What changed in this filing

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Item 1. Financial Statements

2025-08-13 compared with 2025-05-14 · 265 added, 202 removed, 500 unchanged (48% of the section changed)

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THERAPEUTICS, INC.

Cash and cash

expenses and other current assets

June 30, 2025

December 31, 2024

Cash and cash equivalents

Prepaid expenses and other current assets

Liabilities and Stockholders’ Equity:

Accounts payable

and other current liabilities

Accrued and other current liabilities

Total liabilities

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Stockholders’ Equity:

Common Stock, par value $ 0.0001 per share,

250,000,000 shares authorized;

6,032,648 shares issued and outstanding as of March 31, 2025;

2,517,768 shares issued and outstanding

as of December 31, 2024

Common Stock, par value $ 0.0001 per share, 250,000,000 shares authorized;

637,757 shares issued and outstanding as of June 30, 2025;

251,725 shares issued and outstanding as of December 31, 2024

Additional paid-in capital

Accumulated deficit

( 69,680,019 )

( 65,675,339 )

stockholders’ equity

Total liabilities and

stockholders’ equity

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes are an integral part of these financial statements.

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of Operations

the three months ended

Operating expenses:

and administrative

For the three months ended

For the six months ended

Operating expenses:

from operations

Research and development

General and administrative

Total operating expenses

Loss from operations

( 1,772,731 )

( 2,883,742 )

( 4,112,535 )

( 6,087,302 )

Other income and expenses:

Interest income

$ ( 1,701,093 )

$ ( 2,829,106 )

Net loss per share of

Common Stock, basic and diluted

$ ( 4,004,680 )

$ ( 5,963,368 )

Net loss per share of Common Stock, basic and diluted

Weighted-average basic and diluted Common Stock

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THERAPEUTICS, INC.

of Stockholder’s Equity

of Stockholders’ Equity

Stockholders’

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Stock-based compensation

Issuance of Common Stock and warrants from

January 2025 PIPE, net of issuance costs

Issuance of Common Stock upon exercise of pre-funded

Issuance of Common Stock and warrants from

March 2025 Warrant Inducement, net of issuance costs

Issuance of Common Stock and warrants from January 2025 PIPE, net of issuance costs

Issuance of Common Stock upon exercise of pre-funded warrants

Issuance of Common Stock and warrants from March 2025 Warrant Inducement, net of issuance costs

( 2,303,587 )

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$ ( 67,978,926 )

Stock-based compensation

Issuance of abeyance shares

Issuance costs related to the March 2025 Warrant Inducement

( 1,701,093 )

Balance at June 30, 2025

$ ( 69,680,019 )

accompanying notes are an integral part of these financial statements.

THERAPEUTICS, INC.

of Stockholder’s Equity

of Stockholders’ Equity

Stockholders’

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$ ( 53,387,878 )

Stock-based compensation

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$ ( 56,522,140 )

Stock-based compensation

Issuance of Common Stock upon exercise of warrants, net of issuance costs

Settlement of fractional shares paid in cash

( 2,829,106 )

Balance at June 30, 2024

$ ( 59,351,246 )

accompanying notes are an integral part of these financial statements.

1 unchanged sentence

of Cash Flows

the three months ended

the six months ended June 30,

Cash flows from operating activities:

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$ ( 5,963,368 )

Adjustments to reconcile

net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Increase (decrease) in

cash resulting from changes in:

Prepaid expenses and other

current assets

Increase (decrease) in cash resulting from changes in:

Prepaid expenses and other current assets

Accounts payable

and other current liabilities

adjustments to reconcile net loss to net cash used in operations

Net cash used in operating

Accrued and other current liabilities

Total adjustments to reconcile net loss to net cash used in operations

Net cash used in operating activities

( 4,624,547 )

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Cash flows from financing activities:

Proceeds from issuance

of Common Stock, pre-funded warrants, and warrants, net of issuance costs

Proceeds from exercise

of pre-funded warrants

of prior period issuance costs

cash provided by financing activities

Net increase (decrease)

in Cash and cash equivalents

Proceeds from issuance of Common Stock and warrants, net of issuance costs

Payment of prior period issuance costs

Issuance costs paid setting up ATM agreement

Proceeds from exercise of pre-funded warrants

Payment for fractional shares in reverse stock split

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

( 2,491,035 )

Cash and cash equivalents

at beginning of period

Cash and cash equivalents

at end of period

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Non-cash financing activities:

March 2025 Warrant Inducement issuance costs in accounts payable

Issuance of abeyance shares

January 2025 PIPE issuance

costs in accounts payable

March 2025 Warrant Inducement

issuance costs in accounts payable

May 2024 Warrant Reload issuance costs in accounts payable

Deferred financing costs included in accounts payable or accrued expenses

Supplemental disclosure:

Cash paid for taxes

accompanying notes are an integral part of these financial statements.

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aesthetic skin conditions and diseases.

July 15, 2025, the Company held its annual meeting of stockholders at which time the stockholders approved the adoption of an amendment

to its Amended and Restated Certificate of Incorporation, as amended, to effect a reverse stock split of its issued and outstanding shares

of Common Stock, at a specific ratio, ranging from one-for-two to one-for-thirty, with the exact ratio determined by the Company’s

board of directors without further approval or authorization of its stockholders.

On August 1, 2025, the Company effected the reverse

split of its shares of Common Stock at a ratio of 1-for-10, as approved by the Company’s board of directors (the “2025 Reverse

Stock Split”).

The par value was not adjusted as a result of the 2025 Reverse Stock Split.

All issued and outstanding shares of

Common Stock and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse stock

split for all periods presented.

May 7, 2024, the Company held its annual meeting of stockholders at which time the stockholders approved the adoption of an amendment

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any revenue or commercialized any product candidates.

As of March 31, 2025, cash and cash equivalents totaled $ 9.7 million and the Company

As of June 30, 2025, cash and cash equivalents totaled $ 6.5 million and the Company

had an accumulated deficit of $ 69.7 million.

For the three months ended March 31, 2025, and the year ended December 31, 2024, the Company

For the six months ended June 30, 2025, and the year ended December 31, 2024, the Company

used cash of $ 4.6 million and approximately $ 11.1 million, respectively, in operations.

The Company’s cash and cash equivalents

are expected to fund operations into the first quarter of 2026.

are expected to fund operations into the second quarter of 2026.

The Company anticipates that it will continue to incur net losses for

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On an ongoing basis, management evaluates these

estimates and judgments, including those related to accrued research and development expenses.

estimates and judgments, including those related to accrued research and development expenses, stock-based compensation, and equity instruments.

The Company bases its estimates on various

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the Company’s chief operating decision maker view the Company’s operations and manage its business in one operating segment,

which is the business of developing and commercializing pharmaceuticals.

which is the business of developing and commercializing pharmaceutical candidates.

and Cash Equivalents

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Company uses a three-tier fair value hierarchy to prioritize the inputs used in the Company’s fair value measurements.

tiers include:

Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

Level 2, defined as inputs

other than quoted prices in active markets that are either directly or indirectly observable;

and Level 3, defined as unobservable inputs

in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company believes the carrying

amount of cash and cash equivalents, accounts payable and accrued expenses approximate their estimated fair values due to the short-term

nature of these assets and liabilities.

Level 2, defined

as inputs other than quoted prices in active markets that are either directly or indirectly observable;

and Level 3, defined as

unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Company does not have any Level 2 or Level 3 instruments.

The Company believes the carrying amount of cash and cash equivalents,

accounts payable and accrued expenses approximate their estimated fair values due to the short-term nature of these assets and

income consists of interest income earned on cash and cash equivalents from interest bearing demand accounts.

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Common Stock warrants

Total potentially dilutive

Total potentially dilutive securities

Accounting Pronouncements

the three months ended March 31, 2025 , the Company has reviewed recent accounting standards and identified the following as relevant

to the Company.

the six months ended June 30, 2025, the Company has reviewed recent accounting standards and identified the following as relevant to

December 2023, the FASB issued ASU No.

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Improvements to Income Tax Disclosures (“ASU

ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information

on income taxes paid.

ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early

adoption permitted.

The Company is currently evaluating the impact of this guidance on its financial statements and income tax footnote.

ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate

reconciliation as well as information on income taxes paid.

ASU 2023-09 is effective for public entities with annual periods

beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-09 as of January 1, 2025;

there was no impact on its financial statements and income tax footnote.

November 2024, the FASB issued ASU No.

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Prepaid insurance

Prepaid research and development

other and other current assets

Total prepaid expenses

and other current assets

Prepaid research and development costs

Prepaid other and other current assets

Total prepaid expenses and other current assets

Accrued and other current liabilities:

Accrued research and development

Accrued compensation and

Total accrued and other

current liabilities

Accrued research and development costs

Accrued compensation and benefits

Accrued other

Total accrued and other current liabilities

Equity Securities

summary of the Company’s equity securities as of March 31, 2025 , is as follows:

summary of the Company’s equity securities as of June 30, 2025, is as follows:

of Equity Securities

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Preferred Stock

2021 Omnibus Equity Incentive

2021 Omnibus Equity Incentive Plan

Total equity securities

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of Common Stock (the “New Series B Warrant Shares” and together with the New Series A Warrant Shares, the “New Warrant

The New Warrants were exercisable subject to stockholder approval, which the Company received at a stockholder meeting

on July 15, 2025.

The Company received net proceeds of approximately $ 5.7 million from the exercise of the Existing Warrants by the Holder,

after deducting financial advisor fees and other offering expenses payable by the Company.

to the March 2025 Inducement Letter, at closing the Holder received 602,000 Common Shares, with the balance of 4,232,470 held in abeyance

as of March 31, 2025, to be released to the Holder at the Holder’s request.

As of June 30, 2025, the Holder has received

94,747 Common Shares, with the balance of 388,700 shares held in abeyance, to be released to the Holder at the Holder’s request.

January 21, 2025, the Company closed a private placement (the “January 2025 PIPE”) priced at the market under Nasdaq rules,

in which it sold 1,935,412 shares of Common Stock, pre-funded warrants to purchase an aggregate of 72,468 shares of Common Stock with

an exercise price of $ 0.001 per share (“January 2025 Pre-Funded Warrants”), and 2,007,880 warrants (the “January 2025

PIPE Warrants”) to purchase up to an aggregate of 2,007,880 shares of Common Stock.

The January 2025 PIPE Warrants have an exercise

price of $ 1.27 .

Certain Company insiders, including the Company’s Chief Executive Officer, Chief Financial Officer and certain

members of the Company’s board of directors, participated in the January 2025 PIPE.

These Company insiders purchased an aggregate

of 1,220,476 shares of Common Stock and January 2025 PIPE Warrants to purchase up to an aggregate of 1,220,476 shares of Common Stock,

for an aggregate purchase price of approximately $ 1,550,000 .

The purchase price per share of Common Stock and accompanying January 2025

PIPE Warrant for these Company insiders was the same as paid by other investors in the January 2025 PIPE.

In connection with the January

2025 PIPE, the Company entered into a registration rights agreement with the investor, pursuant to which the Company agreed to prepare

and file a registration statement with the SEC registering the resale of the shares of Common Stock underlying the securities sold in

the January 2025 PIPE financing.

in which it sold 193,539 shares of Common Stock, pre-funded warrants to purchase an aggregate of 7,246 shares of Common Stock with an

exercise price of $ 0.01 per share (“January 2025 Pre-Funded Warrants”), and 200,785 warrants (the “January 2025 PIPE

Warrants”) to purchase up to an aggregate of 200,785 shares of Common Stock.

The January 2025 PIPE Warrants have an exercise price

Certain Company insiders, including the Company’s Chief Executive Officer, Chief Financial Officer and certain members

of the Company’s board of directors, participated in the January 2025 PIPE.

These Company insiders purchased an aggregate of 122,047

shares of Common Stock and January 2025 PIPE Warrants to purchase up to an aggregate of 122,047 shares of Common Stock, for an aggregate

purchase price of approximately $ 1,550,000 .

The purchase price per share of Common Stock and accompanying January 2025 PIPE Warrant for

these Company insiders was the same as paid by other investors in the January 2025 PIPE.

The January 2025 Warrants were exercisable subject

to stockholder approval, which the Company received at a stockholder meeting on July 15, 2025.

In connection with the January 2025 PIPE,

the Company entered into a registration rights agreement with the investor, pursuant to which the Company agreed to prepare and file

a registration statement with the SEC registering the resale of the shares of Common Stock underlying the securities sold in the January

2025 PIPE financing.

The Company filed a Form S-3 on January 30, 2025, which was declared effective by the SEC on February 5, 2025.

The Company received net cash proceeds of approximately $ 2.3 million from the January 2025 PIPE after deducting underwriters’

discounts and offering expenses of approximately $ 0.3 million.

During the first quarter of 2025, all of the January 2025 Pre-Funded Warrants

were exercised.

As of March 31, 2025, no January 2025 Pre-Funded Warrants remained outstanding.

Company received net cash proceeds of approximately $ 2.2 million from the January 2025 PIPE after deducting underwriters’ discounts

and offering expenses of approximately $ 0.4 million.

During the first quarter of 2025, all of the January 2025 Pre-Funded Warrants were

As of June 30, 2025, no January 2025 Pre-Funded Warrants remained outstanding.

September 17, 2024, the Company closed a private placement (the “September 2024 PIPE”) priced at the market under Nasdaq

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price of $ 0.01 per share (the “September 2024 Pre-Funded Warrants”), and 191,256 series A warrants (the “September

2024 PIPE Series A Common Warrants”) to purchase up to an aggregate of 1,912,569 shares of Common Stock and 1,912,569 series B

warrants (the “September 2024 PIPE Series B Common Warrants” and together with the September 2024 PIPE Series A Warrants,

the “September 2024 PIPE Warrants”) to purchase up to an aggregate of 1,912,569 shares of Common Stock.

The September 2024

PIPE Warrants have an exercise price of $ 1.58 .

In connection with the September 2024 PIPE, the Company entered into a registration rights

agreement with the investor, pursuant to which the Company agreed to prepare and file a registration statement with the SEC registering

the resale of the shares of Common Stock underlying the securities sold in the September 2024 PIPE financing.

The Company filed a Form

S-3 on September 19, 2024, which was declared effective by the SEC on September 24, 2024.

2024 PIPE Series A Common Warrants”) to purchase up to an aggregate of 191,256 shares of Common Stock and 191,256 series B warrants

(the “September 2024 PIPE Series B Common Warrants” and together with the September 2024 PIPE Series A Warrants, the “September

2024 PIPE Warrants”) to purchase up to an aggregate of 191,256 shares of Common Stock.

The September 2024 PIPE Warrants have an

exercise price of $ 15.80 .

In connection with the September 2024 PIPE, the Company entered into a registration rights agreement with the

investor, pursuant to which the Company agreed to prepare and file a registration statement with the SEC registering the resale of the

shares of Common Stock underlying the securities sold in the September 2024 PIPE financing.

The Company filed a Form S-3 on September

19, 2024, which was declared effective by the SEC on September 24, 2024.

The Company received net cash proceeds of approximately $ 3.1

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As of December 31, 2024, 90,500 September 2024 Pre-Funded Warrants remained outstanding, which were exercised during the first quarter

As of March 31, 2025, no September 2024 Pre-Funded Warrants remained outstanding.

As of June 30, 2025, no September 2024 Pre-Funded Warrants remained outstanding.

June 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with a sales agent (the “Sales

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issuer costs and other expenses related to setting up and issuing shares from the Company’s ATM.

As of March 31, 2025, the Company

As of June 30, 2025, the Company

does not have any remaining capacity under its ATM Agreement.

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Existing Warrants by the Holders, after deducting placement agent fees and other offering expenses payable by the Company.

to the May 2024 Inducement, during July 2024, the balance of 267,000 abeyance shares related to the May 2024 Warrant Inducement were

released to the investor, leaving no further abeyance shares outstanding as of December 31, 2024.

the Company has 10,000,000 shares of preferred stock authorized with a par value of $ 0.0001 , no shares of preferred stock are outstanding

as of March 31, 2025, or December 31, 2024, respectively.

to the May 2024 Inducement, during July 2024, the balance of 26,700 abeyance shares related to the May 2024 Warrant Inducement were released

to the investor, leaving no further abeyance shares outstanding as of December 31, 2024.

the Company has 10,000,000

shares of preferred stock authorized with a par value of $ 0.0001 , no

shares of preferred stock are issued or outstanding as of June 30, 2025, or December 31, 2024, respectively.

of Warrants Outstanding

warrants outstanding as of March 31, 2025, are exercisable into 12,389,769 shares of Common Stock which had a fair value of $ 1.08 per

share, based on the closing trading price on March 31, 2025.

The aggregate intrinsic value of warrants outstanding as of March 31, 2025,

is calculated as the difference between the exercise price of the warrants and the closing market price of the Company’s Common

Stock on that date.

The intrinsic value of warrants outstanding as of March 31, 2025, was zero .

warrants outstanding as of June 30, 2025, are exercisable into 1,238,949 shares of Common Stock which had a fair value of $ 5.85 per share,

based on the closing trading price on June 30, 2025.

The aggregate intrinsic value of warrants outstanding as of June 30, 2025, is calculated

as the difference between the exercise price of the warrants and the closing market price of the Company’s Common Stock on that

The intrinsic value of warrants outstanding as of June 30, 2025, was zero .

of Information of Outstanding Warrants

Quantity of Warrants

Outstanding as of

June 30, 2025

December 31, 2024

Exercise Price

Expiration Date

Pre-IPO Series 1a Warrants

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March 2025 Warrant Inducement Series B Warrants

March 2025 Warrant Inducement

Placement Agent Warrants

March 2025 Warrant Inducement Placement Agent Warrants

Total warrants outstanding

(1) The warrants issued in January and March 2025 are subject to stockholder approval, at which time the warrants will become exercisable.

The warrants will expire five years from the effective date of such stockholder approval for the recently issued Series A Warrants or will expire eighteen months from the effective date of such stockholder approval for the recently issued Series B and Placement Agent Warrants.

March 2025, the Company entered into the March 2025 Inducement Letter with a Holder who agreed to exercise 483,447 warrants to purchase

Common Stock at a reduced exercise price of $ 1.284 per share in exchange for 4,980,806 New Series A Warrants and 4,688,134 New Series

B Warrants with an exercise price of $ 1.284 per share.

The March 2025 Inducement Letter, which resulted in the lowering of the exercise

price of the Existing Warrants and the issuance of the New Warrants, is considered a modification of the Existing Warrants under the

guidance ASC 815-40.

The modification is consistent with the equity issuance classification under that guidance as the reason for the

modification was to induce the holders of the Existing Warrants to cash exercise their warrants, which raised equity capital and generated

net proceeds of approximately $ 5.8 million.

As the Existing Warrants and the New Warrants were classified as equity instruments before

and after the exchange, and as the exchange is directly attributable to an equity offering, the Company recognized the effect of the

modification of approximately $ 4.9 million as an equity issuance cost.

Common Stock at a reduced exercise price of $ 12.84 per share in exchange for 498,080 New Series A Warrants and 468,813 New Series B Warrants

with an exercise price of $ 12.84 per share.

The March 2025 Inducement Letter, which resulted in the lowering of the exercise price of

the Existing Warrants and the issuance of the New Warrants, is considered a modification of the Existing Warrants under the guidance

The modification is consistent with the equity issuance classification under that guidance as the reason for the modification

was to induce the holders of the Existing Warrants to cash exercise their warrants, which raised equity capital and generated net proceeds

of approximately $ 5.7 million.

As the Existing Warrants and the New Warrants were classified as equity instruments before and after the

exchange, and as the exchange is directly attributable to an equity offering, the Company recognized the effect of the modification of

approximately $ 4.9 million as an equity issuance cost.

May 2024, the Company completed the May 2024 Inducement with the Holders who agreed to exercise 51,632 warrants to purchase Common Stock

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B Warrants with an exercise price of $ 49.10 per share.

The May 2024 Inducement, which resulted in the lowering of the exercise price of

the May 2024 Existing Warrants and the issuance of the May 2024 New Warrants, is considered a modification of the May 2024 Existing Warrants

under the guidance ASC 815-40.

The modification is consistent with the equity issuance classification under that guidance as the reason

for the modification was to induce the holders of the May 2024 Existing Warrants to cash exercise their warrants, which raised equity

capital and generated net proceeds of approximately $ 2.3 million.

As the May 2024 Existing Warrants and the May 2024 New Warrants were

classified as equity instruments before and after the exchange, and as the exchange is directly attributable to an equity offering, the

Company recognized the effect of the modification of approximately $ 1.5 million as an equity issuance cost.

The May 2024 Inducement, which resulted in the lowering of the exercise price

of the May 2024 Existing Warrants and the issuance of the May 2024 New Warrants, is considered a modification of the May 2024 Existing

Warrants under the guidance ASC 815-40.

The modification is consistent with the equity issuance classification under that guidance as

the reason for the modification was to induce the holders of the May 2024 Existing Warrants to cash exercise their warrants, which raised

equity capital and generated net proceeds of approximately $ 2.3 million.

As the May 2024 Existing Warrants and the May 2024 New Warrants

were classified as equity instruments before and after the exchange, and as the exchange is directly attributable to an equity offering,

the Company recognized the effect of the modification of approximately $ 1.5 million as an equity issuance cost.

Equity Incentive Plan

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and one year for directors of the Company’s Board and consultants.

of March 31, 2025, there remain 63 shares reserved for issuance under the 2021 Plan, as amended.

of June 30, 2025, there remain 13 shares reserved for issuance under the 2021 Plan, as amended.

Value Measurement

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yield of zero.

following table presents the weighted-average assumptions used for stock options granted during the following periods:

The Company granted stock options in January 2025 and 2024.

no stock option grants during the second quarter of 2025 or 2024.

The following table presents the weighted-average assumptions used for

stock options granted during the following periods:

of Weighted Average Assumptions used for Stock Options

Three Months Ended

Six Months Ended June 30,

Grant date fair value

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of Stock Based Compensation Expense

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

General and administrative

Stock-based compensation expense

Option Award Activity

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Options cancelled

Balance at March 31, 2025

Options exercisable at March 31, 2025

Balance at June 30, 2025

Options exercisable at June 30, 2025

January 2024, the Board unanimously approved to provide employees and directors of the Company the opportunity to cancel outstanding,

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Company recognized stock-based compensation expense of $ 568,372 resulting from the stock option cancellation during the first quarter

aggregate intrinsic value of options outstanding and exercisable as of March 31, 2025, is calculated as the difference between the exercise

price of the underlying options and the closing market price of the Company’s Common Stock on March 31, 2025, which was $ 1.08 per

The intrinsic value of options outstanding and exercisable as of March 31, 2025, was zero .

of March 31, 2025, total unrecognized compensation cost related to stock options was approximately $ 0.3 million and the weighted average

aggregate intrinsic value of options outstanding and exercisable as of June 30, 2025, is calculated as the difference between the exercise

price of the underlying options and the closing market price of the Company’s Common Stock on June 30, 2025, which was $ 5.85 per

The intrinsic value of options outstanding and exercisable as of June 30, 2025, was zero .

of June 30, 2025, total unrecognized compensation cost related to stock options was approximately $ 0.3 million and the weighted average

period over which this cost is expected to be recognized is 2.7 years.

Commitments and Contingencies

the first quarter of 2025, the Company announced positive topline results for its XYNGARI™ Phase 3 STAR-1 clinical trial.

contract amount with the clinical research organization is approximately $ 7.2 million, which will extend from the fourth quarter of 2023

to the first half of 2025, and which has a 30-day termination notice period.

During the three months ended March 31, 2025, and 2024,

the Company recognized $ 0.7 million and $ 0.9 million, respectively, in research and development expense for the STAR-1 clinical trial.

March 2025, the Company announced positive topline results for its XYNGARI™ Phase 3 STAR-1 clinical trial.

The total contract amount

with the clinical research organization was approximately $ 7.2 million, which extended from the fourth quarter of 2023 into the second

quarter of 2025.

During the six months ended June 30, 2025, the Company recognized $ 0.7 million in research and development expense for

the STAR-1 clinical trial.

During the three and six months ended June 30, 2024, the Company recognized $ 1.6 million and $ 2.4 million,

respectively, in research and development expense for the STAR-1 clinical trial.

The STAR-1 clinical trial is completed, and no further

expenses are expected to be incurred.

a result of Russia’s invasion of Ukraine, the United States, the United Kingdom, and the European Union governments, among others,

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The Company is currently

a party to an exclusive supply agreement for the supply of the Spongilla raw material used in XYNGARI™ and DMT410.

The counterparty

to this supply agreement is a Russian entity.

The imposition of enhanced export controls and economic sanctions on transactions with

Russia and Russian entities by the United States, the United Kingdom, and/or the European Union could prevent the Company from performing

under this existing contract or any future contract it may enter or may prevent the Company from remitting payment for raw material purchased

from the Company’s supplier.

The Company has received multiple shipments of raw material from its supplier subsequent to the implementation

of export controls and sanctions, containing additional quantities of Spongilla raw material, which will provide the Company with

sufficient quantities of Spongilla to initiate and complete two Phase 3 studies in moderate-to-severe acne and support filing

a new drug application for XYNGARI™ in acne upon the successful completion of two Phase 3 studies.

Depending on the extent and

breadth of new sanctions or export controls that may be imposed against Russia, otherwise or as a result of the impact of the war in

Ukraine, it is possible that the Company’s ability to obtain additional supply of the Spongilla raw material used in XYNGARI™

and DMT410 could be negatively impacted, which could adversely affect its business, results of operations, and financial condition.

a party to an exclusive supply agreement for the supply of the Spongilla raw material used in XYNGARI™ and DMT410 product

The counterparty to this supply agreement is a Russian entity.

The imposition of enhanced export controls and economic sanctions

on transactions with Russia and Russian entities by the United States, the United Kingdom, and/or the European Union could prevent the

Company from performing under this existing contract or any future contract it may enter or may prevent the Company from remitting payment

for raw material purchased from the Company’s supplier.

The Company has received multiple shipments of raw material from its supplier

subsequent to the implementation of export controls and sanctions, containing additional quantities of Spongilla raw material,

which will provide the Company with sufficient quantities of Spongilla to initiate and complete two Phase 3 studies in moderate-to-severe

acne and support filing a new drug application for XYNGARI™ in acne upon the successful completion of two Phase 3 studies.

on the extent and breadth of new sanctions or export controls that may be imposed against Russia, otherwise or as a result of the impact

of the war in Ukraine, it is possible that the Company’s ability to obtain additional supply of the Spongilla raw material

used in XYNGARI™ and DMT410 product candidates could be negatively impacted, which could adversely affect its business, results

of operations, and financial condition.

March 31, 2017, the Company entered into a license agreement, as amended (the “License Agreement”) with Villani, Inc.

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intellectual property protection, confidentiality, remedies, and warranties.

As of March 31, 2025, the Company evaluated the likelihood

As of June 30, 2025, the Company evaluated the likelihood

of the Company achieving the specified milestones and determined that the likelihood is not yet probable and as such no accrual of these

payments is required as of March 31, 2025.

payments is required as of June 30, 2025.

Collaboration

17 unchanged sentences

The Company has agreed to sponsor, conduct, and fund the Phase 2a clinical trial.

As of March 31, 2025, the Company has not

As of June 30, 2025, the Company has not

incurred any expenses related to the Revance Clinical Trial Agreement.

13 unchanged sentences

aggregate subscription amount.

As of March 31, 2025, the Company determined that the likelihood of the Company incurring liquidated damages

pursuant to the Registration Rights Agreement is remote, and as such, no accrual of these payments is required as of March 31, 2025.

As of June 30, 2025, the Company determined that the likelihood of the Company incurring liquidated damages

pursuant to the Registration Rights Agreement is remote, and as such, no accrual of these payments is required as of June 30, 2025.

the normal course of business, the Company may be involved in legal proceedings or threatened legal proceedings.

22 unchanged sentences

following table summarizes the segment’s financial information including the Company’s significant segment expenses:

Schedule of Segment Financial Information

Quarters Ended

and development

of Segment Financial Information

Three Months Ended

Six Months Ended

Research and development

and administrative

Personnel related

Total research and development

General and administrative

Interest income

$ ( 1,701,093 )

$ ( 2,829,106 )

$ ( 4,004,680 )

$ ( 5,963,368 )

Related Party Transaction

2 unchanged sentences

These Company insiders purchased an aggregate

of 1,220,476 Common Stock and Warrants to purchase up to an aggregate of 1,220,476 shares of Common Stock, for an aggregate purchase

price of $ 1.55 million.

The purchase price per share and accompanying Warrant for these Company insiders was the same as paid by other

investors in the January 2025 PIPE.

of 122,047 Common Stock and Warrants to purchase up to an aggregate of 122,047 shares of Common Stock, for an aggregate purchase price

of $ 1.55 million.

The purchase price per share and accompanying Warrant for these Company insiders was the same as paid by other investors

in the January 2025 PIPE.

Subsequent Events

to March 31, 2025, at the Holder’s request, the Company delivered 345,470 shares of Common Stock which were held in abeyance, related

to the March 2025 Warrant Inducement to the Holder.

Accordingly, 3,887,000 shares are held in abeyance, which are not issued and not

previously reported, on March 25, 2025, the Company received a letter from the Listing Qualifications Department of The Stock Market

LLC (“Nasdaq”) notifying the Company that it is no longer in compliance with the minimum stockholders’ equity requirement

for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Rule 5550(b)(1) (“Stockholders’ Equity Requirement”).

Nasdaq has provided the Company with 45 calendar days, or until May 9, 2025, to either regain compliance with the minimum stockholders’

equity standard or submit a plan to regain compliance.

If the plan is accepted, then Nasdaq can grant and extension of up to 180 calendar days from the date of the letter.

to June 30, 2025, at the Holder’s request, the Company delivered 43,800 shares of Common Stock which were held in abeyance, related

to the March 2025 Warrant Inducement.

Accordingly, 344,900 shares are held in abeyance, which are not issued and not outstanding.

previously reported, on May 14, 2025, the Company received a letter from the Listing Qualifications Department (the “Staff”)

of The Nasdaq Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s Common Stock

for the prior 30 consecutive business days, the Company was not in compliance with the requirement to maintain a minimum bid price of

$ 1.00 per share for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

Staff further indicated that, based upon the Company’s implementation of a reverse stock split within the prior one-year period,

the Company’s securities were subject to delisting from the Nasdaq Capital Market and would be suspended at the opening of business

on May 23, 2025.

The Company timely requested a hearing before the Panel, which request stayed any further suspension or delisting action

by Nasdaq, pending the ultimate conclusion of the hearing process.

July 2, 2025, the Panel notified the Company that it has granted Company’s request for an exception until August 14, 2025, to demonstrate

compliance with the Minimum Bid Price Requirement.

There can be no assurance that the Company will be able to regain compliance and maintain

its listing on the Nasdaq Capital Market.

If the Company does not regain compliance with the Minimum Bid Price Requirement, or if the

Company fails to satisfy another Nasdaq requirement for continued listing, Nasdaq could provide notice that the Company’s securities

will become subject to delisting.

the Company’s 2025 annual meeting of stockholders on July 15, 2025, the Company’s stockholders approved an amendment to its

Amended and Restated Certificate of Incorporation to effect a reverse stock split of the issued and outstanding shares of the Company’s

common stock at a specific ratio, ranging from one-for-two to one-for-thirty, with the exact ratio to be determined by the Company’s

board of directors without further approval or authorization of the Company’s stockholders.

On July 15, 2025, the Company’s

board of directors set and approved a reverse split ratio of one-for-ten and authorized the Company’s management to effect the

reverse stock split on August 1, 2025.

The number of shares of the Company’s authorized common stock was not affected by the 2025

Reverse Stock Split and the par value of the Company’s common stock remained unchanged at $ 0.0001 per share.

where disclosed, all amounts related to number of shares and per share amounts have been retrospectively adjusted in these financial

statements to reflect the 2025 Reverse Stock Split.

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

What changed 10-Q

Item 1. Financial Statements