FENNEC PHARMACEUTICALS INC. 10-Q

Item 1. Financial Statements Fennec Pharmaceuticals Inc. Condensed Consolidated Balance Sheets (U.S. Dollars and shares in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2026 ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 41,249 ​ $ 36,788 ​ Accounts receivable, net ​ ​ 23,266 ​ ​ 23,221 ​ Prepaid expenses ​ 3,635 ​ 3,738 ​ Inventory ​ ​ 2,374 ​ ​ 1,565 ​ Other current assets ​ 1,976 ​ 1,731 ​ Total current assets ​ ​ 72,500 ​ ​ 67,043 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets ​ ​ ​ ​ ​ ​ ​ Non-current accounts receivable, net ​ ​ 2,587 ​ ​ 2,791 ​ Other non-current assets, net of amortization ​ ​ 666 ​ ​ 717 ​ Total non-current assets ​ ​ 3,253 ​ ​ 3,508 ​ Total assets ​ $ 75,753 ​ $ 70,551 ​ ​ ​ ​ ​ ​ ​ Liabilities and stockholders’ equity ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ Accounts payable ​ $ 5,516 ​ $ 4,635 ​ Accrued liabilities ​ 3,696 ​ 5,635 ​ Contract liability - current ​ ​ 3,182 ​ ​ 248 ​ Total current liabilities ​ 12,394 ​ 10,518 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities ​ ​ ​ ​ ​ ​ ​ Contract liability - long-term ​ ​ 20,917 ​ ​ 24,561 ​ Total long-term liabilities ​ ​ 20,917 ​ ​ 24,561 ​ Total liabilities ​ 33,311 ​ 35,079 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 6) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ Common stock, no par value; unlimited shares authorized; 35,034 shares issued and outstanding (2025 ‑ 34,163 ) ​ 193,190 ​ 189,906 ​ Additional paid-in capital ​ 75,257 ​ 73,745 ​ Accumulated deficit ​ ( 227,248 ) ​ ( 229,422 ) ​ Accumulated other comprehensive income ​ 1,243 ​ 1,243 ​ Total stockholders’ equity ​ 42,442 ​ 35,472 ​ Total liabilities and stockholders’ equity ​ $ 75,753 ​ $ 70,551 ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ ​ ​ 3 Table of Contents Fennec Pharmaceuticals Inc. Condensed Consolidated Statements of Operations (U.S. Dollars and shares in thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PEDMARK product sales, net ​ $ 17,164 ​ $ 9,652 ​ $ 32,272 ​ $ 18,403 Other revenue ​ ​ 710 ​ ​ — ​ ​ 710 ​ ​ — Total revenue ​ ​ 17,874 ​ ​ 9,652 ​ ​ 32,982 ​ ​ 18,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ ​ 721 ​ ​ 967 ​ ​ 1,291 ​ ​ 1,340 Research and development ​ 118 ​ 107 ​ 167 ​ 201 Selling and marketing ​ ​ 10,659 ​ ​ 4,784 ​ ​ 22,081 ​ ​ 8,011 General and administrative ​ 4,639 ​ 6,526 ​ 7,825 ​ 12,391 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ​ ( 16,137 ) ​ ( 12,384 ) ​ ( 31,364 ) ​ ( 21,943 ) Income/(loss) from operations ​ ​ 1,737 ​ ​ ( 2,732 ) ​ ​ 1,618 ​ ​ ( 3,540 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (expense)/income ​ ​ ​ ​ ​ ​ ​ ​ Unrealized foreign exchange (loss)/gain ​ ​ ( 6 ) ​ ​ 17 ​ ​ ( 18 ) ​ ​ 30 Amortization expense ​ ​ — ​ ​ ( 13 ) ​ ​ — ​ ​ ( 26 ) Unrealized loss on securities ​ — ​ ​ ( 1 ) ​ ​ — ​ ​ ( 2 ) Interest income ​ 287 ​ ​ 171 ​ ​ 626 ​ ​ 407 Interest expense ​ ​ ( 3 ) ​ ​ ( 594 ) ​ ​ ( 10 ) ​ ​ ( 1,186 ) Total other income/(expense) ​ 278 ​ ( 420 ) ​ 598 ​ ( 777 ) Income/(loss) before provision for income taxes ​ ​ 2,015 ​ ​ ( 3,152 ) ​ ​ 2,216 ​ ​ ( 4,317 ) Provision for income taxes ​ ​ 42 ​ ​ — ​ ​ 42 ​ ​ — Net income/(loss) ​ $ 1,973 ​ $ ( 3,152 ) ​ $ 2,174 ​ $ ( 4,317 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net income/(loss) per common share ​ $ 0.06 ​ $ ( 0.11 ) ​ $ 0.06 ​ $ ( 0.16 ) Diluted net income/(loss) per common share ​ $ 0.05 ​ $ ( 0.11 ) ​ $ 0.06 ​ $ ( 0.16 ) Weighted-average number of common shares outstanding basic ​ ​ 34,545 ​ ​ 27,664 ​ ​ 34,596 ​ ​ 27,621 Weighted-average number of common shares outstanding diluted ​ 36,430 ​ 27,664 ​ ​ 37,410 ​ ​ 27,621 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 4 Table of Contents ​ Fennec Pharmaceuticals Inc. Condensed Consolidated Statements of Stockholders’ Equity (Deficit) Three and Six Months Ended June 30, 2026, and 2025 (U.S. dollars and shares in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Comprehensive ​ Stockholders’ ​ Shares Amount Capital Deficit Income Equity (deficit) Balance at December 31, 2025 34,163 ​ $ 189,906 ​ $ 73,745 ​ $ ( 229,422 ) ​ $ 1,243 ​ $ 35,472 Equity-based compensation — ​ ​ — ​ ​ 990 ​ — ​ — ​ 990 Stock option exercise ​ 264 ​ ​ 1,323 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,323 Restricted and performance stock release ​ 114 ​ ​ — ​ ​ ( 311 ) ​ ​ — ​ ​ — ​ ​ ( 311 ) Net income — ​ — ​ — ​ 201 ​ — ​ 201 Balance at March 31, 2026 34,541 ​ ​ 191,229 ​ ​ 74,424 ​ ​ ( 229,221 ) ​ ​ 1,243 ​ $ 37,675 Equity-based compensation ​ — ​ ​ — ​ ​ 1,710 ​ ​ — ​ ​ — ​ ​ 1,710 Employee stock purchase plan ​ — ​ ​ — ​ ​ 64 ​ ​ — ​ ​ — ​ ​ 64 Stock option exercise ​ 319 ​ ​ 1,961 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,961 Restricted and performance stock release ​ 174 ​ ​ — ​ ​ ( 941 ) ​ ​ — ​ ​ — ​ ​ ( 941 ) Net income ​ — ​ ​ — ​ ​ — ​ ​ 1,973 ​ ​ — ​ ​ 1,973 Balance at June 30, 2026 ​ 35,034 ​ $ 193,190 ​ $ 75,257 ​ $ ( 227,248 ) ​ $ 1,243 ​ $ 42,442 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Comprehensive ​ Stockholders’ ​ Shares ​ ​ Amount Capital Deficit Income (Deficit) Balance at December 31, 2024 ​ 27,527 ​ $ 145,608 ​ $ 66,958 ​ $ ( 219,681 ) ​ $ 1,243 ​ $ ( 5,872 ) Equity-based compensation — ​ ​ — ​ ​ 798 ​ — ​ — ​ ​ 798 Stock option exercise ​ 55 ​ ​ 371 ​ ​ — ​ ​ — ​ ​ — ​ ​ 371 Restricted stock release ​ 12 ​ ​ — ​ ​ ( 12 ) ​ ​ — ​ ​ — ​ ​ ( 12 ) Net loss ​ — ​ — ​ — ​ ( 1,165 ) ​ — ​ ​ ( 1,165 ) Balance at March 31, 2025 27,594 ​ ​ 145,979 ​ ​ 67,744 ​ ​ ( 220,846 ) ​ ​ 1,243 ​ ​ ( 5,880 ) Equity-based compensation ​ — ​ ​ — ​ ​ 1,494 ​ ​ — ​ ​ — ​ ​ 1,494 Stock option exercise ​ 52 ​ ​ 186 ​ ​ — ​ ​ — ​ ​ — ​ ​ 186 Restricted stock release ​ 87 ​ ​ — ​ ​ ( 111 ) ​ ​ — ​ ​ — ​ ​ ( 111 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 3,152 ) ​ ​ — ​ ​ ( 3,152 ) Balance at June 30, 2025 ​ 27,733 ​ $ 146,165 ​ $ 69,127 ​ $ ( 223,998 ) ​ $ 1,243 ​ $ ( 7,463 ) ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 5 Table of Contents Fennec Pharmaceuticals Inc. Condensed Consolidated Statements of Cash Flows (U.S. Dollars in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ June 30, ​ June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows provided by/(used in): ​ ​ ​ ​ ​ Operating activities: ​ ​ ​ ​ ​ Net income/(loss) ​ $ 2,174 ​ $ ( 4,317 ) ​ Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ ( 340 ) ​ ​ 1,222 ​ Amortization of Norgine asset ​ ​ 51 ​ ​ 51 ​ Amortization of debt discount ​ ​ — ​ ​ 26 ​ Unrealized loss on securities ​ ​ — ​ ​ 2 ​ Stock-based compensation ​ 2,764 ​ 2,292 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Accounts receivable ​ ​ 295 ​ ​ ( 5,542 ) ​ Prepaid expenses ​ 103 ​ ( 1,659 ) ​ Inventory ​ ​ ( 809 ) ​ ​ ( 1,141 ) ​ Other current assets ​ ( 245 ) ​ ( 435 ) ​ Other non-current assets ​ ​ 204 ​ ​ — ​ Accounts payable ​ 881 ​ 2,700 ​ Accrued liabilities ​ ( 1,939 ) ​ ( 1,203 ) ​ Contract liability ​ ​ ( 710 ) ​ ​ — ​ Net cash provided by/(used in) operating activities ​ 2,429 ​ ( 8,004 ) ​ ​ ​ ​ ​ ​ ​ Financing activities: ​ ​ ​ ​ ​ Issuance of shares, options exercise ​ 3,284 ​ 186 ​ Cash paid for taxes on restricted share release ​ ​ ( 1,252 ) ​ ​ ( 111 ) ​ Net cash provided by financing activities ​ 2,032 ​ 75 ​ ​ ​ ​ ​ ​ ​ ​ ​ Increase/(decrease) in cash and cash equivalents ​ ​ 4,461 ​ ​ ( 7,929 ) ​ Cash and cash equivalents - Beginning of period ​ ​ 36,788 ​ ​ 26,634 ​ Cash and cash equivalents - End of period ​ $ 41,249 ​ $ 18,705 ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ ​ ​ ​ 6 Table of Contents Fennec Pharmaceuticals Inc. Notes to the Unaudited Interim Condensed Consolidated Financial Statements (U.S. dollars and shares in thousands, except per share information) 1. Nature of Business and Liquidity ​ Fennec Pharmaceuticals Inc., a corporation existing under the laws of British Columbia (“Fennec,” “the Company,” “we,” “us,” or “our”) was originally formed as a British Columbia corporation under the name Adherex Technologies Inc. and subsequently changed its name on September 3, 2014. Fennec, together with its wholly owned subsidiaries Oxiquant, Inc. and Fennec Pharmaceuticals, Inc., both Delaware corporations, Cadherin Biomedical Inc., a Canadian corporation, and Fennec Pharmaceuticals (EU) Limited, an Ireland company (“Fennec Limited”), collectively referred to herein as the “Company,” is a biopharmaceutical company focused on the commercialization of PEDMARK ® , which is approved by the U.S. Food and Drug Administration, the European Medicines Agency (“EMA”), and the Medicines and Healthcare products Regulatory Agency (“MHRA”) to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors. With the exception of Fennec Pharmaceuticals, Inc., all subsidiaries are inactive. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements, and these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company’s accounting policies are consistent with those presented in the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025. As of June 30, 2026, the Company had cash and cash equivalents of $ 41,249 , an accumulated deficit of $ 227,248 and total stockholders’ equity of $ 42,442 . For the six months ended June 30, 2026, the Company reported income from operations of $ 1,618 , net income of $ 2,174 and net cash provided by operating activities of $ 2,429 . The Company believes that its existing cash and cash equivalents, together with expected revenues from operations, will be sufficient to fund its operating plan for at least the next twelve months from the issuance date of these unaudited interim condensed consolidated financial statements. ​ ​ ​ 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are the responsibility of the Company’s management. These unaudited interim condensed consolidated financial statements do not include all of the information and notes required by U.S. GAAP for annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting period. Significant estimates include revenue recognition, allowance against trade receivables, measurement of stock- 7 Table of Contents based compensation and estimates of the Company’s capital requirements over the next twelve months from the date of issuance of the consolidated financial statements. Actual results could differ from those estimates. Credit Losses The Company estimates and records a provision for expected credit losses related to its trade receivables. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors and other industry-specific factors when evaluating expected credit losses. To determine the provision for credit losses for accounts receivable, the Company disaggregates its receivables by class of customer because the risk profile of its customers may vary based on characteristics such as credit history, past payment history and geography. Each class of customer is analyzed individually for estimated credit losses, and specific allowance amounts are established, when appropriate, based on a review of outstanding invoices for customers with a higher probability of default. Segment and Geographic Information Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment, which is the commercialization of PEDMARK ® , and its employees support only one operating segment. Stock-Based Compensation Under the Company’s stock-based compensation programs, the Company periodically grants stock options and restricted stock to employees, directors and consultants. The Company also issues shares under an employee stock purchase plan. The fair value of each award is recognized in the Company’s statements of operations over the requisite service period for such award. Under the employee stock purchase plan, substantially all employees of the Company and its U.S. subsidiaries are eligible to participate, subject to statutory limitations, including the exclusion of employees who own 5% or more of the Company’s voting stock. The Company uses the Black-Scholes option pricing model to value stock option awards without market conditions, which requires the Company to make certain assumptions regarding the expected volatility of its common stock price, the expected term of the option grants, the risk-free interest rate and the dividend yield with respect to its common stock. The Company calculates volatility using its historical stock price data. Due to the lack of the Company’s own historical data, the Company elected to use the “simplified” method for “plain vanilla” options to estimate the expected term of the Company’s stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. The risk-free interest rate used for each grant is based on the United States Treasury yield curve in effect at the time of grant for instruments with a similar expected life. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends and, at present, has no intention to pay cash dividends. Inventory Inventories are valued under a standard costing methodology on a first-in, first-out basis and are stated at the lower of cost or net realizable value. The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. Capitalized costs of inventories mainly include third party manufacturing, logistics and distribution costs. The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories. ​ 8 Table of Contents Revenue Recognition Under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue when its customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company determines it expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies its performance obligation(s). As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. License Agreements The Company generates revenue from license or similar agreements with pharmaceutical companies for the commercialization of its product. Such agreements may include the transfer of intellectual property rights in the form of licenses. Payments made by the customers may include non-refundable upfront fees, payments based upon the achievement of defined milestones, and royalties on sales of product. If a license to the Company's intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the license as revenue upon transfer of control of the license. All other promised goods or services in the agreement are evaluated to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services where any additional consideration paid to the Company reflects their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations. If optional future services are priced in a manner which provides the customer with a significant or incremental discount, they are material rights, and are accounted for as separate performance obligations. Contingent milestones at contract inception are estimated at the amount which is not probable of a material reversal and included in the transaction price using the most likely amount method. Milestone payments that are not within the Company's control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore the variable consideration is constrained. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company re-evaluates the probability of achieving development or sales-based milestone payments that may not be subject to a material reversal and, if necessary, adjust the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and other revenue, as well as earnings, in the period of adjustment. For arrangements that include sales-based royalties, including sales-based milestone payments, and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, revenue is recognized at the later of when the related sales occur or when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied). Net Product Revenue On September 20, 2022, the FDA approved PEDMARK ® in the United States to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors. PEDMARK ® became commercially available on October 17, 2022. PEDMARK ® is the Company’s first commercial product. Amongst the Company’s customers are distributors which subsequently resell the Company’s products to health care providers and patients. In addition to distribution agreements, the Company enters into arrangements with health care providers and payors that provide for government-mandated and/or privately- negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s products. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the customer. 9 Table of Contents Other Revenue – Material Right Under PEDMARK ® License Other revenue for the three and six months ended June 30, 2026 of $ 710 relates to the amortization of amounts previously recorded as deferred licensing revenue (contract liability) under the Company’s commercialization agreement for PEDMARK ® with Norgine. Under ASC 606, a portion of the upfront consideration received from Norgine was allocated to a material right and initially recorded as deferred revenue. This deferred revenue is recognized as “Other revenue” as PEDMARK ® units are shipped to Norgine and the related material right is satisfied. Royalties earned under the Norgine agreement on commercial sales of PEDMARK ® are included in PEDMARK ® product sales, net. Product Sales Discounts and Allowances The Company records revenues from product sales at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established primarily from discounts, chargebacks, rebates, co-pay assistance, returns and other allowances that are offered within contracts between the Company and its customers, health care providers, payors and other indirect customers relating to the sales of its products. These reserves are based on the amounts to be claimed on the related sales and are classified as a contra-asset or current liability. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, forecasted customer buying and payment patterns, and the Company’s historical experience that will develop over time as PEDMARK ® and PEDMARQSI ® (European branded product name) is the Company’s first and only commercial product. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of its contracts. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. Chargebacks: Chargebacks are discounts that occur when contracted customers purchase directly from a specialty distributor. Contracted customers, which currently consist of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty distributor, in turn, charges back to the Company the difference between the price initially paid by the specialty distributor and the discounted price paid to the specialty distributor by its contracted customer. The allowance for chargebacks is based on actual chargebacks received and an estimate of sales by the specialty distributor to its contracted customers. Discounts for Prompt Payment: The customers receive a discount for prompt payment which may range from 0.5 % to 2.0 %. The Company expects its customers will earn 100 % of their prompt payment discounts and, therefore, the Company deducts the full amount of these discounts from total product sales when revenues are recognized. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program and other government programs. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contractual discount rates and expected utilization. The Company’s estimates for the expected utilization of rebates are based on customer and payor data received from the specialty distributors and historical utilization rates that will develop over time, as PEDMARK ® is the Company’s first and only commercial product. Rebates are generally invoiced by the payor and paid in arrears, such that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to the customers, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, the Company may need to adjust its accruals, which would affect net product revenues in the period of adjustment. Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. The Company accrues a liability for co-payment assistance based on actual program participation and estimates of program redemption using customer data provided by the third party that administers the copay program. 10 Table of Contents Other Customer Credits: The Company pays fees to its customers for account management, data management and other administrative services. To the extent the services received are distinct from the sale of products to its customers, the Company classifies these payments in selling and marketing expenses in its condensed consolidated statements of operations. Distribution and Other Fees: The Company pays distribution and other fees to certain customers in connection with the sales of PEDMARK ® . The Company records distribution and other fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as an operating expense. These costs are typically known at the time of sale, resulting in minimal adjustments subsequent to the period of sale. The following table summarizes net product revenues for PEDMARK ® earned during the three and six months ended June 30, 2026, and 2025, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ ​ June 30, ​ ​ June 30, ​ ​ June 30, ​ ​ June 30, In thousands ​ ​ ​ 2026 ​ ​ 2025 ​ ​ 2026 ​ ​ 2025 Product revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross product revenues ​ ​ $ 18,890 ​ $ 10,941 ​ $ 34,758 ​ $ 21,753 Discounts and allowances ​ ​ ​ ( 1,726 ) ​ ​ ( 1,289 ) ​ ​ ( 2,486 ) ​ ​ ( 3,350 ) Net product revenues ​ ​ $ 17,164 ​ $ 9,652 ​ $ 32,272 ​ $ 18,403 Other revenue ​ ​ ​ 710 ​ ​ - ​ ​ 710 ​ ​ - Total revenue ​ ​ $ 17,874 ​ $ 9,652 ​ $ 32,982 ​ $ 18,403 ​ For the three and six months ended June 30, 2026, the Company had two distributors that each represented more than 10 % of net sales, respectively. The activities and ending allowance balances for each significant category of discounts and allowances for PEDMARK ® (which constitute variable consideration) for the six months ended June 30, 2026, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chargebacks, ​ Rebates, Returns, Customer ​ ​ ​ ​ ​ Discounts for ​ Fees/Credits ​ ​ ​ ​ ​ Prompt pay and ​ and Co-Pay ​ ​ ​ In thousands ​ Other allowances ​ Assistance ​ Totals Balance at December 31, 2025 ​ $ 477 ​ $ 1,423 ​ $ 1,900 Provision related to sales made in: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period ​ 577 ​ ​ 712 ​ ​ 1,289 Prior periods ​ ​ — ​ ​ — ​ ​ — Payments and customer credits issued ​ ​ ( 824 ) ​ ​ ( 1,196 ) ​ ​ ( 2,020 ) Balance at March 31, 2026 ​ $ 230 ​ $ 939 ​ $ 1,169 Provision related to sales made in: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period ​ 866 ​ ​ 210 ​ ​ 1,076 Prior periods ​ ​ — ​ ​ — ​ ​ — Payments and customer credits issued ​ ​ ( 980 ) ​ ​ ( 492 ) ​ ​ ( 1,472 ) Balance at June 30, 2026 ​ $ 116 ​ $ 657 ​ $ 773 ​ The allowances for chargebacks, fees due to customers, rebates and discounts for prompt payment are recorded as a contra-asset to accounts receivable, while Medicaid rebates and return allowances are in accrued liabilities in the accompanying condensed consolidated balance sheets. 11 Table of Contents Trade Receivables The Company records gross trade receivables at the time of product sale to its customers. Trade accounts receivable are recorded at the invoiced amount and are typically non-interest bearing. Amounts estimated for the associated chargebacks, cash discounts for prompt payment and any allowances for credit losses are booked as a reserve against accounts receivable and reduction of revenue. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company considers various factors, including loss history, individual credit risk associated with each customer, and the current and future condition of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such a customer. For customers that are large specialty distributors, the Company considered the risk of potential credit losses to be low. Sales to other select global distributors have an increased potential for losses. The Company evaluates the risk of credit losses on sales on an individual basis using the above-mentioned criteria. Accounts receivable that are expected to be received past 12 months are recorded as non-current accounts receivable. The Company has determined any financing component of non-current receivables to be immaterial. The Company had a balance in allowance for credit losses of $ 6,273 as of June 30, 2026. ​ Cost of Products Sold Cost of products sold is related to the Company's product revenues for PEDMARK ® and consists primarily of product production costs associated with finished goods inventory. Cost of products sold also consists of shipping and other third-party logistics and distribution costs for the Company’s product. As of June 30, 2026, the Company capitalized approximately $ 2,374 of costs as inventory on the condensed consolidated balance sheet. Of the items capitalized, $ 1,157 was capitalized as raw materials, $ 998 was capitalized as work in process, $ 219 was capitalized into finished goods. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments with original maturities at the date of purchase of three months or less. The Company places its cash and cash equivalents in investments held by highly rated financial institutions in accordance with its investment policy designed to protect the principal investment. At June 30, 2026, the Company had $ 41,249 in cash, savings and money market accounts ($ 36,788 at December 31, 2025). While the Company has not experienced any loss or write-down of its money market investments, the amounts it holds in money market accounts are substantially above the $ 250 amount insured by the FDIC and may lose value. Financial Instruments Financial instruments recognized on the balance sheets at June 30, 2026 and December 31, 2025, consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying values of which approximate fair value due to their relatively short time to maturity or variable interest rates that approximate market interest rates. The Company does not hold or issue financial instruments for trading. The Company’s investment policy is to manage investments to achieve, in the order of importance, the financial objectives of preservation of principal, liquidity and return on investment. Investments, when made, are made in U.S. or Canadian bank securities, commercial paper of U.S. or Canadian industrial companies, utilities, financial institutions and consumer loan companies, and securities of foreign banks provided the obligations are guaranteed or carry ratings appropriate to the policy. Securities must have a minimum Dun & Bradstreet rating of A for bonds or R1 low for commercial paper. The policy risks are primarily the opportunity cost of the conservative nature of the allowable investments. The Company has chosen to avoid investments of a trading or speculative nature to preserve cash. 12 Table of Contents Research and Development Costs and Investment Tax Credits Research costs, including employee compensation, laboratory fees, lab supplies, and research and testing performed under contract by third parties, are expensed as incurred. Development costs, including drug substance costs, clinical study expenses and regulatory expenses are expensed as incurred. The Company conducts certain research and development activities under clinical trial and other research agreements with third parties and records expenses for these activities based on estimates of the work performed during the reporting period. In developing these estimates, the Company considers factors such as the terms of the underlying contracts, progress of patient visits and related clinical procedures, the achievement of contractual milestones, and data received from CROs and other service providers, and adjusts accruals as actual information becomes available. Investment tax credits, which are earned as a result of qualifying research and development expenditures, are recognized when the expenditures are made and their realization is reasonably assured. They are applied to reduce related capital costs and research and development expenses in the year recognized. Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, and accounts receivable. The Company maintains deposits in highly rated, federally-insured financial institutions in excess of federally insured limits. The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the high credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument. The Company’s trade receivables includes amounts billed to customers for product sales of PEDMARK ® . In the U.S., the customers are a limited group of specialty distributors, and direct customers, and accordingly, the Company considers the risk of potential credit losses to be low. The Company also sells to a select group of global distributors. These global distributors are established companies and although the Company regards credit losses with these distributors to be low, it does recognize the potential for credit losses with this group. Income Taxes The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. The Company has deferred tax assets, which are subject to periodic recoverability assessments. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. As of June 30, 2026, we maintained a full valuation allowance against our deferred tax assets. The provisions of the Financial Accounting Standards Board (“FASB”) ASC 740-10, Uncertainty in Income Taxes, address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. Foreign Currency Transactions The U.S. dollar is the functional currency for the Company’s consolidated operations. All gains and losses from currency transactions are included in the results of operations. Income/(Loss) Per Share Basic net income/(loss) per share is computed by dividing net income/(loss) by the weighted average number of common shares outstanding during the year. Diluted net income/(loss) per share is computed using the same method, except the 13 Table of Contents weighted average number of common shares outstanding includes convertible debentures, stock options and warrants, if dilutive, as determined using the if-converted method and treasury methods. Reclassifications Certain prior period amounts in the accompanying condensed consolidated financial statements have been reclassified to conform to the current period presentation. Specifically, certain equity-based compensation costs previously classified within general and administrative expenses have been reclassified to selling and marketing expenses. These reclassifications had no effect on previously reported net loss or stockholders' equity. Recent Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments require public business entities to provide additional disaggregated disclosures in the notes to the financial statements for certain income statement expense captions, including specified natural expense categories and selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Accordingly, the amendments will be effective for the Company’s annual report for the year ending December 31, 2027 and its interim period ending March 31, 2028. The Company is currently evaluating the impact of the new disclosure requirements and expects adoption to have a significant impact on the level of expense disaggregation included in its financial statement footnotes; however, the amendments are not expected to affect the Company’s consolidated financial statements, results of operations, or cash flows. In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU introduces optional practical expedients intended to simplify the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in ASU 2025-05 are intended to reduce complexity in applying the current expected credit loss model to short-term receivables and contract assets while maintaining decision-useful information for financial statement users. The Company adopted this amended standard in the first quarter of 2026 and such adoption did not have a material impact on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Reporting. This ASU clarifies the applicability of interim reporting guidance, improves the navigability of Topic 270, identifies interim disclosure requirements included in other Topics of the Accounting Standards Codification, and establishes a principle requiring disclosure of events since the end of the last annual reporting period that have a material impact on an entity. The amendments in ASU 2025-11 are not intended to fundamentally expand or reduce existing interim disclosure requirements, but rather to improve clarity and consistency in the application of interim reporting guidance. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. Accordingly, the amendments will be effective for the Company beginning with its interim period ending March 31, 2028. The Company is currently assessing the effect of this guidance on its interim disclosures and presentation. The Company does not currently expect the adoption of this standard to have a material impact on its condensed consolidated financial statements other than potential additional or clarified interim disclosure requirements. In December 2025, the FASB issued ASU 2025-12, Codification Improvements. ASU 2025-12 includes technical corrections, clarifications, and other minor improvements to various Topics within the Accounting Standards Codification. The Company is currently evaluating the effect of this guidance on its consolidated financial statements and related disclosures. The Company does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements. Other than the pronouncements discussed above, the Company reviewed other recently issued accounting standards and concluded that they are either not applicable to its business or are not expected to have a material impact on its condensed consolidated financial statements or related disclosures. 14 Table of Contents 3. Income/(Loss) Per Share ​ Net income/(loss) per common share is presented under two formats: basic net income/(loss) per common share and diluted income/(loss) per common share. Basic net income/(loss) per common share is computed by dividing net income/(loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted income/(loss) per common share is computed by dividing net income/(loss) by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common shares equivalents (e.g. convertible debt, stock options and warrants). Dilutive common share equivalents consist of the incremental common shares issuable upon exercise of convertible debt, restricted share units, stock options and warrants. The following table sets forth the computation of basic and diluted net income/(loss) per share (in thousands except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income/(loss) ​ $ 1,973 ​ $ ( 3,152 ) ​ $ 2,174 ​ $ ( 4,317 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average common shares, basic ​ 34,545 ​ ​ 27,664 ​ ​ 34,596 ​ ​ 27,621 Dilutive effect of stock options ​ 1,666 ​ — ​ 2,597 ​ — Dilutive effect of restricted share units ​ ​ 217 ​ ​ — ​ ​ 217 ​ ​ — Dilutive effect of warrants ​ 2 ​ — ​ — ​ — Incremental dilutive shares ​ 1,885 ​ — ​ 2,814 ​ — Weighted-average common shares, diluted ​ 36,430 ​ 27,664 ​ 37,410 ​ 27,621 Net income/(loss) per share diluted ​ $ 0.05 ​ $ ( 0.11 ) ​ $ 0.06 ​ $ ( 0.16 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three and six months ended June 30, 2026, the Company reported net income and therefore included the effect of dilutive common share equivalents to the extent they were dilutive. For the three and six months ended June 30, 2025, the Company reported a net loss and, accordingly, all potentially dilutive securities were excluded from diluted net loss per share because their inclusion would have been anti-dilutive. The following common stock equivalents, outstanding convertible debt, options and warrants were excluded from the computation of diluted net income/(loss) per share for the periods presented because including them would have had an anti-dilutive effect: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted Earnings Per Share ​ Diluted Earnings Per Share ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2026 ​ ​ ​ 2025 ​ 2026 ​ ​ ​ 2025 Options to purchase common shares 972 ​ 221 ​ 1,291 ​ 6,078 Convertible debt to purchase common shares — ​ 24 ​ — ​ 3,785 Restricted share units to purchase common shares — ​ — ​ — ​ 485 Performance share units to purchase common shares — ​ 100 ​ — ​ 100 Warrants to purchase common shares — ​ — ​ 111 ​ 150 ​ ​ ​ 4. Stockholders’ Equity Authorized Capital Stock The Company’s authorized capital stock consists of an unlimited number of common shares, no par value per share. 15 Table of Contents Warrants to Purchase Common Stock During the three and six months ended June 30, 2026, and 2025, there were no warrants exercised and no warrants were issued. Outstanding warrants have a weighted average life of 1.18 years on June 30, 2026. The following tables detail the Company’s warrant activity for the three and six months ended June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ ​ ​ ​ ​ ​ ​ Issuable Upon Exercise ​ ​ ​ ​ ​ of Outstanding ​ ​ Weighted-Average Investor Warrants ​ Warrants ​ ​ Exercise Price Outstanding December 31, 2025 111 ​ $ 8.11 Issued — ​ — Outstanding March 31, 2026 ​ 111 ​ $ 8.11 Issued ​ — ​ — Outstanding June 30, 2026 ​ 111 ​ $ 8.11 ​ Equity Incentive Plan The Company maintains the Fennec Pharmaceuticals Inc. 2020 Equity Incentive Plan, as amended (the “Plan”), which is administered by the Compensation Committee of the Board of Directors. The Plan provides for the issuance of stock options, restricted share units (“RSUs”), stock appreciation rights, restricted stock awards, unrestricted stock awards, cash-based awards, dividend equivalent rights and stock purchase rights to employees, directors, officers and consultants of the Company. The Compensation Committee is responsible for determining eligible participants and approving individual award grants under the Plan. ​ On April 24, 2025, the Company’s Board of Directors approved an amendment to the Plan to: (i) increase the number of common shares available for issuance under the Plan (excluding common shares issued prior to the date of the meeting pursuant to the exercise of options and vesting of RSUs) to 8,500 common shares; and (ii) include provisions for an employee stock purchase program. This amendment was approved by the Company’s shareholders on June 3, 2025. ​ On April 27, 2026, the Company’s Board of Directors approved a further amendment to the Plan to increase the maximum number of common shares reserved and available for issuance under the Plan, together with the Prior Plan, to 10,000 common shares, excluding for this purpose any shares issued under the Plan or the Company’s prior stock option plan prior to June 10, 2026. This amendment was approved by the Company’s shareholders at the Company’s Annual General Meeting of Shareholders held on June 10, 2026. ​ Prior to the June 2026 amendment, the maximum number of equity instruments issuable under the Plan, together with the Company’s prior stock option plan, was limited to 8,500 common shares, excluding common shares issued prior to June 3, 2025 pursuant to the exercise of options and vesting of RSUs. Prior to the June 2025 amendment, the maximum number of equity instruments issuable under the Plan, together with the Company’s prior stock option plan, was limited to 25 % of the Company’s issued and outstanding common shares, which based on the then-current outstanding share count equated to a maximum of 6,825 common shares available for issuance. ​ All stock options granted under the Plan have an exercise price equal to the fair value of the Company’s common shares on the date of grant. Options generally vest over a period of up to three years and are exercisable for a period of up to ten years from the grant date. Awards under the Plan may be denominated in either U.S. or Canadian dollars. ​ The Company recognizes stock-based compensation expense for all share-based awards granted to employees and non-employees based on the fair value of the awards on the grant date. The following table summarizes stock-based compensation expense related to equity awards: 16 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ 2025 ​ ​ ​ 2026 ​ 2025 Stock-based compensation expense recognized ​ $ 1,774 ​ $ 1,494 ​ $ 2,764 ​ $ 2,292 Total stock-based expense recognized ​ $ 1,774 ​ $ 1,494 ​ $ 2,764 ​ $ 2,292 ​ Stock Option Activity The following is a summary of option activity for the three and six months ended June 30, 2026. ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Weighted-Average Options ​ Options ​ ​ ​ Exercise Price Outstanding at December 31, 2025 ​ 5,853 ​ $ 6.38 Granted ​ 1,640 ​ 5.77 Exercised ​ ( 264 ) ​ 5.01 Outstanding at March 31, 2026 ​ 7,229 ​ ​ 6.29 Granted ​ 160 ​ ​ 9.08 Exercised ​ ( 319 ) ​ ​ 6.09 Forfeited ​ ( 31 ) ​ ​ 6.22 Outstanding at June 30, 2026 ​ 7,039 ​ $ 6.37 ​ Of the 7,039 options granted and outstanding at June 30, 2026, 4,567 are fully vested and exercisable. ​ The fair value of equity awards valued using the Black-Scholes option pricing model, including stock options awards, was estimated using the assumptions in the table below. Expected volatility was determined based on the historical volatility of the Company’s common stock over a period consistent with the expected term of the applicable award. ​ ​ ​ ​ ​ ​ ​ Valuation ​ ​ ​ Assumptions ​ ​ ​ Six Months Ended ​ Black-Scholes Model Assumptions ​ June 30, 2026 ​ Expected dividend - % Risk free rate 4.07 - 4.35 % Expected volatility ​ 140.87 - 159.22 % Expected life ​ 5.00 - 6.00 years ​ Performance-Based Units In May and August 2025, the Board of Directors approved grants of performance-based restricted share units (“PSUs”) that vest based on the achievement of specified revenue performance milestones for 2025, and the related compensation cost was fully recognized in 2025. During the six months ended June 30, 2026, no additional PSUs were granted, and certain PSUs vested and were released in accordance with the original terms of the awards. ​ Restricted Share Units Activity ​ The Plan allows for the issuance of restricted share units (“RSUs”). The following is a summary of RSU activity for the three and six months ended June 30, 2026. During the three and six months ended June 30, 2026, there were 287 and 405 RSUs released from restriction, respectively. Standard vesting of RSUs is over three years with 1/3 vesting on the first 17 Table of Contents anniversary date of the grant and then 1/24 on the last day of each subsequent month. The Compensation Committee may also award RSUs with alternative vesting. ​ ​ ​ ​ ​ ​ Number of ​ ​ Restricted Share RSUs Current Periods ​ Units Outstanding at December 31, 2025 630 Awarded — Released ​ ( 118 ) Forfeited ​ — Outstanding at March 31, 2026 ​ 512 Awarded ​ — Released ​ ( 287 ) Forfeited ​ ( 8 ) Outstanding at June 30, 2026 ​ 217 ​ ​ The value of RSUs issued was estimated using the share price on the date of the award multiplied by the number of common shares granted. ​ Employee Stock Purchase Plan ​ The Company maintains an employee stock purchase plan under the Fennec Pharmaceuticals Inc. 2020 Equity Incentive Plan that allows eligible employees to purchase common shares at a discount through after-tax payroll deductions during recurring six-month offering periods. The purchase price is generally 85% of the lower of the fair market value of the Company’s common shares on the first or last trading day of the applicable offering period, subject to statutory limits. The ESPP is accounted for as a compensatory plan under ASC 718, and the grant-date fair value of purchase rights is estimated using the Black-Scholes option pricing model. ESPP-related stock-based compensation expense for the three and six months ended June 30, 2026 was $ 64 and $ 64 , respectively, reflecting expense only for the second quarter of 2026, when the ESPP became effective. ​ Under the ESPP, eligible employees of the Company and its participating subsidiaries may purchase common shares through after-tax payroll deductions at a discounted price. Substantially all employees of the Company and its U.S. subsidiaries are eligible to participate, except employees who own 5% or more of the Company’s voting stock and employees who may be excluded under the plan’s terms in accordance with Section 423 of the Internal Revenue Code (e.g., based on service requirements, customary hours worked, or highly-compensated status). ​ ​ ​ 5. Fair Value Measurements The Company has adopted ASC 820, the Fair Value Measurements and Disclosure Topic of the FASB. This Topic applies to certain assets and liabilities that are being measured and reported on a fair value basis. The Fair Value Measurements Topic defines fair value, establishes a framework for measuring fair value in accordance with US GAAP, and expands disclosure about fair value measurements. This Topic enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Topic requires that financial assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: ​ Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. ​ 18 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at June 30, 2026 and December 31, 2025 ​ ​ Quoted Price in Active ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market for Identical ​ Significant Other Significant ​ ​ ​ ​ ​ ​ Instruments ​ Observable Inputs Unobservable Inputs ​ ​ ​ ​ ​ ​ Level 1 ​ Level 2 Level 3 ​ Total ​ ​ 2026 ​ ​ ​ ​ 2025 ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 2,544 (1) $ 3,072 (1) $ 38,705 $ 33,716 $ — $ — $ 41,249 $ 36,788 Processa common shares ​ $ 2 (2) $ 2 (2) $ — $ — $ — $ — $ 2 $ 2 ​ (1) The Company held approximately $ 2,544 in cash accounts as of June 30, 2026, of which approximately $ 404 was held in foreign currencies (translated into U.S. dollars). As of December 31, 2025, the Company held approximately $ 3,072 in cash of which approximately $ 481 was in foreign currencies (translated into U.S. dollars). (2) The Company holds 51 unrestricted common shares of Processa Pharmaceuticals, Inc. (NASDAQ:PCSA). ​ ​ 6. Commitments and Contingencies Executive Severance In the event of termination of Mr. Hackman's (Chief Executive Officer) employment with the Company other than for cause, the Company will be obligated to pay him a one -time severance payment equal to twelve months of salary (currently $ 615 ). In the event of termination of Mr. Andrade’s (Chief Financial Officer) employment with the Company other than for cause, the Company will be obligated to pay him a one -time severance payment equal to nine months of salary which is equivalent to $ 361 . Further, certain other Executive Employment Agreements generally provide that if employment is terminated without “Cause” (as defined in the applicable Executive Employment Agreement) and other conditions are satisfied, then such executive officer shall receive as severance an amount equal to their then current base salary for a period of nine ( 9 ) months, less standard withholdings for tax and social security purposes. Leases The Company has an operating lease in Research Triangle Park, North Carolina utilizing a small space within a commercial building. The operating lease has payments of $ 0.4 per month with no scheduled increases. This operating lease is terminable with 30 days’ notice and has no penalties or contingent payments due. ​ On January 23, 2020, the Company entered into an Office Service Agreement (the “Office Service Agreement”) with Regus to lease office space in Hoboken, New Jersey. Per the terms of the Office Service Agreement, the monthly rent payments are $ 1 . The Company was required to pay a security deposit of $ 2 , which is the equivalent to two months of rent. The Office Service Agreement commenced on January 27, 2020, and terminated on July 31, 2020, thereafter the lease has been continuing on a month-to-month basis with either party being able to terminate the agreement by providing one month ’s advance written notice of termination. ​ Because the Company’s lease arrangements are short-term or month-to-month in nature, no operating lease liability was recorded on the condensed consolidated balance sheets as of June 30, 2026 or December 31, 2025. ​ Employee Benefit Plan ​ In May 2021, the Company established the Fennec Pharmaceuticals, Inc. 401(k) Plan (the “401(k) Plan”) for its employees, which is designed to be qualified under Section 401(k) of the Internal Revenue Code of 1986. Eligible employees are permitted to contribute to the 401(k) Plan within statutory and 401(k) Plan limits. Effective June 1, 2026, the Company began matching employee contributions to the 401(k) Plan at 100 % of employee contributions, up to 3 % of eligible compensation. ​ ​ ​ ​ ​ 19 Table of Contents 7. License Agreement License Agreement with Norgine Pharma UK Limited On March 17, 2024, the Company announced that, through its wholly-owned subsidiary, Fennec Pharmaceuticals, Inc. entered into a License and Supply Agreement (the “Agreement”) with Norgine, pursuant to which Norgine is granted an exclusive license to commercialize the Company’s product PEDMARQSI® (known as PEDMARK ® in the United States) for all human indications in the European Economic Area, Switzerland, the United Kingdom, Australia and New Zealand (collectively, the “Territory”). On July 26, 2024, Norgine and Fennec amended the Agreement. The amended Agreement maintains all principal payment terms with the primary addition of Norgine assuming responsibility for packaging and labeling of PEDMARQSI ® . Pursuant to the terms of the Agreement, Fennec shall receive the following payments from Norgine: (i) an upfront payment in the amount of € 40 million or approximately $ 43.2 million, which was paid to Fennec on March 15, 2024, (ii) up to € 210 million (or approximately $ 230 million) upon the achievement of certain regulatory and commercial milestones, and (iii) tiered royalty payments based on net sales of PEDMARQSI ® in the Territory, which royalty payment range from mid-teen percent to mid-twenty percent based on the aggregate net sales of PEDMARQSI ® in the Territory. The tiered royalty payments are subject to material reduction if an alternative or generic version of PEDMARQSI ® becomes available in any respective country or jurisdiction within the Territory. Subject to customary rights of each party to earlier terminate the Agreement, the term of the Agreement continues for the longer of: (i) March 15, 2034, or (ii) with respect to any particular country in the Territory, (a) the expiration of regulatory market exclusivity for PEDMARQSI ® in such country, or (b) the last-to-expire of all patents for PEDMARQSI ® in such country. The term of the Agreement shall be automatically renewed for additional three-year periods unless either party provides the other party written notice of its intent not to renew the Agreement at least one year prior to the applicable termination date of the Agreement. ​ The Company evaluated the Agreement under ASC 606 and concluded that Norgine is a customer in the arrangement. The Company identified two performance obligations under the Agreement: a license of functional intellectual property and a material right for future supply. A portion of the non-refundable upfront payment was allocated to the license and recognized as license revenue in 2024, and the portion associated with the material right was deferred and is reflected as contract liabilities in the condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, contract liabilities related to the Agreement were $ 24,099 and $ 24,809 , respectively, consisting of $ 3,182 classified as current and $ 20,917 classified as long-term. For the six months ended June 30, 2026, the Company recognized $ 710 of revenue related to the deferred material right and $ 326 of royalty revenue under the Agreement. No milestone was recognized during the period. In conjunction with entering into the Agreement, the Company paid approximately $ 1,700 in incremental costs, which were capitalized and recorded within Other non-current assets. The Company amortizes the asset over the period of expected benefit using a systematic basis that reflects the pattern of transfer to Norgine. A portion that represents the license was recognized immediately and is recorded within selling and marketing expense in the consolidated statements of operations. As of June 30, 2026, $ 666 in incremental cost was capitalized. 8. Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes . The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, recognized in the period in which they occur. For the three and six months ended June 30, 2026, the Company recorded an income tax provision of $ 42 , compared to no income tax provision for the three and six months ended June 30, 2025. The 2026 provision relates primarily to state income taxes, as federal taxable income was substantially offset by available net operating loss carryforwards. No 20 Table of Contents provision was recorded in the 2025 periods, in which the Company incurred net losses. The Company continues to maintain a full valuation allowance against its deferred tax assets. The Company continues to maintain a valuation allowance against deferred tax assets for jurisdictions where, based on all available evidence, it is more likely than not that such deferred tax assets will not be realized. The Company will continue to evaluate the realizability of deferred tax assets in future periods, including the impact of sustained profitability, future taxable income and the reversal of temporary differences. 9. Segment Reporting Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company operates as a single operating and reportable segment focused on the commercialization of PEDMARK®/PEDMARQSI ® . The Company’s CODM is its Chief Executive Officer. The CODM reviews consolidated net income (loss) to assess performance, make operating decisions and allocate resources. This measure is reported on the condensed consolidated statements of operations. ​ The accounting policies of the operating segment are the same as those described in Note 2, Significant Accounting Policies. Segment assets are reported on the condensed consolidated balance sheets as total assets. The CODM also reviews significant expense categories, which are presented on the condensed consolidated statements of operations, including cost of product sales, research and development, selling and marketing, and general and administrative expenses. 10. Subsequent Events Management has evaluated subsequent events through the date of this filing and concluded there are no events of significance which require disclosure. ​ ​