What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-26 · 137 added, 328 removed, 160 unchanged (74% of the section changed)

10 unchanged sentences

dollars, unless otherwise noted.

is a clinical-stage biotechnology company developing therapeutic candidates in immunology and inflammation with high unmet need.

3, 2023, we entered into a patent license agreement (the “Avior License Agreement”) with Avior Inc.

d/b/a Avior Bio, LLC

(“Avior”) pursuant to which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed

Technology to, among other things, Develop, have Developed, make, have made, use, sell, import, export and commercialize TH104 and TH103

and to practice the Licensed Technology in connection with the foregoing, throughout the world, each as defined in the Avior License

In February 2023, the U.S.

Food and Drug Administration (“FDA”) approved an investigational new drug (“IND”)

application for TH104.

TH104 has a dual mechanism of action by affecting multiple receptors, known to suppress chronic, debilitating

pruritus or “uncontrollable itching.” With respect to TH104, we intend to first seek approval for the treatment of moderate-to-severe

chronic pruritus in patients with primary biliary cholangitis (“PBC”), an orphan rare form of liver disease with no known

cure in which more than 70% of patients suffer from debilitating chronic pruritic.

We expect to obtain topline data from a Phase 2 trial

in TH104 in Q4 2025 and with respect to TH103, we intend to develop the product candidate and potentially file an IND.

September 11, 2024, we entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited (“Intract”),

pursuant to which, we exclusively licensed INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody

Infliximab is a purified, recombinant DNA-derived chimeric IgG monoclonal antibody protein that contains both murine and

human components that inhibit tumor TNF-α.

Under the terms of the Intract Agreement, we licensed global development and commercialization

rights (outside of South Korea) to Intract’s Soteria® and Phloral® delivery platform along with an existing supply agreement

for infliximab to be used in the oral product development program.

are also developing an early-stage pipeline of novel therapeutic candidates targeting validated high value immuno-oncology (“IO”)

targets including human epidermal growth factor (“EGF”) receptor 2 (“HER2”), human EGF receptor 3 (“HER3”)

and programmed cell death protein 1 (“PD-1”).

We are developing antibodies including bispecific antibodies, antibody drug

conjugates (“ADCs”) and small molecular weight bovine-derived Picobodies™ or antibody “knob” domains which

have the potential to target and bind more tightly to “undruggable” epitopes better than full sized antibodies.

We are advancing

HS3215, a bispecific against both HER2 and HER3 antibody which targets a novel “bridging epitope” encompassing multiple domains

of the HER2 extracellular domain (“ECD”) as well as ligand-dependent and independent blocking of the ECD of HER3 into IND-enabling

studies in 2025.

In addition, we anticipate that HS0059, a HER2/HER3 bispecific ADC (“bsADC”), and HS1940, a PD-1 Picobody,

will progress to enter IND-enabling studies in 2025.

critical components of our business strategy to achieve our goals include:

TH104 as a transmucosal buccal film product for the treatment of moderate-to-severe chronic pruritus in PBC and other inflammatory

TH023 by obtaining regulatory authorization to initiate a first-in-human bioavailability clinical trial and pursue an IND through

a preclinical and clinical path forward for, HS1940, a unique PD-1 knob-domain antibody fragment with unique binding differentiation

compared to full length antibodies for IO vulnerable tumors;

to advance pre-clinical candidate selection activities against HER2/HER3 receptors with various antibody formats, including HS3215

designed for multiple solid tumor types;

create a strategy to develop HS0059 as a bispecific ADC specifically targeted to both HER2 and HER3 receptors in high unmet need

standard-of-care resistant tumors with a high capacity to metastasize;

the discovery of next generation multi-specific (bi- and tri) antibodies with binding capabilities to novel epitopes of combinations

of HER2, HER3, PD-1, PD-L1, TROP2 with and without toxin delivery capacity to multiple high unmet need rare cancers and other validated

immunology and metabolic targets, including glucose-dependent insulinotropic peptide (GIP);

strategic collaboration opportunities including potential M & A transactions to maximize the value of our pipeline to bring novel

therapies to patients suffering from high unmet need conditions

Biomedical Research Institute Research and Development Collaboration and License Agreement

July 5, 2023 (the “ABSI Effective Date”), we entered into a Research and Development Collaboration and License Agreement

(the “ABSI Agreement”) with Applied Biomedical Science Institute (“ABSI”) pursuant to which ABSI granted us an

exclusive royalty-bearing, sublicensable license to the ABSI Patents and a non-exclusive, royalty-bearing, sublicensable license to the

ABSI Know-How to Exploit the ABSI Products for the treatment, diagnosis, prediction, detection or prevention of disease in humans and

animals worldwide (the “Territory”).

Pursuant to the ABSI Agreement, the parties shall form a committee to manage the preclinical,

IND- enabling studies and such other activities as shall lead to the initiation of a Phase 1 clinical trial of the ABSI Product.

parties will collaborate on a Target-by-Target basis to identify and evaluate ABSI Products directed against such Target with a view

to identifying or generating suitable Products for our Company to Exploit.

“Target” means ErB2 (Her2) and ErbB3.

Upon completion

of the Discovery Timeline for a Target, subject to the terms and conditions of ABSI Agreement, we shall exclusively own any ABSI Products

against such Target.

In the event the committee determines that the discovery activities are unsuccessful with respect to a Target, we

may propose an additional target, which, upon approval by ABSI, shall replace a failed Target, each capitalized term as defined in the

ABSI Agreement.

part of the ABSI Agreement, on July 26, 2023, we issued 1,674 shares of our common stock with a per share value of $149.34, representing

total compensation expense of $250,000.

March 11, 2024, we entered into an addendum to the ABSI Agreement to fund research services with quarterly payments of $50,000 beginning

March 18, 2024 with subsequent payments due on the 18 th of each calendar quarter.

Patent License Agreement

November 3, 2023 (the “Avior Effective Date”), we entered into the Avior Patent License Agreement with Avior pursuant to

which we received an exclusive sublicensable right and license to Licensed Patent Rights and Licensed Technology to, among other

things, develop, have developed, make, have made, use, sell, import, export and commercialize TH104 and TH103 and to practice the

Licensed Technology in connection with the foregoing, throughout the world.

Pursuant to the Avior Patent License Agreement, we paid

Avior an up front license fee of $400,000 within ten days of the Avior Effective Date and an additional mid-six digit license fee

which shall be paid in four equal installments within ten days of the end of each fiscal quarter following the Avior Effective Date.

In addition, we shall pay Avior a high single digit percentage of any upfront payments received by us as a result of the grant of

any sublicenses with respect to TH104.

We shall also pay Avior milestone payments in the aggregate amount of $24.25 million upon the

occurrence of various development milestones (the “Development Milestone Payments”).

Furthermore, we shall pay Avior

certain fees based upon sales milestones.

The payments for such sales milestones range from the low seven digits to the low eight

digits with higher sales being subject to higher fees.

Finally, we shall pay Avior royalties based on net sales.

Such royalties

range from low single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages.

Avior Patent License Agreement shall expire upon the expiration of the final payment obligation due to Avior as set forth in such

Upon the expiration of the Avior Patent License Agreement, we shall have a fully paid-up, irrevocable, freely

transferable and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed,

make, have made, use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have

commercialized any and all Licensed Products and to practice the Licensed Technology worldwide.

Pursuant to the Avior Patent License

Agreement, we may terminate the agreement at any time without cause, upon 30 days’ prior written notice to Avior along with

payment of the next unpaid Development Milestone Payment, if any.

Furthermore, either we or Avior may terminate the Avior Patent

License Agreement (i) on written notice to the other party if the other party materially breaches any provision of the Avior Patent

License Agreement and fails to cure such breach within 30 days after the breaching party receives written notice thereof or (ii) on

written notice in the event that either party (A) becomes insolvent or admits its inability to pay its debts generally as they

(B) becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or

insolvency law, which is not fully dismissed or vacated within 60 days;

for such purpose;

(D) makes a general assignment for the benefit of creditors;

or (E) has a receiver, trustee, custodian or similar

agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or

Upon termination of the Avior Patent License Agreement, the license granted pursuant to such agreement shall terminate and

all rights in the Licensed Patent Rights and Licensed Products shall revert back to Avior.

License Agreement

June 17, 2024 (the “Enkefalos Effective Date”), we signed a letter of intent (the “Enkefelos LOI”) to enter into

the Enkefalos License Agreement with Enkefalos Biosciences Inc.

pursuant to which we are licensing the global rights in all fields of

use for the products related to the compounds knows as cyclotides to deliver HER2 antibodies across the blood-brain barrier and all associated

know-how, technology, intellectual property and related information and constructs, and any associated authorized generic rights and

all related assets (collectively, the “Products” referred to in this letter as ENBI-01) from Enkefalos Biosciences, Inc.

Pursuant to the Enkefalos License Agreement, we paid Enkefalos an upfront license fee of $150,000 upon signing of the Enkefalos LOI and

an additional $150,000 license fee to be paid 6 months after the Enkefalos Effective Date.

In addition, we shall pay Enkefalos a $50,000

annual license fee and milestone payments in the aggregate amount of up to $8,500,000 upon the occurrence of various development milestones

(the “Enkefalos Development Milestone Payments”).

Furthermore, we shall pay Enkefalos royalties based on net sales.

royalties range from low-single digit percentages to mid-single digit percentages with higher sales being subject to lower percentages.

The Enkefalos License Agreement shall expire upon the expiration of the final payment obligation due to Enkefalos as set forth in such

Upon the expiration of the Enkefalos Patent License Agreement, we shall have a fully paid, irrevocable, freely transferable

and sublicensable worldwide license to the Licensed Patent Rights and Licensed Technology to Develop, have Developed, make, have made,

use, have used sell, offer for sale, have sold, import, have imported, export, have exported, commercialize or have commercialized any

and all Licensed Products and to practice the Licensed Technology worldwide.

Pursuant to the Enkefalos License Agreement, either the

Company or Enkefalos may terminate the Enkefalos License Agreement on written notice to the other party.

Upon termination of the Enkefalos

License Agreement, the license granted pursuant to such agreement shall terminate and all rights in the Licensed Patent Rights and Licensed

Products shall revert back to Enkefalos.

Patent License Agreement

September 11, 2024 (the “Intract Effective Date”), we entered into a Patent License Agreement (the “Intract

Agreement”) with Intract Pharma Limited, (“Intract”), pursuant to which the Company exclusively licensed

INT-023/TH023, an oral anti-Tumor Necrosis Factor-alpha (TNF-α) monoclonal antibody infliximab.

Under the terms of the Intract

Agreement, we licensed global development and commercialization rights (outside of South Korea) to Intract’s Soteria® and

Phloral® delivery platform along with an existing supply agreement for infliximab to be used in the oral product development

Pursuant to the Intract Agreement, Intract recieved an upfront license fee of $400,000 and is eligible to receive

additional payments upon an equity financing of the Company and for future development, regulatory and commercial

milestones, as well as mid-single digit royalties based on net product sales.

Under the terms of the Intract Agreement, we retain a

right of first refusal to continue development and commercialization after a Phase 2 clinical trial and have the option to exercise

the license to Intract’s platform for up to four additional targets.

The term of the Intract Agreement expires upon the final

payment obligation of the Company under the Intract Agreement.

In addition, the Intract Agreement may be terminated by us at any

time upon 90 days written notice to Intract.

Either party may terminate the Intract Agreement if the other party materially breaches

any provision of the Intract Agreement and fails to cure such breach within thirty (30) days after the breaching party receives

written notice thereof.

In addition, either party may terminate the Intract Agreement on written notice in the event that either

party declare:

(a) becomes insolvent or admits inability to pay its debts generally as they become due;

(b) becomes subject,

voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law, which is not fully

dismissed or vacated within sixty (60) days;

makes a general assignment for the benefit of creditors;

or (e) has a receiver, trustee, custodian or similar agent appointed by

order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.

June 7, 2024, we entered into an at-the-market offering agreement (the “ATM Agreement”) with Rodman & Renshaw LLC

(the “ATM Sales Manager”) under which we may sell, from time to time through the ATM Sales Manager, shares of common stock

in one or more offerings up to a total dollar amount of $1.65 million.

Sales of shares of our common stock through the ATM Sales Manager,

if any, will be made by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415(a)(4)

under the Securities Act of 1933, as amended (the “Securities Act”), including without limitation sales made directly on

the Nasdaq Stock Market LLC or any other existing trading market for the common shares.

Our common stock is being offered and sold pursuant

to the effective shelf registration statement on Form S-3 and an accompanying prospectus declared effective by the U.S.

Securities and

Exchange Commission (the “SEC”) on March 24, 2023, and pursuant to a prospectus supplement dated June 7, 2024.

June 10, 2024, we reported positive results from our Phase 1 clinical trial with TH104.

Results from healthy subjects demonstrated consistent

pharmacokinetic (PK) profiles across buccal and intravenous routes of administration with a comparable safety and tolerability profile

between routes of administration.

This Phase 1 trial was a single-dose, single-center, open-label, randomized 2-way crossover study comparing

16 mg of TH104 with 1 mg intravenous nalmefene administered under fasting conditions, with a 7-day washout period between doses.

healthy subjects were enrolled to complete both doses of the crossover design.

All 20 subjects completed TH104 buccal dosing, while 19

of 20 subjects also completed the intravenous dosing.

The primary objective was to evaluate the absolute bioavailability of TH104, as

well as to assess safety and tolerability.

Findings from the study indicated that the primary endpoint of the study which was absolute

bioavailability (F) of TH104, or fraction (or percentage) of the administered dose absorbed into the systemic circulation compared to

an equivalent intravenous dose of nalmefene, was 0.459 (45.9%).

The median time to maximum concentration (C max ) of TH104 was

2.0 hours, and mean half-life (T 1/2 ) as measured in the blood of subjects was 14 hours after a single buccal administration

of TH104, compared to 9 hours for the 1mg intravenous dose of nalmefene.

These data were consistent and within range of previous findings

of nalmefene in the literature and the Company believes PK results from this Phase 1 trial show proportional kinetics consistent with

published findings of oral and intravenous formulations, suggesting TH104 could be developed for once-daily dosing in a target population

of moderate-to-severe chronic pruritus in PBC patients.

The Phase 1 trial also demonstrated that a 16mg dose of TH104 had a comparable

safety and tolerability profile to the FDA-approved 1mg dose of nalmefene intravenous formulation.

Treatment emergent adverse events

(TEAEs) in this study were reported in 8 subjects (40.0%) in the TH104 group and 7 subjects (36.8%) in the intravenous group.

TEAEs were considered mild in severity.

The most frequently reported TEAE for both TH104 and intravenous treatments was dizziness (4

subjects in the TH104 group;

7 subjects in the intravenous group).

TEAEs reported in at least 2 subjects in any treatment group were

nausea (3 subjects in each group) and somnolence (3 subjects in each group).

There were no serious adverse events reported during this

No subjects discontinued the study due to adverse events.

No subjects exhibited abnormal results for the visual examinations of

the buccal mucosa pre- or post-dosing with TH104 buccal film.

June 17, 2024, we reported positive Type C meeting feedback from the U.S.

Food and Drug Administration (FDA) for our Phase 2

clinical trial with TH104, confirming our plan to pursue a 505(b)(2) approval pathway, which permits inclusion of data from external

studies when the active ingredient is already approved in the United States.

The FDA also agreed that the nonclinical studies

submitted to the FDA in advance of the meeting appear sufficient to support the proposed Phase 2 clinical trial.

In addition, the

FDA provided feedback on study design and certain recommendations regarding PBC patient inclusion, the primary endpoint to assess

pruritus in these patients, and considerations for monitoring for adverse events in this patient population.

Based on this

interaction, in early 2025, we began start up activities in preparation for the Phase 2 trial with TH104 in moderate-to-severe chronic pruritus

in PBC patients.

We plan to plan to initiate a hepatic impairment study prior to launching the Phase 2 study.

On June 7, 2024, we entered into an at-the-market offering agreement (the

“ATM Agreement”) with Rodman & Renshaw LLC (the “Manager”), pursuant to which we may offer and sell, from

time to time, shares of our common stock having an aggregate offering price of up to $1,650,000 through the Manager.

Any shares sold under

the ATM Agreement will be issued pursuant to our effective shelf registration statement on Form S-3 and the related prospectus supplement.

We will pay the Manager a commission of 3.0% of the aggregate gross proceeds from the sales of shares of our common stock sold through

the Manager pursuant to the ATM Agreement.

During the year ended December 31, 2024, we raised gross proceeds of $83,568 pursuant to the

ATM Agreement from the sale of 40,000 shares of our common stock at an average price of $ 2.0892

per share (the “ATM Sale”).

The net proceeds from the ATM Sale during the year ended December 31, 2024 were $ 73,189,

after deducting sales agent commissions of $2,507 and other fees of $7,992.

June 21, 2024, we closed a private placement offering (the “June 2024 PIPE Offering”) with certain accredited investors of

$2.08 million of our securities consisting of shares of our common stock and/or pre-funded warrants to acquire shares of our common stock

and warrants to acquire shares of our common stock.

Net proceeds from the June 2024 PIPE Offering were approximately $1.8 million.

signed a development agreement for TH1014 Phase 2A clinical trial manufacturing on July 25, 2024.

In the study, our CMO will manufacture

four increasing strengths of TH104 active material and their corresponding placebos.

The manufacturing operation is a 5-month program,

where each of the strengths will be released for clinical packaging by the end of the year.

We are pleased to state that the developmental

activities are on track and within budget.

Updates to the developmental activities are provided biweekly, and we currently see no risks

to the timely completion of the activities and procurement of the clinical trial materials in the proposed timeframe.

December 9, 2024, we closed a private placement offering (the “December 2024 PIPE Offering”) with certain accredited investors

of $2.02 million of our securities consisting of shares of our common stock and/or pre-funded warrants to acquire shares of our common

stock and warrants to acquire shares of our common stock.

Net proceeds from the December 2024 PIPE Offering were approximately $1.8 million.

the year ended December 31, 2025, we began a strategic shift in our business to prioritize digital asset treasury management and investment

in the digital asset ecosystem, specifically the Canton Network.

As described in Item 1, from 2022 through late 2025, we primarily operated

as a biotechnology company developing therapeutic candidates in inflammatory and immunologic conditions.

In November 2025, we undertook

a strategic shift to prioritize a disciplined digital asset treasury strategy.

connection with this shift, in November 2025 we completed a private placement offering, strengthening our liquidity and supporting our

digital asset treasury strategy.

Concurrently, we entered into an at-the-market equity program and established a shelf registration statement.

In January 2026, we completed a registered direct offering of common stock and pre-funded warrants, further strengthening our capital

digital asset treasury strategy is centered on acquiring, holding and deploying Canton Coin (“CC”) and supporting the Canton

Network through validator operations, application support and ecosystem participation.

results of operations for the year ended December 31, 2025 reflect our two reportable segments:

legacy biotechnology operations, and

our digital asset treasury strategy initiated in November 2025.

See Note 10 to our consolidated financial statements included elsewhere

in this Annual Report on Form 10-K for additional segment financial performance information.

of Results of Operations

43 unchanged sentences

travel expenses and other operating costs that are not specifically attributable to research activities.

General and administrative

expenses also include expenses related to our canton-centric digital asset treasury strategy.

expect that our general and administrative expenses will increase in the future as we increase our personnel headcount to support our

continued research activities and development of our product candidates.

We also incur expenses associated with being a public company,

including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, directors and officers insurance expenses,

corporate governance expenses, investor relations activities and other administrative and professional services.

digital asset treasury strategy and continued research activities and development of our product candidates.

We also incur expenses associated

with being a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, directors

and officers insurance expenses, corporate governance expenses, investor relations activities and other administrative and professional

income consists of interest income from funds held in our cash accounts.

Loss from Digital Asset Holdings

unrealized gain (loss) from digital assets holdings represents the change in fair value of our digital assets.

We use a USD/CC reference

price from a crypto market data provider for purposes of periodic fair value remeasurement.

of Operations

1 unchanged sentence

following table sets forth key components of our results of operations for the years ended December 31, 2025 and 2024.

Consolidated Statements

of Operations Data:

Operating expenses:

and administrative

Consolidated Statements of Operations Data:

Operating expenses:

Research and development

$ (3,318,133 )

General and administrative

Total operating expenses

Other income (expense):

Interest expense

other income (expense)

Interest income

Unrealized loss from digital assets holdings

(22,010,362 )

Total other income (expense)

(21,997,297 )

(22,233,521 )

Total loss before income taxes

$ (42,103,363 )

$ (12,197,568 )

$ (29,905,795 )

and Development Expenses

and development expenses increased by $2.8 million, or 80%, to $6.4 million for the year ended December 31, 2024 from $3.6 million for

table below summarizes by program our research and development expenses for the periods presented:

Year Ended December 31,

The increase was primarily the result of an increase in clinical trial expenses of approximately $1.6 million

due to completion of our Phase 1 clinical trial and start-up costs related to our Phase 2 clinical trial in TH104, an increase of $1.8

million in license fees, and an increase of $0.2 million in regulatory fees.

These increases were offset by a decrease of $0.7 million

in pre-clinical vendor expenses and a decrease of $0.1 million in stock-based compensation expense related to our research and development

Other research and development

Total research and development expenses

$ (3,318,133 )

and development expenses decreased by $3.3 million, or 52%, to $3.1 million for the year ended December 31, 2025 from $6.4 million for

year ended December 31, 2024.

The decrease was primarily the result of decreases in (i) clinical trial expenses of approximately $1.6

million due to completion of our Phase 1 clinical trial and offset by start-up costs related to our Phase 2 clinical trial in GV104,

(ii) license fees of $1.5 million, (iii) pre-clinical expenses of $0.9 million.

These decreases were offset by an increase of $0.3 million

in CMC expenses and an increase of $0.1 million in stock-based compensation expense and $0.2 million in wages related to our research

and development personnel.

and Administrative Expenses

1 unchanged sentence

for the year ended December 31, 2024.

The change in general and administrative expenses was primarily due to a decrease of $0.2 million

in investor relations, a decrease of $0.4 million in insurance, and a decrease of $0.1 million in stock-based compensation expense related

to our general and administrative personnel.

These decreases were offset by an increase in wages of $0.4 million, an increase in $0.1

million in general corporate, and an increase of $0.1 million in director remuneration.

expense decreased by $2,821, or 17%, to $13,684 for the year ended December 31, 2024 from $16,505 for the year ended December 31, 2023.

The decrease in interest expense was primarily related to the decrease in D&O insurance premium financing liability.

income increased by $97,277, or 64%, to $249,908 for the year ended December 31, 2024 from $152,631 for year ended December 31, 2023.

The increase in interest income was primarily due to the increase in cash from the June 2024 and December 2024 PIPE Offerings as well

as a higher balance toward the end of 2023 which existed for most of 2024

The change in general and administrative expenses was primarily due to increases of (i) $7.3 million

in general and administrative personnel expenses including bonuses, (ii) $1.5 million in investor relations, (iii) $2.0 million in stock-based

compensation expense related to our general and administrative personnel (iv) $0.2 million in public company expenses, and (v) $0.1 million

in other general corporate.

These increases were offset by a decrease in professional fees of $0.2 million.

expense increased by $14,661, or 107%, to $28,345 for the year ended December 31, 2025 from $13,684 for the year ended December 31, 2024.

The increase in interest expense was primarily related to the director and officer insurance premium financing liability as well as a

note payable which was fully paid as of December 31, 2025.

income decreased by approximately $0.2 million, or 83%, to less than $0.1 million for the year ended December 31, 2025 from $0.3 million

for year ended December 31, 2024.

The decrease in interest income was primarily due to the decrease in cash during 2025 and a decrease

in interest rates.

Loss from Digital Assets Holdings

loss from digital assets holdings increased to $22.0 million for the year ended December 31, 2025 from $0 for year ended December 31,

This was the result of the contribution of digital assets from the Cryptocurrency Offering in November 2025 and subsequent digital

asset purchases, where the reference price of CC as of December 31, 2025 was less than the weighted average cost of our CC holdings.

and Capital Resources

4 unchanged sentences

net cash used in operating activities, and had an accumulated deficit of approximately $72.8 million as of December 31, 2025.

December 31, 2024, we have primarily financed our operations through public and private offerings of our equity securities.

net proceeds from our initial public offering (“IPO”) on January 14, 2022 of approximately $12.5 million.

Additionally, we

closed the May 2023 Offering and November 2023 Offering, public offerings with net proceeds of approximately $2.1 million and $8.7 million,

respectively.

the year ended December 31, 2024, we raised gross proceeds of $83,688 pursuant to the ATM Agreement from the sale of 40,000 shares of

our common stock at an average price of $2.0892 per share.

The net proceeds from the ATM Sale during the year ended December 31, 2024

were $73,189, after deducting sales agent commissions of $2,507 and other fees of $7,992.

Further, on June 17, 2024 and December 9, 2024, we closed private placement offerings (the “June 2024 PIPE Offering”

and “December 2024 PIPE Offering”) with certain accredited investors, consisting of offerings of shares of our common stock

and/or pre-funded warrants to acquire shares of our common stock and warrants to acquire shares of our common stock, with combined net

proceeds of approximately $3.6 million.

The shares of our common stock began trading on The Nasdaq Capital Market on January 12, 2022

under the ticker symbol “HILS” and effective as of September 25, 2023, are traded under the ticker symbol “THAR.”

on our limited operating history, recurring negative cash flows from operations, current plans and available resources, we will need

substantial additional funding to support future operating activities.

We have concluded that the prevailing conditions and ongoing liquidity

risks faced by us raise substantial doubt about our ability to continue as a going concern for at least one year following the date these

consolidated financial statements included elsewhere in this Annual Report on Form 10-K are issued.

The accompanying consolidated financial

statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

may seek to raise additional funding through the sale of additional equity or debt securities, enter into strategic partnerships, grants

or other arrangements or a combination of the foregoing to support our future operations;

however, there can be no assurance that we

will be able to obtain additional capital on terms acceptable to us, on a timely basis, or at all.

The failure to obtain sufficient additional

funding could adversely affect our ability to achieve our business objectives and product development timelines and may result in delaying

or terminating clinical trial activities which could have a material adverse effect on our results of operations.

December 31, 2025, we have primarily financed operations through public and private offerings of equity securities.

the year ended December 31, 2024, we sold 203,359 shares of our common stock pursuant to the 2024 ATM Agreement for net proceeds of approximately

$0.3 million, after deducting commissions of $15,506 and other offering fees of $41,952.

During the year ended December 31, 2025, we

sold 1,657,799 shares of our common stock pursuant to the 2025 ATM Agreement for net proceeds of approximately $5.1 million, after deducting

commissions of approximately $0.1 million.

on June 17, 2024, December 9, 2024, June 13, 2025, and July 25, 2025, we closed private placement offerings (the “June 2024 PIPE

Offering,” “December 2024 PIPE Offering,” “June 2025 PIPE Offering,” and the “July 2025 PIPE Offering,”

respectively) with certain accredited investors, consisting of shares of our common stock and/or pre-funded warrants to acquire shares

of our common stock and common warrants to acquire shares of our common stock.

The combined net proceeds received from these offerings

was approximately $7.0 million.

addition, on July 23, 2025 and August 26, 2025, we closed registered direct public offerings (the “July 2025 Direct Offering”

and the “August 2025 Direct Offering”) with certain investors, consisting of shares of our common stock and/or pre-funded

warrants to acquire shares of our common stock and common warrants to acquire shares of our common stock, with combined net proceeds

of approximately $6.3 million.

November 2025, we closed the Cash Offering for net proceeds of approximately $90.9 million in cash and the Cryptocurrency Offering for

net proceeds of approximately $446.2 million in cryptocurrency.

the prior reporting period, we identified certain conditions that raised substantial doubt about our ability to continue as a going concern.

These conditions included our limited operating history, recurring operating losses, and recurring negative cash flows from operations

as described above.

However, on November 3, 2025, we raised net proceeds of over $537 million through a private placement offering.

a result, we believe we now have sufficient liquidity to fund anticipated cash requirements for operations and working capital purposes

through at least March 2027.

As a result, the previously disclosed going concern uncertainty language has been removed as substantial

doubt no longer exists regarding our ability to continue as a going concern.

Flow Activities for the Years Ended December 31, 2025 and 2024

following table sets forth a summary of our cash flows for the periods presented.

Ended December 31,

Year Ended December 31,

Net cash used in operating activities

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$ (10,901,991 )

Net cash used in investing activities

(77,572,567 )

Net cash provided by financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

$ (7,375,991 )

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used in operating activities for the year ended December 31, 2025 was $16.0 million which consisted of net loss of $42.1 million, partially

offset by non-cash stock-based compensation of approximately $0.7 million, non-cash stock issuance pursuant to a services agreement of

less than $0.1 million, and net changes in operating assets and liabilities of approximately $0.6 million.

offset by non-cash stock-based compensation of approximately $2.9 million, unrealized loss from digital asset holdings of approximately

$22.0 million, write-off of deferred offering costs of $0.1 million, and net changes in operating assets and liabilities of approximately

$1.1 million.

used in operating activities for the year ended December 31, 2024 was $10.9 million which consisted of net loss of $12.2 million, partially

offset by non-cash stock-based compensation of approximately $0.7 million, non-cash stock issuance pursuant to a services agreement of

approximately $0.4 million, and net changes in operating assets and liabilities of approximately $0.8 million.

less than $0.1 million, and net changes in operating assets and liabilities of approximately $0.6 million.

Flows from Investing Activities

used in investing activities for the year ended December 31, 2025 was $77.6 million, representing the purchase of digital assets.

were no cash flows from investing activities during the year ended December 31, 2024.

Flows from Financing Activities

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The net increase in financing activities was

due to proceeds from the PIPE Offerings of $4.1 million, proceeds from the ATM Sale of $0.1 million and insurance premium financing

liability of $0.4 million, offset by payments of deferred offering costs of $0.7 million and repayments of insurance premium financing

liability of $0.4 million.

due to proceeds from the Cash Offering of $99.4 million, proceeds from the PIPE offerings of $3.7 million, proceeds from the registered

direct public offerings of $7.1 million, proceeds from the ATM offerings of $5.5 million, proceeds from the exercise of warrants of $1.5

million and proceeds from option exercises of $0.2 million.

These increases were offset by payments of deferred offering and other issuance

costs of $10.0 million and repayment of note payable of $0.2 million.

provided by financing activities for the year ended December 31, 2024 was $3.5 million.

The net increase in financing activities was

from net cash proceeds of $12.2 million from the issuance of our common stock in connection with public offerings and $0.7 million in

proceeds received from insurance premium financing liability offset by deferred offering costs of $0.5 million and $0.7 million in repayments

of insurance premium financing liability.

due to proceeds from the PIPE Offerings of $4.1 million, proceeds from the ATM Sale of $0.1 million and insurance premium financing liability

of $0.4 million, offset by payments of deferred offering costs of $0.7 million and repayments of insurance premium financing liability

of $0.4 million.

May 24, 2024, the Company effectuated an additional reverse split of shares of its common stock at a ratio of 1-for-15 pursuant to an

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and management must select an amount that falls within that range of reasonable estimates.

Estimates are used in the following areas,

among others:

research and development expense recognition, stock-based compensation, allowances of deferred tax assets, and cash flow

assumptions regarding going concern considerations.

Although management believes the estimates that have been used are reasonable, actual

results could vary from the estimates that were used.

We consider the following areas to be our

critical accounting estimate:

fair value of digital assets, research and development expense recognition, stock-based compensation, allowances

of deferred tax assets, and cash flow assumptions regarding going concern considerations.

Although management believes the estimates

that have been used are reasonable, actual results could vary from the estimates that were used.

Accounting Policies

account for digital assets, which are comprised of CC, as indefinite-lived intangible assets in accordance with Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-60, Intangibles—Goodwill and

Other-Crypto Assets .

Our digital assets are initially recorded at cost.

Subsequently, they are measured at fair value with the gain

or loss associated with remeasurement of the digital assets recognized in net income (loss) during each reporting period.

Upon disposal

of a digital asset (e.g., by sale, exchange or transfer), we derecognize the asset and recognize a realized gain or loss in net income,

calculated as the difference between the sale proceeds and the asset’s carrying amount.

fair value of the digital assets is determined based on the quoted price in its principal market at the time of measurement.

its principal market as the market that it has access to and has the greatest volume and level or orderly transactions in accordance

with FASB ASC 820, Fair Value Measurement .

We track the cost of its digital assets using the first-in-first-out (FIFO) method.

and development

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recognize compensation costs resulting from the issuance of stock-based awards to employees, non-employees and directors as an expense

in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each

stock-based award.

The fair value of each option grant to employees, non-employees and directors is estimated as of the date of grant

using the Black-Scholes option-pricing model, net of actual forfeitures.

The fair value is amortized as compensation cost on a straight-line

basis over the requisite service period of the awards, which is generally the vesting period.

in the consolidated statements of operations over the requisite service period based on a measurement of fair value for each stock-based

The fair value of each option grant to employees, non-employees and directors is estimated as of the date of grant using the Black-Scholes

option-pricing model, net of actual forfeitures.

The fair value is amortized as compensation cost on a straight-line basis over the requisite

service period of the awards, which is generally the vesting period.

fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis