What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-28 · 580 added, 313 removed, 564 unchanged (61% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID Number 173 )

Balance Sheets

2 unchanged sentences

Statements of Cash Flows

RE PORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

HCW Biologics Inc.

Opinion on the financial statements

We have audited the accompanying balance sheet of HCW Biologics Inc.

(the “Company”) as of December 31, 2023, the related statements of operations, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for year then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provided a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor from 2019 to 2024.

May 15, 2024 (except for Note 16, as to which the date is March 28, 2025)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Opinion on the Financial Statements

We have audited the accompanying balance sheet of HCW Biologics Inc (the "Company") as of December 31, 2024, the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheet of HCW Biologics Inc (the "Company") as of December 31, 2025 and 2024, the related statements of operations, stockholders’ equity (deficit), and cash flows for the year ended, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring negative cash flows from operations, negative working capital and the need for funding to support its operations that raise substantial doubt about its ability to continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operations, negative working capital and the need for funding to support its operations that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

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Total current liabilities

Contingent liability - related party

Total liabilities

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( 100,556,137

( 108,515,846

Total stockholders’ equity (deficit)

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General and administrative

Legal expenses

Reserve for credit losses and other expenses

Legal expenses (recoveries), net

Impairment of long-lived asset

Nonoperating loss

Total operating expenses

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Interest expense

Change in fair value of investment

Change in fair value of contingent liability

Loss on sale of put shares

Gain on extinguishment of liability

Other income, net

Equity dividend to investor

Net loss attributable to Common Stockholders

Net loss per share, basic and diluted

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Balance, January 1, 2024

Issuance of Class A

Common Stock upon

exercise of stock options

Stock-based compensation

Balance, December 31, 2023

Common Stock upon exercise of stock options

Common Stock upon equity subscription

Issuance of Common Stock upon exercise of stock options

Issuance of Common Stock upon equity subscription

Issuance of Common Stock

Issuance of warrants

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( 100,556,137

Issuance of Common Stock (1)

Issuance of pre-funded warrants

Issuance of Common Stock warrants

Exercise of pre-funded warrants

Issuance cost of Common Stock

Issuance cost of Common Stock warrants

Issuance cost of pre-funded warrants

Equity dividend to investor

Issuance of Common Stock upon exercise of stock options

Issuance of Common Stock to Square Gate

Issuance of Common Stock under Standby Equity Purchase Agreement

Issuance of Common Stock to extinguish restructured debt

Issuance of Common Stock warrants to extinguish restructured debt

Gain on conversion of debt with related parties

Stock-based compensation

Adjustment for reverse stock split

Balance, December 31, 2025

( 108,515,846

(1) Represents the aggregate fair value of 1,704,447 shares of common stock, which includes 727,447 shares that have been issued and 977,000 shares held in abeyance (See Note 7 - Sale of Common Stock Warrants).

The accompanying notes are an integral part of these financial statements.

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

Depreciation and amortization

Depreciation and accretion

Stock-based compensation

Unrealized (gain) on investments, net

Realized (gain) on investments, net

Commitment fee

Change in fair value of investment

Change in fair value of contingent liability

Gain on extinguishment of liability

Loss on sale of put shares

Loss on conversion of debt with related parties

Impairment of long-lived asset

Changes in the carrying amount of right-of-use asset

Reserve for credit losses

Changes in operating assets and liabilities:

Accounts receivable

Deposit for interest reserve

Prepaid expenses and other assets

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Purchases of property and equipment

Proceeds for sale or maturities of short-term investments

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock

Proceeds from issuance of debt

Proceeds from issuance of Common Stock, net

Proceeds from issuance of Common Stock under SEPA, net

Proceeds from issuance of pre-funded warrants, net

Proceeds from Common Stock warrants

Issuance costs for common stock and warrants

Proceeds from issuance of debt

Issuance costs for Common Stock, pre-funded warrants, and Common Stock warrants

Debt repayment

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the period

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Cash paid for interest, net of amounts capitalized

Noncash operating, investing and financing activities:

Noncash investing activities:

Capital expenditures accrued, but not yet paid

Purchases of property and equipment included in accounts payable and other liabilities

Reserve for credit losses

Purchases of property and equipment included in accounts payable

Noncash financing activities:

Extinguishment of restructured debt with related parties

Issuance of Common Stock, warrants and other rights upon extinguishment of restructured debt with related parties

Gain on extinguishment of debt with related parties

Equity dividend to investor

The accompanying notes are an integral part of these financial statements.

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HCW Biologics Inc.

(the “Company”) is a clinical-stage biopharmaceutical company focused on discovering and developing novel immunotherapies to lengthen health span by disrupting the link between chronic, low-grade inflammation and age-related diseases.

The Company believes age-related low-grade chronic inflammation, or “inflammaging,” is a significant contributing factor to several chronic diseases and conditions, such as cancer, cardiovascular disease, diabetes, neurodegenerative diseases, and autoimmune diseases.

(“HCW Biologics” or the “Company”) is a clinical-stage biopharmaceutical company developing transformative fusion immunotherapeutics to support or treat diseases promoted by chronic inflammation.

Our assets include both clinical-stage immunotherapeutics as well as commercial-ready proprietary compounds for use as reagents in the production of immunotherapeutics for the treatment of infectious diseases and cancer.

The Company believes low-grade chronic inflammation is a significant contributing factor to several diseases and conditions, such as autoimmune disorders and other proinflammatory diseases such as neurodegenerative disease, cancer, and senescence-associated dysplasia.

The Company is located in Miramar, Florida and was incorporated in the state of Delaware in April 2018.

Reverse Stock Split

On March 31, 2025, at a Special Meeting of the Stockholders (the “Special Meeting”), the stockholders of the Company approved a reverse stock split of all outstanding shares of the Company’s common stock (“Common Stock”), and the Board approved a reverse stock split of the Common Stock at a final ratio of one-for-forty ( 1 ::40) (the “Reverse Stock Split”).

The Reverse Stock Split was effective at 12:01 a.m.

Eastern Time on April 11, 2025.

The Common Stock commenced trading on a reverse split-adjusted basis when the markets opened on April 11, 2025, under the existing trading symbol “HCWB.”

In addition to the Reverse Stock Split, the stockholders approved two other proposals at the Special Meeting:

(1) use of the Company’s equity line of credit to raise up to $ 40.0 million through sales of shares of the Company’s Common Stock thereunder and (2) execution of the principal terms for the conversion of up to approximately $ 6.9 million of the outstanding principal of Secured Notes into shares of Common Stock.

Debt -- Troubled Debt Restructuring of Secured Notes.

All authorized, issued, and outstanding shares of Common Stock, Preferred Stock, stock option awards, and per share data included in these audited financial statements have been recast to give retrospective effect to the adjusted authorized shares and Reverse Stock Split for all periods presented.

The Reverse Stock Split did not have any effect on the stated par value of the Company’s Common Stock or the rights and privileges of the holders of shares of Common Stock.

Options, warrants and convertible securities outstanding immediately prior to the Reverse Stock Split were appropriately adjusted to reflect the Reverse Stock Split.

Liquidity and Going Concern

In accordance with FASB Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern (“Topic 205-40”), management is required to evaluate whether there are conditions and events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the Company’s audited financial statements.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Presentation of Financial Statements – Going Concern (“Topic 205-40”), management is required to evaluate whether there are conditions and events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the Company’s audited financial statements.

This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the financial statements are issued.

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The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

As of December 31, 2024, the Company had not generated any revenue from commercial product sales of its internally developed immunotherapeutic products for the treatment of cancer and other age-related diseases.

During its development activities, the Company has sustained operating losses and expects to continue to incur operating losses for the foreseeable future.

Since inception to December 31, 2024, the Company incurred cumulative net losses of $ 98.1 mill ion.

These losses reflect the events previously reported in the Form 10-K/A filed on May 15, 2024 with the Securities and Exchange Commission (“SEC”), involving reserve for credit losses and other expenses of $ 6.6 million.

The reserve for credit losses and other expenses arose from two events previous reported by the Company on the Form 8-K filed on January 12, 2024 and the Form 8-K filed on May 1, 2024.

See Part II, Item 9A.

-- “Controls and Procedures.”

On August 15, 2022, the Company entered into a loan and security agreement (the “2022 Loan Agreement”) with Cogent Bank, pursuant to which it received $ 6.5 million in proceeds to purchase a building that will become the Company's new headquarters.

The loan is secured by a first priority lien on the building.

As of December 31, 2024, certain subcontractors have filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories.

The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements;

however, as of the reporting date, the lender has not elected to do so.

As of December 31, 2024, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

The Company continues to seek the financing required to complete the construction project, with the cooperation of the lender and lien holders .

To date, the Company has funded operations primarily through the sale of stock, issuance of Senior Notes and revenues generated from the Company’s exclusive worldwide license with Wugen, Inc.

As of December 31, 2025, the Company had not generated any revenue from commercial product sales of its internally developed immunotherapeutic products.

During its development activities, the Company has sustained operating losses experienced negative operating cash flows and negative working capital position and expects to continue to incur operating losses for the foreseeable future.

Since inception to December 31, 2025, the Company incurred cumulative net losses of $ 105.8 million.

For the year ended December 31, 2025, the Company has funded operations primarily through the sale of stock;

issuance of Senior Notes;

and revenues generated from the Company’s exclusive worldwide license with Wugen, Inc.

(“Wugen”), pursuant to which Wugen licensed limited rights to develop, manufacture, and commercialize cell therapy treatments for cancer based on two of the Company’s internally-developed multi-cytokine fusion protein molecules, and its manufacturing and supply arrangement with Wugen.

In the years ended December 31, 2023 and 2024, Company recognized revenues generated from the supply of clinical and research grade material to Wugen of $ 2.8 million and $ 2.6 million, respectively.

As reported in the Company’s Form 8-K filed on July 18, 2024 and further described in Part I, Item 3.

– “Legal Proceedings” below, as of July 13, 2024, the Company and Dr.

Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with ImmunityBio and its affiliates.

The Settlement Agreement includes mutual general releases by and among the parties thereto.

No party is required to make any monetary payments to any other party or person under the Settlement Agreement and each party will bear its own expenses incurred in connection with the matter.

In accordance with the provisions of the Settlement Agreement, upon completion of remedial procedures, the parties stipulated that the Arbitration and Complaint should be dismissed.

The Arbitration and related Complaint were dismissed on December 24, 2024.

The Company entered into the Settlement Agreement to avoid the costs, disruption and distraction of further litigation.

In the accompanying condensed balance sheet as of December 31, 2024, the Company reported a balance of $ 14.4 million for legal fees incurred but not yet paid that were included within Accounts payable and an accrual of $ 42,800 for accrued legal fees within Accrued liabilities and other current liabilities.

The Company is engaged in discussions with the law firms involved with this matter to arrange a reasonable payment plan with respect to those legal fees.

With the execution of the Settlement Agreement, the Company resolved the attendant uncertainties for the outcome of the Arbitration and additional complexities, and it launched its new financing plan.

Subsequent to the year end, the Company received a $ 2.0 million insurance payment, which was paid directly to the law firm who represented Dr.

Wong for his defense during the Arbitration.

For the years ended December 31, 2024 and 2025, the Company recognized revenues generated from the supply of clinical and research grade material to Wugen of $ 2.6 million and $ 54,232 , respectively.

From inception on December 24, 2020 to December 31, 2025, the Company recognized over $ 16.2 million in revenue as a result of the Wugen license.

For the year ended December 31, 2025, the Company agreed to Wugen’s request to suspend the Wugen License for a period of one year, ending on May 29, 2026.

Until the end of the term, the Company has the right to seek another licensee for the molecules HCW9206 and HCW9201, which were the subject of the Wugen license.

During the period of suspension, Wugen plans to focus its ongoing pivotal clinical trials for its CAR-T clinical program.

In January 2026, Wugen received a Breakthrough Therapy Designation from the U.S.

Food and Drug Administration (“FDA”) for its investigational CAR-T cell therapy, Sofi-cel.

Sofi-cel is an investigational, potential first-in-class, allogeneic, anti-CD7 CAR-T cell therapy currently under evaluation in a pivotal trial (T-RRex) for patients with relapsed or refractory (R/R) T cell acute lymphoblastic leukemia or T cell lymphoblastic lymphoma (T-ALL/LBL).

Breakthrough Therapy Designation is intended to expedite the development and review of medicines for serious or life-threatening conditions with evidence of a substantial clinical improvement.

Wugen plans to file a BLA in 2027.

This therapy holds the potential to be the first approved “off-the-shelf” CART-T for T-cell malignancies.

The Company continues to hold a significant number of shares of Wugen common stock.

On November 17, 2025, the Company and Trimmune entered into an Amended and Restated License, Research and Co-Development Agreement (“Trimmune License”) following the assignment of the original WY Biotech License to Trimmune.

In accordance with the terms of the Trimmune License, the deal closing took place upon receipt of the upfront payment.

On March 16, 2026, the Company received the full upfront license fee, which consisted of $ 3.5 million in gross proceeds, or $ 2.9 million net of taxes, and a transferable minority equity interest in Trimmune.

Subsequent Events.

Prior to the resolution of the Arbitration, the Company had limited options to raise capital required to operate.

On February 20, 2024, the Company completed a $ 2.5 million private placement of shares of common stock with certain of its officers and directors at a price of $ 1.40 per share.

The Company issued 1,785,718 shares of common stock in connection with the offering.

The shares have not been registered and will not be sold or transferred except as permitted under law and pursuant to registration or exemption therefrom.

The Board of Directors and Audit Committee of the Board of Directors reviewed the transaction under the Company’s policy for Related Party Transactions (the “Policy”) and determined that the transaction was in compliance with the Policy.

In multiple closings that occurred from March 31, 2024 to October 31, 2024, the Company issued an aggregate of $ 6.9 million of Secured Notes, with $ 2.9 million from the Company’s officers and members of the board of directors, including $ 2.4 million purchased by Dr.

Wong, Founder and CEO, $ 220,000 purchased by Rebecca Byam, Chief Financial Officer, $ 140,000 purchased by Scott T.

Garrett, Chairman of the board of directors, $ 60,000 purchased by Gary M.

Winer, member of the board of directors, $ 25,000 purchased by Lee Flowers, Senior Vice President for Business Development, and $ 25,000 purchased by Rick S.

Greene, member of the board of directors.

The Company launched a new financing plan in the third quarter of 2024.

On November 13, 2024, we entered into an engagement letter with the Maxim Group to act as the exclusive placement agent for a multi-step equity financing.

In November 2024, the Company completed two financing transactions.

On November 18, 2024, the Company entered a $ 6.9 million securities purchase agreement with an institutional investor, involving a registered direct offering and a concurrent private placement of common stock and warrants.

The offering, priced above market under Nasdaq rules and closed on November 20, 2024.

As a result of this offering, the Company issued 6,717,000 shares of Common Stock and warrants to purchase 6,717,000 shares of Common Stock at $ 1.03 per shares, at a combined price of $ 1.03 per unit consisting of one share of Common Stock and one five-year warrant to purchase a share of Common Stock.

On November 17, 2024, HCW Biologics entered into an exclusive worldwide license agreement with WY Biotech for the rights to develop and commercialize one of HCWB’s preclinical product candidates, HCW11-006.

WY Biotech Co., Ltd.

is a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies.

As the Company disclosed in the Form 8-K filed on March 19, 2025, the Company and WY Biotech agreed on the principal terms for an amendment to the WY Biotech License Agreement, in which the parties agreed to restructure the payment schedule for the $ 7.0 million upfront license fees, including delaying the initial $ 4.0 million portion thereof that was originally due on or about March 17, 2025 .

The parties also agreed to amend the Company’s final deliverable to fulfill the performance obligation is the delivery of a report on the characterization of the license molecule.

Under the amended terms, the Company expects to fulfill its performance obligations and earn the full $ 7.0 million upfront fee in June 2025.

There were no other material changes to the WY Biotech License Agreement, which involves the grant to WY Biotech of an exclusive, world-wide license to use and apply HCW11-006 for in vivo applications.

In particular, the Company will retain the Opt-In Right thereunder, which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of HCW11-006 for in vivo applications in the North America, South America, and Central America.

The Company retains ex vivo rights.

On March 3, 2025, the Nasdaq Hearings Panel (the “Panel”) of The Nasdaq Stock Market LLC (“Nasdaq” or the “Exchange”) granted the Company an extension in which to regain compliance with all Nasdaq continued listing rules.

The Panel’s determination follows a hearing on February 13, 2025, at which the Panel considered the Company’s plan to regain compliance with Listing Rules 5450(a)(1), 5450(b)(2)(A) and 5450(b)(2&3)(C), the minimum bid price (“Bid Price”), the market value of publicly held securities (“MVPHS”) and the market value of listed securities (“MVLS”) rules, respectively.

As a result of the extension, the Panel granted the Company’s request for continued listing on the Exchange, provided that the Company demonstrates compliance with the Bid Price Rule by April 28, 2025, and all other Exchange continued listing rules by June 15, 2025.

As of December 31, 2024, the conclusion of a going concern assessment, before consideration of our financing plans, was that there is substantial doubt about the Company’s ability to continue as a going concern.

Pursuant to the terms of the Trimmune License, the Company retains a payment-free, milestone-free, and royalty-free option to recapture all rights to the development and commercialization of the licensed molecule for in vivo applications in the United States, Canada, Central America, and South America ( the “Opt-in Territory”) following completion of the Phase 1 clinical trial.

Trimmune is responsible for funding all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization activities for the licensed molecule in its territory.

On December 30, 2025, the Company entered a settlement agreement with Cooley LLP (“Cooley”) related to legal fees incurred in connection the defense of Dr.

As a result of that agreement, the Company, Dr.

Wong and Cooley agreed to settle a $ 7.5 million obligation for $ 2.0 million in cash and contingent payments up to $ 5.5 million upon achievement of certain triggering events, all of which were deemed to be remote as of December 31, 2025.

In accordance with the terms of the settlement agreement, $ 500,000 was paid on December 31, 2025.

Based on an amendment to the settlement agreement, the Company paid $ 750,000 on March 20, 2026, and will pay the remaining $ 750,000 upon the earlier of the completion of a financing for at least $ 4.0 million in gross proceeds or August 31, 2026.

After this settlement, as of December 31, 2025, the Company has a liability of $ 6.2 million for remaining amounts owed for legal fees related to the Arbitration which continue to remain outstanding.

On December 9, 2025, the Company entered into a settlement agreement with its contract development and manufacturing organization, EirGenix, Inc.

(“EirGenix”).

Outstanding obligations owed to EirGenix related to manufacturing costs were $ 1.7 million.

The parties agreed to reduce this amount to $ 1.2 million if the amount was paid in full by April 30, 2026, but if the Company fails to do so, the entire $ 1.7 million plus interest and penalties will be due.

The Company paid $ 620,000 on March 3, 2026.

Subsequent Events.

Subsequent to the year ended December 31, 2025, the Company raised $ 5.0 million in gross cash proceeds.

Subsequent Events.

Proceeds were derived from the following transactions:

• On February 19, 2026, the Company completed a $ 1.5 million follow-on public offering, before offering costs with an existing institutional investor.

• As of March 16, 2026, we received the the upfront license fee from Trimmune, including $ 3.5 million before taxes.

As of December 31, 2025, the conclusion of a going concern assessment, before consideration of the Company’s financing plans, was that there is substantial doubt about the Company’s ability to continue as a going concern.

The Company considered future elements of its financing plan that were probable and likely to be implemented within the next year to determine if financing activities currently underway are sufficient mitigate the substantial doubt in the going concern analysis, in addition to considering continued operating losses and the burden of obligations for expenses incurred in connection with past legal proceedings.

The Company expects to complete other capital-raising transactions in the first half of 2025, for which Maxim Group will act as our Placement Agent.

The Company expects to complete other capital-raising transactions in 2026, with an emphasis on strategic investors and business development transactions.

Management concluded that there were no mitigating circumstances which alleviated the substantial doubt over its ability to continue as a going concern.

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Reclassification of Prior Period Presentation of Legal Expenses

Certain prior period amounts have been reclassified to distinguish between General and administrative expenses in the ordinary course of business and legal expenses incurred in connection with the Arbitration and Settlement Agreement described in Notes 1.

Reclassification of legal expenses incurred in connection with legal proceedings impacts the audited statements of operations.

Certain prior period amounts have been reclassified to distinguish between General and administrative expenses in the ordinary course of business, primarily legal expenses incurred in connection with the Arbitration and Settlement Agreement described above in Liquidity and Going Concern.

There is no effect on reporting results of operations from prior periods.

Legal expenses related to the Arbitration are presented in Legal expenses (recoveries), net in the accompanying statements of operations.

Use of Estimates

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Segment Reporting

The Company operates and manages its business as one reportable and operating segment, which is the business of developing and commercializing novel immunotherapies for diseases promoted by chronic inflammation, especially age-related diseases.

The Company’s chief executive officer, who is the chief operating decision maker ("CODM"), reviews financial information on an aggregate basis for allocating and evaluating financial performance.

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Segment Reporting for further details.

The single operating segment constitutes all of the Company activity, the chief operating decision maker regularly reviews the entity-wide operating results and performance .

The single operating segment constitutes all of the Company activity, the CODM regularly reviews the entity-wide operating results and performance .

All long-lived assets are maintained in the United States of America.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“Topic 820”), establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between fair value measurements based on market data (observable inputs) and those based on the Company’s own assumptions (unobservable inputs).

FASB ASC 820, Fair Value Measurement (“Topic 820”), establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between fair value measurements based on market data (observable inputs) and those based on the Company’s own assumptions (unobservable inputs).

This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs.

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Observable inputs such as quoted prices in active markets;

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

Inputs, other than the quoted prices in active markets, which are observable either directly or indirectly;

Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions.

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The Company has not experienced any losses on its deposits of cash and cash equivalents.

For the year ended December 31, 2024, the Company recognized revenues of $ 2.6 million.

For the year ended December 31, 2025, the Company recognized revenues of $ 54,232 .

A ll of the Company's revenues were derived from the supply of clinical grade material to Wugen under the supply agreement between Wugen and the Company, as contemplated in the Wugen License.

As of December 31, 2024 , there was a balance of $ 582,201 in accounts receivable related to sales to Wugen on the accompanying audited balance sheet, which was collected as of the date of issuance of the Annual Report.

As of December 31, 2025 , there was a balance of $ 32,175 in accounts receivable related to sales to Wugen on the accompanying audited balance sheets, which was collected as of the date of issuance of the Annual Report.

Since December 24, 2020, the Company holds 2,174,311 shares of Wugen common stock, which were received as consideration for the Wugen License on December 24, 2020.

Currently, these shares represent a 5.6 % equity ownership interest of Wugen, based on fully diluted, issued and outstanding shares as of December 31, 2024.

Currently, these shares represent 1.61 % equity ownership inter est of Wugen, based on fully diluted, issued and outstanding shares as of December 31, 2025.

The Company has not been able to realize any benefit from the sale of these shares, as they are not currently traded on any public market and thus have limited marketability.

The Company is highly dependent on a third-party manufacturer to supply drug products for its research and development activities of its programs, including clinical and non-clinical studies.

A portion of these shares have been pledged to certain noteholders as part of the terms for restructure debt or conversion.

Debt - Troubled Debt Restructuring of Secured Notes.

The Company is highly dependent on a third-party manufacturer to supply drug products for i ts research and development activities of its programs, including clinical and non-clinical studies.

To mitigate this risk, the Company endeavors to use multiple organizations for third-party manufacturing.

These programs could be adversely affected by a significant interruption in the supply of such drug products.

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A long-lived asset may consist of several different and significant physical components.

A component is a tangible part or portion of property, plan and equipment that (a) can be separately identified as an asset and depreciated or amortized over its own separate expected useful life and (b) is expected to provide economic benefit for more than one year.

A component is a tangible part or portion of property, plant and equipment that (a) can be separately identified as an asset and depreciated or amortized over its own separate expected useful life and (b) is expected to provide economic benefit for more than one year.

If a component has an expected useful life that differs from the expected useful life of the asset to which it relates, the cost should be accounted for separately and depreciated or amortized over its separate expected useful life.

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The estimate of accumulated depreciation is calculated using the same depreciation method and expected useful life previously used to depreciate the total asset to which the component relates.

Depreciation of property, plant and equipment is calculated by component using the straight-line method over the estimated useful lives of the assets, as follows:

The following table sets forth the estimated useful lives for property, plant and equipment:

Estimated Useful Lives

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Recoverability is measured by comparison of the carrying amounts to the future undiscounted cash flows attributable to these assets.

An impairment loss is recognized to the extent an asset group is not recoverable, and the carrying amount exceeds the projected discounted future cash flows arising from these assets.

Impairment losses, if any, are recognized in earnings.

There were no impairment losses for any of the periods presented.

An impairment is recognized to the extent an asset group is not recoverable, and the carrying amount exceeds the projected discounted future cash flows arising from these assets.

Impairments, if any, are recognized in earnings.

There was a $1.5 million impairment to the group of assets that comprise the building project the Company has undertaken to build a manufacturing facility, upgraded laboratories, a vivarium and common areas.

There was no impairment for the years ended December 31, 2024.

Collaborative Arrangements

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Revenue Recognition

The Company accounts for revenues in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”).

The Company accounts for revenues in accordance with Topic 606.

To determine revenue recognition for arrangements that fall within the scope of Topic 606, the Company performs the following five steps:

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For each in process SOW, amounts are billed in the same quarter the costs are incurred.

For the years ended December 31, 2023 and 2024 , the Company recognized revenues related to sale of development supply materials to Wugen of $ 2.8 million and $ 2.6 million, respectively.

For the years ended December 31, 2024 and 2025 , the Company recognized revenues related to sale of development supply materials to Wugen of $ 2.6 million and $ 54,232 , respectively.

Accounts Receivable, Net

Accounts receivable is presented in accordance the current expected credit losses (“CECL”) impairment model as required under Topic 326.

Accounts receivable is presented in accordance the current expected credit losses (“CECL”) impairment model as required under FASB ASC 326, Financial Instrument - Credit Losses (“Topic 326”).

The Company estimates a reserve for expected credit losses based on existing contractual payment terms, actual payment patterns of its customers, current and future economic and market conditions and individual customer circumstances.

As of December 31, 2023 or December 31, 2024 , the Company determined that a reserve for expected credit losses was not required.

As of December 31, 2024 and 2025, the Company determined that a reserve for expected credit losses was not required.

No accounts were written off during the periods presented.

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The current portion of deferred revenue represents the amount to be recognized within one year from the balance sheet date based on the estimated performance period of the underlying performance obligations.

There were no deferred revenue balances as of December 31, 2023 or 2024.

The Company holds a minority interest in Wugen.

The underlying shares of common stock are not traded on any public market and thus have limited marketability.

The Company does not have any influence over the operating and financial policies of Wugen.

As a result, the Company has accounted for this investment using the measurement alternative whereby the investment is recorded at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same investee.

No impairment was recognized during the years ended December 31, 2023 and 2024.

Subsequent Events.

There were no deferred revenue balances as of December 31, 2024 and 2025.

As part of its financing strategy, the Company may enter into licensing or collaboration agreements under which it receives consideration in the form of a minority equity interest in a counterparty, in lieu of or in addition to cash payments.

These financial instruments are presented within Investments in the accompanying audited balance sheets.

When consideration is an equity interest in a private entity whose equity has limited marketability with no readily determinable fair value and for which the Company does not have significant influence over the investee, the Company measures the equity interest using the measurement alternative, at cost less impairment, adjusted for observable price changes in orderly transactions for the identical or similar investment of the same issuer (ASC Topic 321, Investments - Equity Securities), unless the fair value method is otherwise elected.

If the Company elects to measure an equity security at fair value, the entity shall measure all identical or similar investments of the same issuer, including future purchases of identical or similar investments of the same issuer, at fair value.

The election to measure those securities at fair value shall be irrevocable.

Any resulting gains or losses on the securities for which that election is made shall be recorded in earnings at the time of the election.

Fair Value of Financial Instruments.

For the year ended December 31, 2025, the Company elected to account for its Wugen shares, previously accounted for under the measurement alternative, at fair value as determined using financial valuation techniques and market information available.

Further, the Company will remeasure the change in fair value of the Wugen shares, and related contingent liability, in subsequent reporting periods and recognize the change in earnings.

From time to time, the Company invests excess cash in U.S.

Treasury bills and notes, which are classified as trading securities.

As of December 31, 2024 and 2025, the Company had no short-term investments.

Operating Leases

The Company determines if an arrangement is a lease at inception.

Operating leases right of use (“ROU”) assets are included in Other assets, and operating liabilities are included in Accrued liabilities and other current liabilities, and Other liabilities on the balance sheets included in the audited financial statements.

ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

Unless the Company elects to use the practical expedient available under US GAAP lease accounting guidance, operating leases are included in Other assets, Accrued liabilities and Other current liabilities, and Other liabilities in the Company’s balance sheets.

Operating lease Right of Use (“ROU”) assets and Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

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The Company has a lease agreement with lease and non-lease components, which are accounted for separately.

For short-term leases with a term of one year or less, the Company uses the practical expedient and does not record an ROU asset for such short-term leases.

For short-term leases with a term of one year or less, the Company adopts the practical expedient and does not record an ROU asset or lease liability for such short-term leases.

Research and Development Expenses

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Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified.

Costs related to filing and pursuing patent applications are recorded as general and administrative expenses in the statement of operations and expensed as incurred, since recoverability of such expenditures is uncertain.

Accrued Research and Development Expenses

In order to properly record services that have been rendered but not yet billed to the Company, the Company reviews open contracts and purchase orders, communicates with personnel and estimates the level of service performed and the associated cost incurred for the service when has not yet been invoiced or otherwise notified of the Company of the actual cost.

The majority of the Company’s service providers invoice monthly or quarterly in arrears for services performed or when contractual milestones are met.

The Company makes estimates of accrued expenses as of each balance sheet date in financial statements based on facts and circumstances known at that time.

The Company periodically confirms the accuracy of its estimates with the service providers and adjusts if necessary.

Examples of accrued research and development expenses include amounts owed to clinical sites for clinical trial expenses, collaborators, toxicology testing, and other service providers in connection with research and development activities.

Costs related to filing and pursuing patent applications are recorded as general and administrative expenses in the statements of operations and expensed as incurred, since recoverability of such expenditures is uncertain.

Stock-based Compensation

The Company measures its stock-based awards granted to employees and directors based on the estimated fair value of the option on the date of grant (grant date fair value) and recognizes compensation expense over the vesting period.

Compensation expense is recorded as either research and development or general and administrative expenses in the statement of operations based on the function to which the related services are provided.

Compensation expense is recorded as either research and development or general and administrative expenses in the statements of operations based on the function to which the related services are provided.

The Company has granted options with service-based and performance-based vesting conditions.

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Debt Issuance Costs

Debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of the related debt and are amortized, using the effective interest method, as interest expense over the contractual life of the related debt.

Debt issuance costs are presented in the balance sheets as a direct deduction from the carrying amount of the related debt and are amortized, using the effective interest method, as interest expense over the contractual life of the related debt.

Deferred Offering Costs

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For offerings expected to occur within 90 days, the deferred offering costs will be offset against the proceeds received upon the completion of the offering.

Deferred offering costs will be recorded under Other noncurrent assets on the balance sheet.

In the event an offering is terminated or the timing for completing the offering is uncertain, all of the deferred offering costs will be expensed within the Company’s statement of operations in the period in which the determination is made.

Deferred offering costs will be recorded under Other noncurrent assets on the balance sheets.

In the event an offering is terminated or the timing for completing the offering is uncertain, all of the deferred offering costs will be expensed within the Company’s statements of operations in the reporting period in which the determination is made.

The Company accounts for income taxes using an asset and liability approach in accordance with applicable guidance prescribed by FASB issued ASC 740, Income Taxes (“Topic 740”).

Topic 740 requires that the deferred tax consequences of temporary differences between the amounts recorded in the financial statements and the amounts included in the federal and state income tax returns to be recognized in the balance sheet.

The Company makes judgments regarding the realizability of its deferred tax assets.

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As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses.

Generally, cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome in determining that a valuation allowance is not needed.

Generally, cumulative losses in recent years is a significant piece of negative evidence that is difficult to overcome in determining that a valuation allowance is not needed.

The Company’s tax positions may be subject to income tax audits.

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The credits are generally available to offset income tax liabilities.

As of December 31, 2023 and 2024 , the outstanding payroll tax receivables is included in Other current assets in the balance sheet.

As of December 31, 2024 and 2025 , the outstanding payroll tax receivables is included in Other current assets in the accompanying balance sheets.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period.

Basic net loss per share is calculated by divid ing the net loss attributable to Common Stockholders by the daily weighted-average number of common shares outstanding for the period, without consideration of potential dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to Common Stockholders by the sum of the daily weighted average number of common shares plus the potential dilutive effects of potential dilutive securities outstanding during the period.

Potential dilutive securities are excluded from diluted earnings or loss per share if the effect of such inclusion is anti-dilutive.

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For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

Standby Equity Purchase Agreement

The Company and Square Gate Capital Master Fund, LLC - Series 4 (“Square Gate”) entered a Standby Equity Purchase Agreement (“SEPA”) providing for an equity line of credit with Square Gate on February 20, 2025.

This agreement provides a mechanism for submission by the Company and acceptance by Square Gate of Put Notices under the SEPA pursuant to which Square Gate and the Company may agree to and execute one purchase and sale of Put Shares (“Standard Put Shares”).

The Standard Put Notice has a pricing mechanism based on a volume-adjusted weighted average trading price over three days following the acceptance of the Standard Put.

On August 14, 2025, the parties entered into a First Amendment to the SEPA (the “First Amendment”) to provide a mechanism for submission by the Company and acceptance by Square Gate of Put Notices under the SEPA pursuant to which Square Gate and the Company may agree to and execute multiple purchases and sales of Put Shares on the same trading day (“Intraday Put Shares”).

Under the First Amendment, among other things, the purchase price of the Intraday Put Shares will be the lowest traded price during a specified valuation time period which begins with the acceptance of the Intraday Put and ends when trading volume reaches 1000% of the amount of shares included in the Intraday Put.

A SEPA is an equity-linked instrument for which an investor has the right, but not the obligation, to purchase shares of the entity’s common stock over a specified period of time.

The SEPA creates a purchase put option for the overarching arrangement which was determined to be a derivative.

Economically, before the entity has elected to sell shares, a SEPA represents a purchased put option on the entity’s own equity.

However, once the entity “draws” on the SEPA, the related number of shares issued constitutes a financial instrument.

Thus, a SEPA contains both a purchased put option element and a forward share issuance element.

This generally means that a SEPA generally does not qualify for equity classification.

Accordingly, entities must recognize an asset or liability for its SEPA.

Such asset or liability must be measured at fair value, with changes in fair value recognized in net (loss) income.

Further, individual draws must also be evaluated to determine if they meet criteria for equity classification.

With regards to the individual draws for a Standard Put under the SEPA, an individual draw would create a separate financial instrument with settlement criteria that does not meet indexation guidance.

While the number of shares is known at inception and therefore not subject to the overarching share cap, there are two inputs into the settlement amount paid by the Investor which are not inputs into a fixed-for-fixed option:

(1) the maximum amount to be funded under the SEPA of $ 20 million, which inherently limits the settlement amount regardless of the Company’s stock price and (2) the discount which reduces the amount to be paid upon settlement.

With regards to the individual draws for an Intraday Put under the First Amendment to the SEPA, an individual draw would create a separate financial instrument with settlement criteria that does not meet the indexation guidance.

While the number of shares is known at inception and therefore not subject to an overarching share cap, the only inputs into its settlement is the Company’s stock price and trading volume during the pricing period.

Inputs noted above are not all inputs into a fixed-for-fixed option pricing model, thus the individual draw issuances are not eligible for equity classification in accordance with Subtopic 815-40, and therefore an asset or liability will be recorded and marked to market while the financial instrument is outstanding.

Upon settlement of the financial instruments, the Company should recognize the following amounts in earnings:

• The gain (loss) for the excess (deficit) of (a) the carrying amount of the asset or liability for the financial instrument plus the proceeds received and (b) the fair value of the common shares.

• Any discount, issuance or transaction costs incurred in conjunction with the settlement of the put shares.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures which requires significant disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table.

The new guidance will be applied prospectively and is effective for the Company for fiscal periods beginning after December 15, 2024.

The Company is evaluating the impact of the standard on the Company’s financial statements.

In November 2024, the FASB issued ASU No.

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The Company is evaluating the impact of the standard on the Company’s financial statements.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segments Disclosures (“ASU No.

2023-07”), which improves segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses.

The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment.

We adopted ASU No.

2023-07 on January 1, 2024.

The adoption had no impact on the reportable segment we have identified, and additional required disclosures have been included in Note 16.

Segment Reporting.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires enhanced disclosures regarding the rate reconciliation and income taxes paid, among other items.

The standard is effective for annual periods beginning after December 15, 2024.

The Company adopted this standard as required.

The adoption of this ASU did not have a significant impact on the Company’s financial statements.

In September 2025, the FASB issued Accounting Standards Update (ASU) 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Accounting for and Disclosure of Software Costs to update the accounting for internal use software costs.

The guidance requires entities to start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

The guidance, which applies to all entities, is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

Entities may apply the guidance using a prospective, retrospective or modified transition approach.

Early adoption is permitted.

The Company is evaluating the impact of the standard on the Company’s financial statements.

In September 2025, the FASB issued Accounting Standards Update (ASU) 2025-07—Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-based Noncash Consideration from a Customer in a Revenue Contract to expand the scope of contracts that are excluded from derivative accounting (i.e., measured at fair value through earnings).

ASU 2025-07 addresses stakeholders’ concerns about (1) the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract and (2) the diversity in accounting for share-based noncash consideration from a customer that is consideration for the transfer of goods or services.

The guidance is effective for annual reporting periods beginning after 15 December 2026, and interim periods within those annual periods.

Entities may apply the guidance either on a modified retrospective or prospective basis.

Early adoption is permitted.

The Company is evaluating the impact of the standard on the Company’s financial statements.

Property, Plant and Equipment, Net

Property, plant and equipment, net consists of the following:

At December 31,

Laboratory equipment

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Property, plant and equipment, net

Construction in progress of $ 13.5 million represents direct costs of construction and equipment incurred for the Company’s new research lab and manufacturing facilities, that are not ready for their intended use.

Depreciation and amortization expense for the year ended December 31, 2023 was $ 794,619 , of which $ 541,679 is included in research and development expenses.

Depreciation and amortization expense for the year ended December 31, 2024 was $ 644,616 , of which $ 390,209 is included in research and development expenses.

During the year ended December 31, 2023 and 2024, the Company capitalized interest expense of $ 95,627 and $ 189,416 , respectively, which is presented within Construction in progress.

Construction in progress of $ 13.5 million represents direct costs of construction and equipment incurred for the Company’s new research lab and manufacturing facilities, which are not ready for their intended use.

Depreciation and amortization expense for the year ended December 31, 2024 was $ 644,616 , of which $ 390,209 is included in research and development expenses in the accompanying audited statements of operations.

Depreciation and amortization expense for the year ended December 31, 2025 was $ 507,021 , of which $ 270,016 is included in research and development expenses in the accompanying audited statements of operations.

During the years ended December 31, 2024 and 2025, the Compan y capitalized interest expense of $ 189,416 and $ 0 , respectively, which is presented within Construction in progress in the accompanying audited balance sheets.

For the year ended December 31, 2025, the Company recognized an impairment of $ 1.5 million related to the group of assets related to the property it is refurbishing to create a biologics manufacturing facility, upgraded laboratory space, vivarium and common areas.

As a result a result of the impairment, the net book value of this asset group is $16.6 million.

In its assessment of potential indicators of impairment of the asset, the Company concluded that during the year, legal procedures were initiated by holders of mechanics liens against the Company’s property with claims for nonpayment on April 17, 2025, and the Company was notified by Cogent Bank that it exercised its discretion to make a demand that the Company cure the mechanics liens on October 24, 2025.

Commitment and Contingencies - Other Matters.

Fair Value of Financial Instruments

The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, U.S.

government backed securities with maturity dates up to one year, accounts payable and accrued liabilities, are measured at approximate fair value due to their short-term maturities.

The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, U.S.

government-backed securities with maturity dates up to one year, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities.

Money market funds included in cash and cash equivalents and U.S.

government-backed securities are measured at fair value based on quoted prices in active markets, which are considered Level 1 inputs.

The Company measures its investment in shares of Wugen common stock and related contingent liability at fair value based on a combination of valuation techniques, consisting of the adjusted enterprise valuation method and the backsolve method, which are considered Level 3 inputs.

No transfers between levels occurred during the periods presented.

The following table presents the Company’s assets which were measured at fair value at December 31, 2023 and 2024:

At December 31, 2023:

The following table presents the Company’s assets and liabilities which were measured at fair value at December 31, 2024 and 2025:

December 31, 2024

Money market funds

At December 31, 2024:

December 31, 2025

Money market funds

In December 2020, the Company entered into the Wugen License for limited rights to develop, manufacture and commercialize cellular therapy products based on two of the Company’s fusion protein molecules.

As part of the consideration received for the Wugen License, the Company received shares of Wugen common stock, which were recognized at $ 1.6 million, the fair value of the securities as of December 24, 2020, the effective date for the Wugen License.

Initial recognition was at fair value based on level 3 inputs, since there was no public market on which to trade these shares at the time they were received.

The fair value was determined based primarily on the pricing and terms of a third-party financing completed by Wugen in 2020.

So long as there continues to be no public market for these securities, the Company will classify this asset as a cost method investment, recorded at cost less impairment adjusted for observable market changes.

As of December 31, 2023 and 2024 , Investments had a balance of $ 1.6 million, reflecting the investment in Wugen, whic h the Company continues to carry at cost since no public market exists for these securities and no impairment adjustments have been necessary since the acquisition d ate.

Subsequent Events.

Contingent liability

Accrued Liabilities and Other Current Liabilities

As of December 31, 2023, the Company had a balance of $ 2.6 million included in Accrued liabilities and other current liabilities in the balance sheet included in the audited financing statements, consisting of $ 392,000 for construction expenses, $ 105,000 for manufacturing expenses, $ 1.1 million for legal expenses, $ 262,000 for clinical expenses, $ 365,000 in bonus expense, $ 160,000 for salary expenses, $ 119,000 for the current portion of long-term debt , $ 28,500 in lease liability and $ 68,500 of other liabilities.

As of December 31, 2024, the Company had a balance of $ 981,940 included in Accrued liabilities and other current liabilities in the balance sheet included in the audited financing statements, consisting of $ 422,000 for construction expenses, $ 49,000 for manufacturing expenses, $ 155,000 for legal expenses, $ 121,000 for clinical expenses, $ 5,000 in bonus expense, $ 202,000 for salary expenses and $ 28,000 of other liabilities.

As of December 31, 2024 , the Company had a balance of $ 981,940 included in Accrued liabilities and other current liabilities in the accompanying audited balance sheet, consisting of $ 422,000 for construction expenses, $ 49,000 for manufacturing expenses, $ 155,000 for legal expenses, $ 121,000 for clinical expenses, $ 5,000 in bonus expense, $ 202,000 for salary expenses and $ 28,000 of other liabilities.

As of December 31, 2025 , the Company had a balance of $ 1.1 million included in Accrued liabilities and other current liabilities in the accompanying audited balance sheet, consisting of $ 422,000 for construction expenses, $ 87,000 for accrued interest expense, $ 49,000 for manufacturing expenses, $ 159,000 for legal fees, $ 186,000 for clinical expenses, $ 79,000 for salary expenses and $ 118,000 for other accrued expenses or current liabilities.

Cogent Bank Loan

On August 15, 2022, the Company entered into the 2022 Loan Agreement with Cogent Bank, pursuant to which it received $ 6.5 million in proceeds to purchase a building that will become the Company's new headquarters.

On August 15, 2022, the Company entered the 2022 Loan Agreement with Cogent Bank (the “2022 Loan Agreement”), pursuant to which it received $ 6.5 million in proceeds to purchase a property where the Company planned to construct a manufacturing facility for biologics and upgraded research laboratory facilities.

The loan is secured by a first priority lien on the building.

As of December 31, 2025, the Company had $ 6.2 million in principal outstanding under the 2022 Loan Agreement.

The interest-only period was one year followed by 48 months of equal payments of principal and interest beginning on September 15, 2023 based on a 25-year amortization rate.

The unamortized balance is due on August 15, 2027 (the “Maturity Date”), and bears interest at a fixed per annum rate equal to 5.75 %.

Upon the Maturity Date, a final payment of unamortized principal will be due.

The Company has the option to prepay the outstanding balance of the loan prior to the Maturity Date without penalty.

Under the terms of the 2022 Loan Agreement, the Company is required to keep an operating account from which payments to service the Cogent Bank Loan will be drawn.

In addition, the Company also agreed to maintain an escrow account with adequate funds for at least 90 days of principal payments, interest payments, taxes and insurance, with a balance of $ 185,436 as of December 31, 2024.

The unamortized balance is due on August 15, 2027 (the “2022 Loan Agreement Maturity Date”), and bears interest at a fixed per annum rate equal to 5.75 %.

Upon the 2022 Loan Agreement Maturity Date, a final payment of unamortized principal will be due.

The Company is in compliance with covenants related to current payment of principal and interest as of December 31, 2025.

The Company has the option to prepay the outstanding balance of the loan prior to the 2022 Loan Agreement Maturity Date without penalty.

As of December 31, 2024 and 2025, certain subcontractors filed mechanics liens related to unpaid invoices issued in connection with the Company’s construction of its new manufacturing facilities and upgraded research laboratories.

The 2022 Loan Agreement contains a provision for a discretionary default in the event that the Company fails to pay sums due in connection with construction of any improvements.

however, as of the reporting date, the lender has not elected to do so.

As of December 31, 2024, the Company has reflected this loan as Short-term debt, net, to reflect that the lender has the right to accelerate the loan under a discretionary default provision.

As of December 31, 2024, $ 6.3 million is included in Short-term debt, net in the accompanying audited balance sheet.

Senior Secured Notes

On March 31, 2024, the Company entered into a Note Purchase Agreement with the Purchasers (as defined in the Note Purchase Agreement), pursuant to which the Company may issue secured notes up to an aggregate principal amount up to $ 10.0 million (“Secured Notes”).

As of December 31, 2024, the Company received $ 6.9 million through the issuance of Secured Notes, which is included within Debt, Net on the accompanying audited balance sheet.

As of December 31, 2024 and 2025, the Company has reported this loan as Short-term debt, net.

On October 24, 2025, the Company was notified by Cogent Bank that it exercised its discretion to make a demand that the Company cure the mechanics liens no later than thirty (30) days after receipt of this letter in strict compliance with Section 7.2(3) of the Loan Agreement by:

(i) paying and discharging all of the Claims of Lien and causing satisfactions to be recorded in the Public Records of Broward County, Florida for all of the Claims of Lien, and (ii) resolving all litigation against the Borrower and the mortgaged property described in the Mortgage and causing such claims in the Foreclosure Actions to be dismissed and all related notices of lis pendens to be released.

The Company and Cogent Bank have had negotiations to come to terms on a forbearance agreement to provide additional time for the Company to comply with the demands it made in the demand letter.

Secured Notes

As of December 31, 2024, the Company received $ 6.9 million in funding from the issuance of Secured Notes, which is included within Debt, net on the accompanying audited balance sheet.

Investors included Dr.

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Garrett, the Chairman of the Company’s board of directors, who invested $ 140,000 ;

Winer, a member of our board of directors, who invested $ 60,000 ;

Greene, a member of the board of directors, who invested $ 25,000 , as well as unrelated parties.

As of July 2, 2024, existing investors in Secured Notes unanimously agreed to an Amended and Restated Note Purchase Agreement and related documents (“Amended and Restated Note Purchase Agreement”).

On September 30, 2024, existing investors approved an amendment to the Amended and Restated Note Purchase Agreement which extended the last closing date to October 31, 2024.

No other terms were changed.

Under the terms of the Amended and Restated Note Purchase Agreement, the Secured Notes continue to bear interest at a rate of 9 % per annum, payable quarterly in arrears.

The Secured Notes will mature on August 30, 2026 (the “Maturity Date”), on which date the principal balance, accrued but unpaid interest and other amounts owed under the terms of the Amended and Restated Note Purchase Agreement shall be due and payable.

The Company pledged its equity ownership interest in Wugen, which was equivalent to a 5.6 % ownership stake in that company as of December 31, 2024 (“Pledged Collateral”).

Winer, a member of the Company’s board of directors at the time of his investment, who invested $ 60,000 ;

Greene, a member of the board of directors, who invested $ 25,000 , and other significant investors.

In July and October 2024, the terms of the Secured Notes were amended, including but not limited to a fixed bonus payable on Maturity.

As of December 31, 2025, there was $ 325,000 of outstanding principal amount of Secured Notes reported in Short-term debt, net in the accompanying audited balance sheet.

As of December 31, 2025, the Company restructured $ 6.6 million outstanding principal of Secured Notes by conversion to equity.

The Company pledged a portion of the proceeds of the sale or liquidation of its shares of Wugen common stock (“Pledged Collateral”).

The Pledged Collateral will be held and released according to the terms of the Escrow Agreement, as security for the Secured Notes.

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In the event of a Mandatory Prepayment, Secured Notes may receive a bonus payment based on the gross proceeds of the sale of the Pledged Collateral.

If the Secured Notes are repaid on the Maturity Date, holders will receive their pro rata share of a fixed bonus payment of $ 3.4 million in addition to payment of outstanding

principal and accrued and unpaid interest.

If a bonus payment is paid, then there is no prepayment penalty.

The Amended and Restated Note Purchase Agreement also contains default provisions, according to which, following an event of default, the Company may be required to distribute the Pledged Collateral to the Purchasers on a pro rata basis based on a $ 10.0 million issuance of Secured Notes, in full satisfaction of the indebtedness evidenced by the Secured Notes.

As of December 31, 2024, the fair value of the embedded derivative, which incorporated the likelihood of certain events occurring, was immaterial.

Thus, as of December 31, 2024, the Company did not recognize the embedded derivative in the accompanying condensed financial statements.

Subsequent Events.

The Company accounts for the bonus payment to be paid if the Secured Notes are repaid on the Maturity Date by accreting the bonus payment to the full amount due on the Maturity Date, utilizing the effective interest rate method.

As of December 31, 2024, the Company recognized $ 527,304 for the accretion of the fixed bonus payment.

The agreement also contains default provisions, according to which, following an event of default, the Company may be required to distribute the Pledged Collateral to the Purchasers on a pro rata basis based on a $ 10.0 million issuance of Secured Notes, in full satisfaction of the indebtedness evidenced by the Secured Notes.

If the Secured Notes are repaid on the Maturity Date, holders will receive their pro rata share of a fixed bonus payment of $ 3.4 million in addition to payment of outstanding principal and accrued interest.

If a bonus payment is paid, there is no prepayment penalty.

For the years ended December 31, 2024 and 2025, the Company recognized $ 527,304 and $ 405,222 , respectively, as an expense for accretion of the fixed bonus payment due in the event the Secured Notes are repaid on the Maturity Date, presented within General and administrative expenses in the accompanying audited statements of operations.

The Secured Notes were deemed to be a hybrid instrument, consisting of a debt host with embedded derivatives requiring bifurcation and accounting for separately.

The embedded derivatives consist of the Mandatory Redemption, which depends on certain events occurring, and the fixed bonus payable upon the Maturity Date.

The fair value of the embedded derivative, which incorporated the likelihood of certain events occurring, was immaterial.

Thus, as of December 31, 2024 and 2025, the Company did not recognize the embedded derivative in the accompanying audited balance sheets.

The Company accounts for the fixed bonus payment to be paid if the Secured Notes are repaid on the Maturity Date by accreting the bonus payment to the full amount due on the Maturity Date, utilizing the effective interest rate method.

On May 1, 2025, the noteholders holding $ 6.6 million of the principal of the outstanding Secured Notes elected to convert their outstanding indebtedness to equity and entered the Second Amendment to the Amended and Restated Note Purchase Agreement (the “Conversion Agreement”).

On May 7, 2025, $ 6.6 million of outstanding principal amount of Secured Notes and an obligation of $ 860,462 of accumulated accretion as of the conversion date of a fixed bonus to be paid on the Maturity Date to these noteholders were extinguished upon conversion.

For those noteholders who converted to equity, the right to a fixed bonus payable on the Maturity Date was terminated and previously accumulated fixed bonus was waived.

See section “Troubled Debt Restructuring of Secured Notes” below.

For those Secured Notes which remain outstanding, as of December 31, 2025, the Company reported $ 397,065 for the outstanding principal and accumulated accretion of a fixed bonus payment due upon maturity as a current liability in Short-term debt, net in the accompanying audited balance sheet.

Troubled Debt Restructuring of Secured Notes

The Company entered into the Second Amendment to its Secured Note in which certain Secured Note noteholders and the Company agreed to the terms to effectively extinguished $ 7.4 million of debt through the issuance of 253,083 shares of Common Stock, warrants to purchase 126,540 shares of Common Stock, and rights to receive a pro rata share of 49.11 % of the proceeds or shares from the Company’s investment in Wugen.

The transaction was accounted for under ASC Subtopic 470-50, Debt Modifications and Extinguishments, and ASC Subtopic 470-60, Troubled Debt Restructurings by Debtors as a troubled debt extinguishment, as the Company was experiencing financial difficulty and it was granted a concession by Secured Note noteholders whereby the fair value of consideration transferred was less than the carrying amount of the Secured Notes.

The net carrying amount of the restructured Secured Notes was $ 7.4 million, including principal of $ 6.6 million and accumulated accretion of a fixed bonus payable upon Maturity Date of $ 860,462 .

The fair value of consideration transferred including Common Stock, warrants to purchase Common Stock, and rights to proceeds of a portion of the Company’s shares of Wugen common stock was $ 4.0 million, with the difference of $ 3.5 million being recognized as a troubled debt restructuring gain.

Due to the related party nature of the converting noteholders, the gain was recorded to additional paid-in capital as of December 31, 2025 in the accompanying audited statements of stockholders’ equity (deficit).

Unsecured Promissory Notes

As of May 5, 2025, the Company issued a total of $ 270,000 principal amount of unsecured convertible promissory notes that mature on May 5, 2026 with paid in kind interest accruing thereon, payable quarterly in arrears at 10 % per annum (the “Convertible Bridge Notes”).

In accordance with their terms, following the completion of a qualified offering, the Convertible Bridge Notes were converted into shares of our Common Stock at the final offering price in an offering that closed on May 15, 2025.

In addition, holders of the Convertible Bridge Notes have the right to receive a portion of the proceeds of the Company’s shares of Wugen common stock, if and when such shares are ever sold, determined by the number of the Wugen shares equal to 0.25 multiplied by the original principal amount, in dollars, of the Convertible Bridge Notes.

Investors included:

$ 60,000 invested by Hing C.

Wong, the Company’s Founder and CEO;

$ 100,000 invested by Scott T.

Garrett, the Chairman of the Company’s Board of Directors;

and $ 10,000 invested by Gary M.

Winer, who was a member of the Company’s Board of Directors at the time of his investment.

As of May 15, 2025, the outstanding principal of Convertible Bridge Notes were converted.

The fair value of consideration transferred including 36,242 shares of Common Stock and rights to proceeds of a portion of the Company’s shares of Wugen common stock was $ 401,134 , with the difference of $ 131,135 being recognized as a loss on conversion.

Due to the related party nature of the converting noteholders, the loss was recorded to additional paid-in capital in the accompanying audited statements of stockholders’ equity (deficit).

Promissory Note with Personal Guarantee

On May 8, 2025, the Company issued a promissory note for $ 150,000 , secured by a personal guaranty and pledge given by the Company’s Founder and CEO, Dr.

Wong (“Guarantor”) in accordance with the provisions of that certain Guaranty and Pledge Agreement of even date herewith between the Company and the Holder.

The promissory note was issued with an original issue discount of $ 75,000 .

On the Maturity Date of February 7, 2026 , the Company will repay $ 225,000 .

There are provisions which allow the Company to prepay the promissory note before the Maturity Date.

The proceeds of this promissory note were used to pay the expenses required to be paid prior to the equity financing which closed on May 15, 2025.

The Company is accreting the original issue discount on a straight-line basis over the seven-month term.

There is no current interest due on the promissory note with personal guarantee.

As of December 31, 2025, the Company reported a balance of $ 214,722 in the audited balance sheet.

For the year ended December 31, 2025, the Company recognized accretion of original issue discount of $ 64,722 in Interest expense in the accompanying audited statement of operations.

The Company repaid the Promissory Note in full on February 6, 2026.

Contingent Liabilities

In connection with the Trouble Debt Restructuring and the conversion of the Unsecured Promissory Note discussed above, the converting noteholders have a right to receive proceeds of a portion of the Company’ shares of Wugen common stock in the event of a liquidation or sale of these shares.

The Company retained ownership of all of its Wugen shares which is presented in Investments on the accompanying audited balance sheets.

The Company recognized a contingent liability for the rights transferred to the converting noteholders presented in Contingent liability - related party on the accompanying audited balance sheets.

As of December 31, 2025, the carrying value of the Company’s Wugen shares was $ 1.3 million, and carrying value for the Contingent liability - related party was $ 692,531 in the accompanying audited balance sheet.

Fair Value of Financial Instruments.

Five-Year Maturities

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Maturities per Year

Note that the total debt in the table above includes the full accretion of debt issuance costs for the Cogent Bank Loan and the full accretion of the fixed bonus payment for the Senior Secured Notes.

Promissory Note

Maturities per Year

Note that the total debt in the table above includes the full accretion of debt issuance costs for the Cogent Bank Loan and the full accretion of the fixed bonus payment for the Secured Notes.

License Agreements

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The Company concluded that Wugen is a customer and the Wugen License is a functional license under the provisions of Topic 606.

WY Biotech License

On November 17, 2024, the Company entered into the WY Biotech License transferring rights to WY Biotech to develop and commercialize a preclinical molecule constructed with the Company’s T-cell Receptor β Chain constant region (“TRBC”) drug discovery and development platform.

The term of the agreement with expire on the date on which all obligations under this Agreement between the parties with respect to the payment of milestones or royalties with respect to licensed products have passed or expired.

On March 17, 2025, the parties agreed to the principal terms of an amendment to the terms of the WY Biotech License.

The Company concluded that WY Biotech is a customer and the WY Biotech License, as amended, is a functional license under the provisions of Topic 606.

Opt-In Right for WY Biotech License

Under the terms of the WY Biotech License, the Company has an “opt-in right” for United States, Canada, Central America, and South America markets for no cost, that may be exercised after the completion of a Phase 1 trial in China.

WY Biotech is responsible for all of the costs for the clinical study.

The Company will make a determination of whether it will exercise the Opt-In Right upon the release of a human-data read-out from the Phase 1 trial to be conducted by WY Biotech.

During the year ended December 31, 2025, the Company agreed to a request from Wugen to suspend the Wugen License, which will run for a period of one year from the effective date of the suspension, or until May 29, 2026.

The Company expects to generate revenue for ancillary services provided to Wugen during this time, as provided for under the amended Wugen License.

During the suspension, the Company is free to enter licenses with other parties for the molecules that are subject of the Wugen license.

We are seeking a large biologics manufacturer who has a use for a reagent based on HCW9206 and like molecules to improve the efficacy of their manufacturing process of CAR-T products.

T rimmune License

On November 17, 2025, the Company and Beijing Trimmune Biotech Co., Ltd.

(“Trimmune”) entered into an Amended and Restated License, Research and Co-Development Agreement (“Trimmune License”) following the assignment of the original License, Research and Co-Development Agreement, which includes an exclusive license to HCW11-006 for in vivo applications (“WY Biotech License”) from WY Biotech Co., Ltd.

The parties restructured the terms of the original WY Biotech License to include the assignment of rights to Trimmune and an option to license HCW9302 for in vivo applications in China or Asia.

In the Trimmune License, the parties agreed to restructure the upfront license fee to consist of a $ 3.5 million cash payment from which the government of China would withhold taxes which are refundable, and a transferable minority equity ownership interest in Trimmune.

In addition, the parties agreed that for additional consideration, Trimmune has an option to license the exclusive China rights to clinical development and commercialization for in vivo applications of HCW9302, the Company’s clinical-stage molecule currently being evaluated for the treatment of an autoimmune disorder.

In addition to the upfront license fee, the Company is eligible to receive additional development milestone payments and double-digit royalties on future product sales.

The Company will receive a substantial portion of the proceeds from certain future transaction(s) involving the molecule, if such a transaction(s) occur.

We also have a payment-free, milestone-free, and royalty-free option to recapture the development and commercialization rights for this molecule for the United States, Canada, Central America, and South America (Opt-in Territory) after the conclusion of the Phase 1 clinical trial in China.

Trimmune is financially responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the molecule.

Each party will be financially responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the licensed molecule in its territory.

Therefore, expenses to complete the first Phase 1 clinical trial in China will be paid by Trimmune.

This arrangement allows HCW Biologics to have direct access to the Phase 1 results without financial responsibility for the costs incurred prior to the time a decision must be made regarding the Opt-In Right.

In accordance with the terms of the Trimmune License, the deal closing took place upon receipt of the upfront payment.

Subsequent Events.

Milestones and Royalties

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Sale of Common Stock and Warrants

On November 18, 2024, the Company entered into a securities purchase agreement with a single institutional investor (the “Investor”) for the issuance and sale of (i) 4,160,000 shares (the “Shares”) of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) and (ii) pre-funded warrants to purchase up to 2,557,000 shares of Common Stock (the “Pre-Funded Warrants”) in a registered direct offering (the “Registered Offering”), pursuant to a shelf registration statement on Form S-3 (File No.

Sale of Shares of Common Stock through SEPA

During the year ended December 31, 2025, the Company submitted Put Shares to Square Gate which were accepted and resulted in the sale of 600,000 shares of Common Stock.

Standby Equity Purchase Agreement.

November 2025 Inducement Transaction

On November 19, 2025, the Company entered into a warrant inducement agreement with an investor (“Investor”) for the immediate exercise of certain outstanding warrants that the Company issued on November 20, 2024 (the “November 2024 Warrants”) and May 15, 2025 (the “May 2025 Warrants”), respectively.

Pursuant to a warrant inducement agreement, the Investor agreed to a reduced exercise price of the outstanding November 2024 Warrants and May 2025 Warrants to an amended exercise price of $ 2.66 ,

and to exercise the outstanding November 2024 Warrants to purchase an aggregate of 167,925 shares of the Company’s Common Stock and the outstanding May 2025 Warrants to purchase an aggregate of 1,342,280 shares of the Company’s Common Stock, at the amended exercise price of $ 2.66 .

Investor exercised the November 2024 and May 2025 for an aggregate of 1,510,205 shares of the Company’s Common Stock.

Of these shares, approximately 299,000 were issued at closing, and the remaining 1,211,205 shares were held in abeyance, subject to issuance as and when permitted pursuant to the beneficial ownership limitations contained in the November 2024 and May 2025 Warrants.

As of December 31, 2025, of the shares purchased in the Inducement transaction, 533,205 shares were issued and outstanding and 977,000 shares were held in abeyance.

On March 16, 2026, the Investor requested the Company to issue the remaining shares held in abeyance.

In consideration for the immediate exercise of the November 2024 and May 2025 Warrants, the Company also agreed to issue to the Investor unregistered warrants to purchase an aggregate of 3,020,410 shares of the Company’s Common Stock with an exercise price of $ 2.41 per share (the “New Warrants” or “Common Stock Warrants”).

The New Warrants will be immediately exercisable and will expire on the five and one-half year anniversary of the original issuance date.

The Company agreed to file a registration statement with the SEC covering the resale of the shares of Common Stock issuable upon exercise of the New Warrants.

On January 29, 2026, the SEC declared effective a resale registration statement on Form S-1 (File Number 333-292652) covering the resale of shares underlying the New Warrants.

The gross proceeds to the Company from the Offering were approximately $ 4.0 million before deducting the placement agent’s fees and other offering expenses of $ 321,379 payable by the Company.

The fair value of the securities issued and the modification of the warrant in this transaction was $ 8.2 million.

This included a fair value of $ 2.9 million for the shares of Common Stock issued based on the number of shares purchased (including shares held in abeyance) times the closing price on November 20, 2025, or $ 1.92 per share.

In addition, the fair value of the Common Stock Warrants issued in this transaction was estimated at $ 4.9 million using the Black-Scholes option pricing model with assumptions including a term of 5.5 years, volatility of 121.4 % and a risk-free rate of 3.68 %.

As this was a transaction with an existing stockholder, the difference between the gross proceeds and the fair value of securities issued and the modification of the warrant, or $ 4.2 million, was deemed to be an equity dividend to the Investor which was recorded in additional-paid-in capital as of December 31, 2025.

The Investor may not exercise any portion of the Common Stock Warrants to the extent it would beneficially own more than the limits defined in the respective Warrant Purchase Agreement.

The exercise price and number of shares of Common Stock issuable upon the exercise of the Common Stock Warrants are subject to adjustment in the event of any stock dividends and distributions, stock splits, stock combinations or stock reclassifications, as described in the respective warrant agreements.

Under certain circumstances, the warrants may be exercised on a “cashless” basis.

The Common Stock Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date.

The Common Stock Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of shares of Common Stock upon exercise, are indexed to the Company’s Common Stock and meet the equity classification criteria.

In addition, the Common Stock Warrants and the Pre-Funded Warrants do not provide any guarantee of value or return.

May 2025 Equity Financing

On May 13, 2025, the Company entered into a securities purchase agreement with a single institutional investor (the “Investor”) for the issuance and sale of (i) 158,000 shares (the “Shares”) of the Company’s Common Stock and (ii) Pre-funded Warrants to purchase up to 513,140 shares of Common Stock (the “Pre-Funded Warrants”) in a follow-on public offering (the “Offering”), pursuant to a registration statement filed under Rule 424(b)(4) (File No.

333-287136), which was declared effective by the SEC on May 15, 2025.

The Company also issued warrants to purchase up to an aggregate of 1,342,280 shares of Common Stock (“Common Stock Warrants”) for $ 7.45 per share.

The Company sold the Common Stock and Pre-Funded Warrants with an accompanying two Common Stock Warrant, each of which may purchase one share of Common Stock, and the Common Stock and Pre-Funded Warrants were immediately separated from the Common Stock Warrants and issued separately.

The combined purchase price for each Share and the two accompanying Common Stock Warrant was $ 7.45 per unit and the combined purchase price for each Pre-Funded Warrant and the two accompanying Common Stock Warrant was $ 7.4999 per unit.

The Common Stock Warrants have an exercise price of $ 7.45 per share, are exercisable immediately, and expire on the five-year anniversary of the date of issuance.

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately, and will not expire until exercised in full.

The gross proceeds to the Company from this financing were approximately $ 5.0 million before deducting the placement agent’s fees and other offering expenses of $ 802,602 payable by the Company.

This transaction closed on May 15, 2025, at which time the closing stock price was $ 8.20 per share.

In this financing, the Company issued shares of Common Stock of Pre-Funded Warrants that may be exercised to purchase Common Stock in lieu thereof, and Warrants that may be exercised to purchase Common Stock.

In a contemporaneous private agreement entered into with the investor, the Company agreed to reprice warrants to purchase up to 167,925 shares of Common Stock that were issued to the investor in a financing that closed on November 20, 2024 to an exercise price of $ 7.45 per share.

The fair value of the Common Stock was determined based on the shares issued and the closing price on the date the transaction closed.

The Company estimated the fair value of the Warrants issued, using the Black Scholes valuation model to estimate the fair value of the warrants with assumptions including a term of 5 - 0 years, volatility of 120.6 % and a risk-free rate of 4.07 % - 4.45 %.

The fair value of securities issued was $ 15.2 million.

As this was a transaction with an existing stockholder, the Company recognized a $ 10.2 million deemed equity dividend to the Investor which was recorded in additional-paid-in capital for the year ended December 31, 2025.

The Investor may not exercise any portion of the Common Stock Warrants or Pre-Funded Warrants to the extent it would beneficially own more than the limits defined in the respective Warrant Purchase Agreement.

The exercise price and number of shares of Common Stock issuable upon the exercise of the Common Stock Warrants and Pre-Funded Warrants are subject to adjustment in the event of any stock dividends and distributions, stock splits, stock combinations or stock reclassifications, as described in the respective warrant agreements.

Under certain circumstances, the warrants may be exercised on a “cashless” basis.

Both the Common Stock Warrants and Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital and were recorded at the issuance date.

The Common Stock Warrants and Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of shares of Common Stock upon exercise, are indexed to the Company’s Common Stock and meet the equity classification criteria.

In addition, the Common Stock Warrants and the Pre-Funded Warrants do not provide any guarantee of value or return.

As of December 31, 2025, the Investor exercised all of the Pre-Funded Warrants by delivering a notice of exercise to the Company and paying the exercise price for 513,140 shares of registered Common Stock.

The Common Stock Warrants issued on May 15, 2025 were all exercised on November 20, 2025, in connection with the Inducement Transaction described above.

November 2024 Equity Financing

On November 18, 2024, the Company entered into a securities purchase agreement with the Investor for the issuance and sale of (i) 104,000 shares (the “Shares”) of the Company’s Common Stock, par value $ 0.0001 per share (the “Common Stock”) and (ii) Pre-funded Warrants to purchase up to 63,925 shares of Common Stock (the “Pre-Funded Warrants”) in a registered direct offering (the “Registered Offering”), pursuant to a shelf registration statement on Form S-3 (File No.

333-266991), which was declared effective by the SEC on August 26, 2022.

The Registered Offering was made by means of a prospectus supplement filed with the SEC on November 20, 2024 that forms a part of such registration statement.

In a concurrent private placement (the “Private Placement” and together with the Registered Offering, the “Offering”), the Company also issued unregistered warrants to purchase up to an aggregate of 6,717,000 shares of Common Stock (“Common Stock Warrants”) for $ 1.03 per share.

In a concurrent private placement (the “Private Placement”) and together with the Registered Offering, the Company also issued unregistered warrants to purchase up to an aggregate of 167,925 shares of Common Stock (“Common Stock Warrants”).

The Common Stock Warrants have an exercise price of $ 7.45 per share, are exercisable immediately, and expire on the five-year anniversary of the date of issuance.

The Company sold the Common Stock and Pre-Funded Warrants with an accompanying Common Stock Warrant to purchase one share of Common Stock, and the Common Stock and Pre-Funded Warrants were immediately separated from the Common Stock Warrants and issued separately.

The combined purchase price for each Share and accompanying Common Stock Warrant was $ 41.20 per unit and the combined purchase price for each Pre-Funded Warrant and accompanying Common Stock Warrant was $ 41.1999 per unit.

The Common Stock Warrants have an exercise price of $ 1.03 per share, are exercisable immediately, and expire on the five-year anniversary of the date of issuance.

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable immediately, and will not expire until exercised in full.

The gross proceeds to the Company from the offering were approximately $ 6.9 million before deducting the placement agent’s fees and other offering expenses of $ 638,045 payable by the Company.

The Offering closed on November 20, 2024.

It closed on November 20, 2024.

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On November 20, 2024, the Investor exercised all of the Pre-Funded Warrants by delivering a notice of exercise to the Company and paying the exercise price.

The Company issued 2,557,000 shares of registered Common Stock to the Investor on November 21, 2024.

There were no Common Stock Warrants exercised as of December 31, 2024.

The Company issued 63,925 registered shares of Common Stock to the Investor on November 21, 2024.

On April 16, 2025, the 167,925 shares of Common Stock underlying the Common Stock Warrants issued to the Investor on November 20, 2024 were registered in a registration statement filed pursuant to Rule 424(b)(3) (File No.

On May 15, 2025, the Company entered into a privately negotiated agreement with the Investor for its Common Stock Warrants to reduce the exercise price of such warrants from $ 41.20 per share to $ 7.45 per share.

The Company considered the change in fair value of this modification of the warrant as a deemed dividend to the Investor related to the equity offering that closed in May 2025 with the Investor.

The Common Stock Warrants issued on November 20, 2024 were all exercised on November 20, 2025, in connection with the Inducement Transaction described above.

Standby Equity Purchase Agreement

On February 20, 2025 , the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Square Gate Capital Master Fund, LLC - Series 4 (“Square Gate”), which the Company deemed to be a Standby Equity Purchase Agreement (“SEPA”).

Under the Equity Purchase Agreement, the Company will have the right, but not the obligation, to sell to Square Gate, and Square Gate will have the obligation to purchase from the Company, up to $ 20,000,000 (the “Maximum Commitment Amount”) worth of the Company’s shares of Common Stock, at the Company’s sole discretion, over the next 36 months (the “Put Shares”), subject to certain conditions precedent and other limitations.

Square Gate has covenanted not to cause or engage in any short sales or hedging transactions with respect to the shares of the Company’s Common Stock.

The Maxim Group LLC acted as the Company’s exclusive Placement Agent in connection with this transaction.

Unless earlier terminated, the Equity Purchase Agreement will remain in effect until the earlier of February 18, 2028 (i.e., the expiry of the 36-month period commencing on the date of the Equity Purchase Agreement) or the date on which Square Gate has purchased the Maximum Commitment Amount (the “Commitment Period”).

The Company has the right to terminate the Equity Purchase Agreement at any time, subject to certain provisions as set forth in the Equity Purchase Agreement.

Square Gate has the right to terminate the Equity Purchase Agreement under certain provisions as set forth in the Equity Purchase Agreement, including the continued listing of the Company’s Common Stock on an Eligible Market.

The Equity Purchase Agreement and Registration Rights Agreement contain customary representations, warranties and agreements by the Company and customary conditions to Square Gate’s obligation to purchase the Put Shares.

Actual sales of shares of our Common Stock, if any, to Square Gate under the Equity Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations.

The net proceeds to us from sales of our Common Stock to Square Gate under the Equity Purchase Agreement, if any, will depend on the frequency and prices at which the Company sells shares to Square Gate under the Equity Purchase Agreement.

Any proceeds that the Company receives from sales of shares of our Common Stock to Square Gate under the Equity Purchase Agreement will be used to advance our clinical development programs and expand our discovery, research and preclinical activities in the near term and in the future.

During the Commitment Period, the Company will have the right, but not the obligation, to direct Square Gate to make a purchase of the Put Shares by delivering written notice (a “Put Notice”) to Square Gate on any trading day (the “Put Date”) to purchase a number of Put Shares pursuant to a formula set forth in the Equity Purchase Agreement.

The number of Put Shares that the Company can issue to Square Gate from time to time under the Equity Purchase Agreement may not exceed 4.99 % of the number of shares of our Common Stock outstanding immediately after giving effect to the issuance of shares issuable pursuant to a Put Notice.

On March 12, 2025, the Company issued 9,616 shares of the Company’s Common Stock (subject to adjustment for the Reverse Stock Split) to Square Gate in payment of the Commitment Fee (“Commitment Shares”).

At the Special Meeting of Stockholders, stockholders approved the Company’s use of the Equity Purchase Agreement.

On April 16, 2025, the SEC declared a registration statement effective to register the Commitment Shares and shares required to sell up to $ 40.0 million of the Company’s shares to Square Gate, according to provisions of the Equity Purchase Agreement.

As of December 31, 2025, the Company concluded that the Equity Purchase Agreement for Standard Put Shares does not qualify for equity classification.

On the effective date, the Company concluded that the fair value of the Equity Purchase Agreement at inception was zero and no asset or liability was recorded.

As a result, fees paid to Square Gate in excess of the fair value of the Equity Purchase Agreement were expensed as incurred.

Any issuance costs or other transaction costs attributable to a freestanding equity-linked financial instrument that is classified as an asset or liability should be recognized in earnings in the period incurred.

The Commitment Fee and issuance costs for the registration statement to register the underlying shares of Common Stock issued under the Equity Purchase Agreement were expensed for the year ended December 31, 2025.

For the year ended December 31, 2025, the Company expensed the $ 150,000 Commitment Fee which was incurred in the period ended March 31, 2025.

The Commitment Fee was paid in-kind with an equivalent value of shares of the Company’s Common Stock.

For the year ended December 31, 2025, the Company recorded commission expenses of $ 76,216 payable to the Company’s exclusive Placement Agent.

The Standby Equity Purchase Agreement (“SEPA”) provide two mechanisms for submission by the Company and acceptance by the investor of Put Notices under the SEPA pursuant to which the investor and the Company may agree to and execute s single purchase and sale of Put Shares (“Standard Put Shares”) or multiple purchases and sales of Put Shares on the same trading day (“Intraday Put Shares”).

Standard Put Shares

For a Standard Put, the Company submits a put order to Square Gate on Day 0.

After Square Gate accepts the Standard Put on Day 0, the Company issues the shares on Day 1.

The amount that Square Gate will pay for the shares is determined in a pricing period that occurs from Day 1 – 3 trading days.

The price to be paid by Square Gate is determined using the minimum volume-weighted average trading price in one of the three trading days after the put order is accepted, less fixed discount.

Under the terms of the SEPA, Square Gate is required to transfer proceeds to the Company for the Put Shares by Day 5.

The Company accounts a Standard Put as a financial instrument with a gain or loss recognized in earnings upon settlement.

The discount and cost of issuance for each put will be recognized in earnings upon settlement.

Intraday Put Shares

On August 14, 2025, the Company and the investor entered into a First Amendment to the SEPA (the “First Amendment”) to provide a mechanism for submission by the Company and acceptance by Square Gate of Put Notices under the SEPA pursuant to which Square Gate and the Company may agree to and execute multiple purchases and sales of Put Shares on the same trading day (“Intraday Put Shares”).

The Intraday Put Shares have a pricing period that is based on trading volume and a price that is lowest traded price during the pricing period.

When there is a lag between the issuance of the shares and the pricing of the shares, the Company accounts for an Intraday Put as a financial instrument with a gain or loss recognized in earnings upon the settlement.

The cost of issuance for each put will be recognized in earnings upon settlement.

Put Shares Accepted by Square Gate

During the year ended December 31, 2025, the Company issued 600,000 shares of Common Stock through issuance of shares under the SEPA which resulted in net proceeds of $ 2.5 million.

Loss on the sale of put shares was $ 263,974 and was presented in Loss on sale of put shares in the accompanying audited statement of operations for the year ended December 31, 2025.

Preferred Stock

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The following table summarizes the computation of the basic and diluted net loss per share.

The 977,000 of shares held in abeyance as of December 31, 2025 were included in the weighted-average common shares outstanding since all necessary conditions for issuance have been met.

Years Ended December 31,

Weighted-average common shares outstanding

Equity dividend to investor

Net loss attributable to Common Stockholders

Weighted-average common shares outstanding, basic and diluted

Net loss per share, basic and diluted

The following table summarizes the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:

At December 31,

Common stock options

Common stock warrants

Potentially dilutive securities

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Weighted Average

Outstanding at December 31, 2022

Outstanding at January 1, 2024

Forfeited or cancelled

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Forfeited or cancelled

Adjustment for reverse stock split

Outstanding at December 31, 2025

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Fair value underlying common stock

For the year ended December 31, 2023 , for options with service-based vesting conditions, the Company recognized $ 65,941 of employee stock-based compensation expense in research and development expenses and $ 937,808 of employee stock-based compensation in general and administrative expenses in the statement of operations included in the audited financial statements.

For the year ended December 31, 2024 , for options with service-based vesting conditions, the Company recognized $ 61,250 of employee stock-based compensation expense in research and development expenses and $ 947,762 of employee stock-based compensation in general and administrative expenses in the statement of operations included in the audited financial statements.

For the year ended December 31, 2025 , for options with service-based vesting conditions, the Company recognized $ 48,069 of employee stock-based compensation expense in research and development expenses and $ 720,555 of employee stock-based compensation in general and administrative expenses in the accompanying audited statement of operations.

As of December 31, 2025 , the Company had an aggregate of $ 23,697 of unrecognized employee stock-based compensation cost for options with service-based vesting, which is expected to be recognized over a weighted average vesting period of 1.14 years.

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Collaborative Arrangements

The Company has certain contract research agreements with contractors that were entered during the two years ended December 31, 2024 for the (i) hybridoma development, (ii) cell line manufacturing productivity improvement, and (iii) research to support pre-clinical studies.

The Company has certain contract research agreements with contractors and research institutions that were entered during the two years ended December 31, 2025 for the (i) hybridoma development, (ii) cell line manufacturing productivity improvement, and (iii) research to support pre-clinical studies.

Under the hybridoma development and cell line manufacturing productivity improvement agreements, we own all rights to the resulting intellectual property, including the antibodies, sequences, and data.

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The Company di d no t have a provision for income taxes (current or deferred tax expense) for tax years ended December 31, 2024 and 2025.

The following table summarizes the differences between the statutory federal income tax rate and the Company's effective income tax rate (percent data):

In accordance with ASU 2023-09, the following table summarizes differences between income tax expense (benefit) at the statutory federal income tax rate and as presented on the statements of operations:

Rate Reconciliation

Net Loss Before Taxes

Benefit at statutory rate

State tax benefit net of federal benefit

Permanent book/tax differences

Deferred adjustments & true-up

R&D credit carryforward

federal statutory tax rate

Research and development tax credit

Change in valuation allowance

Nontaxable and nondeductible items

Gain on Conversion of Sr.

Secured Notes

Other Adjustments

Income tax expense/(benefit)

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Reserve for credit losses

R&D Tax Credit

Depreciable assets

Accrued expenses

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Charitable contributions

Unrealized loss on investment

Total deferred tax assets

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Such annual limitations could affect the utilization of NOL and tax credit carryforwards in the future.

Effective for tax years beginning after December 31, 2021, Section 174 requires that research and experimental expenses (“R&E”) be capitalized and amortized.

The amortization period is five years for domestic expenses and 15 years for foreign expenses.

Since the Company has a significant amount of expenses that fall under the definition of R&E expenses, the change can materially affect the Company's tax provision.

During the year ended December 31, 2023 and 2024 , the Company analyzed its expenses and determined that expenses of $ 9.8 million and $ 6.4 million, respectively, fell within the definition of Section 174.

Accordingly, these expenditures were capitalized and amortized for tax purposes.

As of December 31, 2023 and 2024 , the Company had $ 2.6 million and $ 3.8 million, respectively, of amortization expense related to Section 174 capitalized R&E costs.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions.

The provisions in the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through future years.

One of the most significant provisions for the Company is the repeal of the requirement to capitalize and amortize domestic research and experimental (R&E) expenditures under Section 174 of the Internal Revenue Code.

Effective for tax years beginning after December 31, 2024, the Company is permitted to immediately deduct domestic R&E expenditures as incurred for federal income tax purposes.

The requirement to amortize foreign R&E expenditures over 15 years remains unchanged.

The Company has included the impact of the provisions effective in 2025, including the Section 174 change, in its Consolidated Financial Statements.

The impact of these provisions was not material to the Company’s results of operations and financial condition for the year ended December 31, 2025.

The Company’s tax returns remain subject to examination by tax authorities beginning with the tax year ended December 31, 2021.

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The Company recognizes interest accrued and penalties for unrecognized tax benefits in its tax provision.

As of December 31, 2023 and 2024 , the Company had no t recognized any expense related to uncertain tax position in its statement of operations.

As of December 31, 2024 and 2025, the Company had no t recognized any expense related to uncertain tax position in its statements of operations.

Related Party Transactions

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Garrett, Chairman of the board of directors, $ 60,000 purchased by Gary M.

Winer, member of the board of directors, $ 25,000 purchased by Lee Flowers, Senior Vice President for Business Development, and $ 25,000 purchased by Rick S.

Winer, who was a member of the board of directors at the time of his investment, $ 25,000 purchased by Lee Flowers, Senior Vice President for Business Development, and $ 25,000 purchased by Rick S.

Greene, member of the board of directors.

In addition, other significant stockholders invested in Secured Notes totally $ 3.7 million.

In May 2025, as part of the Nasdaq Compliance Plan, the Company entered into the Second Amendment to its Secured Note in which certain Secured Note noteholders agreed to restructure their Secured Notes.

At the time of the restructuring, the net carrying amount of the restructured Secured Notes was $ 7.4 million including principal of $ 6.6 million and accumulated accretion of a fixed bonus payable upon Maturity Date of $ 860,462 .

On May 7, 2025, the Company extinguished $ 7.4 million of debt through the issuance of 253,083 shares of Common Stock, warrants to purchase 126,540 shares of Common Stock, and rights to receive a pro rata share of 49.11 % of the proceeds or shares from the Company’s investment in Wugen.

In accordance with their terms, following the completion of a qualified offering, the unsecured convertible promissory notes were converted into shares of our Common Stock at the final offering price in an offering that closed on May 15, 2025.

In addition, holders of these notes have the right to receive a portion of the proceeds of the Company’s shares of Wugen common stock, if and when such shares are ever sold, determined by the number of the Wugen shares equal to 0.25 multiplied by the original principal amount, in dollars, of the Convertible Bridge Notes.

Investors included:

$ 60,000 invested by Hing C.

Wong, the Company’s Founder and CEO;

$ 100,000 invested by Scott T.

Garrett, the Chairman of the Company’s Board of Directors;

and $ 10,000 invested by Gary M.

Winer, who was a member of the Company’s Board of Directors at the time of his investment.

As of May 15, 2025, the outstanding principal of unsecured promissory notes were converted.

Debt - Unsecured Promissory Notes.

On May 15, 2025, the Company completed an offering (the “Offering”) with an existing stockholder of the Company in which the Company issued (i) 158,000 shares of the Company’s Common Stock and (ii) Pre-funded Warrants to purchase up to 513,140 shares of Common Stock in a follow-on public offering.

The Company also issued Warrants to purchase up to an aggregate of 1,342,280 shares of Common Stock.

The gross proceeds to the Company from the Offering were approximately $ 5.0 million before deducting the placement agent’s fees and other offering expenses of $ 802,602 payable by the Company.

The Company estimated the fair value of the securities issued, using the Black Scholes valuation model to estimate the fair value of the warrants, and determined the fair value of securities issued was $ 15.2 million.

As this was a transaction with an existing stockholder of the Company, the Company recognized a $ 10.2 million deemed equity dividend to the Investor which was recorded in additional-paid-in capital for the year ended December 31, 2025.

Sale of Common Stock and Warrants - May Equity Financing.

On November 20, 2025, the Company completed an inducement transaction (the “Inducement Transaction”) with an existing stockholder of the Company.

Pursuant to a warrant inducement agreement, the related-party stockholder agreed to a reduced exercise price of the outstanding Warrants issued in previous transactions in November 2024 and May 2025.

In consideration for the immediate exercise of the Warrants, the Company also agreed to issue to the related-party stockholder unregistered warrants to purchase an aggregate of 3,020,410 shares of the Company’s Common Stock.

The gross proceeds to the Company from the Offering were approximately $ 4.0 million before deducting the placement agent’s fees and other offering expenses of $ 321,379 payable by the Company.

The fair value of the securities issued, using the Black Scholes valuation model to estimate the fair value of securities issued and the modification of the warrant, was $ 8.2 million.

As this was a transaction with an existing stockholder of the Company, the Company recognized $ 4.2 million deemed equity dividend to investor which was recorded in additional-paid-in-capital for the year ended December 31, 2025.

Sale of Common Stock and Warrants - November 2025 Inducement Transaction.

Segment Reporting

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The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the life science segment based on net loss, which is reported on the statement of operations as net loss.

The CODM assesses performance for the life science segment based on net loss, which is reported on the statements of operations as net loss.

The measure of segment assets is reported on the balance sheet as total assets.

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Other segment items include the following unusual or nonrecurring items:

Arbitration legal fees

Reserve for credit losses and other expenses

Accretion of fixed bonus upon maturity of Senior Notes

Arbitration legal fees (recoveries), net

Accretion of fixed bonus upon maturity of Secured Notes

Interest expense

Change in fair value of investment

Change in fair value of contingent liability

Nonoperating loss

Loss on sale of put shares

Gain on extinguishment of liability

Impairment of long-lived asset

Other income, net

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The Company has operating leases for approximately 12,250 square feet of space located in Miramar, Florida.

On February 29, 2024, the lease on the Company's current location reached the end of its term and the Company entered a new one-year lease for the same location which commenced on March 1, 2024 and terminated on February 28, 2025 .

On January 27, 2025, the Company entered a new one-year lease for the same location which commenced on March 1, 2025 and terminates on February 28, 2026 .

As a lease of 12 months or less in duration and qualifies for a short-term lease exemption under A SC 842-20-25-2.

On January 27, 2025, the Company entered a new one-year lease for the same location which commenced on March 1, 2025 and terminated on February 28, 2026 .

On February 2, 2026, the Company entered a new one-year lease for the same location which commenced on March 1, 2026 and terminates on February 28, 2027 .

As a lease of 12 months or less in duration and qualifies for a short-term lease exemption under FASB ASC 842, Leases, for short-term leases, as provided for in ASC 842-20-25-2, which is the short-term lease exception whereby a lessee recognizes the lease payments in profit or loss on a straight-line basis over the lease term.

The Company elected to account for this lease on a straight-line basis over the lease term and will not recognize a ROU asset and a lease liability as a result.

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Contractual Commitments

The Company has commitments with a third-party manufacturing organization to supply us with clinical grade materials.

As of December 31, 2024, we are under contract for obligations of $ 12,500 that we expect to pay during the year ending December 31, 2025.

As of December 31, 2024 the Company had commitments to fund $ 4.4 million for future construction costs related to the buildout of its new headquarters and manufacturing facility under the terms of a construction agreement with BE&K Building Group (“Construction Contract”) , which are not included in the balance sheets.

The Construction Contract was terminated as of December 31, 2024.

As of December 31, 2024, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with the facility.

On December 16, 2024, BE&K sent the Company a draft, unfiled lawsuit and requested the parties discuss payment.

On January 22, 2025, the Company entered into a forbearance agreement with BE&K to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the building.

Pursuant to the forbearance agreement, the Company made an initial payment of $ 1.0 million in partial satisfaction of amounts owing to BE&K and its subcontractors.

The Company has continued to pursue financing alternatives to provide the funding needed to come current in past amounts due and complete the construction and renovation of the Property.

Project Financing

On January 10, 2024, the Company exercised its right to terminate its credit agreement (the “Credit Agreement”), dated April 21, 2023, with Prime Capital Ventures, LLC (the “Lender”), as permitted under the terms of the Credit Agreement.

The termination followed repeated delays in funding and related concerns.

There are no borrowings under the Credit Agreement, and the Company will not incur any penalties as a result of such termination under the terms of the Agreement.

Upon exercising its right to terminate the Agreement, the Company was entitled to receive the return of the $ 5.3 million that the Company placed on deposit to establish an interest reserve account with the Lender.

Subsequent to the year ended December 31, 2023, the Lender defaulted on its obligation to return the interest reserve deposit.

Given the uncertainty of when or if funds will be recovered from the Lender, the Company recognized a reserve for a credit loss for $ 5.3 million as of December 31, 2023.

The Company continues to pursue all available remedies to recover these funds, including legal actions, receivership and insurance.

The Company has commitments with R&D outsourcing and development companies to supply us with clinical grade materials or other development services.

As of December 31, 2025, it is under contract for future obligations of $ 396,100 it expects to pay during the year ending December 31, 2026.

Company Victim to Fraudulent Criminal Scheme

As reported in the Company’s Form 8-K filed on May 1, 2024 with the SEC, the Company became aware that it was the victim of a criminal scheme involving the impersonation of a purchaser upon the default (the “Default”) on a legally binding commitment to purchase $ 8.0 million of secured notes from the Company.

The scheme resulted in the misdirection of approximately $ 1.3 million held in Company accounts to a fraudulent account controlled by a third party.

The Company recognized a $ 1.3 million loss reported as a Nonoperating loss in the accompanying audited statements of operations for the year ended December 31, 2024.

The Company has pursued all available remedies to recover this loss, including reporting it to law enforcement.

Legal Matters

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Arbitration, Settlement and General Release

On December 23, 2022, Altor BioScience, LLC and NantCell, Inc.

(collectively “ImmunityBio”) initiated an arbitration against Dr.

On December 23, 2022, ImmunityBio initiated an arbitration against Dr.

Wong, the Company’s Founder and Chief Executive Officer, in California alleging breach of contract and fiduciary duty, among other claims.

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On March 26, 2024, ImmunityBio filed a complaint (the “Complaint”) against the Company in the Chancery Court of the State of Delaware for the contribution of legal fees and expenses advanced to Dr.

As reported in the Company’s Form 8-K filed on July 18, 2024 and described in Part I, Item 3.

– “Legal Proceedings,” as of July 13, 2024, the Company and Dr.

Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement and Release (the “Settlement Agreement”) with Altor BioScience, LLC (“Altor”), NantCell, Inc.

As of July 13, 2024, the Company and Dr.

Wong, the Company’s Founder and Chief Executive Officer, entered into a confidential Settlement Agreement with Altor BioScience, LLC (“Altor”), NantCell, Inc.

(“NantCell”), and ImmunityBio, Inc.

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No party is required to make any monetary payments to any other party or person under the Settlement Agreement and each party will bear its own expenses incurred in connection with the matter.

In accordance with the provisions of the Settlement Agreement, upon completion of these procedures, the parties mutually stipulated that the Arbitration and Complaint should be dismissed.

The Arbitration and the Complaint were dismissed on December 24, 2024.

The Arbitration and related Complaint were dismissed with prejudice as of December 31, 2024.

As of December 31, 2024, the Company owed $ 13.5 million in legal fees for costs incurred in connection with mounting a legal defense for the Company and Dr.

In January 2025, the Company received a $ 2.0 million insurance reimbursement which was paid directly to Cooley LLP (“Cooley”), the law firm that represented Dr.

Wong in his defense.

On December 30, 2025, the Company and Dr.

Wong entered into a settlement agreement with Cooley related to legal fees incurred in connection the defense of Dr.

As a result of that agreement, the Company, Dr.

Wong and Cooley agreed to settle an approximately $ 7.5 million obligation for $ 2.0 million in cash payments and a commitment to potential contingent payments up to approximately $ 5.5 million upon achievement of certain triggering events (including a sale of the Company above a certain threshold or receipts of substantial cash amounts for future business development transactions), all of which were deemed to be remote as of December 31, 2025.

In accordance with the terms of the settlement agreement, $ 500,000 was paid on December 31, 2025.

After this settlement, as of December 31, 2025, the Company recognized a liability of $ 6.2 million for remaining amounts owed for legal fees related to the Arbitration which continue to remain outstanding.

Other Matters

As of December 31, 2025, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with the facility.

On January 22, 2025, the Company entered into a forbearance agreement with BE&K Building Group (“BE&K”), its general contractor, to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the property.

Pursuant to the forbearance agreement, the Company made an initial payment of $ 1.0 million in partial satisfaction of amounts owing to BE&K and its subcontractors.

As the Company reported in a Form 8-K, on April 17, 2025, the Company received a summons and a copy of a complaint filed by BE&K in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the “BE&K Complaint”).

Other Defendants named in the BE&K Complaint who are subcontractors elected to file counterclaims and cross-claims as part of their responses to the BE&K Complaint.

To our knowledge as of the date hereof, Cogent Bank, also named as a Defendant in the BE&K Complaint, has not elected to take legal action at this time.

In addition, on April 28, 2025, the Company received a summons and a copy of a complaint filed by Fisk Electric Company (which is a defendant in the BE&K Complaint) in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the “Fisk Complaint”) against the Company, BE&K, and the other defendants in the BE&K Complaint.

On August 8, 2025, B&I Contractors, Inc.

(“B&I), one of the defendants in the BE&K Complaint, filed a motion for summary judgment (the “MSJ”) as to the Count I (Foreclosure of Construction Lien).

The Company has responded to the BE&K and Fisk Complaints and cross-claims and filed a timely response to the B&I MSJ.

The cases were consolidated, and a Case Management conference was held.

On February 19, 2026, a stipulation was submitted to the Court for a settlement and release agreement between the Company and B&I calling for payment of a total of $ 860,000 installments in settlement of amounts owed and an allowance for interest and other fees, the last installment of which is payable on or before May 31, 2026.

The Company and Cogent Bank have had in negotiations to come to terms on a forbearance agreement to provide additional time for the Company to comply with the demands it made in the demand letter.

Inflationary Cost Environment, Geopolitical Risks and Other Macroeconomic Factors

The Company’s operations have been affected by many headwinds, including inflationary pressures, rising interest rates, ongoing global supply chain disruptions resulting from increased geopolitical tensions such as the war in the Middle East, the conflict between Russia and Ukraine, China-Taiwan relations, financial market volatility and currency movements.

The Company’s operations have been affected by many headwinds, including inflationary pressures, tariffs, rising interest rates, ongoing global supply chain disruptions resulting from increased geopolitical tensions such as the war in the Middle East, the conflict between Russia and Ukraine, China-Taiwan relations, financial market volatility and currency movements.

The Company has been impacted by inflation, and may continue to be so, when procuring materials required for the buildout of our new headquarters, the costs for recruiting and retaining employees and other employee-related costs.

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In addition to the required recognition or disclosure disclosed in the footnotes herein, there were also the following subsequent events after the reporting date:

As the Company disclosed in the Form 8-K filed on March 19, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement due to a delay in WY Biotech coming to a definitive agreement with their designated contract design

development and manufacturing organization (“CDMO”).

Specifically, in order to accommodate the delay, the parties agreed to restructure the payment schedule for the $ 7.0 million upfront license fees, including delaying the initial $ 4.0 million portion thereof that was originally due on or about March 17, 2025 , to reduce the performance milestones that the Company must complete in order to earn the full $ 7.0 million nonrefundable upfront payments in June 2025, and to provide that either party may terminate the Agreement if WY Biotech is not able to definitively engage its CDMO by June 2025.

Under the amended terms, the Company expects to fulfill our performance obligations and earn the full $ 7.0 million upfront fee in June 2025.

The Panel’s determination followed a hearing on February 13, 2025, at which the Panel considered the Company’s plan to regain compliance with Listing Rules 5450(a)(1), 5450(b)(2)(A) and 5450(b)(2&3)(C), the minimum bid price (“Bid Price”), the market value of publicly held securities (“MVPHS”) and the market value of listed securities (“MVLS”) rules, respectively.

As reported in the Company’s Form 8-K filed on February 21, 2025, on February 20, 2025 , the Company entered into an Equity Purchase Agreement with Square Gate Capital Master Fund, LLC - Series 4 (“Square Gate”), pursuant to which the Company will have the right, but not the obligation, to sell to Square Gate, and Square Gate will have the obligation to purchase from the Company, up to $ 20,000,000 (the “Maximum Commitment Amount”) (with a potential increase of an additional $ 20,000,000 ) worth of the Company’s shares of Common Stock, at the Company’s sole discretion, over the next 36 months (the “Put Shares”), subject to certain conditions precedent and other limitations.

Square Gate covenanted not to cause or engage in any short sales or hedging transactions with respect to the shares of the Company’s Common Stock.

On February 20, 2025, the Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with Square Gate, pursuant to which the Company agreed to submit to the SEC an initial registration statement on Form S-1 by April 6, 2025 and to use commercially reasonable efforts to cause the Registration Statement to be declared effective by the SEC.

The Maxim Group LLC acted as the Company’s exclusive Placement Agent in connection with this transaction.

Pursuant to Equity Purchase Agreement, following the expiration of the due diligence period, the Company was obligated to pay Square Gate a commitment fee of $ 150,000 , which was required to be paid in shares of the Company’s common stock, par value $ 0.0001 per share (“Common Stock”), valued at the closing share price of the Common Stock on The Nasdaq Stock Market on February 19, 2025.

The due diligence period expired on or about March 10, 2025.

On March 12, 2025, the Company issued 384,615 shares of Common Stock to Square Gate, and such share will be restricted until such time as the Company has an effective S-1 registration statement to register these shares, as is required by the Registration Rights Agreement.

On February 20, 2025, the Company and certain holders of Senior Notes agreed on the Principal Terms for conversion of approximately $ 6.6 million of the outstanding principal of the Senior Notes into shares of the Company’s Common Stock at an exercise price of $ 0.65 per share, along with issuance of warrants to purchase shares of the Company’s Common Stock at an exercise price of $ 0.65 per share up to approximately $ 3.3 million of such shares, and the granting of rights to receive proceeds from some of the Company’s shares of Wugen common stock.

Upon conversion, the Senior Notes will be surrendered, including the right to receive their pro rata portion of a $ 3.4 million fixed bonus if they had been repaid at maturity.

The conversion terms are contingent on stockholder approval and will be subject to a vote at the Special Meeting of the Stockholders scheduled on March 31, 2025.

On February 21, 2025, the Company filed a definitive proxy statement related to matters that will be presented to stockholders for their approval at a Special Meeting of Stockholders (“Special Meeting”) to be held on March 31, 2025.

At the Special Meeting, the Company will submit to its stockholders the following three proposals, each of which is, among other things, part of the Company’s plan to regain compliance with applicable Nasdaq continued listing requirements:

(1) approval of one or more reverse splits of the Company’s Common Stock, (2) approval of the full issuance of shares of our Common Stock under an Equity line of Credit, and (3) approval of the issuance of shares of the Company’s Common Stock upon conversion of approximately $ 6.6 million of the $ 6.9 million outstanding principal of the Secured Notes pursuant to the Principal Terms for Conversion Amendment, as defined, and more fully described in Part II, Item 9B – “Other Information – Special Meeting of the Stockholders.”

After reaching an agreement earlier in January, on January 24, 2025, the Company received a $ 2.0 million insurance payment to offset its legal expenses related to fees incurred in mounting a defense for Dr.

Wong, the Company’s Founder and Chief Executive Officer, in the Arbitration between ImmunityBio and the Company and Dr.

Commitments and Contingencies - Legal Matters.

As of December 31, 2024, certain subcontractors had filed mechanics liens related to unpaid invoices issued in connection with construction of the Company’s new manufacturing facilities and upgraded research laboratories.

On January 22, 2025, the Company entered into a forbearance agreement with BE&K Building Group, the prime contractor on the project, to allow the Company until March 31, 2025 to continue efforts to find the financing required to complete the construction and renovation of the Property.

Pursuant to the forbearance agreement, the Company made an initial payment of $ 1.0 million in partial satisfaction of amounts owing to BE&K and its subcontractors.

The Company has continued to pursue financing alternatives to provide the funding needed to come current in past amounts due and complete the construction and renovation of the facility.

February 2026 Sale of Common Stock and Warrants

On February 17, 2026, the Company entered into a securities purchase agreement with an existing stockholder of the Company, a single institutional investor (the “Investor”) pursuant to which the Company agreed to offer and sell, in a follow-on public offering (the “2026 Offering”), 2,477,292 units (the “Units”) consisting of (i) 2,477,292 shares (the “Common Shares”) of the Company’s Common Stock, $ 0.0001 par value per share (the “Common Stock”) or, in lieu thereof, up to 2,477,292 Pre-Funded Warrants (as defined below) to purchase up to 2,477,292 shares of Common Stock (the “Pre-Funded Warrant Shares”), and (ii) up to 2,477,292 Common Stock purchase warrants the exercise of which is conditioned on stockholder approval (the “Common Warrants”, and together with the Pre-Funded Warrants, the “Warrants”) to purchase up to 2,477,292 shares of Common Stock.

On February 17, 2026, the Company also entered into a privately negotiated agreement with the Investor, which holds certain existing outstanding warrants to purchase up to 3,020,410 shares of Common Stock (the “Prior Warrants”) to seek stockholder approval in accordance with applicable Nasdaq rules to reduce the exercise price of such Prior Warrants to the public offering price per Unit paid in the Offering (the “Existing Warrants Amendment Agreement”).

There can be no assurance that we will obtain such stockholder approval or amend the Prior Warrants or as to the final terms of any amendments to the Prior Warrants.

The combined purchase price for each Unit consisting of one share of Common Stock or Pre-Funded Warrant in lieu thereof and accompanying Common Stock Warrant to purchase one share of Common Stock was $ 0.6055 per unit, and the combined purchase price for each unit consisting of one Pre-Funded Warrant that may be exercised for one share of Common Stock and accompanying Common Stock Warrant to purchase one share of Common Stock is $ 0.6054 .

The Common Stock Warrants have an exercise price of $ 0.6055 per share, will be exercisable only upon receipt of stockholder approval thereof in accordance with applicable Nasdaq rules, and expire on the five-year anniversary of such stockholder approval.

The Pre-Funded Warrants have an exercise price of $ 0.0001 , are exercisable immediately and will not expire until exercised in full.

The Company filed a definitive proxy statement for a Special Stockholders’ Meeting to be held on April 27, 2026.

The securities described above were offered pursuant to a registration statement on Form S-1, as amended (File No.

333-293396), which was declared effective by the Securities and Exchange Commission on February 17, 2026.

The gross proceeds to the Company from the 2026 Offering are approximately $ 1.5 million before deducting the placement agent’s fees and other offering expenses payable by the Company.

The 2026 Offering closed on February 19, 2026.

On March 16, 2026, the Investor exercised all of its Pre-Funded Warrants issued in the 2026 Offering, and the Company issued 2,477,292 shares of Common Stock.

Also on February 25, 2026 and March 16, 2026, the Investor requested the Company issue 237,000 and 740,000 , respectively, of the remaining shares in abeyance.

B&I Contractors Settlement Agreement and Release

On February 19, 2026, a stipulation was submitted to the Court for a settlement and release agreement between the Company and B&I calling for payment of a total of $ 860,000 in installments in settlement of amounts owed and an allowance for interest and other fees the last installment of which is payable on or before May 31, 2026.

The Company did not recognize any gain or loss as a result of this settlement.

Compliance with Nasdaq Continued Listing Requirements

On February 26, 2026, the Nasdaq Hearings Panel found that the Company regained compliance with all continued listing rules of The Nasdaq Capital Market.

Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor.

Pursuant to Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of this letter.

If, within that one-year monitoring period, Staff finds the Company again out of compliance with the Equity Rule that was the subject of the exception, the Staff will issue a Delist Determination Letter.

In such a case, the Company will have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel is unavailable.

On March 26, 2026, the Company received a written notice from the Staff which notified the Company that, for the 30 consecutive business days, the Company’s security did not maintain a minimum bid price of $ 1 per share, in accordance with Nasdaq Listing Rule 5810(c)(3)(A) (“Bid Price Rule”).

Due to the fact that the Company effected a 1 -for-40 reverse stock split on April 11, 2025, the Company was not afforded a 180-calendar day period to demonstrate compliance.

The Company plans to request an appeal of this determination in a timely manner.

Beijing Trimmune Biotech Co., Ltd.

As of March 16, 2026, the Company received the full payment of the upfront licensing fee for the exclusive worldwide license for HCW11-006, a preclinical molecule, from Trimmune.

In accordance with the terms of the Trimmune License, the deal closing took place upon receipt of the upfront payment.

The upfront license fee consisted of a payment of $ 3.5 million in gross proceeds, or $ 2.9 million net of taxes, and a transferable minority equity interest in Trimmune.

Settlement Agreement with EirGenix, Inc.

On December 9, 2025, the Company and EirGenix entered into a settlement agreement.

On March 3, 2026, the Company paid $ 620,000 to EirGenix for the first payment in the $ 1.2 million settlement agreement.

On March 17, 2026, the parties agreed to amend the terms of the settlement agreement such that the settlement of $ 1.2 million must be paid in full by April 30, 2026, or the entire amount of $ 1.7 million in past due amounts plus interest and penalties thereon will be due.

Settlement Agreement with Cooley LLP

On March 23, 2026, the Company and Cooley LLP entered into an Amendment to Settlement Agreement and Mutual Release the parties entered on December 30, 2025.

In accordance with the amended agreement, the Company paid Cooley $ 750,000 on March 24, 2026.

The remaining $ 750,000 owed will be paid upon the earlier of the completion of a financing for at least $ 4.0 million in gross proceeds or August 31, 2026.

Engagement Letter with E.F.

On March 26, 2026, the Company entered into an engagement letter with the E.F.

to act as the exclusive placement agent for a private placement.

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .

2 unchanged sentences

This decision was not related to any disagreements with Grant Thornton on any matter of accounting principles, financial statements disclosures, auditing scope or auditing procedure.

The Audit Committee appointed Crowe LLP (“Crowe”), as the successor independent registered public accounting firm beginning in the quarter ended September 30, 2024, and is effective immediately.

The Audit Committee appointed Crowe LLP (“Crowe”), as the successor independent registered public accounting firm beginning in the quarter ended September 30, 2024, and it was effective immediately.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data