Item 7. Management’s Discussion and Analysis
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and
analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing
elsewhere in this Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks
and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results
and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements
as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.”
Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of
many factors, including those set forth under “Risk Factors” and elsewhere in this Form 10-K.
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Overview
We are a biotechnology company organized as a Nevada
corporation in July 2017. We are focused on building a high-value pipeline for neurology and oncology indications that have the potential
to be best-in-class. We are leveraging our executive team’s experiences in these therapeutic areas to execute our new corporate
strategy, which also includes pivoting from a singular focus on glioblastoma multiforme and exploring out-licensing opportunities for
our legacy assets TPI 287 and Berubicin for which we have intellectual property rights under license agreement with Cortice and own pursuant
to a collaboration and asset purchase agreement with Reata.
Results of Operations for the Year Ended December 31, 2025 Compared
to the Year Ended December 31, 2024 (rounded to the nearest thousand)
General and Administrative Expense
General and administrative expense was approximately
$6,215,000 for the year ended December 31, 2025 compared to approximately $5,612,000 for 2024. The increase in general and administrative
expense was mainly attributable to an increase of approximately $34,000 in professional expenses, $913,000 in employee compensation,
$142,000 in travel expenses, $48,000 in insurance expenses and other general and administrative expenses of $44,000. These changes were
offset by decrease of approximately $575,000 in stock-based compensation and $3,000 in board of director compensation.
Research and Development Expense
Research and development expense was approximately
$9,772,000 for the year ended December 31, 2025 compared to approximately $9,290,000 for 2024. The change in research and development
expense during the period is primarily attributable to increase in expenditures preparing for a TPI 287 trial including drug manufacturing
as well as other expenses offset by decline in trial costs for the Berubicin trial.
Other Income (Expense)
Interest income was approximately $154,000 and
$60,000 for the years ended December 31, 2025 and 2024, respectively. Interest and other expenses were approximately $18,000 and $16,000
for the years ended December 31, 2025 and 2024, respectively.
Net Loss
The net loss for the year ended December 31, 2025
was approximately $15,851,000 compared to approximately $14,858,000 for 2024. The change in net loss is primarily attributable to increased
research and development costs.
Liquidity and Capital Resources
On December 31, 2025, we had cash of approximately
$7,201,000 and we had a working capital of approximately $4,002,000. We have historically funded our operations from proceeds from debt
and equity sales.
On July 26, 2024 we entered into a Sales Agreement
(the “AGP ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the AGP
ATM Sales Agreement, we are permitted to sell from time to time through AGP, as sales agent or principal, shares of our common stock.
During the year ended December 31, 2025, we sold 185,521 shares of common stock pursuant to the AGP ATM Sales Agreement for net proceeds
of approximately $9.5 million. As of December 31, 2025, the Company has sold 268,169 shares of common stock pursuant to the AGP ATM Sales
Agreement for net proceeds of approximately $23.2 million.
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On May 13, 2025 we entered into a placement agency
agreement with AGP for the public offering of (i) 27,084 shares of our common stock, (ii) pre-funded warrants to purchase 302,295 shares
of common stock (the “Pre-Funded Warrants”); and (iii) Series F Warrants to purchase up to an aggregate of 329,381 shares
of common stock (the “Common Warrants”). The Common Warrants and Pre-Funded Warrants are collectively referred to herein as
the (“Warrants”). The combined purchase price of one share of common stock and one accompanying Common Warrant was $15.18
and the combined purchase price of one Pre-Funded Warrant and one accompanying Common Warrant was $15.17.
Subject to certain ownership limitations, the Warrants
are exercisable immediately upon issuance. Each Pre-Funded Warrant is exercisable into one share of Common Stock at a price per share
of $0.001 and expire once such Pre-Funded Warrants are fully exercised. The Common Warrants are exercisable into one share of Common Stock
at a price per share of $13.68 and expire five years from Initial Exercise Date. The gross proceeds to the Company from the offering were
approximately $5 million, before deducting the Placement Agent’s fees and other offering expenses. The closing of this offering
occurred on May 14, 2025.
We estimate that we have sufficient capital to
take us into the third quarter of 2026. Our strategy is focused on identifying and securing the rights to development stage assets focused
on neurology and oncology indications and advancing any assets we obtain the rights to. The timing, cost and ultimate success of which
are all difficult to predict and as such the foregoing estimate may prove to be inaccurate. The cost of advancing any drug candidate will
require significant additional capital. We have no commitments for such additional needed financing and will likely be required to raise
additional capital through the sale of additional equity or debt securities.
We will need to raise significant
additional capital in the future in order to meet our future obligations and execute our business plan. If we are unable to raise sufficient
funds, we will be required to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our
business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan
will be successful and if it is not successful we may need to cease operations entirely.
Summary of Cash Flows
Cash used in operating activities
Net cash used in operating activities was approximately
$13,811,000 and $17,113,000 for the years ended December 31, 2025 and 2024, respectively, and mainly included payments made for clinical
trial costs, drug manufacturing and development, officer compensation, insurance, marketing, professional fees to our consultants, attorneys
and accountants and stock-based compensation.
Cash used in investing activities
Net cash used in investing activities was approximately
$18,000 and $4,000 for the years ended December 31, 2025 and 2024 and included payments for furniture and equipment.
Cash provided by financing activities
Net cash provided by financing activities was approximately
$14,569,000 and $23,030,000 for the years ended December 31, 2025 and 2024, respectively. We received net proceeds of approximately $14,046,000
from the issuance of common stock during the year ended December 31, 2025.
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Off-balance Sheet Arrangements
As of December 31, 2025, we did not have any relationships
with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities,
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Purchase Commitments
We do not have any material commitments for capital
expenditures, although we are required to pay certain milestone fees and royalties to Reata and Cortice as described in the section “Overview”
above.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments
that affect the amounts reported in the financial statements, including the notes thereto. We consider critical accounting policies to
be those that require more significant judgments and estimates in the preparation of our financial statements. Management relies on historical
experience and other assumptions believed to be reasonable in making its judgment and estimates. Actual results could differ materially
from those estimates.
Management believes its application of accounting
policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated,
and adjustments are made when facts and circumstances dictate a change. As of December 31, 2025, there were no critical audit estimates.
Item 7A.
Quantitative and Qualitative Disclosure About Market Risk.
We are a smaller reporting company as defined by
Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
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