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, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ Current assets ​ ​ ​ Cash and cash equivalents ​ $ 18,705 ​ $ 26,634 ​ Accounts receivable, net ​ ​ 17,502 ​ ​ 12,884 ​ Prepaid expenses ​ 1,421 ​ 3,080 ​ Inventory ​ ​ 2,201 ​ ​ 1,060 ​ Other current assets ​ 965 ​ 466 ​ Total current assets ​ ​ 40,794 ​ ​ 44,124 ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets ​ ​ ​ ​ ​ ​ ​ Non-current accounts receivable, net ​ ​ 3,314 ​ ​ — ​ Other non-current assets, net of amortization ​ ​ 768 ​ ​ 822 ​ Total non-current assets ​ ​ 4,082 ​ ​ 822 ​ Total assets ​ $ 44,876 ​ $ 44,946 ​ ​ ​ ​ ​ Liabilities and stockholders’ deficit ​ ​ ​ Current liabilities: ​ ​ ​ Accounts payable ​ $ 5,941 ​ $ 3,241 ​ Accrued liabilities ​ 2,225 ​ 3,428 ​ Contract liability - current ​ ​ 248 ​ ​ 248 ​ Operating lease liability - current ​ ​ — ​ ​ 2 ​ Total current liabilities ​ 8,414 ​ 6,919 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term liabilities ​ ​ ​ ​ ​ ​ ​ Term loan ​ ​ 18,206 ​ ​ 18,206 ​ PIK interest ​ ​ 1,271 ​ ​ 1,271 ​ Debt discount ​ ​ ( 113 ) ​ ​ ( 139 ) ​ Contract liability - long-term ​ ​ 24,561 ​ ​ 24,561 ​ Total long-term liabilities ​ ​ 43,925 ​ ​ 43,899 ​ Total liabilities ​ 52,339 ​ 50,818 ​ ​ ​ ​ ​ Commitments and contingencies (Note 6) ​ ​ ​ ​ ​ ​ ​ Stockholders’ deficit: ​ ​ ​ Common stock, no par value; unlimited shares authorized; 27,733 shares issued and outstanding (2024 ‑ 27,527 ) ​ 146,165 ​ 145,608 ​ Additional paid-in capital ​ 69,127 ​ 66,958 ​ Accumulated deficit ​ ( 223,998 ) ​ ( 219,681 ) ​ Accumulated other comprehensive income ​ 1,243 ​ 1,243 ​ Total stockholders’ deficit ​ ( 7,463 ) ​ ( 5,872 ) ​ Total liabilities and stockholders’ deficit ​ $ 44,876 ​ $ 44,946 ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, ​ 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PEDMARK product sales, net ​ $ 9,652 ​ $ 7,262 ​ $ 18,403 ​ $ 14,681 Licensing revenue ​ ​ — ​ ​ — ​ ​ — ​ ​ 17,958 Total revenue ​ ​ 9,652 ​ ​ 7,262 ​ ​ 18,403 ​ ​ 32,639 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ Cost of product sales ​ ​ 967 ​ ​ 608 ​ ​ 1,340 ​ ​ 1,158 Research and development ​ 107 ​ 157 ​ 201 ​ 160 Selling and marketing ​ ​ 4,354 ​ ​ 4,672 ​ ​ 7,301 ​ ​ 9,881 General and administrative ​ 6,956 ​ 6,864 ​ 13,101 ​ 12,736 ​ ​ ​ ​ ​ Total operating expenses ​ ( 12,384 ) ​ ( 12,301 ) ​ ( 21,943 ) ​ ( 23,935 ) (Loss)/income from operations ​ ​ ( 2,732 ) ​ ​ ( 5,039 ) ​ ​ ( 3,540 ) ​ ​ 8,704 ​ ​ ​ ​ ​ Other (expense)/income ​ ​ ​ ​ Unrealized foreign exchange gain / (loss) ​ ​ 17 ​ ​ ( 17 ) ​ ​ 30 ​ ​ ( 55 ) Amortization expense ​ ​ ( 13 ) ​ ​ ( 23 ) ​ ​ ( 26 ) ​ ​ ( 43 ) Unrealized loss on securities ​ ( 1 ) ​ ​ — ​ ​ ( 2 ) ​ ​ ( 11 ) Interest income ​ 171 ​ ​ 570 ​ ​ 407 ​ ​ 767 Interest expense ​ ​ ( 594 ) ​ ​ ( 1,044 ) ​ ​ ( 1,186 ) ​ ​ ( 2,078 ) Total other expense ​ ( 420 ) ​ ( 514 ) ​ ( 777 ) ​ ( 1,420 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss)/income ​ $ ( 3,152 ) ​ $ ( 5,553 ) ​ $ ( 4,317 ) ​ $ 7,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic net (loss)/income per common share ​ $ ( 0.11 ) ​ $ ( 0.20 ) ​ $ ( 0.16 ) ​ $ 0.27 Diluted net (loss)/income per common share ​ $ ( 0.11 ) ​ $ ( 0.20 ) ​ $ ( 0.16 ) ​ $ 0.24 Weighted-average number of common shares outstanding basic ​ ​ 27,664 ​ ​ 27,297 ​ ​ 27,621 ​ ​ 27,250 Weighted-average number of common shares outstanding diluted ​ 27,664 ​ 27,297 ​ ​ 27,621 ​ ​ 30,354 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2025, and 2024 (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, 2024 ​ 27,527 ​ $ 145,608 ​ $ 66,958 ​ $ ( 219,681 ) ​ $ 1,243 ​ $ ( 5,872 ) Stock-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 ) Stock-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 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Comprehensive ​ Stockholders’ ​ ​ Shares Amount Capital Deficit Income Equity (deficit) Balance at December 31, 2023 ​ 27,027 ​ $ 144,307 ​ $ 62,073 ​ $ ( 219,245 ) ​ $ 1,243 ​ $ ( 11,622 ) Stock-based compensation — ​ ​ — ​ ​ 1,191 ​ — ​ — ​ ​ 1,191 Stock option exercise 75 ​ ​ 627 ​ ​ — ​ ​ — ​ ​ — ​ 627 Restricted stock release ​ 3 ​ ​ — ​ ​ ( 19 ) ​ ​ — ​ ​ — ​ ​ ( 19 ) Net income ​ — ​ — ​ — ​ 12,837 ​ — ​ ​ 12,837 Balance at March 31, 2024 27,105 ​ ​ 144,934 ​ ​ 63,245 ​ ​ ( 206,408 ) ​ ​ 1,243 ​ ​ 3,014 Stock-based compensation ​ — ​ ​ — ​ ​ 925 ​ ​ — ​ ​ — ​ ​ 925 Stock option exercise ​ 147 ​ ​ 347 ​ ​ — ​ ​ — ​ ​ — ​ ​ 347 Restricted stock release ​ 77 ​ ​ — ​ ​ ( 90 ) ​ ​ — ​ ​ — ​ ​ ( 90 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 5,553 ) ​ ​ — ​ ​ ( 5,553 ) Balance at June 30, 2024 ​ 27,329 ​ $ 145,281 ​ $ 64,080 ​ $ ( 211,961 ) ​ $ 1,243 ​ $ ( 1,357 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, ​ ​ 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ Cash flows provided by (used in): ​ ​ ​ Operating activities: ​ ​ ​ Net (loss)/income ​ $ ( 4,317 ) ​ $ 7,284 ​ Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities: ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ 1,222 ​ ​ — ​ Amortization of Norgine asset ​ ​ 51 ​ ​ 749 ​ Amortization of debt discount ​ ​ 26 ​ ​ 43 ​ Unrealized loss on securities ​ ​ 2 ​ ​ 11 ​ PIK interest ​ ​ — ​ ​ 803 ​ Stock-based compensation ​ 2,292 ​ 2,116 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Accounts receivable ​ ​ ( 5,542 ) ​ ​ ( 3,498 ) ​ Prepaid expenses ​ ( 1,659 ) ​ ( 1,804 ) ​ Inventory ​ ​ ( 1,141 ) ​ ​ 12 ​ Other current assets ​ ( 435 ) ​ ( 255 ) ​ Accounts payable ​ 2,700 ​ 669 ​ Accrued liabilities ​ ( 1,203 ) ​ ( 716 ) ​ Contract liability - current ​ ​ — ​ ​ 25,246 ​ Net cash (used in) / provided by operating activities ​ ( 8,004 ) ​ 30,660 ​ ​ ​ ​ ​ Financing activities: ​ ​ ​ Issuance of shares, options exercise ​ 186 ​ 974 ​ Cash paid for taxes on restricted share release ​ ​ ( 111 ) ​ ​ ( 109 ) ​ Deferred issuance costs ​ — ​ ( 1,740 ) ​ Net cash provided by / (used in) financing activities ​ 75 ​ ( 875 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ (Decrease) / increase in cash and cash equivalents ​ ​ ( 7,929 ) ​ ​ 29,785 ​ Cash and cash equivalents - Beginning of period ​ ​ 26,634 ​ ​ 13,269 ​ Cash and cash equivalents - End of period ​ $ 18,705 ​ $ 43,054 ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statement. ​ ​ ​ ​ ​ 6 Table of Contents Fennec Pharmaceuticals Inc. Notes to the 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 with one FDA, EMA and U.K. approved product developed 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. These unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) that are applicable to a going concern which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. During the three and six-month period ended June 30, 2025, the Company experienced a net loss from operations of $( 2,732 ) and $( 3,540 ), respectively. On June 30, 2025, it had an accumulated deficit of $ 223,998 , and had experienced negative cash flows from operating activities in the amount of $( 8,004 ) for the six-month period ended June 30, 2025. ​ On August 1, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with Petrichor Opportunities Fund I LP (the “Petrichor”) in connection with the issuance of up to $ 45,000 of senior secured floating rate convertible notes (the “Notes”), issuable in multiple tranches (the “Note Financing”). The notes are due in August 2027. On August 19, 2022, the Company closed on the initial tranche of $ 5,000 (the “First Closing Note”) which has an Initial Conversion Price equal to $ 8.11 per share, which was calculated based on a 20 % premium of the 5-day volume weighted average price of the Company’s common shares as traded on the Nasdaq Capital Market (the “VWAP”) immediately prior to the announcement of the SPA. In connection with the first closing, the Company repaid in full its secured indebtedness with Bridge Bank in the amount of $ 5,000 . ​ On September 23, 2022, the Company closed on the second tranche of the Note Financing in the amount of $ 20,000 (the “Second Closing Note”), which has an Initial Conversion Price equal to $ 7.89 per share, which was calculated based on a 20 % premium of the 5-day VWAP immediately prior to September 20, 2022, which was the date the Company obtained FDA approval of PEDMARK ® . ​ A commitment fee of 2.0 % of the Notes was payable under the SPA. Half of such fee was paid by the issuance on the first closing of warrants to purchase 55,498 Fennec common shares (“First Closing Warrant”) and half was payable in cash or warrants of 55,498 Fennec common shares (“Second Closing Warrant”), at our election, on the second closing. The warrants are exercisable at a price per share of $ 8.11 and have a term of five years from the date of the grant. The Company elected to have all the commitment fee of the Notes payable in warrants. ​ On December 4, 2023, the Company closed a third tranche under the SPA in the amount of $ 5,000 (the “Third Closing Note”), which has an Initial Conversion Price equal to $ 7.89 per share, which was calculated based on a 20 % premium of the 5-day VWAP immediately prior to September 20, 2022, which was the date the Company obtained FDA approval of PEDMARK ® . Also on December 4, 2023, the Company entered into a First Amendment to the Securities Purchase Agreement (the “SPA Amendment”) with Petrichor, which, among other things, extend the period that the Company could draw the remaining $ 15,000 under the SPA from December 31, 2023, to December 31, 2024. The ability to draw the remaining $ 15,000 under the SPA expired on December 31, 2024. 7 Table of Contents ​ On December 18, 2024, the Company entered into a Waiver and Redemption Agreement (the “Redemption Agreement”) with Petrichor, pursuant to which the Company repurchased and redeemed Notes in an aggregate principal amount of $ 13,000 (consisting of approximately $ 11,800 of original principal balance and approximately $ 1,271 in Payment-in-kind (“PIK”) interest) (collectively, the “Note Redemptions”). ​ As a result of the Note Redemptions, the First and Third Closing Notes were repurchased and redeemed in full, and, as of June 30, 2025, there remains outstanding Second Closing Notes in the aggregate principal amount (inclusive of PIK interest) of approximately $ 19,477 . ​ In March of 2024, the Company announced that it had secured an exclusive licensing agreement with Norgine Pharma UK Limited (“Norgine”) to commercialize PEDMARQSI ® , which is the branded name for PEDMARK ® outside of the U.S., in Europe, Australia and New Zealand. The deal provided the Company with approximately $ 43,000 up front, with the potential of approximately another $ 230,000 in future royalties and milestone payments. ​ The Company believes current funds, which include funds from the upfront payment from Norgine, provide sufficient funding for the Company to carry out its planned activities, including the continuation of commercialization efforts of PEDMARK ® , for at least the next twelve months. These financial statements do not reflect the potentially material adjustments in the carrying values of assets and liabilities, the reported expenses, and the balance sheet classifications used, that would be necessary if the going concern assumption were not appropriate. ​ ​ 2. Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with US 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 US GAAP for annual financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited condensed consolidated financial statements and notes filed with the Securities and Exchange Commission (“SEC”) in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 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, 2024. These unaudited interim condensed consolidated financial statements have been prepared in U.S. dollars. All amounts presented are in thousands except for per share amounts. 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-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 its 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 for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. ​ 8 Table of Contents To determine the provision for credit losses for accounts receivable, the Company has disaggregated its accounts receivable by class of customer, as the Company determined that risk profile of its customers may vary based on certain characteristics such as credit history, past payment history and geography. Each class of customer component is analyzed for estimated credit losses individually. In doing so, the Company establishes a customer profile, based on the previous collections of accounts receivable by the age of such receivables, and evaluates the current and forecasted financial position of its customers, as available. Further, the Company considers macroeconomic factors and the status of the life sciences industry to estimate if there are current expected credit losses within its trade receivables based on the trends and the Company’s expectation of the future status of such economic and industry-specific factors. Also, specific allowance amounts are established based on review of outstanding invoices to record the appropriate provision for customers that have 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 in assessing performance. The Company views its operations and manages its business in one operating segment and employees support only one operating segment which is the production and commercialization of PEDMARK ® . 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. 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. In May 2025, the Board of Directors approved a performance-based unit, or PSU, grant whereby vesting depends on certain revenue performance milestones over the next year. The Company estimates the likelihood of achievement of performance milestones for all PSU awards at the end of each reporting period. To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period. As of June 30, 2025, the Company deems the achievement of a portion of the performance milestones to be probable. 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. ​ 9 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). Costs to Obtain Contract As the majority of the Company's contracts are short-term in nature, sales commissions are generally expensed when incurred as the amortization period would have been less than one year. These costs are recorded within selling and marketing expenses in the condensed consolidated statements of operations. For contracts that extend beyond one year, the incremental expense recognition matches the recognition of related revenue. 10 Table of Contents 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. 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 of 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. 11 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, 2025, and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ ​ ​ June 30, ​ ​ June 30, ​ ​ June 30, ​ ​ June 30, In thousands ​ ​ ​ 2025 ​ ​ 2024 ​ ​ 2025 ​ ​ 2024 Product revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross product revenues ​ ​ $ 10,941 ​ $ 9,466 ​ $ 21,753 ​ $ 19,022 Discounts and allowances ​ ​ ​ ( 1,289 ) ​ ​ ( 2,204 ) ​ ​ ( 3,350 ) ​ ​ ( 4,341 ) Net product revenues ​ ​ $ 9,652 ​ $ 7,262 ​ $ 18,403 ​ $ 14,681 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the three and six months ended June 30, 2025, the Company had five and four 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, 2025, 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, 2024 ​ $ 276 ​ $ 707 ​ $ 983 Provision related to sales made in: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period ​ 418 ​ ​ 224 ​ ​ 642 Prior periods ​ ​ — ​ ​ — ​ ​ — Payments and customer credits issued ​ ​ ( 328 ) ​ ​ ( 61 ) ​ ​ ( 389 ) Balance at March 31, 2025 ​ $ 366 ​ $ 870 ​ $ 1,236 Provision related to sales made in: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current period ​ 553 ​ ​ 196 ​ ​ 749 Prior periods ​ ​ — ​ ​ — ​ ​ — Payments and customer credits issued ​ ​ ( 637 ) ​ ​ ( 185 ) ​ ​ ( 822 ) Balance at June 30, 2025 ​ $ 282 ​ $ 881 ​ $ 1,163 ​ 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. 12 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 the 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 $ 4,306 as of June 30, 2025. ​ 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, 2025, the Company capitalized approximately $ 2,201 of costs as inventory on the condensed consolidated balance sheet. Of the items capitalized, $ 943 was capitalized as raw materials, $ 593 was capitalized as work in process, $ 665 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, 2025, the Company had $ 18,705 in cash, savings and money market accounts ($ 26,634 at December 31, 2024). 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, 2025 and December 31, 2024 consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and term loans, the carrying values of which approximate fair value due to their relatively short time to maturity or 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. 13 Table of Contents Common Shares and Warrants As of June 30, 2025, the Company has 150 warrants with a weighted average strike price of $ 7.71 outstanding to purchase common shares that have a weighted average life of 2.55 years. 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. 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 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 remote, 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, 2025, 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. Loss Per Share Basic net income/(loss) per share is computed by dividing net 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 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. 14 Table of Contents Recent Accounting Pronouncements In December 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance will be effective for annual periods beginning the year ended December 31, 2025. The Company is currently evaluating the effect the adoption of this ASU will have on its consolidated financial statements. 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,” which requires disclosure of additional disaggregated information about significant expenses within relevant income statement captions, such as purchases of inventory, employee compensation, depreciation, amortization and depletion. The new guidance is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. We are currently evaluating the impact of this standard on our consolidated financial statements . 3. 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 stock 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, ​ 2025 2024 2025 2024 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) / income ​ $ ( 3,152 ) ​ $ ( 5,553 ) ​ $ ( 4,317 ) ​ $ 7,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: ​ ​ ​ ​ Weighted-average common shares, basic ​ 27,664 ​ ​ 27,297 ​ ​ 27,621 ​ ​ 27,250 Dilutive effect of stock options ​ — ​ — ​ — ​ 843 Dilutive effect of restricted share units ​ ​ — ​ ​ — ​ ​ — ​ ​ 445 Dilutive effect of warrants ​ — ​ — ​ — ​ 11 Dilutive effect of convertible debt ​ ​ — ​ ​ — ​ ​ — ​ ​ 253 Incremental dilutive shares ​ — ​ — ​ — ​ 1,552 Weighted-average common shares, diluted ​ 27,664 ​ 27,297 ​ 27,621 ​ 30,354 Net (loss) / income per share diluted ​ $ ( 0.11 ) ​ $ ( 0.20 ) ​ $ ( 0.16 ) ​ $ 0.24 ​ 15 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, ​ 2025 2024 ​ 2025 2024 Options to purchase common shares 221 ​ 3,466 ​ 6,078 ​ 5,228 Convertible debt to purchase common shares 24 ​ — ​ 3,785 ​ — Restricted share units to purchase common shares — ​ 445 ​ 485 ​ 445 Performance share units to purchase common shares 100 ​ — ​ 100 ​ — Warrants to purchase common shares — ​ 34 ​ 150 ​ 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. Warrants to Purchase Common Stock During the three and six months ended June 30, 2025, and 2024, there were no warrants issued or exercised . Outstanding warrants have a weighted average life of 2.55 years on June 30, 2025. The following tables detail the Company’s warrant activity for the three and six months ended June 30, 2025, and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ ​ ​ ​ Issuable Upon Exercise ​ ​ ​ ​ ​ of Outstanding ​ ​ Weighted-Average Investor Warrants ​ Warrants ​ ​ Exercise Price Outstanding December 31, 2024 150 ​ $ 7.71 Issued — ​ — Outstanding March 31, 2025 ​ 150 ​ $ 7.71 Issued ​ — ​ — Outstanding June 30, 2025 ​ 150 ​ $ 7.71 ​ Equity Incentive Plan The Company maintains an equity incentive plan (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”), and other equity-based awards 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, representing approximately 30.8 % of the total issued and outstanding common shares as of the date of the circular; and (ii) include provisions for an employee stock purchase program. The amendment was subsequently approved by the Company’s shareholders on June 3, 2025. ​ Prior to this 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. Based on the then-current outstanding share count, this equated to a maximum of 6,825 common shares available for issuance. ​ 16 Table of Contents 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: . ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2025 ​ 2024 2025 ​ 2024 Stock-based expense recognized ​ $ 1,494 ​ $ 925 ​ $ 2,292 ​ $ 2,116 Total option expense recognized ​ $ 1,494 ​ $ 925 ​ $ 2,292 ​ $ 2,116 ​ Stock Option Activity The following is a summary of option activity for the three and six months ended June 30, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Weighted-Average Options ​ Options Exercise Price Outstanding at December 31, 2024 ​ 5,855 ​ $ 6.22 Granted ​ 180 ​ 6.50 Exercised ​ ( 55 ) ​ 5.00 Forfeited ​ ( 123 ) ​ ​ 6.94 Outstanding at March 31, 2025 ​ 5,857 ​ ​ 6.22 Granted ​ 318 ​ ​ 7.41 Exercised ​ ( 52 ) ​ ​ 5.08 Forfeited ​ ( 45 ) ​ ​ 4.23 Outstanding at June 30, 2025 ​ 6,078 ​ $ 6.31 ​ ​ ​ ​ ​ ​ ​ Of the 6,078 options granted and outstanding at June 30, 2025, 4,433 are fully vested and exercisable. ​ The value of options issued was estimated using the Black-Scholes option pricing model using the assumptions in the table below. The expected volatility was determined using historical volatility of our stock based on the expected term of the award. ​ ​ ​ ​ ​ ​ ​ Valuation ​ ​ ​ Assumptions ​ Black-Scholes Model Assumptions ​ June 30, 2025 ​ Expected dividend - % Risk free rate 3.93 - 4.19 % Expected volatility ​ 71.04 - 161.67 % Expected life ​ 1.5 - 6.0 years ​ Performance-Based Units In May 2025, the Board of Directors approved a performance-based unit, or PSU, grant whereby vesting depends on certain revenue performance milestones over the next year. The Company estimates the likelihood of achievement of performance milestones for all PSU awards at the end of each reporting period. To the extent those awards or portions 17 Table of Contents thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period. As of June 30, 2025, the Company deems the achievement of a portion of the performance milestones to be probable. ​ The following table summarizes PSU activity under the 2020 Plan during the six months ended June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ Number of ​ Grant Date Fair Value ​ Stock Units ​ Per Share Unvested balance at January 1, 2025 ​ — $ — Granted ​ 100 ​ 6.62 Vested ​ — ​ — Forfeited ​ — ​ — Unvested balance at June 30, 2025 ​ 100 $ 6.62 ​ ​ ​ 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, 2025 and 2024. During the three and six months ended June 30, 2025, there were 13 and 102 RSUs released from restriction, respectively. Standard vesting of RSUs is over three years with 1/3 vesting on the first 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, 2024 324 Awarded 283 Released ​ ( 13 ) Forfeited ​ ( 5 ) Outstanding at March 31, 2025 ​ 589 Awarded ​ — Released ​ ( 102 ) Forfeited ​ ( 2 ) Outstanding at June 30, 2025 ​ 485 ​ ​ 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. ​ ​ ​ 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 18 Table of Contents 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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurement at June 30, 2025 and December 31, 2024 ​ ​ Quoted Price in Active ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market for Identical ​ Significant Other Significant ​ ​ ​ ​ ​ ​ Instruments ​ Observable Inputs Unobservable Inputs ​ ​ ​ ​ ​ ​ Level 1 ​ Level 2 Level 3 ​ Total ​ ​ 2025 ​ 2024 ​ 2025 2024 2025 2024 2025 2024 Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,984 (1) $ 2,020 (1) $ 16,721 $ 24,614 $ — $ — $ 18,705 $ 26,634 Processa common shares ​ $ 1 (2) $ 2 (2) $ — $ — $ — $ — $ 1 $ 2 ​ (1) The Company held approximately $ 1,984 in cash accounts as of June 30, 2025, of which approximately $ 442 was held in foreign currencies (translated into U.S. dollars). As of December 31, 2024, the Company held approximately $ 1,314 in cash of which approximately $ 363 was in foreign currencies (translated into U.S. dollars). (2) The Company holds 51 unrestricted common shares of Processa Pharmaceuticals, Inc. (NASDAQ:PCSA), which it received as part of a royalty arrangement in 2020. ​ 6. Commitments and Contingencies Litigation CIPLA Litigation On December 1, 2022, we received a letter dated November 30, 2022, notifying us that CIPLA Ltd. and CIPLA USA (“CIPLA”) submitted to the FDA an ANDA (ANDA No. 218028) for a generic version of PEDMARK ® (sodium thiosulfate solution) that contained Paragraph IV Certifications on two of our patents covering PEDMARK ® : the OHSU licensed ‘190 Patent, expiration date January 2038; and our US 11,291,728 Patent (the “’728 Patent”), expiration date July 2039. On January 6, 2023, we received a letter dated January 5, 2023, notifying us that CIPLA submitted to the FDA a Paragraph IV Certification on our newly issued US 11,510,984 Patent (the “’984 Patent”). These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for PEDMARK ® . The certifications allege these patents are invalid or will not be infringed by the manufacture, use, or sale of CIPLA’s sodium thiosulfate solution . Under the Food, Drug, and Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, as amended, after receipt of a valid Paragraph IV notice, the Company may bring a patent infringement suit in a federal district court against CIPLA within 45 days from the receipt of the Notice Letter and if such a suit is commenced within the 45-day period, the Company is entitled to a 30 month stay on the FDA’s ability to give final approval to any proposed products that reference PEDMARK. In addition to the 30-month stay, because we have received Orphan Drug Exclusivity, the FDA may not approve CIPLA’s ANDA for at least 7 years from PEDMARK’s FDA approval date of September 20, 2022, which is September 20, 2029. On January 10, 2023, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:23-cv-00123), for infringement of the US ‘190 Patent, the US ‘728 Patent, and the US ‘984 Patent. On April 20, 2023, we filed an Amended Complaint to assert infringement of the US ‘728 Patent and the US ‘984 Patent. On April 4, 2023, we were granted US 11,617,793 Patent (the “US ‘793 Patent”) covering the formulation of the PEDMARK product, which was listed in the Orange Book on or around April 17, 2023, and has an expiration date of July 2039. On May 11, 2023, we received written notice of CIPLA’s Paragraph IV Certification as to the US ‘793 Patent, which was dated May 10, 2023, along with an enclosed statement of alleged factual and legal bases for stating that the US ‘793 Patent is invalid, unenforceable, and/or will not be infringed by CIPLA’s ANDA Product. On July 27, 2023, we filed a Second 19 Table of Contents Amended Complaint to assert the US ‘793 Patent. CIPLA filed an Answer to the Second Amended Complaint on August 31, 2023. On April 23, 2024, we were granted US 11,964,018 Patent (the “US ‘018 Patent) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around May 8, 2024, and has an expiration date of July 2039. On May 28, 2024, we were granted US 11,992,530 Patent (the “US ‘530 Patent”) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around June 20, 2024, and has an expiration date of July 2039. On June 4, 2024, we were granted US 11,998,604 Patent (the “US ‘604 Patent”) covering a method of using our PEDMARK product to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer, which was listed in the Orange Book on or around June 24, 2024, and has an expiration date of July 2039. On June 13, 2024, we filed a Motion for Leave to File a Third Amended Complaint to focus the ANDA litigation against CIPLA on the US ‘018 Patent and the US ‘793 Patent only. The non-asserted patents remain listed in the Orange Book. On July 22, 2024, CIPLA filed a response indicating that they do not oppose our Motion for Leave to File a Third Amended Complaint. On July 30, 2024, the court granted us leave to file the Third Amended Complaint, which we filed on September 16, 2024. In coordination with the Third Amended Complaint, we entered into a covenant not to sue CIPLA on the US ‘363 Patent, US ‘728 Patent, US ‘984 Patent, US ‘530 Patent, and US ‘604 Patent, subject to the limitation that such shall not apply to the extent CIPLA alters the product or formulation described in its FDA ANDA application. ​ On May 27, 2025, we were granted US 12,311,026 (the “US ‘026 Patent”) covering a method of using pharmaceutical compositions comprising sodium thiosulfate and specific stabilizers to reduce ototoxicity in a patient receiving a platinum based chemotherapeutic for the treatment of a cancer. The US ‘026 Patent has an expiration date of July 2039. ​ On May 27, 2025, we filed suit against the CIPLA entities in the United States District Court for the District of New Jersey (Case No. 2:25-cv-05709), for infringement of the US ‘026 Patent based on the Cipla entities’ ANDA filing. Subsequently, we filed a Motion to Consolidate Case No. 2:25-cv-05709 and Case No. 2:23-cv-00123. ​ On July 14, 2025, the court granted the Motion to Consolidate Case No. 2:25-cv-05709 with Case No. 2:23-cv-00123. On July 14, 2025, the court issued its Order on Claim Construction on two claim terms in dispute, adopting our proposed constructions for both. ​ The suit is ongoing. 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 $ 559 ). 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 $ 344 . 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. ​ 20 Table of Contents 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. ​ On August 1, 2023, the Company entered into a second Office Service Agreement (the “Second Office Service Agreement”) with Regus to lease office space in Dublin, Ireland. Per the terms of the Second Office Service Agreement, the monthly rent payments are $ 2 . The Company was required to pay a security deposit of $ 5 , which is the equivalent of two months rent. The Second Office Service Agreement commenced on August 1, 2023, and terminated on January 31, 2025, thereafter the lease may continue 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. This lease was terminated. ​ 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. As of June 30, 2025, the Company does not offer matching contributions. ​ ​ 7. Term Loans On August 1, 2022, the Company entered into the SPA with the Petrichor in connection with the issuance of up to $ 45,000 of Notes, issuable in multiple tranches. On August 19, 2022, the Company closed on the initial tranche of $ 5,000 , which has an Initial Conversion Price equal to $ 8.11 per share, which was calculated based on a 20 % premium of the 5-day VWAP immediately prior to the announcement of the SPA. In connection with the first closing, the Company repaid in full its secured indebtedness with Bridge Bank in the amount of $ 5,000 . The Notes become due on the maturity date, which is August 19, 2027. On September 23, 2022, the Company closed on the second tranche of the Note Financing in the amount of $ 20,000 , which has an Initial Conversion Price equal to $ 7.89 per share, which was calculated based on a 20 % premium of the 5-day VWAP immediately prior to September 20, 2022, which was the date the Company obtained FDA approval of PEDMARK ® . ​ A commitment fee of 2.0 % of the Notes was payable under the SPA. Half of such fee was paid by the issuance on the first closing of warrants to purchase 55,498 Fennec common shares and half was payable in cash or warrants of 55,498 Fennec common shares, at our election, on the second closing. The warrants are exercisable at a price per share of $ 8.11 and have a term of five years from the date of the grant. The Company elected to have all the commitment fee of the Notes payable in warrants. ​ On December 4, 2023, the Company closed a third tranche under the SPA in the amount of $ 5,000 , which has an Initial Conversion Price equal to $ 7.89 per share, which was calculated based on a 20 % premium of the 5-day VWAP immediately prior to September 20, 2022, which was the date the Company obtained FDA approval of PEDMARK ® . ​ Also on December 4, 2023, the Company entered into the SPA Amendment with the Petrichor, which, among other things, extended the period that the Company could draw the remaining $ 15,000 under the SPA from December 31, 2023, to December 31, 2024. The ability for subsequent draws expired on December 31, 2024. ​ On December 18, 2024, the Company entered into the Redemption Agreement with Petrichor, pursuant to which the Company repurchased and redeemed Notes in an aggregate principal amount of $ 13,000 (consisting of approximately $ 11,800 of original principal balance and approximately $ 1,271 in PIK interest). ​ 21 Table of Contents As a result of the Note Redemptions, the First and Third Closing Notes were repurchased and redeemed in full, and, as of June 30, 2025, there remains outstanding Second Closing Notes in the aggregate principal amount (inclusive of PIK interest) of approximately $ 19,477 . ​ Cash interest on outstanding principal shall accrue at a rate of prime, plus 4.5 % per annum, from the date of funding ( 12 % at June 30, 2025, and December 31, 2024, respectively). Cash interest is due on the first business day of each calendar quarter (“Interest Date”). PIK interest will commence on funding date and accrue at a rate of 3.5 % per annum. PIK interest stopped accruing on August 24, 2024. All accrued PIK interest remained outstanding and was payable on each Interest Date and added to the outstanding principal amount. The Company has accrued $ 1,271 in PIK interest and has classified the PIK interest in long-term liabilities. The SPA notes are convertible into fully paid, non-assessable share of common shares at any point after their issuance dates and before the maturity date. Any amount of the SPA notes may be converted into common shares so long as it does not create partial shares. The conversion rate is determined by dividing the conversion amount by the conversion price. Provisions of the PSA create legal, valid and enforceable liens on, and security interests in, all of the Company’s and each of its subsidiaries’ assets. Aggregate annual payments due on the SPA as of June 30, 2025, are as follows (in thousands): ​ ​ ​ ​ ​ Years Ending December 31, ​ Amount 2025 ​ $ — 2026 ​ ​ — 2027 ​ ​ 18,206 Payment in kind interest ​ ​ 1,271 Total future payments ​ ​ 19,477 Less: unamortized debt discount ​ ​ ( 113 ) Total term loan, net of debt discount ​ $ 19,364 ​ In the event of default or change of control, all unpaid principal and all accrued and unpaid interest amounts (if any) under the SPA notes become immediately due and payable. Events of default include, but are not limited to, a payment default, a material adverse change, and insolvency. The SPA facility is secured by all of the Company’s assets, including all capital stock held by the Company. Debt issuance costs of $ 175 were paid in cash for legal fees and to the Investor in 2022 and warrants valued at $ 441 were granted the Investor to secure access to the SPA. These amounts were capitalized and are being amortized over the access period of the SPA. Upon drawing tranche 1 and tranche 2, the Company recorded a debt discount of $ 314 , which was based on a pro-rata allocation of the issue costs to secure the SPA, reducing the capitalized amount by the same amount. The debt discount is being amortized over the life of the SPA. ​ 8. 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 22 Table of Contents (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 Norgine License Agreement under ASC 606 and concluded that Norgine represents a customer in the transaction. There were two performance obligations: A license of functional IP and a material right for future supply. The Company will allocate the transaction price, including currently unrecognized variable consideration, to the two performance obligations based on estimated standalone selling price, which was estimated using projected cash flows. The initial transaction price consisted of the non-refundable upfront payment, a portion of which was allocated to and recognized as License Revenue in the first quarter of 2024 as the requirements for revenue recognition under ASC 606 were met. The portion of the transaction price associated with the material right is deferred and reflected as deferred revenue in the condensed consolidated balance sheets. Deferred revenue associated with the material right is recognized as contract liabilities under the supply arrangement are made. The remaining forms of consideration are variable because they are dependent on the achievement of sales-based or other milestones. The Company evaluated the constraint on variable consideration and concluded that the milestone payments are dependent on regulatory approvals and actions of third parties, and thus are highly susceptible to factors outside the Company’s influence. Therefore, at contract inception, the milestones are not included in the transaction price as it is not probable that a significant reversal of revenue would not occur. Sales-based milestones will be recognized as revenue or deferred as part of the material right in the period when the related sales threshold is met. All other milestones will be recognized as revenue or deferred as part of the material right immediately in the period the underlying milestone is achieved. Any consideration related to sales-based royalties will be recognized as revenue or deferred as part of the material right when the related sales occur. For the six months ended June 30, 2025, the Company did not recognize any milestone payments from Norgine sales of PEDMARQSI ® pursuant to the Agreement. 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, 2025, $ 768 in incremental cost was capitalized. 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 in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment principally in the United States. Fennec’s chief operating decision maker is the senior executive team that includes the chief executive officer and chief financial officer. The chief operating decision maker uses net loss to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the single segment or any other part of the entity, such as for acquisitions or to pay dividends. The accounting policies of the operating segment are the same as those described in Note 2, Significant Accounting Policies. The chief operating decision maker evaluates the performance of the operating segment and allocates resources based on net loss that also is reported on the consolidated income statement as net loss. The measure of the operating segment assets is reported on the consolidated balance sheet as total assets. 23 Table of Contents The chief operating decision maker uses net loss to monitor budget versus actual results and to analyze cash flows in assessing performance of the segment and allocating resources. The significant expenses are presented in the Company’s Statements of Operations. 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. ​ ​