Canton Strategic Holdings, Inc. 10-K

ITEM 1. BUSINESS Overview We are the first publicly traded company to leverage Canton Coin (“CC”) and support the Canton Network to advance institutional blockchain adoption and the digitization of financial markets. In addition to driving value through activities on the Canton Network, we also operate clinical-stage biotech research and development programs. From 2022 through late-2025, we primarily operated as a biotechnology company, developing therapeutic candidates in inflammatory and immunologic conditions with high unmet need. In November 2025, we undertook a strategic shift to prioritize disciplined digital asset treasury management and investment in the digital asset ecosystem, specifically the Canton Network. Since November 2025, we have strengthened our liquidity and expanded our access to capital through a public offering of common stock and private placements, and by establishing a shelf registration statement and our ATM Program (as defined below). Our Digital Asset Treasury Strategy We believe that the configurable privacy enabled by the Canton Network’s blockchain technology is transforming the future of global finance by connecting leading institutions on a single, secure, and interoperable blockchain. With trillions of assets represented on-chain and the support of major market participants, the Canton Network delivers real-world utility, privacy, and atomic settlement. CC plays a critical role as the utility token for transactions on the Canton Network, with a purposefully designed tokenomics policy that seeks to drive transparency and align incentives across the ecosystem. Our strategic digital asset reserve of CC reflects our conviction in the potential of the Canton Network to drive efficiency, transparency, and resiliency in global markets. This Canton digital asset treasury strategy is part of our broader approach to enhancing our platform with capital efficiency, diversifying treasury management practices, and engaging with emerging financial technologies. We intend to execute a diverse strategy with the following key elements: ● Validator Operations and Network Participation : We operate as a Super Validator and intend to run additional validator nodes on the Canton Network. Through these activities, we expect to earn recurring protocol-based validation rewards in CC and support network security, resiliency, and governance. ● Application Support and Strategic Investments : We plan to build, sponsor, or invest in applications and middleware that complement capital markets transactions conducted on the Canton Network. These activities may include investments in technology providers, workflow solutions, and financial products designed to drive network utilization and expand institutional adoption, with the objective of increasing transaction activity and long-term network value. Our focus is on projects and companies that are built on, or tightly integrated with the Canton Network. ● Collaboration and Ecosystem Advancement : We plan to collaborate with other Super Validators and other ecosystem participants, including financial institutions, technology providers, and application developers. We believe championing such broad-based participation will enhance the use case for Canton Network infrastructure and workflows, including custody, asset issuance, settlement, collateral and margin management, payments, and the integration of public and private market interfaces. ● Capital Raising and Treasury Expansion : We may, from time to time, access the capital markets, including through our ATM program and other offerings, with the objective of deploying a portion of the net proceeds toward additional CC acquisitions and Canton-related ecosystem investments. The Company may also evaluate alternative financing structures designed to increase its CC exposure in a manner intended to be accretive to shareholders on a per-share basis, subject to market conditions and risk management considerations. 5 ● Token Management - Locking, Lending, and Options : We expect to deploy a portion of our CC holdings into long term locking programs, where applicable, to align with Canton governance frameworks and seek enhanced rewards. We may also engage in CC lending and secured financing transactions to generate additional yield and improve capital efficiency, and we may utilize CC linked options and other derivative income strategies—such as selling options or hedging structures—to manage risk and potentially enhance returns on our CC portfolio. ● Canton Foundation : We are active participants in the Canton Foundation and a member of the Foundation Board. Through this role, we help shape the Canton Network’s governance framework, tokenomics, and strategic roadmap, and we believe our participation aligns our long term interests with those of the broader ecosystem and its institutional users. ● Governance and Risk Management : Our board of directors retains broad discretion over investment, treasury, validator, and leverage policies and may amend or modify the digital assets treasury strategy. All CC acquisitions, validator operations, and treasury management activities (including locking, lending, and options) are overseen by senior management and the Board. The Company intends to maintain internal controls, custody arrangements, risk limits, and compliance protocols designed to support the prudent execution of its strategy. The strategy is designed to supplement our capital allocation framework by integrating a forward-looking, technology-driven approach to treasury management. Over time, participation in the Canton Network—through infrastructure operations, token management, and strategic ecosystem investments—may offer strategic advantages for product development and global expansion. Overview of Canton Network and Canton Coin Canton Network is a public, permissionless blockchain with privacy proven to work at institutional scale. Unlike traditional public blockchains, Canton operates as a “network of networks,” where independently governed applications interoperate securely through decentralized public infrastructure called the Global Synchronizer. We view the following Canton Network developments as particularly relevant to our strategy: Built for Institutional Privacy . Canton’s protocol implements “proof-of-stakeholder” validation which, unlike traditional proof-of-stake networks, ensures that only the parties to a transaction can see and validate it. The Global Synchronizer uses Byzantine Fault Tolerant consensus to time-order cross-application transactions, keep participants in sync and prevent conflicts. It doesn’t replicate and broadcast all data globally; it coordinates proofs between participants, ensuring everyone reaches the same outcome, while always preserving privacy. Network Scale and Institutional Adoption. Major institutions, fintechs and a fast-growing builder community create applications on Canton to transact and synchronize assets and data atomically, 24/7, with highly configurable privacy. Today, applications running on Canton enable cross-market settlement and asset mobility without compromising confidentiality and process more than $6 trillion in tokenized real-world assets, including over $350 billion in daily U.S. Treasury repo. The Global Synchronizer is independently stewarded by the neutral Canton Foundation, which facilitates open governance, covering protocol oversight and improvement proposals. Differentiated Tokenomics . CC is the native utility token of the network, used to pay traffic fees for the Global Synchronizer, and to reward those who contribute measurable utility to the ecosystem. Every coin in circulation is earned through network participation only. Such participation includes application providers building high-utility apps, users driving activity, Validators, and infrastructure operators (Super Validators). CC’s fair-launch and incentive alignment across the network anchors the token in real-world transactions and utility over speculation. CC supply follows a declining issuance curve designed to reward early contributors while trending toward long-term sustainability. CC issuance started high to bootstrap participation and app development, then halves periodically (with the next halving in the second quarter of 2029) to balance inflation and burn. The share of new CC issuances is now shifting from favoring Super Validators to applications and Validators. Unlike other networks, approximately two-thirds of total supply over the first 10 years is available as rewards for application providers and Validators, with approximately one-third to Super Validators. 6 CC follows a burn-and-mint equilibrium model that ties supply to verified network activity rather than fixed inflation or pre-minted reserves. It provides a dynamic balance between fixed, dollar-denominated fees and a floating CC market price against a known issuance curve. Fees are fixed in $ terms, with users paying a set $ / MB for transactions that use the Global Synchronizer. The quantity of CC burned depends on market price: users pay for network fees by burning the $USD equivalent amount of CC at the on-chain conversion rate. If the price is too high relative to on-chain activity, mint exceeds burn (net inflation), creating downward pressure on price. If the price is too low relative to activity, burn exceeds mint (net deflation), creating upward pressure on price. Over time, the system seeks an equilibrium where long-run net supply change approaches zero. Because equilibrium can occur at different price/activity combinations, the ultimate total CC supply is not predetermined. This mechanism ensures that Canton’s token economy remains sustainable, utility-aligned, and structurally supported as adoption scales — unlike the fixed-inflation models of many other L1 networks. Custody of our CC Tokens We hold substantially all of our CC tokens in custody accounts with institutional-grade custodians that have demonstrated records of regulatory compliance and information security. As a result, the primary counterparty risk we are exposed to with respect to our CC tokens is performance obligations under the various custody arrangements into which we have entered. We custody our CC tokens across multiple custodians to diversify our potential risk exposure to any one custodian. We carefully select the custodians that custody our CC tokens after undertaking a due diligence process. We negotiate specific contractual terms and conditions with our custodians that we believe will help establish, under existing law, that our property interest in the CC tokens held by our custodians is not subject to the claims of the custodian’s creditors in the event the custodian enters bankruptcy, receivership or similar insolvency proceedings. All of our custodians are subject to regulatory regimes intended to protect customers in the event that a custodian enters bankruptcy, receivership or similar insolvency proceedings. Based on existing law and the terms and conditions of our contractual arrangements with our custodians, we believe that the CC tokens held on our behalf by our custodians would not be considered part of a custodian’s bankruptcy estate were one or more of our custodians to enter bankruptcy, receivership or similar insolvency proceedings. For a discussion of risks relating to the custody of our CC tokens, see “Item 1A. Risk Factors— Risks Related to Our CC Strategy and Holdings — We face risks relating to the custody of our CC tokens, including the loss or destruction of private keys required to access our CC tokens and cyberattacks or other data loss relating to our CC tokens, including smart contract related losses and vulnerabilities.” Our Therapeutic Candidate Developments Through our subsidiary Gravitas, we develop therapeutic candidates in immunology and inflammation with high unmet need. 7 Our Product Pipeline GV 104 GV104 (formerly TH104) is a proprietary buccal film formulation of nalmefene, a long-acting opioid antagonist, being developed for prophylactic protection against synthetic opioid exposure in military and first responder populations. GV104 is a buccal film containing 16 mg of nalmefene, designed for rapid absorption through the oral mucosa. The film is approximately the size of a dime, enabling discreet and convenient administration without water or injection equipment. Buccal delivery bypasses hepatic first-pass metabolism, resulting in higher bioavailability compared to oral administration. Nalmefene is a 6-methylene derivative of naltrexone with pharmacological properties that address the limitations of naloxone. In a head-to-head clinical study comparing intramuscular nalmefene to intramuscular and intranasal naloxone for reversal of fentanyl-induced respiratory depression, nalmefene demonstrated a plasma half-life of 8 to 11 hours compared to 30 to 90 minutes for naloxone, and mu-opioid receptor binding affinity approximately 3.6 to 5.4 times higher than naloxone. 3 In this study, nalmefene achieved faster onset, greater magnitude, and longer duration of respiratory depression reversal, with 100% of subjects achieving respiratory recovery compared to 60-80% for naloxone formulations. 4 We are pursuing FDA approval through the 505(b)(2) regulatory pathway, which permits reliance on the FDA’s prior findings of safety and effectiveness for REVEX (nalmefene hydrochloride injection), which was approved by the FDA in 1995 and determined by the FDA in November 2017 to not have been withdrawn from sale for reasons of safety or effectiveness. 5 Following a Type C meeting with the FDA in March 2025, we confirmed that no additional clinical trials are required to support our NDA submission. We anticipate initiating a rolling NDA submission in the first half of 2027, with FDA approval anticipated in the first half of 2028. GV023 GV023 (formerly TH023), is an oral anti-tumor necrosis factor-alpha (TNF-α) monoclonal antibody, infliximab. On September 11, 2024, we entered into a Patent License Agreement (the “Intract Agreement”) with Intract Pharma Limited (“Intract”), pursuant to which, we exclusively licensed GV023. Infliximab is a purified recombinant DNA-derived chimeric IgG monoclonal antibody protein that contains both murine and human components that inhibit tumor TNF-a. 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. 3 Cipriano A, Apseloff G, Kapil RP, He E, Shet M, Harris SC. Time Course of Reversal of Fentanyl-Induced Respiratory Depression in Healthy Subjects by Intramuscular Nalmefene and Intramuscular and Intranasal Naloxone. J Clin Pharmacol. 2025;65(2):206-216. PMID: 39347921. 4 Wang DS, Sternbach G, Varon J. Nalmefene: A Long-Acting Opioid Antagonist. Clinical Applications in Emergency Medicine. J Emerg Med. 1998;16(3):471-475. PMID: 9610980 5 FDA. Determination That REVEX (Nalmefene Hydrochloride Injection) Was Not Withdrawn From Sale for Reasons of Safety or Effectiveness. Federal Register. 2017;82(212):51051-51052. November 3, 2017. 8 GV023, an oral formulation of infliximab, addresses a critical limitation of the IV gold standard by eliminating the treatment burden of repeated intravenous infusions. By enabling patient self-administration, an oral TNF-alpha inhibitor may potentially improve medication adherence and persistence while expanding treatment access to patients who currently defer IV therapy due to infusion center barriers, needle anxiety, or lifestyle constraints. Company Developments In the fourth quarter of 2025 and into early 2026, the Company completed a series of significant financing transactions and related strategic initiatives designed to fund its digital asset treasury and CC treasury strategy, validator operations and related activities. November 2025 PIPE In November 2025, the Company completed a private placement offering with accredited investors providing for a private investment in public equity transaction, consisting of (i) the sale of an aggregate of 25,966,048 shares of common stock and cash pre-funded warrants (the “Cash Offering”) and (ii) the issuance of cryptocurrency pre-funded warrants in exchange for CC (the “Cryptocurrency Offering”) contributed by participating investors. We raised in aggregate gross proceeds of approximately $545 million before fees and expenses. Under the terms of the offering, a limited portion of available cash was designated for legacy operating expenses and existing management compensation, with the balance of proceeds allocated to transaction expenses and the acquisition of CC and implementation of the Company’s CC treasury and validator strategy. January 2026 Offering Subsequently, on January 20, 2026, the Company entered into an underwriting agreement with Clear Street LLC, as sole underwriter, for an underwritten registered direct offering to a single institutional investor consisting of 1,800,000 shares of common stock and pre-funded warrants to purchase up to 17,000,000 additional shares at a per share offering price of $2.9200 (less $0.0001 per pre-funded warrant share). The Company announced the closing of this offering for gross proceeds of approximately $54.9 million on January 22, 2026. Collectively, these financings and governance actions were undertaken to strengthen the Company’s capital base and support execution of its revised treasury and network participation strategy. ATM Program Concurrently with the closing of the PIPE Transaction, on November 6, 2025, the Company entered into an at-the-market sales agreement (the “Original Sales Agreement”) with Clear Street LLC (“Clear Street”) and President Street Global, LLC (“President Street”) providing for the offer and sale of shares of its common stock having an aggregate offering price of up to $64,910,161 from time to time under Rule 415 under the Securities Act. On December 3, 2025, President Street provided a notice pursuant to the Sales Agreement to terminate its role as a sales agent, and Clear Street became the sole sales agent. On March 3, 2026, the Company entered into an amended and restated sales agreement (the “Sales Agreement”), with Clear Street and Virtu Americas LLC (“Virtu”, and together with Clear Street, the “Sales Agents”), relating to the sale of shares of the Company’s common stock. The Sales Agreement amends and restates the Original Sales Agreement. Pursuant to the Sales Agreement, the aggregate gross sales price of Common Stock available for issuance under the Sales Agreement is $300,000,000, and such amount excludes the Common Stock previously sold under the Original Sales Agreement. 9 Management Changes In connection with the adoption of the Company’s Digital Asset Treasury Strategy, Sireesh Appajosyula resigned as Chief Executive Officer, effective November 6, 2025. The Board of Directors (the “Board”) appointed Mark Wendland as Chief Executive Officer and Mark Toomey as President, effective the same date. Also on November 6, 2025, Nancy Davis and Sanam Parikh resigned as members of the Board, and Mr. Wendland was appointed to the Board. On December 10, 2025, the Board appointed Jacob Asbury as Chief Financial Officer, and Mr. Appajosyula resigned as Interim Chief Financial Officer, continuing his service as a director and as Chief Executive Officer of Gravitas Life Sciences, Inc., a subsidiary of the Company. At the shareholders meeting held on January 30, 2026, shareholders approved the election of Jill Sommers and William Wiley, to serve as directors. Concurrently with the election of these two director nominees, James Gordon Liddy resigned from the Board. On February 5, 2026, the Board appointed Angela Dominy Radkowski as Chief Operating Officer, Vincent LoPriore stepped down as Chairman and Mark Wendland was elected as the new Chairman. Competition We face different competition for our biotech research and development operations and our digital asset treasury. The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products and intellectual property. We face competition from major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, emerging and start-up companies, universities and other research institutions both in the United States and internationally. Any drug candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future. Our digital asset strategy generally involves, from time to time and subject to market conditions, (i) issuing equity or debt securities or entering into other capital raising transactions with the objective of using the proceeds to acquire CC and other Canton Network–based digital assets and to fund validator, staking and network participation activities, and (ii) deploying excess liquid assets beyond working capital requirements into CC and related on-network positions. In pursuing this strategy, we compete for capital and asset acquisition opportunities with a range of market participants, including digital asset treasury companies, tokenization and real-world asset platforms digital asset investment vehicles and ETPs, private funds and venture-backed entities focused on blockchain infrastructure. Increased competition for investor capital, strategic allocations to network-native assets, validator slots, and high-quality on-network yield opportunities could increase our cost of capital, reduce the availability of attractive acquisition or participation opportunities, and adversely affect our ability to scale our digital asset treasury and Canton-based treasury activities, which in turn could negatively impact our operating results and the market price of our securities. Manufacturing We do not own or operate any facilities in which we can formulate or manufacture our product candidates. We intend to rely on contract manufacturers to produce all materials required to conduct pre-clinical studies and clinical trials under current good manufacturing practice (“cGMP”), with oversight of these activities by our management team. We have identified alternate sources of supply and other contract manufacturers that can produce materials for our pre-clinical and clinical trial requirements on a timely basis. However, if an existing or future contract manufacturer fails to deliver on schedule, or at all, it may delay or interrupt the development process for our product candidates, which may have an adverse effect on our operating results and estimated timelines. Intellectual Property We strive to protect the intellectual property that is available to us, including by obtaining, maintaining, defending, and enforcing patent protection in the United States and internationally. For our product candidates, generally we initially pursue patent protection covering compositions of matter, methods of production, and methods of use. Throughout the development of our product candidates and technologies, we will seek to identify additional means of obtaining patent protection. 10 Our patent portfolio includes four patent families with two issued U.S. patents and 14 pending applications related generally to transmucosal film compositions, treatment of pruritus, and treatment of opioid intoxication. The claims of these patents and applications cover devices and their method of manufacture, as well as methods of treating. Specifically, our patent portfolio currently includes two issued U.S. patents, one allowed U.S. patent application, two additional pending applications in the U.S., 5 issued patents abroad, and 10 pending applications abroad. Patent protection is expected to expire between 2039 and 2046, absent any applicable patent term adjustments or extensions. The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the U.S., the patent term is 20 years from the earliest filing date of a non-provisional patent application. We also have issued patents and pending applications related generally to our polymeric nanoparticle technologies, methods of making our polymeric nanoparticle technologies, and methods of using our polymeric nanoparticles therapeutically ( e.g ., for delivery of therapeutic compounds). Patent protection for the earliest-filed family is expected to expire in 2033, absent any applicable patent term adjustments or extensions, with more recently filed families expiring approximately between 2033 and 2041. We also entered into multiple research collaboration and license agreements to secure rights to technologies, patents, and know-how supporting development of its biologic and antibody-based product candidates. Under agreements with Minotaur Therapeutics, Inc., the Company obtained rights to certain technologies, to discover and develop targeted biologics against high-value immune-oncology targets, including PD-1. The Company also entered into a Research and Development Collaboration and License Agreement with Applied Biomedical Science Institute granting it an exclusive, sublicensable, royalty-bearing license to specified patents and a non-exclusive license to related know-how. Additional exclusive or sublicensable global licenses have been obtained from Avior, and Intract Pharma Limited. These agreements collectively provide the Company with development and commercialization rights, subject to field, territory, and diligence obligations, and are material to its intellectual property portfolio and product development strategy. Government Regulations Digital Assets and CC The laws and regulations applicable to digital assets are evolving and subject to interpretation and change. Governments around the world have reacted differently to digital assets; certain governments have deemed them illegal, and others have allowed their use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain and evolving regulatory requirements. As digital assets have grown in both popularity and market size, the U.S. Executive Branch, Congress and a number of U.S. federal and state agencies, including the Financial Crimes Enforcement Network, the Commodity Futures Trading Commission (“CFTC”), the SEC, the Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS and state financial regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital assets. Depending on the regulatory characterization of CC, the markets for CC in general, and our activities in particular, our business and our CC strategy may be subject to regulation by one or more regulators in the United States and globally. Ongoing and future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers and financial institutions in these markets, and our ability to pursue our digital asset strategy. Additionally, U.S. state and federal and foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets activity. U.S. federal and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution systems. Many state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining in their respective states. 11 The CFTC takes the position that some digital assets fall within the definition of a “commodity” under the Commodity Exchange Act of 1936, as amended (the “CEA”). Under the CEA, the CFTC has broad enforcement authority to police market manipulation and fraud in spot digital assets markets in which we may transact. Beyond instances of fraud or manipulation, the CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize margin, leverage, or financing. In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures, swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the markets on which these products trade. The SEC and its staff have taken the position that certain other digital assets fall within the definition of a “security” under the U.S. federal securities laws. Public statements made by senior officials and senior members of the staff at the SEC indicate that the SEC does not consider certain digital assets to be a security under the federal securities laws. However, such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot be generalized to any other digital assets. In addition, since transactions in digital assets provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as money laundering. This misuse, or the perception of such misuse, could lead to greater regulatory oversight of CC and the Canton Network, and there is the possibility that law enforcement agencies could close or blacklist CC platforms or other related infrastructure with little or no notice and prevent users from accessing or retrieving CC held via such platforms or infrastructure. For example, the U.S. Treasury Department’s Office of Foreign Assets Control has issued updated advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service providers to the Specially Designated Nationals and Blocked Persons list and engaged in several enforcement actions, including a series of enforcement actions that have either shut down or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or North Korean nationals. Additionally, in January 2025, the Consumer Financial Protection Bureau announced that it is seeking public input on privacy protections and surveillance in digital payments, particularly those offered through large technology platforms. Legislation is currently pending in the U.S. Congress which, if passed and signed into law, could significantly affect the digital currency and digital asset markets. One such piece of legislation is the Digital Asset Market Clarity Act of 2025 (“CLARITY Act”), which would clarify which digital currencies and digital assets are commodities, as opposed to securities. Additionally, the CLARITY Act would subject certain spot-market digital commodities to a comprehensive regulatory regime for the first time. For example, the legislation would require several different types of entities to register with the CFTC and/or SEC and comply with various regulatory requirements that would be promulgated by the CFTC and SEC. Further, the legislation would require issuers of new and “non-mature” digital commodities to make a mandatory filing with the SEC containing information regarding the issuer, planned use of proceeds, economics, governance and development roadmap. The details of the legislation are likely to change from its current form as it is reviewed and revised by the U.S. Congress, and it is unknown at this time whether it will be approved. Biopharmaceutical Governmental authorities in the U.S. and other countries extensively regulate the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of pharmaceutical products such as those being developed by us. In the U.S., the FDA regulates such products under the FDCA and its implementing regulations. Failure to comply with applicable FDA requirements, both before and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions and/or criminal prosecution. U.S. Food and Drug Administration Regulation United States Drug Development In the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under the FDCA and its implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning or untitled letters, requests for voluntary product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us. 12 The process required by the FDA before a drug may be marketed in the United States generally involves the following: ● completion of extensive pre-clinical laboratory tests, animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice regulations; ● submission to the FDA of an IND, which must become effective before human clinical trials may begin; ● performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and clinical study related regulations, referred to as GCP, to establish the safety and efficacy of the proposed drug for its proposed indication; ● submission to the FDA of an NDA; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with the FDA’s cGMP requirements; ● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and ● FDA review and approval of the NDA prior to any commercial marketing or sale. Once a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests include laboratory evaluations of product chemistry, toxicity, formulation and stability, as well as animal studies. An IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose. All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. 13 Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: ● Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients. ● Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule. ● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling. Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register them and post the results of completed clinical trials on a government-sponsored database, www.clinicaltrials.gov , in the United States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions. Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the clinical trial sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated check points based on access to certain data from the study. The clinical trial sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate. Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. NDA and FDA Review Process The results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA, which request approval to market a new drug product. The submission of an NDA is subject to the payment of a substantial user fee, and the sponsor of an approved NDA is also subject to an annual program user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review. 14 The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt. The decision to accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and may go through multiple review cycles. After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of an NDA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all. Before approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter describes specific deficiencies in the NDA identified by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than we interpret the same data. There is no assurance that the FDA will ultimately approve a product for marketing in the United States, and we may encounter significant difficulties or costs during the review process. If a product receives marketing approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling or may condition the approval of the NDA on other changes to the proposed labeling, development of adequate controls and specifications, or a commitment to conduct post-market testing or clinical trials and surveillance to monitor the effects of approved products. For example, the FDA may require Phase 4 clinical trials to further assess drug safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized. The FDA may also place other conditions on approvals, including the requirement for a REMS to assure the safe use of the drug. If the FDA concludes a Risk Evaluation and Mitigation Strategy (“REMS”) is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory requirements or if problems occur following initial marketing. 15 Orange Book Listing and Paragraph IV Certification For NDA submissions, including those under Section 505(b)(2), applicants are required to list with the FDA certain patents with claims that cover the applicant’s product. Upon approval, each of the patents listed in the application is published in Approved Drug Products with Therapeutic Equivalence Evaluations , commonly referred to as the Orange Book. Any applicant who subsequently files an abbreviated new drug application (“ANDA”) or 505(b)(2) NDA that references a drug listed in the Orange Book must certify to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA; (2) such patent has expired; (3) the date on which such patent expires; or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. This last certification is known as a Paragraph IV Certification. If an applicant has provided a Paragraph IV Certification to the FDA, the applicant must also send notice of the Paragraph IV Certification to the holder of the NDA for the approved drug and the patent owner once the application has been accepted for filing by the FDA. The NDA holder or patent owner may then initiate a patent infringement lawsuit in response to notice of the Paragraph IV Certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV Certification prevents the FDA from approving the ANDA or 505(b)(2) application until the earlier of 30 months from the date of the lawsuit, the applicant’s successful defense of the suit, or expiration of the patent. Employees We currently employ 12 full-time employees. We are not a party to any collective bargaining agreements, and we believe that we maintain good relations with our employees. Our human capital resources objectives include identifying, recruiting, retaining and incentivizing our existing and future employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through granting of equity-based compensation awards and cash-based compensation awards, in order to increase stockholder value and support success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. Facilities Our corporate headquarters are located at 34 Shrewsbury Ave, Suite 1C, Red Bank, NJ, 07701. Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. Our Corporate History We were incorporated under the laws of the State of Delaware on March 28, 2017 under the name Hillstream BioPharma Inc. (“HBI”). On July 16, 2019, Hillstream BioPharma Holdings, Inc. (“Holdco”) was formed as a Delaware C-corporation. On July 24, 2019, Holdco entered into a Contribution and Exchange Agreement with Nanoproteagen LLC (“Nanoproteagen”) whereby the members of Nanoproteagen exchanged 100% of their membership interests in Nanoproteagen for shares of Holdco common stock. Also on July 24, 2019, the stockholders of HBI exchanged 100% of their shares of common stock for shares of common stock of Holdco. HBI and Nanoproteagen became wholly-owned subsidiaries of Holdco. On August 7, 2019, pursuant to a certificate of amendment, Holdco’s name was changed to Hillstream BioPharma, Inc. and HBI’s name was changed to HB Pharma Corp. On November 12, 2020, Hillstream BioPharma, Inc. entered into a Share Exchange Agreement with Farrington Therapeutics LLC (“Farrington”), whereby the members of Farrington exchanged their membership interest in Farrington for shares of common stock of Hillstream BioPharma, Inc., and Farrington became a wholly-owned subsidiary of Hillstream BioPharma, Inc. On September 21, 2023, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware pursuant to which it changed its name to Tharimmune, Inc. effective as of September 25, 2023. 16 On November 17, 2023, we filed a Certificate of Amendment to our Certificate of Incorporation, as amended, with the Delaware Secretary of State to effectuate a 1-for-25 reverse stock split of our issued and outstanding shares of common stock. The reverse stock split became effective at 4:01 p.m. Eastern time on November 20, 2023. All share data, per share data, and related information contained in this Annual Report on Form 10-K has been retrospectively adjusted to reflect the effect of the reverse stock split. On May 22, 2024, we filed a Certificate of Amendment to our Certificate of Incorporation, as amended, with the Delaware Secretary of State to effectuate a 1-for-15 reverse stock split of our issued and outstanding shares of common stock. The reverse stock split became effective at 4:01 p.m. Eastern time on May 24, 2024. All share data, per share data, and related information contained in this Annual Report on Form 10-K has been retrospectively adjusted to reflect the effect of the reverse stock split. On February 18, 2026, we changed our name to Canton Strategic Holdings, Inc., pursuant to an amended and restated Certificate of Incorporation filed with the Delaware Secretary of State, effective at 12:01 a.m. Eastern time on February 18, 2026. Available Information Our website address is www.cantonstrategic.com . The contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K, and our website address is included in this document as an inactive textual reference only. We make our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC. The SEC maintains a public website at www.sec.gov containing such filings.