 shares of the Company’s common stock, which represents the number of shares that remained available for issuance under the 2017 Plan immediately prior to the approval of the 2020 Plan by the Company’s stockholders. Any shares of common stock which, immediately prior to the approval of the 2020 Plan by the Company’s stockholders, were subject to awards granted under the 2017 Plan that are forfeited or lapse unexercised and are not issued under the 2017 Plan will increase the number of shares of common stock available for grant under the 2020 Plan. In addition, the number of shares available for issuance under the 2020 Plan will increase on the first day of each calendar year, beginning January 1, 2021 and ending on and including January 1, 2030, by a number of shares equal to the lesser of (A) 4 % of the aggregate number of shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares of common stock as determined by the Board of Directors. The shares available for issuance under the 2020 Plan increased by 124 shares and 75 shares on January 1, 2025 and 2024, respectively.
Stock-based awards granted under the 2020 Plan have a term of ten years . The vesting schedule of all awards granted under the 2020 Plan is determined by the Board of Directors, which is generally four years . Stock-based awards granted under the 2020 Plan include stock options, BTI RSUs, and Performance Units.
As of December 31, 2025, there were 42 shares available to be granted under the 2020 Plan.
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BTI Restricted stock units
The table below summarizes activity relating to BTI RSUs.
Number of
shares
Outstanding as of January 1, 2025
27
Granted
111
Cancelled
( 7 )
Vested
( 24 )
Outstanding as of December 31, 2025
107
During the year ended December 31, 2025, the Company granted 111 time-based BTI RSUs. BTI RSUs granted to employees fully vest on the one-year anniversary of the grant date, and BTI RSUs granted to executives fully vest on the nine-month anniversary of the grant date. The weighted average grant date fair value per share for the BTI RSUs granted in the year ended December 31, 2025 was $ 1.65 . The outstanding BTI RSUs issued prior to 2025 generally vest over four years , with 25 % vesting at the one-year anniversary of the grant date and the balance vesting ratably over the remaining 12 quarters of the vesting period. The total fair value of BTI RSUs vested in the year ended December 31, 2025 was $ 50 . Unrecognized stock-based compensation expense related to these awards was $ 198 and $ 760 as of December 31, 2025 and 2024, respectively.
BTI Performance stock units
The table below summarizes activity relating to Performance Units related to BTI common stock.
Number of
shares
Outstanding as of January 1, 2025
70
Granted
—
Cancelled
( 13 )
Vested
( 57 )
Outstanding as of December 31, 2025
—
In July 2024, the Company granted 87 Performance Units to employees. The Performance Units vest on the one-year anniversary of the grant date, provided certain performance criteria are met. The weighted average value per share of Performance Units granted in 2024 was $ 19.20 . All remaining outstanding Performance Units had vested as of December 31, 2025. The total fair value of Performance Units vested in the year ended December 31, 2025 was $ 103 . Unrecognized stock-based compensation expense related to these Performance Units expected to vest is zero , as stock-based compensation expense of $ 1,098 was recognized in June 2025 due to certain performance criteria being met as determined by the Compensation Committee of the Board of Directors.
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OnkosXcel Profit sharing units
The table below summarizes activity relating to the PSUs associated with OnkosXcel as described below.
Weighted average
Number of
price per unit
units
(in whole dollars)
Outstanding as of January 1, 2025
1,166
$
5,686
Granted
—
$
—
Cancelled
( 94 )
$
5,953
Forfeited
—
$
—
Outstanding as of December 31, 2025
1,072
Vested units as of December 31, 2025
1,021
$
5,602
During 2024, OnkosXcel Employee Holdings, LLC, a management holding company used to facilitate the grant of equity interests to service providers of OnkosXcel granted 15 individual (not in thousands) time-based PSUs related to OnkosXcel to certain employees of the Company in consideration for services provided to OnkosXcel. The PSUs represent indirect equity interests in OnkosXcel. These PSUs vest ratably over 48 months .
The fair values of the PSUs granted in 2024 were estimated at the date of grant using a Black-Scholes option pricing model and assumptions below.
2024 grant profit share unit valuation inputs
Expected volatility
97.4
%
Risk-free rate of interest
3.6
%
Expected dividend yield
—
%
Expected term
5.8
years
Unrecognized stock-based compensation expense related to the PSUs was $ 75 and $ 377 as of December 31, 2025 and 2024, respectively.
OnkosXcel restricted stock units
The table below summarizes activity relating to the OnkosXcel RSUs.
Number of
units
Outstanding as of January 1, 2025
176
Granted
—
Vested
( 7 )
Cancelled
( 34 )
Outstanding as of December 31, 2025
135
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As of December 31, 2025, the Company had 135 OnkosXcel Restricted Stock Units outstanding. Unrecognized stock-based compensation expense related to the awards expected to vest was approximately $ 20 and $ 210 as of December 31, 2025 and 2024, respectively.
BTI Stock options
A summary of the Company’s stock option activity for the year ended December 31, 2025, is presented below.
Number of
Weighted average
shares
price per share
Outstanding as of January 1, 2025
311
$
265.36
Granted
78
$
7.47
Forfeited
( 8 )
$
124.50
Cancelled
( 29 )
$
372.12
Exercised
—
$
—
Outstanding as of December 31, 2025
352
$
202.81
Options vested and exercisable as of December 31, 2025
328
$
207.59
As of December 31, 2025, the intrinsic value of options outstanding was $ 0 . The intrinsic value for stock options is calculated based on the difference between the exercise prices of the underlying awards and the quoted stock price of the Company’s common stock as of the reporting date.
The total intrinsic value of stock options exercised for the year ended December 31, 2025 was $ 0 . The total intrinsic value of stock options exercisable as of December 31, 2025 was $ 0 .
The weighted average grant date fair value of options granted during the year ended December 31, 2025 was $ 6.16 .
The weighted average grant date fair value of options vested as of December 31, 2025 was $ 153.24 .
The weighted average remaining contractual life is 5.3 years for options exercisable as of December 31, 2025. The weighted average remaining contractual life was 5.5 years for options outstanding as of December 31, 2025.
Unrecognized compensation expense related to unvested stock option awards as of December 31, 2025, was $ 422 and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 0.6 years.
Stock-Based Compensation
The fair value of options granted during the years ended December 31, 2025 and 2024 was estimated using the Black-Scholes pricing model with the following assumptions:
Year ended
Year ended
December 31, 2025
December 31, 2024
Expected term
5.5
years
-
6.0
years
5.5
years
-
6.1
years
Expected stock price volatility
112.0
%
-
112.1
%
108.0
%
-
112.5
%
Risk-free rate of interest
4.5
%
-
4.5
%
4.0
%
-
4.5
%
Expected dividend yield
0.0
%
-
0.0
%
0.0
%
-
0.0
%
The Company used the historical volatility of its common stock to estimate volatility. The expected term of the awards is estimated based on the simplified method, which calculates the expected term based upon the midpoint of the term of the award and the vesting period. The Company uses the simplified method because it does not have sufficient option exercise data to provide a reasonable basis upon which to estimate the expected term. The expected dividend
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yield is zero percent as the Company has no history of paying dividends nor does management expect to pay dividends over the contractual terms of these options. The risk-free interest rates are determined by reference to the U.S. Treasury yield curve in effect at the time of grant, with maturities approximating the expected term of the stock options. The fair value of the underlying common stock is generally determined as the closing price of the Company’s common stock on The Nasdaq Capital Market on the grant date, with consideration of whether there is material nonpublic information that could impact that estimated fair value when it is released.
The Company recognized stock-based compensation expense related to awards issued under the 2017 Plan and the 2020 Plan, as well as the OnkosXcel PSUs and OnkosXcel RSU’s, of $ 2,767 and $ 6,156 for the years ended December 31, 2025 and 2024, respectively, which were comprised as follows:
Year ended December 31,
2025
2024
Research and development
$
426
$
2,251
Selling, general and administrative
2,341
3,905
Total
$
2,767
$
6,156
2020 Employee Stock Purchase Plan
The Company’s 2020 Employee Stock Purchase Plan (the “ESPP”) was also approved and became effective at the Company’s 2020 annual meeting of stockholders on May 20, 2020. The ESPP is designed to assist eligible employees of the Company with the opportunity to purchase the Company’s common stock at a discount through accumulated payroll deductions during successive offering periods. The aggregate number of shares that may be issued pursuant to rights granted under the ESPP is 6 shares of common stock. In addition, the number of shares available for issuance under the ESPP will increase on the first day of each calendar year, beginning on January 1, 2021 and ending on and including January 1, 2030, by a number of shares of common stock equal to the lesser of (a) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the Board of Directors. The number of shares that may be issued or transferred pursuant to rights granted under the component of the ESPP that is intended to qualify for favorable U.S. federal tax treatment under Section 423 of the Internal Revenue Code (the “Section 423 Component”) shall not exceed 31 shares. The purchase price will be determined by the administrator of the ESPP and, for purposes of the Section 423 Component, shall not be less than 85 % of the fair value of a share on the first trading day or on the last trading day of the applicable offering period, whichever is lower. The shares available for issuance under the ESPP increased by 31 shares and 19 shares on January 1, 2025 and 2024, respectively. To date, no shares have been sold under the ESPP. There were 106 shares available for issuance as of December 31, 2025.
Note 13. Leases
BTI leases office space for its corporate headquarters at 555 Long Wharf Drive, New Haven, Connecticut (the “HQ Lease”) under an operating lease that expires in February 2026. The Company has an option to renew the HQ Lease for one additional five-year term that has not been exercised as of December 31, 2025. Payments under the HQ Lease are fixed.
The Company also leases equipment such as copiers and information technology equipment.
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The future minimum annual lease payments under operating leases, as of December 31, 2025, were as follows:
Year ending December 31,
Amount
2026
$
65
Thereafter
—
Total lease payments
$
65
Imputed interest
—
Total lease liability
$
65
Less current portion of lease liability
( 65 )
Long-term portion of operating lease liability
$
—
The current portion of the Company’s operating lease liability of $ 65 , as of December 31, 2025, is included in Other current liabilities on the Consolidated Balance Sheets.
Lease expense was $ 410 and $ 394 for the years ended December 31, 2025 and 2024, respectively.
Lease renewal options are not included in the ROU asset or lease liability.
Note 14. Employee Benefit Plan
The Company maintains a defined contribution retirement plan for its employees that complies with Section 401(k) of the Internal Revenue Code (the “401(K) Plan”). Employees are eligible to participate in the 401(K) Plan and can contribute a portion of their pay into the 401(K) Plan, subject to annual limits established by the U.S. Internal Revenue Service. Participating employees receive an employer matching contribution equal to 50 % of eligible employee contributions on the first 5 % of eligible compensation contributed. Employer contributions to the 401(K) Plan were $ 176 and $ 289 for the years ended December 31, 2025 and 2024, respectively.
Note 15. Fair Value Measurements
The Company groups its assets and liabilities measured at fair value in three levels based on the nature of the inputs and assumptions used to determine fair value. Refer to Note 3, Summary of Significant Accounting Policies , for additional information on the accounting policies related to fair value.
The carrying amounts of Cash and cash equivalents, Accounts receivable, net and Accounts payable approximate fair value due to the short-term nature of these instruments. As of December 31, 2025 and 2024, the Company had $ 27,085 and $ 29,036 , respectively, primarily in money market funds that hold U.S. government cash equivalent instruments (included in Cash and cash equivalents) which were valued based on Level 1 inputs. There were no transfers between levels within the hierarchy during the years ended December 31, 2025 and 2024.
Derivative liabilities measured at fair value on a recurring basis are summarized below.
As of
December 31, 2025
Level 1
Level 2
Level 3
Total
Derivative liability - BTI Warrants
$
—
$
1,436
$
354
$
1,790
Derivative liability - OnkosXcel Warrants
—
—
—
—
Total derivative liabilities
$
—
$
1,436
$
354
$
1,790
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As of
December 31, 2024
Level 1
Level 2
Level 3
Total
Derivative liability - BTI Warrants
$
—
$
6,593
$
—
$
6,593
Derivative liability - OnkosXcel Warrants
—
—
40
40
Total derivative liabilities
$
—
$
6,593
$
40
$
6,633
Derivative liabilities are comprised of the OnkosXcel Warrants, BTI Warrants, and Option Warrants. The fair value of the derivative liabilities was determined using Binomial Option Pricing and Distribution models for the OnkosXcel Warrants and Option Warrants, and the Black Scholes model was used for the BTI Warrants. As discussed in Note 9, Debt and Credit Facilities , the Equity Investment Right was terminated on November 25, 2024 in connection with the Fifth Amendment to the Credit Agreement.
The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2025. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.
Year ended
December 31,
2025
2024
Derivative liabilities, Balance - January 1
$
40
$
1,905
Termination of derivative liabilities - Equity Investment Right
—
( 1,263 )
Addition of derivative liabilities - BTI Warrant (March 2025 Accompanying Warrants)
2,831
—
Addition of derivative liabilities - Option Warrant
369
—
Termination of derivative liabilities - Option Warrant
( 369 )
—
Reclassification of derivative liabilities - BTI Warrant to permanent equity upon exercise
( 11,548 )
—
Change in fair value
9,031
( 602 )
Derivative liabilities, Balance - December 31
$
354
$
40
The derivative liabilities were reported at their fair values in the Consolidated Balance Sheets. The changes in the fair value of the derivative liabilities were reported as losses in the amount of $ 3,505 for the year ended December 31, 2025, and gains in the amount of $ 20,181 for the year ended December 31, 2024 in the Consolidated Statements of Operations as Other (income) expense, net
Inputs used to calculate the estimated fair value of the Equity Investment Right were as follows:
Equity Investment Right
Strike price relative to volume weighted 30-day average
110.0
%
Volatility (annual)
112.3
%
Probability of exercise
91.0
%
Time period
1.3
years
Estimated premium to 30-day average
24.0
%
Discount rate
4.26
%
The changes in fair value of the Equity Investment Right up to its termination date were recorded in the Consolidated Statements of Operations as Other (income) expense, net. The final carrying value of the Equity Investment Right of $ 1,263 upon derecognition was recorded as a reduction of derivative liability with the offset recorded as a gain in Other (income) expense, net, in the Consolidated Statements of Operations for the year ended December 31, 2024.
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In estimating the fair value of the derivative liability related to the OnkosXcel Warrants, inputs included third-party fair value estimates of OnkosXcel limited liability company units along with the volatility of those units based on the historical volatility of the Company’s stock, along with a peer group of comparable publicly traded companies), and the timing and probability of the relevant capital transactions occurring. As of December 31, 2025, the OnkosXcel Warrants had no fair value, as the Company does not anticipate a public offering of OnkosXcel at this time.
In estimating the fair value of the derivative liability related to the Option Warrants, the valuation inputs used were a strike price of $ 3.50 , the Company’s stock price of $ 2.70 , volatility of 39.2 % (adjusted to set the value of securities in the March 2025 Offering equal to the consideration paid), a term of 0.04 years and a risk-free rate of 4.39 %. The Option Warrants expired on March 18, 2025 without being exercised, and the Company recorded a termination gain of $ 369 in Other (income) expense, net, in the Company’s Consolidated Statements of Operations.
In estimating the fair value of the derivative liability related to the BTI Warrants – March 2025 Accompanying Warrants, the valuation inputs used were a strike price of $ 4.20 , the Company’s stock price of $ 2.70 , volatility of 39.2 % (adjusted to set the value of securities in the March 2025 Offering equal to the consideration paid), a term of 5 years and a risk-free rate of 4.01 %. As the fair value measurement of the derivative liability related to the BTI Warrants – March 2025 Warrants is classified within Level 3 of the fair value hierarchy and relies on a significant unobservable input (volatility), the resulting fair value is subject to inherent measurement uncertainty. Reasonably possible changes in the volatility assumption at the reporting date could have resulted in a significantly higher or lower fair value measurement and increases in volatility would generally increase the fair value of the warrant liability while decreases in volatility would reduce it. The Company remeasured the fair value of the remaining warrants at December 31, 2025 of $ 354 , and for the year ended December 31, 2025 recorded a net gain of $ 849 within Other (income) expense, net in the Company’s Consolidated Statements of Operations. The valuation inputs used as of December 31, 2025 were a strike price of $ 4.20 , the Company’s stock price of $ 1.60 , volatility of 44.48 %, term of 4.2 years and risk-free rate of 3.66 %.
The estimated fair value of the Credit Agreement as of December 31, 2025, was $ 107,850 . Both observable and unobservable inputs were used to determine the fair value of long-term debt, which was classified within the Level 3 category.
The following table presents the BTI warrants issued by the Company and the corresponding balance sheet classification:
Warrant Recipient
Warrant Type
Issue Date
Exercise Price
Number of Warrants
Classification
Lenders and Purchasers
Closing Date Warrants
4/19/2022
$
7.68
17
Equity
Lenders and Purchasers
2023 Warrants
12/5/2023
$
7.68
4
Equity
Lenders and Purchasers
2024 Warrants
3/20/2024
$
7.68
6
Equity
Armistice Capital Master Fund Ltd.
Accompanying Warrants
3/27/2024
$
9.136
534
Derivative Liability
Armistice Capital Master Fund Ltd.
Accompanying Warrants
3/27/2024
$
51.20
5
Derivative Liability
Armistice Capital Master Fund Ltd.
November 2024 Accompanying Warrants
11/25/2024
$
7.68
846
Derivative Liability
Heights Capital Management
November 2024 Accompanying Warrants
11/25/2024
$
7.68
27
Derivative Liability
Hudson Bay Capital Management
November 2024 Accompanying Warrants
11/25/2024
$
7.68
27
Derivative Liability
IntraCoastal Capital, LLC
November 2024 Accompanying Warrants
11/25/2024
$
7.68
13
Derivative Liability
Murchison Capital Partners, LP and assignees
March 2025 Accompanying Warrants
3/4/2025
$
4.20
1,700
Derivative Liability
Total warrants issued
3,179
The fair value of the Closing Date Warrants, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 3,245 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 320.64 , the Company’s stock price of $ 238.88 , volatility of 95 %, term of 7 years and risk-free rate of 2.95 %.
As discussed in Note 9, Debt and Credit Facilities , in connection with the closing of the Second Amendment of the Credit Agreement, on the Second Amendment Effective Date, the Company amended and restated the Closing Date Warrants granted to the Lenders to have an exercise price of $ 58.3232 per share.
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Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants’ fair values at the original strike price of $ 320.64 and the amended strike price of $ 58.3232 were $ 548 and $ 802 , respectively, as of the Second Amendment Effective Date. The Closing Date Warrants’ incremental increase in fair value for the repricing of $ 254 , was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.
In connection with the Second Amendment, the Company issued 4 “2023 Warrants” at a strike price of $ 58.3232 per share. The fair value of the 2023 Warrants, which is a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 200 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the Credit Agreement. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 58.3232 , the Company’s stock price of $ 59.36 , volatility of 99 %, term of 5.4 years and risk-free rate of 4.14 %.
In connection with the Fourth Amendment, the Company issued 6 “2024 Warrants” at a strike price of $ 49.1568 per share. The fair value of the “2024 Warrants”, which was a non-recurring fair value, was determined as of the date of issuance using a Black-Scholes pricing model and the fair value of $ 224 was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts funded under the OFA Facilities. This non-recurring measurement is classified as Level 2. The inputs used were a strike price of $ 49.1568 , the Company’s stock price of $ 44.48 , volatility of 112.2 %, term of 5 years and risk-free rate of 4.25 %.
In addition, in connection with the Fifth Amendment of the Credit Agreement, on the Fifth Amendment Effective Date of November 25, 2024, the Company amended and restated the Closing Date Warrants, 2023 Warrants, and 2024 Warrants granted to the Lenders to have an exercise price of $ 7.68 per share.
Using a Black-Scholes pricing model, the Company determined that the Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ fair values at the previously amended strike price of $ 58.3232 and original strike price of $ 49.1568 the amended strike price of $ 7.68 were $ 105 and $ 164 , respectively, as of the Fifth Amendment Effective Date. The Closing Date Warrants, 2023 Warrants, and 2024 Warrants’ incremental increase in fair value for the repricing of $ 59 , was recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets, with the offset recorded as a discount on the amounts refinanced under the Credit Agreement.
The fair value of the Accompanying Warrants at issuance on March 25, 2024 was determined using a Black-Scholes pricing model and the fair value of $ 19,347 was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets. This fair value measurement is classified as Level 2. The valuation inputs used were a strike price of $ 51.20 , the Company’s stock price of $ 44.96 , volatility of 112.2 %, a term of 5 years and a risk-free rate of 4.2 % . On November 25, 2024, 534 of the 539 Accompanying Warrants’ strike price were amended to $ 9.136 , as part of the consideration provided to one of the investors in the November 2024 Equity raise discussed in Note 11, Common Stock Financing Activities . The increase in fair value due to the amended strike price of $ 1,000 was recorded as an increase in the carrying value of the Derivative liability, with the offset recorded as a loss in Other (income) expense, net, in the Company’s Consolidated Statements of Operations for the year ended December 31, 2024. The Company remeasured the Accompanying Warrants’ fair value at December 31, 2025 of $ 502 and recorded a net gain of $ 1,818 within Other (income) expense, net in the Company’s Consolidated Statements of Operations. The valuation inputs used as of December 31, 2025 were strike prices of $ 9.136 and $ 51.20 for 534 and 5 Accompanying Warrants, respectively, the Company’s stock price of $ 1.60 , volatility of 139.8 %, term of 3.2 years and risk-free rate of 3.57 %.
The fair value of the November 2024 Accompanying Warrants at issuance on November 25, 2024 was determined using a Black-Scholes pricing model and the fair value of $ 5,562 was recorded as a derivative liability with the offset recorded as a component of stockholders’ equity in Additional-paid-in-capital in the Consolidated Balance Sheets. This fair value measurement is classified as Level 2. The valuation inputs used were a strike price of $ 7.68 , the Company’s stock price of $ 7.52 , volatility of 112.5 %, a term of 5 years and a risk-free rate of 4.2 % . The Company remeasured the
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fair value at December 31, 2025 of $ 934 and recorded a net gain of $ 3,339 for the year ended December 31, 2025 within Other (income) expense, net in the Company’s Consolidated Statements of Operations. The valuation inputs used as of December 31, 2025 were a strike price of $ 7.68 , the Company’s stock price of $ 1.60 , volatility of 131.7 %, term of 3.9 years and risk-free rate of 3.64 %.
Note 16. Income Taxes
As a result of the prospective adoption of ASU 2023-09, Improvements to Income Tax Disclosures, certain tables are presented in a different format not comparable to prior year disclosures, and certain data contained within the tables may be presented differently than in prior years.
The significant components of the Company's net deferred tax assets at December 31, 2025 are shown below. In determining the realizability of the Company's net deferred tax assets, the Company considered numerous factors, including historical profitability, estimated future taxable income, and the industry in which it operates. Based on this information the Company has provided a valuation allowance for the full amount of its net deferred tax asset because the Company has determined that it is more likely than not that they will not be realized.
December 31,
December 31,
2025
2024
Deferred tax assets:
Federal net operating losses
$
107,162
$
90,853
State net operating losses
29,513
23,152
Stock options
15,002
14,601
Tax credits
19,031
17,188
Capitalized research & development
40,014
44,377
Accrued expense
102
202
Depreciation
146
103
Lease accounting - liability
17
115
Disallowed charitable contributions
1
1
Deferred Costs
683
674
Debt Amendment
2,273
1,483
Accrued legal settlement
2,590
—
Valuation allowance
( 213,929 )
( 192,149 )
Total deferred tax assets
$
2,605
$
600
Deferred tax liabilities:
Debt amendment
$
—
( 500 )
Insurance settlement
( 2,590 )
$
—
Right-of-use assets
( 15 )
( 100 )
Total deferred tax liabilities
$
( 2,605 )
$
( 600 )
Net deferred tax asset (liability)
$
—
$
—
A reconciliation between the Company’s effective tax rate and the federal statutory rate are as follows:
2025
2024
U.S. federal statutory rate
$
( 14,678 )
21.0
%
$
( 12,516 )
21.0
%
State and local income taxes, net of federal income tax effect
—
—
%
5
%
Tax credits:
Research and development credits
( 1,771 )
2.5
%
( 1,870 )
3.1
%
Changes in valuation allowance
15,293
( 21.9 )
%
18,122
( 30.4 )
%
Non-taxable or non-deductible items:
Warrant mark-to-market
736
( 1.1 )
%
( 4,238 )
7.1
%
Other
420
( 0.5 )
%
497
( 0.8 )
%
Effective tax rate
$
—
—
%
$
—
—
%
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At December 31, 2025 the Company had approximately $ 510,296 of gross federal and $ 530,648 of gross state net operating loss carry-forwards. If not utilized, the federal and state net operating loss carry-forwards will begin to expire in 2037. Of the total federal net operating loss, $ 507,650 incurred after December 31, 2017 will carryforward indefinitely. The utilization of such net operating loss carry-forwards and realization of tax benefits in future years depends predominantly upon having taxable income. The Company has approximately $ 17,736 of federal orphan drug credits and research and development credits which will begin to expire in 2037 if not utilized. The Company also has approximately $ 1,640 of state research and development credits which will begin to expire in 2040 if not utilized.
Utilization of the NOL and research tax credit carryforwards may be subject to a substantial annual limitation due to ownership limitations that has occurred or that could occur in the future, as required by section 382 of the Code, as well as similar state and foreign provisions. These ownership changes may limit the amount of the NOL and research credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction or series of transactions over a three year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a by certain stockholders or public groups.
Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax positions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that as of December 31, 2025, there were no uncertain positions. The Company's U.S. federal and state NOLs have occurred since its inception in 2017 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the U.S. Internal Revenue Service and/or state taxing authorities. The Company did no t have any unrecognized tax benefits and has no t accrued any interest or penalties for the years ended December 31, 2025 and 2024.
On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act, was enacted in the U.S., which includes a broad range of tax reform provisions, including extending and modifying certain key Tax Cuts and Jobs Act Provisions, and provisions allowing accelerated tax deductions for qualified property and research expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. The tax impacts of this legislation do not have a material impact on the Company’s current tax provision.
Note 17. Net Loss Per Share
Basic and diluted net loss per share are as follows :
Year ended
December 31,
2025
2024
Net loss (numerator)
$
( 69,897 )
$
( 59,599 )
Weighted average shares (denominator)
12,208
2,535
Basic and diluted net loss per share
$
( 5.73 )
$
( 23.51 )
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Potentially dilutive securities outstanding consists of stock options, RSUs and performance units, and BTI warrants. The Company had common stock equivalents outstanding are as follows:
As of
December 31,
2025
2024
Stock options
352
311
Restricted stock units
107
27
Performance stock units
—
70
BTI Warrants
3,179
1,792
Total common stock equivalents
3,638
2,200
Note 18. Commitments and Contingencies
From time to time, in the ordinary course of business, the Company may be subject to litigation and regulatory examinations as well as information gathering requests, inquiries and/or investigations. Other than the below, the Company is not currently subject to any matters where it believes there is a reasonable possibility that a material loss may be incurred.
On July 7, 2023, plaintiff Katelyn Martin filed a class action complaint against the Company and certain executives in the United States District Court for the District of Connecticut, captioned Martin v. BioXcel Therapeutics, et al. , 3:23-cv-00915 (D. Conn). The case has since been renamed to Hills et al v. BioXcel Therapeutics, Inc. et al. On October 4, 2023, pursuant to the Private Securities Litigation Reform Act, the court appointed two co-Lead Plaintiffs. The co-Lead Plaintiffs filed an amended complaint on December 5, 2023, alleging violations of Sections 10(b) and 20A of the Securities and Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5 promulgated thereunder. On July 11, 2024, the Court dismissed the amended complaint without prejudice and, on August 1, 2024, co-Lead Plaintiffs filed a second amended complaint. The second amended complaint alleges that defendants made false or misleading statements regarding the TRANQUILITY II trial and the development of BXCL501 for an expanded indication related to the treatment of certain Alzheimer’s-related agitation. The Company moved to dismiss the second amended complaint on September 6, 2024. On February 24, 2025, while the Company’s motion to dismiss remained pending, Plaintiffs moved for leave to further amend their complaint. On September 29, 2025, the Court issued an order granting Plaintiffs’ motion for leave to amend, denying Defendants’ motion to dismiss as moot, and allowing Plaintiffs to proceed on certain of their claims. The Company filed an answer to the third amended complaint on October 28, 2025. On January 23, 2026, the parties reached a tentative agreement to settle the action. In light of this agreement, on January 28, 2026, the Court entered an order vacating the scheduling order and requiring Plaintiffs to file a motion for preliminary approval of the settlement or status report by February 27, 2026. Plaintiffs filed a motion for preliminary approval on February 27, 2026, and the Court granted the motion on March 2, 2026. The hearing on the motion for final approval of the class settlement is set for September 2, 2026.
The Company evaluates developments in legal proceedings on a quarterly basis. In accordance with ASC 450, Contingencies, the Company records an accrual for loss contingencies to the extent that the Company concludes that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. On March 2, 2026, upon entering into a stipulation of settlement, this settlement became estimable and probable. Accordingly, the Company recorded an estimated $ 9,750 liability within Other current liabilities in the Company’s Consolidated Balance Sheets with a corresponding insurance recovery for the 100 % portion to be paid directly by certain of the Company’s insurance carriers within Other current assets in the Company’s Consolidated Balance Sheets.
On November 28, 2023, Plaintiffs Pratheesan Panancherry and Jeffrey Bastress filed a stockholder derivative complaint in the United States District Court for the District of Connecticut purportedly on behalf of the Company and against Vimal Mehta, Richard I. Steinhart, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Panancherry et al v. Mehta et al , 3:23-cv-1554. Following the initial action, Plaintiffs Maria Vomvolakis (3:24-cv-3) and Kelly Fowler
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(3:24-cv-203) each filed separate stockholder derivative complaints in the District of Connecticut raising similar claims as Panancherry and Bastress, including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Stockholder Derivative Litigation , 3:23-cv-1554 (D. Conn.). On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v. BioXcel et al , 3:23-cv-00915 (D. Conn.).
On January 11, 2024, Plaintiff Jeremy Smith filed a stockholder derivative complaint in the United States District Court for the District of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, Richard I. Steinhart, Robert Risinger, and Krishnan Nandabalan as Defendants, and the Company as Nominal Defendant under the caption Smith v. Mehta et al, 1:24-cv-00041. Following the initial action, Plaintiff Janice Korff filed a stockholder derivative complaint in the District of Delaware raising similar claims as Smith (1:24-cv-130), including business torts and violations of the Securities Exchange Act of 1934. The cases have been consolidated under the caption In re BioXcel Therapeutics, Inc. Derivative Litigation , 1:24-cv-00041 (D. Del.). On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v. BioXcel et al , 3:23-cv-00915 (D. Conn.).
On May 7, 2025, Plaintiff Yaakov Portnoy filed a stockholder derivative complaint in the Court of Chancery of the State of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep “Steve” Laumas, Michael P. Miller, Michal Votruba, Richard I. Steinhart, Robert Risinger, and Krishnan Nandabalan, and the Company as Nominal Defendant under the caption Yaakov Portnoy, derivatively on behalf of BioXcel Therapeutics, Inc. v. Vimal Mehta, et al , 2025-0508-BWD (Del. Ch.). The complaint alleges similar claims to those raised in In re BioXcel Therapeutics, Inc. Derivative Litigation , 1:24-cv-00041 (D. Del.), including business torts. On January 27, 2026, the Court entered the parties’ joint stipulation staying the case until the resolution of Hills v. BioXcel et al , 3:23-cv-00915 (D. Conn.).
At this time, the Company does not believe the claims in the above-captioned stockholder derivative matters have merit, and intends to vigorously defend against them; however, the potential costs and liabilities associated with this litigation are uncertain.
In April 2022, the Company signed a commercial supply agreement that requires minimum annual payments for the first three years of the agreement that in aggregate total $ 10,000 for the three-year period, of which $ 5,000 was originally due in year ended 2024. On July 11, 2024, the Company entered into an amendment to the commercial supply agreement (the “Product Supply Agreement Amendment”) that reduces the specified minimum annual payment over the next three years starting in the year ended 2024 and, thereafter, for a specified interval, provides for minimum annual payments to the extent that the Company receives approval of a supplemental new drug application (sNDA) or a new drug application (NDA) from the FDA for enumerated indications. The Company’s renegotiated agreement reduced the minimum commitment for 2024 to $ 1,000 and thereafter for the term of the agreement in annual amounts ranging from $ 2,000 to $ 5,000 subject, in certain instances, to the extent that the Company receives approval of an sNDA or NDA from the FDA for enumerated indications. In accordance with the Product Supply Agreement Amendment, the minimum commitments were reduced to $ 1,000 , $ 2,000 and $ 2,000 in the years 2024, 2025, and 2026. In addition, the Company agreed to make a reconciliation payment of $ 1,200 , paid in the third quarter of 2024 for full settlement for amounts due prior to the July 11, 2024 amendment.
Note 19. Segment Information
The Company views its operations and manages its business as one operating and reportable segment, utilizing artificial intelligence (“AI”) to develop transformative medicines in neuroscience and immuno-oncology. We are focused on utilizing cutting-edge technology and innovative research to develop high-value therapeutics aimed at transforming patients’ lives. We employ various AI platforms to reduce therapeutic development costs and potentially accelerate development timelines.
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Consistent with the operational structure, the Chief Executive Officer, as the chief operating decision maker (“CODM”), reviews weekly cash usage and allocates resources based on consolidated net loss that also is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM utilizes consolidated net loss by comparing actual results against budgeted amounts on a quarterly basis. As part of this process, consolidated net loss is a critical performance measure used to evaluate the Company’s operating performance and guide strategic decisions and resource allocations, including additional investments in research and development and commercialization activities.
The following table provides information about the Company’s one reportable segment and includes the reconciliation to consolidated net loss.
Year ended
December 31,
2025
2024
Product revenue, net
$
642
$
2,266
Less:
Cost of goods sold
$
164
$
2,143
Research and development costs:
Personnel and related costs
$
7,196
$
9,796
Non-cash stock-based compensation
426
2,251
Professional fees
4,004
5,067
Clinical trials expense
15,433
9,384
Chemical, manufacturing and controls cost
1,807
1,927
Other expenses
1,385
2,010
Total research and development costs
$
30,251
$
30,435
Commercial costs:
Personnel and related costs
369
2,516
Non-cash stock-based compensation
—
( 401 )
Professional fees
188
554
Commercial and marketing
407
1,389
Travel related expenses
28
309
Other expenses
( 98 )
906
Total commercial costs
$
894
$
5,273
Selling, general and administrative costs:
Personnel and related costs
$
3,547
$
5,340
Non-cash stock-based compensation
2,341
4,306
Professional fees
10,120
15,583
Travel related expenses
489
446
Other expenses
3,103
3,544
Total selling, general and administrative costs
$
19,600
$
29,219
Restructuring costs
194
2,441
Total operating expenses
$
51,103
$
69,511
Other (income) expense
Interest expense
16,984
15,129
Interest income
( 1,066 )
( 2,602 )
Other (income) expense, net
3,518
( 20,173 )
Segment net loss
$
( 69,897 )
$
( 59,599 )
Adjustments and reconciling items
—
—
Consolidated Net Loss
$
( 69,897 )
$
( 59,599 )
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Note 20. Subsequent Events
As discussed in Note 11, Common Stock Financing Activities , the Company filed a prospectus supplement with the Securities and Exchange Commission for the offer and sale of up to $ 80,000 shares of common stock pursuant to the Equity Distribution Agreement with Canaccord. After December 31, 2025 but before financial statement issuance, the Company sold 245 shares under the Equity Distribution Agreement for gross proceeds of $ 498 and received proceeds of $ 488 , net of issuance costs of $ 10 .
On February 17, 2026, the Company agreed to amend its lease agreement for its HQ lease. The amendment extends the lease on a month-to-month basis with a continued monthly base rent payment of $ 33 .
On March 2, 2026, the Company entered into a stipulation of settlement for the class action complaint filed on July 7, 2023. Refer to Note 18, Commitments and Contingencies , for additional information.
On March 10, 2026, the Company entered into a securities purchase agreement (the “March 2026 Offering”) with a purchaser. Pursuant to the March 2026 Offering, the Company agreed to issue and sell to the purchaser and the purchaser agreed to buy in a registered direct offering (i) an aggregate of 2,480 shares (the “Shares”) of common stock, par value $ 0.001 per share and accompanying warrants to purchase up to 2,480 shares of Common Stock at a combined offering price of $ 1.739 per Share and accompanying warrant, and (ii) Pre-Funded warrants to purchase up to 2,020 shares of Common Stock and accompanying warrants to purchase up to 2,020 shares of Common Stock, at a combined offering price of $ 1.738 per share underlying the Pre-Funded Warrants and accompanying warrant, which equals the offering price per Share and accompanying warrant less the $ 0.001 exercise price per share of the Pre-Funded Warrants, pursuant to an effective registration statement on Form S-3 (File No. 333-275261), including the base prospectus included therein, and a prospectus supplement filed with the Securities and Exchange Commission on March 10, 2026. The accompanying warrants have an exercise price of $ 1.614 per share, are immediately exercisable upon issuance, and will expire on the five-year anniversary of the date of issuance.
The March 2026 Offering closed on March 11, 2026. The Company received aggregate gross proceeds of approximately $ 7,825 , before deducting placement agent fees and estimated offering expenses payable by the Company.
On March 12, 2026, 2,020 Pre-Funded Warrants were exercised by the purchaser for net proceeds of $ 2 .
Rodman & Renshaw LLC (the “Placement Agent”) acted as the Company’s exclusive placement agent in connection with the March 2026 Offering. As compensation in connection with the March 2026 Offering, the Company agreed to pay the Placement Agent a cash fee equal to 6.0 % of the gross proceeds from the March 2026 Offering, and issue to the Placement Agent or its designees warrants to purchase a number of shares of Common Stock equal to 4.0 % of the aggregate number of shares placed in the Registered Direct Offering ( 180,031 shares), at an exercise price equal to 125 % of the offering price per share (or $ 2.0175 per share), with a term of five years from the commencement of the Registered Direct Offering (the “Placement Agent Warrants”). The Company also agreed to reimburse the Placement Agent for certain expenses in an amount of up to $ 75 and to pay up to $ 16 for clearing and closing expenses.
In connection with the March 2026 Offering, pursuant to the terms of a Warrant Amendment Agreement, dated as of March 10, 2026 (the “Warrant Amendment Agreement”), the exercise price of certain outstanding warrants issued on March 27, 2024 and November 25, 2024 to purchase up to an aggregate of 1,385 shares of Common Stock held by the purchaser was reduced to $ 1.614 per share, equal to the exercise price of the Accompanying Warrants issued in the Offering, and the term of such warrants was extended to five years following the closing date of the Offering. The investor paid approximately $ 173 in exchange for the reduction in exercise price and the extension of the term of these warrants. We paid the Placement Agent a cash fee of 6.0 % of the gross proceeds paid for the warrant amendment.
On March 27, 2026, the Company entered into the Ninth Amendment to Credit Agreement and Guaranty (the “Ninth Amendment”), by and among the Company, as the borrower, the Lenders and OFA as administrative agent, which included among other things, (i) a waiver of the “going concern” qualification for our audited annual financial statements for the year ended December 31, 2025 and (ii) a reduction in the Credit Agreement’s minimum liquidity covenant of $ 2,500 (from $ 15,000 to $ 12,500 ).
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In connection with the Ninth Amendment the Company agreed to (i) make a one-time prepayment of the principal amount of $ 2,500 , together with accrued and unpaid interest thereon, by March 31, 2026, (ii) on or prior to April 15, 2026, at the Company’s option either (A) pay the Lenders an amendment fee of $ 2,032 or (B) grant warrants to the Lenders to purchase up to 1,353,729 shares of common stock of the Company, at an exercise price of $ 0.01 per share and (iii) following receipt of aggregated gross proceeds following the effective date of the Ninth Amendment from (a) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (b) non-refundable cash consideration from partnering transactions, (c) the issuance of the Company’s subordinated debt and/or (d) sales by the Company of its assets, in each case ((a) through (d)), in transactions permitted under the Credit Agreement (“Capital Raise Activities”), make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50 % of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith; provided, that the foregoing requirement will not apply (A) with respect to the first $ 2,500 in the aggregate of proceeds raised from Capital Raise Activities (as defined in the Credit Agreement) and (B) once the aggregate principal amount of the Loans prepaid pursuant to one or more Capital Raise Prepayments equals $ 2,500 .
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