What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-25 compared with 2025-03-25 · 179 added, 220 removed, 161 unchanged (71% of the section changed)

12 unchanged sentences

Biopharma, Inc.

is a clinical-stage biopharmaceutical company focused on the application of chimeric antigen receptor cell therapy in

light chain (AL) Amyloidosis and select immune-mediated diseases.

Our lead cell therapy candidate is FDA IND cleared CAR-T NXC-201, currently

being evaluated in our ongoing United States Phase 1b/2 NEXICART-2 (NCT06097832) clinical trial and our ex-U.S.

phase 1b/2a NEXICART-1

(NCT04720313) clinical trial.

is a clinical-stage biopharmaceutical company focused on the application of CAR-T in AL Amyloidosis and other serious

Our lead cell therapy candidate is FDA IND cleared CAR-T NXC-201, currently being evaluated in our ongoing United States Phase

1b/2 NEXICART-2 (NCT06097832) clinical trial and our ex-U.S.

phase 1b/2a NEXICART-1 (NCT04720313) clinical trial.

inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development,

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losses, the majority of which are attributable to research and development activities and negative cash flows from operations.

funded our operations primarily through the sale of convertible debt and equity securities.

Currently, our primary use of cash is to

fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative

expenditures.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product

candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.

In addition, if we obtain

regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing,

marketing, sales and distribution.

Furthermore, we incur costs associated with operating as a public company, including significant legal,

accounting, investor relations and other expenses.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year,

depending on the timing of our clinical trials and our expenses on other research and development activities.

Master Services Agreement

December 22, 2014, we entered into a Master Service Agreement (“MSA”) with AxioMx, Inc.

(“AxioMx”) which is in

the business of developing and supplying custom affinity reagents.

We entered into the MSA to serve as a master agreement governing multiple

sets of projects as may be agreed upon us and AxioMx from time to time.

Pursuant to the MSA, we granted AxioMx a non-exclusive, royalty-free,

worldwide, non-transferable license to certain of our intellectual property to perform services pursuant to the MSA, and AxioMx granted

us an exclusive product assignment option (“Option”) which granted us an exclusive, royalty-bearing right, with the right

to sublicense, under the Deliverable (as defined in the MSA) to further research, develop, use, sell, offer for sale, import and export

one or more assigned products pursuant to the MSA.

We exercised the Option in 2017.

Pursuant to the MSA, AxioMx is entitled to royalties

on the sale of any Deliverable that is used for diagnostic, prognostic or therapeutic purposes, in humans or animals, or for microbiology

testing, including food safety testing or environmental monitoring.

Specifically, we shall pay AxioMx a royalty of 3.5% of Net Sales

(as defined in the MSA) of assigned products for each Deliverable used in licensed products for therapeutic purposes.

In addition, we

shall pay AxioMx a royalty of 1.5% of Net Sales of assigned products for each Deliverable used in licensed products for diagnostic or

prognostic purposes;

provided, however, if three Deliverables are used in an assigned product for diagnostic or prognostic purposes,

the royalty shall be 4.5%.

As of December 31, 2024, the MSA has expired and we do not intend to extend the MSA;

however, the royalty

obligations described therein survived the termination of the MSA.

of Nexcella Subsidiary

May 20, 2024, Nexcella, was merged with and into the Company, with the Company as the surviving corporation.

The Merger was effected

pursuant to Section 253 of the DGCL when the Company filed a Certificate of Ownership and Merger (“Certificate of Merger”)

with the Secretary of State of the State of Delaware.

Immediately prior to the Merger, the Company owned greater than 95% of the outstanding

common stock on a fully diluted basis of Nexcella, par value $0.0001 per share, and 100% of the outstanding shares of each other class

of capital stock of Nexcella.

Under the DGCL, the only approval required was that of the Company’s Board of Directors for the Merger

to become effective.

As a result of the Merger, Nexcella ceased to exist and all assets, operations and other property and rights of

Nexcella have been succeeded to by the Company.

Pursuant to the terms of the Certificate of Merger, as a result of the Merger, each of

the outstanding Nexcella Shares (other than Nexcella Shares held by the Company) were converted, into common stock of the Company.

connection with the Merger, the Company issued 989,876 shares of its common stock to the former stockholders of Nexcella (other than

shares held by the Company) (including Company common stock issued to third-party cash investors in Nexcella).

In addition, the Company

issued to the former participants in the Nexcella 2022 Equity Incentive Plan, 275,759 restricted stock awards to receive common stock

in the Company and options to purchase up to 595,676 shares of Company common stock at an exercise price of $2.47 per share (the closing

price on May 17, 2024), under the Company’s Amended and Restated 2021 Omnibus Equity Incentive Plan.

funded our operations primarily through the sale of convertible debt and equity securities and, to a lesser extent, grant funding.

our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and general

and administrative expenditures.

We expect to continue to incur significant expenses and operating losses for the foreseeable future

as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.

In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses

related to product manufacturing, marketing, sales and distribution.

Furthermore, we incur costs associated with operating as a public

company, including significant legal, accounting, investor relations and other expenses.

Our net losses may fluctuate significantly from

quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenses on other research and development

December 7, 2025, we entered into the 2025 Underwriting Agreement with Morgan Stanley, as representative of the several underwriters

named in Schedule 1 thereto, relating to the issuance and sale of 19,117,646 Shares and Pre-Funded Warrants to purchase up to 490,196

shares of common stock.

The Shares were sold at a price of $5.10 per share and the Pre-Funded Warrants were sold at a price of $5.09

per Pre-Funded Warrant, which represents the per Share offering price minus the $0.01 per share exercise price for each Pre-Funded Warrant.

September 5, 2025 and September 11, 2025, we entered into the September 2025 Securities Purchase Agreements and Registration Rights Agreements

with the Purchasers, pursuant to which we sold to the Purchasers in the Private Placement (i) an aggregate of 3,915,604 shares of common

stock (ii) Warrants to purchase up to an aggregate of 2,936,709 shares of common stock.

The combined purchase price per Share and Warrant

The Private Placement closed on September 5, 2025 and September 11, 2025 and aggregate gross proceeds from both closings were

approximately $9.3 million, before deducting fees and expenses payable by us.

The Warrants are exercisable over a ten-year period at

an exercise price of $2.00 per share, subject to proportional adjustments in the event of stock splits or combinations or similar events.

The Warrants are not transferable other than to affiliates of the Purchasers, and are exercisable only for cash consideration.

to the terms of the Registration Rights Agreements, we filed a resale registration statement with the SEC on October 6, 2025 providing

for the resale of the shares of common stock and the shares of common stock issuable upon exercise of the Warrants by the Purchasers,

which was declared effective by the SEC on December 1, 2025.

Pursuant to the terms of the September 2025 Securities Purchase Agreements,

effective September 8, 2025, our Board appointed Nancy Chang, Ph.D.

as a member of the Board.

2025 ATM Sales Agreement

June 3, 2025, we entered into an At The Market Offering Agreement (the “June 2025 ATM Agreement”) with Citizens JMP Securities,

LLC (“Citizens”) for offers and sales of up to $50 million shares of common stock through Citizens as sales agent.

Citizens a commission of three percent (3%) of the gross sales proceeds of any common stock sold through Citizens under the June 2025

ATM Agreement, and have also provided Citizens with customary indemnification and contribution rights.

Initially, we were eligible to

sell up to $13,450,000 of shares of common stock under the June 2025 ATM Agreement subject to the so-called “baby shelf”

limitations of General Instruction I.B.6 of Form S-3 until such time that our public float equals or exceeds $75.0 million.

aggregate market value of our outstanding shares of common stock held by non-affiliates exceeds $75.0 million, we are no longer subject

to the baby shelf limitation on sales set forth in General Instruction I.B.6 of Form S-3.

During the three months ended December 31,

2025, we sold 610,123 shares of common stock pursuant to the June 2025 ATM Agreement for net proceeds of $1,836,055, after offering expenses.

During the year ended December 31, 2025, we sold 1,697,504 shares of common stock pursuant to the June 2025 ATM Agreement for net proceeds

of $4,409,430, after offering expenses.

and License Agreement with Hadasit and BIRAD

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Licensors equal to 5% of Net Sales during the Royalty Period.

addition, Nexcella shall pay sales milestone payments of up to $20 million for Net Sales exceeding $700 million and Nexcella has committed

to funding NXC-201 clinical trials in Israel over 4 years for an estimated total cost of approximately $13 million, spread on a quarterly

basis over that period, which Nexcella believes will generate clinical trial data owned by Nexcella.

The term of the Agreement commenced

on December 8, 2022 and, unless earlier terminated pursuant to the terms thereof, shall continue in full force and effect until the later

of the expiration of the last Valid Claim under a Licensed Patent or a Joint Patent or Exclusivity Right covering a Licensed Product

or the expiration of a continuous period of 15 years during which there shall not have been a First Commercial Sale of any Licensed Product

in any country in the world.

Licensors may terminate the Agreement immediately if Nexcella or its affiliates or sublicensees commences

an action in which it challenges the validity, enforceability or scope of any of the Licensed Patents or Joint Patents.

either party may terminate the Agreement if the other party materially breaches the Agreement and fails to cure such breach within 30

Additionally, Licensors may terminate the Agreement if Nexcella becomes insolvent or files for bankruptcy.

license remains with the Company after the Nexcella Absorption.

addition, Nexcella shall pay sales milestone payments of up to $20 million for Net Sales (as such term is defined in the Agreement) exceeding

$700 million and Nexcella has committed to funding NXC-201 clinical trials in Israel over 4 years for an estimated total cost of approximately

$13 million, spread on a quarterly basis over that period, which Nexcella believes will generate clinical trial data owned by Nexcella.

The term of the Agreement commenced on December 8, 2022 and, unless earlier terminated pursuant to the terms thereof, shall continue

in full force and effect until the later of the expiration of the last Valid Claim under a Licensed Patent or a Joint Patent or Exclusivity

Right covering a Licensed Product or the expiration of a continuous period of 15 years during which there shall not have been a First

Commercial Sale of any Licensed Product in any country in the world.

Licensors may terminate the Agreement immediately if Nexcella or

its affiliates or sublicensees commences an action in which it challenges the validity, enforceability or scope of any of the Licensed

Patents or Joint Patents.

In addition, either party may terminate the Agreement if the other party materially breaches the Agreement

and fails to cure such breach within 30 days.

Additionally, Licensors may terminate the Agreement if Nexcella becomes insolvent or files

for bankruptcy.

December 16, 2024, Nexcella entered into the First Amendment to the Research and License Agreement (the “First Amendment”)

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The First Amendment includes terms specific to new licensed products and requires an additional upfront license fee

of $1,500,000, payable no later than April 30, 2025, as well as development milestone payments of up to $4.5 million upon the Company’s

achievement of certain milestones.

2023 ATM Offering

July 14, 2023, we entered into an ATM Sales Agreement (the “July 2023 Sales Agreement”) with the Sales Agent pursuant to

which we may offer and sell, from time to time, through the Sales Agent, shares of our common stock, subject to the terms and conditions

set forth in the July 2023 Sales Agreement.

Initially, we are eligible to sell up to $4,200,000 worth of shares of our common stock as

the aggregate market value of our shares of common stock eligible for sale under the July 2023 Sales Agreement is subject to the limitations

of General Instruction I.B.6 of Form S-3 until such time that our public float equals or exceeds $75.0 million.

In the event the aggregate

market value of our outstanding common stock held by non-affiliates equals or exceeds $75.0 million, then the one-third limitation on

sales set forth in General Instruction I.B.6 of Form S-3 will not apply to additional sales made pursuant to the July 2023 Sales Agreement.

We agreed to pay the Sales Agent a commission rate of 3.75% of the aggregate gross proceeds from the sale of the shares of our common

stock pursuant to the July 2023 Sales Agreement and have paid an expense deposit of $15,000 to the Sales Agent, which will be applied

against the actual out-of-pocket accountable expenses.

In addition, we have agreed to reimburse the Sales Agent for all expenses related

to the offering including, without limitation, the fees and expenses of the Sales Agent’s legal counsel up to $50,000, and to reimburse

the Sales Agent, upon request, for such costs, fees and expenses in an amount not to exceed $7,500 on a quarterly basis for the first

three fiscal quarters of each year and $10,000 for the fiscal fourth quarter of each year.

The offering pursuant to the July 2023 Sales

Agreement will terminate upon the earlier of (i) the sale of all of the shares of common stock subject to the July 2023 Sales Agreement

and (ii) termination of the July 2023 Sales Agreement as permitted therein.

We may terminate the July 2023 Sales Agreement in our sole

discretion at any time by giving ten days’ prior notice to the Sales Agent.

The Sales Agent may terminate the July 2023 Sales Agreement

under the circumstances specified in the July 2023 Sales Agreement and in its sole discretion at any time by giving ten days’ prior

notice to us.

In addition, the July 2023 Sales Agreement may be terminated upon mutual agreement by us and the Sales Agent.

July 14, 2023 through February 5, 2024, the Company sold 328,136 common shares pursuant to the July 2023 ATM Facility for net proceeds

of $1,091,887, after offering expenses.

On February 5, 2024, the Company suspended, and is not offering any shares of its common stock

pursuant to, the prospectus supplement dated July 14, 2023, relating to the July 2023 Sales Agreement by and between the Company and

the Sales Agent.

The Company will not make any sales of common stock pursuant to the July 2023 Sales Agreement unless and until a new

prospectus supplement is filed with the SEC;

however, the Sales Agreement remains in full force and effect.

February 5, 2024, the Company entered into an Underwriting Agreement with Titan Partners Group LLC, a division of American Capital Partners,

LLC, relating to an underwritten offering of 5,535,055 shares of common stock of the Company.

The public offering price was $2.71 per

share of Common Stock and the Underwriter agreed to purchase the Common Stock pursuant to the Underwriting Agreement at a price of $2.5203

On February 8, 2024, the Company closed the offering and received net proceeds of $13,565,760, after deducting underwriting

discounts and commissions and estimated offering expenses.

Pursuant to the Agreement, the Company granted the Underwriter a 30-day over-allotment

option to purchase up to an additional 783,970 shares of Common Stock which was exercised in full on March 1, 2024 for net proceeds of

$1,954,594, after deducting underwriting discounts and offering expenses.

July 25, 2024, the Company was awarded an $8 million grant from the California Institute for Regenerative Medicine (CIRM) to support

the clinical development of chimeric antigen receptor T-cell therapy NXC-201 for the treatment of relapsed/refractory AL Amyloidosis.

The award is payable to the Company upon achievement of milestones that are primarily based on patient enrollment in the Company’s

clinical trials.

Additionally, if CIRM determines, in its sole discretion, that the Company has not complied with the terms and conditions

of the grant, CIRM may suspend or permanently cease disbursements.

Funds received under this grant may only be used for allowable project

costs specifically identified with the CIRM-funded project.

Such costs can include, but are not limited to, salary for personnel, itemized

supplies, consultants, and itemized clinical study costs.

Under the terms of the grant, both CIRM and the Company will co-fund the research

project and the amount of the Company’s co-funding requirement is predetermined as a part of the award.

The Company signed the

grant agreement in November 2024 and begin receiving funds from the grant in November of 2024.

As of March 11, 2025, the Company has

received $3.6 million in grant reimbursements under the grant agreement.

February 10, 2025, the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to sterically-optimized CAR-T NXC-201 for

the treatment of relapsed/refractory AL amyloidosis.

As of June 2024 public information, FDA approved less than half of RMAT applications

submitted to the agency during the last eight years.

FDA RMAT designation requires that a drug is an advanced regenerative medicine,

targets a serious condition, with the potential to treat, modify, reverse, or cure, and preliminary clinical evidence has indicated that

the drug has the potential to address these unmet medical needs.

of $1.5 million, which has been paid in full as of December 31, 2025, as well as development milestone payments of up to $4.5 million

upon the Company’s achievement of certain milestones.

is a wholly-owned subsidiary of Immix Biopharma, Inc (was merged with and into the Company in May 2024).

July 25, 2024, we were awarded an $8 million grant from the California Institute for Regenerative Medicine (CIRM) to support the clinical

development of chimeric antigen receptor T-cell therapy NXC-201 for the treatment of relapsed/refractory AL Amyloidosis.

payable to us upon achievement of milestones that are primarily based on patient enrollment in our clinical trials.

Additionally, if

CIRM determines, in its sole discretion, that we have not complied with the terms and conditions of the grant, CIRM may suspend or permanently

cease disbursements.

Funds received under this grant may only be used for allowable project costs specifically identified with the CIRM-funded

Such costs can include, but are not limited to, salary for personnel, itemized supplies, consultants, and itemized clinical

Under the terms of the grant, both CIRM and we will co-fund the research project and the amount of the Company’s co-funding

requirement is predetermined as a part of the award.

We signed the grant agreement in November 2024 and begin receiving funds from the

grant in November of 2024.

As of March 20, 2026, we have received approximately $6.2 million in grant reimbursements under the grant agreement

and $1.8 million of remaining awarded funds are expected to be disbursed upon the achievement of milestones.

of Operations

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and administrative expenses were $13,697,817 for the year ended December 31, 2025 compared to $11,381,978 for the year ended December

expenses incurred in both periods were related to salaries, patent maintenance costs and general accounting and other general

consulting expenses, which were higher for the year ended December 31, 2024, due to increased investor relations and professional

services of $1,839,151 due to service scope expansion and price increases, increased compensation of $1,011,389 due to the hiring of

additional employees, increased stock-based compensation of $449,913 from additional equity awards issued, and increased other general expenses of $675,443.

expenses incurred in both periods were related to salaries, patent maintenance costs and general accounting and other general consulting

expenses, which were higher for the year ended December 31, 2025, due to increased compensation of $1,213,247 due to the hiring of additional

employees, increased investor relations and professional services of $695,152 due to service scope expansion and price increases, and

increased other general expenses of $407,440.

and Development Expenses

3 unchanged sentences

and license fees.

We were able to increase spending on research and development in 2024 as a result of funding from an underwritten public

offering of 5,535,055 shares of our common stock at the public offering price of $2.71 per share, for net proceeds of $13,565,760, after

underwriter discounts and offering expenses.

Additionally, the Company received $1,925,000 in CIRM grant reimbursement which is recorded

as an offset to research and development expenses.

We were able to increase spending on research and development in 2025 as a result of funding from multiple share offerings

resulting in net proceeds of $107,349,347, after underwriter discounts and offering expenses.

Additionally, the Company received $2,725,000

in CIRM grant reimbursement which is recorded as an offset to research and development expenses.

income was $555,526 for the year ended December 31, 2025, compared to $1,017,354 of interest income for the year ended December 31, 2024.

Interest income in the current year was related to interest received on investments in a money market fund and increased from the prior

year as a result of the Company maintaining higher balances in money market funds during the current year.

Interest income in the current year was related to interest received on investments in a money market fund and decreased from the prior

year as a result of the Company maintaining lower balances in money market funds during the current year.

for Income Taxes

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We currently have no credit facility or committed sources of

primary use of cash, cash equivalents, and short-term investments is to fund operating expenses, which consist of clinical research and

development expenses, manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead

Cash, cash equivalents, and short-term investments used to fund operating expenses are impacted by the timing of when we pay or

prepay these expenses.

We expect our expenses to increase in connection with our ongoing activities, particularly as we expand our clinical

programs, continue the research and development of, and seek marketing approval for our product candidates.

In addition, if we obtain

marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales,

marketing, manufacturing and distribution.

of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are

unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors,

including, but not limited to:

scope, timing, progress and results of discovery, pre-clinical development, laboratory testing and clinical trials for our product

costs of manufacturing our product candidates for clinical trials and in preparation for regulatory approval and commercialization;

extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our

product candidates;

costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending

intellectual property-related claims;

costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

needed to attract and retain skilled personnel;

costs associated with being a public company;

costs required to scale up our clinical, regulatory and manufacturing capabilities;

costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities,

for any of our product candidates for which we receive regulatory approval;

if any, received from commercial sales of our product candidates, should any of our product candidates receive regulatory approval.

February and March 2024, we conducted an underwritten public offering of 6,319,025 shares of our common stock, inclusive of the underwriter’s

exercise in full of its over allotment option, at $2.71 per share, for the net proceeds of approximately $15.5 million, after underwriting

exercise in full of its over-allotment option, at $2.71 per share, for net proceeds of approximately $15.5 million, after underwriting

discounts and offering expenses.

July 25, 2024, the Company was awarded an $8 million grant from the California Institute for Regenerative Medicine (CIRM) to support

the clinical development of chimeric antigen receptor T-cell therapy NXC-201 for the treatment of relapsed/refractory AL Amyloidosis.

The award is payable to the Company upon achievement of milestones that are primarily based on patient enrollment in the Company’s

clinical trials.

Additionally, if CIRM determines, in its sole discretion, that the Company has not complied with the terms and conditions

of the grant, CIRM may suspend or permanently cease disbursements.

Funds received under this grant may only be used for allowable project

costs specifically identified with the CIRM-funded project.

Such costs can include, but are not limited to, salary for personnel, itemized

supplies, consultants, and itemized clinical study costs.

Under the terms of the grant, both CIRM and the Company will co-fund the research

project and the amount of the Company’s co-funding requirement is predetermined as a part of the award.

The Company signed the

grant agreement in November 2024 and begin receiving funds from the grant in November of 2024.

As of March 11, 2025, the Company has

received $3.6 million in grant reimbursements under the grant agreement.

discussed above, on July 25, 2024, we were awarded an $8 million grant from CIRM to support the clinical development of chimeric antigen

receptor T-cell therapy NXC-201 for the treatment of relapsed/refractory AL Amyloidosis.

As of March 2026, we have received $6.2 million

in grant reimbursements under the grant agreement.

June 2025, we entered into the June 2025 ATM Agreement under which we may offer and sell, from time to time at its sole discretion, up

to $50 million in shares of its common stock.

During the three months ended December 31, 2025 and the year ended December 31, 2025, we

sold 610,123 and 1,697,504 shares, respectively, of common stock pursuant to the June 2025 ATM Agreement for net proceeds of $1,836,055

and $4,409,430, respectively, after offering expenses.

September 2025, we sold to the Purchasers in the Private Placement, pursuant to the September 2025 Securities Purchase Agreements (i)

an aggregate of 3,915,604 shares of common stock, and (ii) non-transferable Warrants to purchase up to an aggregate of 2,936,709 shares

of common stock for gross proceeds of approximately $9.3 million, before deducting fees and offering expenses payable by us.

December 2025, we conducted an underwritten public offering of 19,117,646 shares of our common stock, at a price of $5.10 per share,

and 490,196 Pre-Funded Warrants at a price of $5.09 per Pre-Funded Warrant, for net proceeds of approximately $93.7 million, after underwriting

discounts and offering expenses.

Cash Requirements

primary use of cash and cash equivalents is to fund operating expenses, which consist of clinical research and development expenses,

manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead costs.

Cash and cash equivalents

used to fund operating expenses are impacted by the timing of when we pay or prepay these expenses.

We expect our expenses to increase

in connection with our ongoing activities, particularly as we expand our clinical programs, continue the research and development of,

and seek marketing approval for our product candidates.

In addition, if we obtain marketing approval for any of our product candidates,

we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

primary use of cash, cash equivalents and short-term investments is to fund operating expenses, which consist of clinical research and

development expenses, manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead

Cash, cash equivalents and short-term investments used to fund operating expenses are impacted by the timing of when we pay or

prepay these expenses.

We expect our expenses to increase in connection with our ongoing activities, particularly as we expand our clinical

programs, continue the research and development of, and seek marketing approval for our product candidates.

In addition, if we obtain

marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales,

marketing, manufacturing and distribution.

of December 31, 2025, we had total assets of approximately $104.8 million and working capital of approximately $91.1 million.

As of December

31, 2024, our liquidity included approximately $17.7 million of cash and cash equivalents.

We believe that our cash and cash equivalents

on hand as of the date of this report coupled with expected disbursements under the CIRM grant, will be sufficient to fund our planned

operations over the 12-month period following the date of this report;

however, there can be no assurance we will not need additional

capital sooner.

In addition, we believe that we will need additional capital to continue our planned operations beyond the 12-month period

following the date of this report.

We intend to seek additional funds through various financing sources, including the sale of our equity

and debt securities, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations,

strategic alliances and licensing arrangements.

In addition, we will consider alternatives to our current business plan that may enable

us to achieve revenue producing operations and meaningful commercial success with a smaller amount of capital.

However, there can be

no guarantees that such funds will be available on commercially reasonable terms, if at all.

If such financing is not available on satisfactory

terms, we may be unable to further pursue our business plan and we may be unable to continue operations.

31, 2025, our liquidity included approximately $100.4 million of cash, cash equivalents and short-term investments.

We believe that our

cash, cash equivalents and short-term investments on hand as of the date of this report coupled with expected disbursements under the

CIRM grant, will be sufficient to fund our planned operations over the 12-month period following the date of this report;

however, there

can be no assurance we will not need additional capital sooner.

In addition, we believe that we will need additional capital to continue

our planned operations beyond the 12-month period following the date of this report.

We intend to seek additional funds through various

financing sources, including the sale of our equity and debt securities, government or other third-party funding, commercialization,

marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements.

In addition, we will consider

alternatives to our current business plan that may enable us to achieve revenue producing operations and meaningful commercial success

with a smaller amount of capital.

However, there can be no guarantees that such funds will be available on commercially reasonable terms,

If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may

be unable to continue operations.

the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be

10 unchanged sentences

necessary equity financing to continue operations and the attainment of profitable operations.

January 2024, the Company entered into a long-term operating lease agreement for biopharmaceutical manufacturing space in California

under a non-cancelable operating lease that expires in December 2033.

Under the terms of the lease we expect to make total lease payments

of $1.6 million through December 2033.

January 2024, we entered into a long-term operating lease agreement for biopharmaceutical manufacturing space in California under a non-cancelable

operating lease that expires in December 2033.

Under the terms of the lease we expect to make total lease payments of $1.4 million through

December 2033.

enter into contracts in the normal course of business with third-party contract organizations for preclinical and clinical studies, manufacture

10 unchanged sentences

offset by non-cash items of stock-based compensation expense of $2,441,875, depreciation expense of $245,747 and right of use asset amortization

Operating activities also included an increase in accounts payable and accrued expenses of $4,401,623 and an increase in

the tax receivable of $971,527, partially offset by a decrease in prepaid expenses of $554,771.

Net cash used for the year ended December

31, 2023 was primarily related to our net loss of $15,595,522 offset by non-cash items of stock-based compensation expense of $2,565,708

and depreciation expense of $5,468.

Operating activities also included an increase in accounts payable and accrued expenses of $2,434,467,

an increase in the tax receivable of $893,401, and a decrease in prepaid expenses of $111,842.

Operating activities also included increases in accounts payable and accrued expenses of $1,027,161, and in prepaid expenses

of $286,729 partially offset by a decrease in the tax receivable of $2,059,507.

Net cash used in operating activities for the year ended

December 31, 2024 was primarily related to our net loss of $21,698,363, offset by non-cash items of stock-based compensation expense

of $3,020,573, depreciation expense of $32,941 and right of use asset amortization of $82,447.

Operating activities also included an

increase in accounts payable and accrued expenses of $4,401,623 and an increase in the tax receivable of $971,527, partially offset by

a decrease in prepaid expenses of $554,770.

used in investing activities

cash used in investing activities was $1,177,680 for the year ended December 31, 2024, consisting solely of purchase of property and

operating equipment, compared to $52,089 for the year ended December 31, 2023.

cash used in investing activities was $7,213,785 for the year ended December 31, 2025, consisting of purchase of property and

operating equipment of $732,925 and $6,480,860 for the purchase of short term investments, compared to $1,177,680 for the year ended December 31, 2024.

The decrease was related to the completion of the

build-out of our manufacturing space in 2025.

provided by financing activities

cash provided by financing activities was $107,386,859 for the year ended December 31, 2025 and $15,948,567 for the year ended December

Net cash provided by financing activities in 2024 was related to proceeds of $15,946,078 from the sale of common shares through

a public offering.

Net cash provided by financing activities in 2023 was primarily related to $9,934,153 in net proceeds from the issuance

of shares of our common stock and warrants in our August 2023 private placement and $5,438,970 in net proceeds from the sale of shares

of our common stock pursuant to our ATM facilities.

Accounting Policies and Estimates

Net cash provided by financing activities in 2025 was primarily related to proceeds of $107,392,716 from the sale of common

stock, which includes $4,409,430 from the sale of common stock through an at-the-market offering.

Net cash provided by financing activities

in 2024 was related to proceeds of $15,946,078 from the sale of common stock through a public offering.

Accounting Estimates

management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial

78 unchanged sentences

a smaller reporting company, we are not required to provide the information required by this item.

As a smaller reporting company, we

are not required to provide the information required by this item.

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 7. Management’s Discussion and Analysis