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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-08-07 · 202 added, 198 removed, 439 unchanged (48% of the section changed)

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Forward-Looking Statements

This Form 10-Q contains certain

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

For this purpose, any statements

contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements.

Without limiting

the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,”

“estimate” or “continue” or comparable terminology are intended to identify forward-looking statements.

statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety

of factors, many of which are not within our control.

These factors include but are not limited to economic conditions generally and in

the industries in which we may participate;

competition within our chosen industry, including competition from much larger competitors;

This Quarterly Report on Form

10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

purpose, any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be

forward-looking statements.

Without limiting the foregoing, words such as “may,” “will,” “expect,”

“believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended

to identify forward-looking statements.

These statements by their nature involve substantial risks and uncertainties, and actual results

may differ materially depending on a variety of factors, many of which are not within our control.

These factors include but are not limited

to economic conditions generally and in the industries in which we may participate;

competition within our chosen industry, including

competition from much larger competitors;

technological advances and failure to successfully develop business relationships.

Description of Business

Our objective is to

develop and commercialize our product candidates to treat diseases where the innate immune system is dysfunctional causing or

contributing to the patient’s disease.

Innate immune dysfunction can occur for a variety of reasons including genetics,

lifestyle, and other factors.

However, age plays a significant role in the development of immune dysfunction.

Innate immune

dysfunction can be seen in cancer where Natural Killer (“NK”) cells are impaired and facilitate a tumor’s evasion

of the immune system and subsequent disease progression.

Chronic inflammation is implicated in various diseases, where it impairs

the innate immune system.

Our primary focus continues to be treatment of cancer with INKmune, treatment of Alzheimer’s Disease

(“AD”) with XPro1595 and treatment of receswsive dystrophic epidermolysis bullosa (RDEB) with CORDStrom, a proprietary,

pooled, human umbilical cord mesenchymal stromal cell platform.

RDEB is a pediatric orphan disease caused by mutations in the COL7A1

gene which results in highly debilitating skin blistering, dysphagia and failure to thrive with chronic wound problems that often

result in fatal squamous cell carcinoma.

Our objective is to develop

and commercialize our product candidates to treat diseases where inflammation and immunology cause a dysfunctional immune system contributing

Immune dysfunction can occur for a variety of reasons including genetics, lifestyle, and other factors.

However, age plays

a significant role in the development of immune dysfunction.

Immune dysfunction can be seen in cancer where Natural Killer (“NK”)

cells are impaired and facilitate a tumor’s evasion of the immune system and subsequent disease progression.

Chronic inflammation

is implicated in various diseases, where it impairs the immune system.

Our primary focus continues to be treatment of Alzheimer’s

Disease (“AD”) with XPro1595 (“XPro™ and DN-TNF) and treatment of recessive dystrophic epidermolysis bullosa (“RDEB”)

with CORDStrom, a proprietary, pooled, human umbilical cord mesenchymal stromal cell platform.

RDEB is a pediatric orphan disease caused

by mutations in the COL7A1 gene which results in highly debilitating skin blistering, dysphagia and failure to thrive with chronic wound

problems that often result in fatal squamous cell carcinoma.

XPro for AD has completed

Phase I and Phase II trials with enrollment of patients at clinical sites in the United Kingdom, EU, Australia and Canada.

the recent Phase 2 results of XPro in AD along with company resources, the treatment resistant depression trial will not be pursued.

INKmune program is in an open label Phase II trial in metastatic castrate resistant prostate cancer (“mCRPC”).

CORDStrom for

the treatment of children with RDEB has completed a pivotal blinded randomized cross-over trial.

program has nearly completed an open label Phase II trial in metastatic castrate resistant prostate cancer (“mCRPC”).

for the treatment of children with RDEB has completed a pivotal blinded randomized cross-over trial.

The data will be submitted for marketing

authorization by filing a Marketing Authorization Application (MAA) in the United Kingdom followed by a Biologics License Application

(“BLA”) with the FDA in the US which is anticipated in the first half of 2026.

We believe our DN-TNF platform

can be used as a CNS (“central nervous system”) therapy to target glial activation to prevent progression of AD along with

other inflammatory diseases.

(“BLA”) with the FDA in the US which is anticipated in 2026.

We believe our XPro™

platform can be used as a CNS (“central nervous system”) therapy to target glial activation to prevent progression of AD along

with other inflammatory diseases.

The primary focus of the Company’s development efforts for XPro is AD.

In each case, we believe neutralizing

sTNF is a cornerstone to the treatment of these diseases.

In each case, we believe

neutralizing sTNF is a cornerstone to the treatment of neuroinflammation and immune dysfunction in these diseases.

We believe the DN-TNF platform

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death that may include demyelination.

Synaptic dysfunction means the connections between nerve cells stop working efficiently and may

Synaptic dysfunction means the connections between nerve cells cease to work efficiently and may

decrease in number.

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Germany, Spain, Czech Republic and Slovakia.

Full enrollment in the Phase II AD trial occurred

in late 2024 with 208 patients enrolled and top-line data was received during June 2025.

In the Phase 2 MINDFuL trial of XPro™ in

patients with early Alzheimer’s Disease (AD) with biomarkers of inflammation, the modified intent-to-treat (mITT) population (n=200)

did not meet the primary and key secondary endpoints ( figure 1 ).

Efficacy, Demographics and Safety data are shown below.

Full enrollment in the Phase

II AD trial occurred in late 2024 with 208 patients enrolled and top-line data was received during June 2025.

In the Phase 2 MINDFuL trial

of XPro™ in patients with early Alzheimer’s Disease (AD) with biomarkers of inflammation, the modified intent-to-treat

(mITT) population (n=200) did not meet the primary and key secondary endpoints ( figure 1 ).

Efficacy, Demographics and Safety data

are shown below.

Phase 2 Study Results – mITT population Primary

and Key Secondary Endpoints, Change From Baseline

As these graphs depict, the primary and secondary

endpoints in this trial were not met as no decline in the placebo groups were observed.

A trend was observed in NPI that favored XPro1595

over placebo.

As these graphs depict, the primary

and secondary endpoints in this trial were not met as no decline in the placebo groups were observed.

A trend was observed in NPI that

favored XPro1595 over placebo.

For reference, A higher EMACC score =better, A lower CDR and NPI score is better.

LS Mean Diff (SE):

-0.018 (0.0414),

-0.018 (0.0414), 90% CI:

-0.0860, 0.0509, p-value:

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-0.417, 0.195, p-value:

LS Mean Diff (SE):

-0.9 (0.78), 90% CI:

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the mITT and enriched population

patients in the mITT did not show decline on the EMACC over the 24 week study.

In the enriched group, placebo patients did decline over

To evaluate a subgroup after missing the primary

endpoint, we used effect size as the primary metric due to the smaller sample size (n=100).

Effect size, measured by Cohen’s D,

is well-suited for small samples and allows comparisons across different measures (e.g., cognitive tests and biomarkers).

Unlike p-values,

which indicate the likelihood of results being due to chance, effect size reflects clinical relevance and is commonly used for signal

detection in Phase 2 studies.

Placebo patients in the mITT

did not show decline on the EMACC over the 24 week study.

In the enriched group, placebo patients did decline over 24 weeks.

To evaluate a subgroup after

missing the primary endpoint, we used effect size as the primary metric due to the smaller sample size (n=100).

Effect size, measured

by Cohen’s D, is well-suited for small samples and allows comparisons across different measures (e.g., cognitive tests and biomarkers).

Unlike p-values, which indicate the likelihood of results being due to chance, effect size reflects clinical relevance and is commonly

used for signal detection in Phase 2 studies.

We defined a promising signal

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population (50% of the total sample, n=100) showed trends toward improvement with XPro on the primary endpoint (EMACC) and a key secondary

endpoint (NPI) ( Figure 3 ).

endpoint (NPI) ( Figure 3a ).

With the placebo group showing the expected decline on EMACC over six months, a beneficial effect of

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effect on CDR-SB, which measures cognition and function (lower scores are better).

We also evaluated the effect size of additional endpoints

( Figure 4 ).

Across most endpoints, XPro showed favorable trends, with effect sizes approaching the 0.2 threshold for clinical relevance.

Within the dose compliant group of patients, there

was an increased benefit seen corresponding to the amount of XPro received during the trial (Figure 3b).

We also evaluated the effect

size of additional endpoints ( Figure 4 ).

Across most endpoints, XPro showed favorable trends, with effect sizes approaching the

0.2 threshold for clinical relevance.

Phase 2 Study Results – Enriched population primary

and key secondary endpoints, change from baseline

The enriched population show effect size >0.2 favoring

XPro1595 on the EMACC and NPI.

The enriched population show

effect size >0.2 favoring XPro1595 on the EMACC and NPI.

, A higher EMACC score =better, A lower CDR and NPI score is better.

LS Mean Diff (SE):

0.086 (0.0603),

0.086 (0.0603), 90% CI:

-0.0146, 0.1857, p-value:

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0.426, p-value:

LS Mean Diff (SE):

-1.6 (1.25), 90% CI:

-3.71, 0.47, p-value:

Phase 2 Study Results – Most endpoints favor treatment

with XPro1595.

Phase 2 Study Results – XPro had greater impact

on dose compliant patients

Effect size of XPro across multiple endpoints described

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Any TEAE with Fatal Outcome

Organ Class & Preferred Term

General disorders and administration site conditions

Injection site reaction

Injection site erythema

Injection site hypersensitivity

Injection site pruritus

Infections and infestations

Upper respiratory tract infection

Musculoskeletal and connective tissue disorders

Nervous system disorders

The Company believes these

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The Company is planning an end-of-phase 2 meeting with the FDA, which is expected

to occur towards the end of 2025, to determine next steps and expects to be eligible for Break Through status.

to occur towards the end of 2025 or early 2026, to determine next steps and expects to be eligible for one of the accelerated pathways.

developed by INmune Bio circa 2020, represents a breakthrough in mesenchymal stromal cell technology.

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Mission EB data form the basis of a license that was entered into between INmune Bio and GOSH, whereby the Company gains exclusive access

to the clinical study data for commercial uses in exchange for payment of an initiation milestone of £250,000 (approximately $0.3

million at June 30, 2025) and a single development milestone of approximately £6 million (approximately $7.8 million at June 30,

2025) due on receipt of first marketing authorization from the FDA, EMA, or MHRA, which has not occurred yet, and an ongoing commitment

to supply CORDStrom to patients enrolled in an open label arm of the Mission EB trial, subject to certain limitations.

to the clinical study data for commercial uses in exchange for payment of an initiation milestone of approximately $0.3 million which

the Company paid during July 2025 and a single development milestone of approximately £6 million (approximately $8.1 million at

September 30, 2025) due on receipt of first marketing authorization from the FDA, EMA, or MHRA, which has not occurred yet, and an ongoing

commitment to supply CORDStrom to patients enrolled in an open label arm of the Mission EB trial, subject to certain limitations.

reviewing results of the Mission EB study, the Company initiated a Type C meeting with the FDA to obtain CMC and regulatory feedback and

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will be visible as patients are treated.

The Company will report data from each cohort as it becomes available.

The Company plans to report data from each cohort as it becomes available.

Because of the modified

Bayesian design, the Company estimates the trial will be completely enrolled Q425 with top-line data available 6 months later.

data are divided into immunologic and tumor response variables.

The most important immunologic response variable is related to memory-like

NK cell persistence.

Bayesian design, the Company estimates the trial will be completely enrolled during the fourth quarter of 2025 with top-line data anticipated

approximately 6 months thereafter.

Topline data are divided into immunologic and tumor response variables.

The most important immunologic

response variable is related to memory-like NK cell persistence.

There are 3 important variables to tumor response:

i) blood PSA changes;

ii) change in PSMA-PET scan and iii) change

in circulating tumor DNA (ctDNA).

INKmune is not a hormone-targeting treatment and will not directly reduce PSA levels but tumor load

measured by PSMA-PET and/or ctDNA are expected to decrease with treatment.

We do not expect this 6-month trial to provide survival data.

We continue to incur significant development and other expenses related

to our ongoing operations.

As a result, we are not and have never been profitable and have incurred losses in each period since our inception,

resulting in substantial doubt in our ability to continue as a going concern.

We reported a net loss of $34.2 million for the six months

ended June 30, 2025.

As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $33.4 million and $20.9 million, respectively.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our

research and development of, and seek regulatory approvals for, our product candidates.

The size of our future net losses will depend,

in part, on the rate of future growth of our expenses and our ability to generate revenues, if any.

ii) change in PSMA-PET scan and iii) change in circulating tumor DNA (ctDNA).

INKmune is not a hormone-targeting treatment and will not

directly reduce PSA levels but tumor load measured by PSMA-PET and/or ctDNA are expected to decrease with treatment.

We do not expect

this 6-month trial to provide survival data.

We continue to incur significant

development and other expenses related to our ongoing operations.

As a result, we are not and have never been profitable and have incurred

losses in each period since our inception, resulting in substantial doubt in our ability to continue as a going concern.

We reported a

net loss of $40.7 million for the nine months ended September 30, 2025.

As of September 30, 2025 and December 31, 2024, we had cash and

cash equivalents of $27.7 million and $20.9 million, respectively.

We expect to continue to incur significant losses for the foreseeable

future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, our

product candidates.

The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability

to generate revenues, if any.

Our recurring net losses and

negative cash flows from operations raised substantial doubt regarding our ability to continue as a going concern within one year after

the issuance of our unaudited condensed consolidated financial statements for the six months ended June 30, 2025.

the issuance of our unaudited condensed consolidated financial statements for the nine months ended September 30, 2025.

Until we can generate

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Our research and development expense primarily

trial and regulatory-related costs;

clinical trial and regulatory-related costs;

expenses incurred under agreements with investigative sites and consultants that conduct our clinical trials;

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

External Costs

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Results of Operations

Comparison of the Three Months Ended June

Comparison of the Three Months Ended September

30, 2025 and 2024

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Three Months Ended

September 30,

(in thousands)

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General and administrative

Impairment of acquired in-process research and development intangible assets

Total operating expenses

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Research and Development

Research and development expenses were approximately $5.8 million during

the three months ended June 30, 2025, compared to approximately $7.1 million during the three months ended June 30, 2024.

in research and development expenses during the three months ending June 30, 2025 compared to the three months ending June 30, 2024 is

mainly due to the Company incurring $1.5 million less expenses related to our Alzheimer’s clinical program due to the Company completing

the Phase 2 clinical trial.

Research and development expenses

were approximately $4.9 million during the three months ended September 30, 2025, compared to approximately $10.1 million during

the three months ended September 30, 2024.

The change in research and development expenses during the three months ending September 30,

2025 compared to the three months ending September 30, 2024 is mainly due to the Company incurring $6.4 million less expenses related

to our Alzheimer’s clinical program due to the Company completing the Phase 2 clinical trial, partially offset by incurring additional

compensation expense of $1.3 million mainly due to costs associated with the termination of employees.

General and Administrative

General and administrative

expenses were approximately $2.3 million during the three months ended June 30, 2025 compared to $2.8 million during the three months

ended June 30, 2024.

The decrease in general and administrative expenses was mainly due to the Company incurring $0.4 million lower stock-based

compensation during 2025.

Impairment of acquired in-process research

and development intangible assets

During the three months ended

June 30, 2025, the Company released the Phase 2 clinical trial results for our Alzheimer’s drug candidate, XPro, which failed to

meet the primary endpoint, though a subgroup showed potential benefits.

Due to insufficient resources to fund further trials, the Company

has halted immediate plans to develop XPro for Alzheimer’s or other indications and are instead seeking a partner to continue these

As part of preparing its interim unaudited condensed consolidated financial statements, the Company determined that the intangible

asset’s fair value was likely below its carrying value.

Following a quantitative impairment assessment, the Company estimated the

asset’s fair value at $0 as of June 30, 2025, resulting in a recorded impairment of $16.5 million.

expenses were approximately $2.5 million during the three months ended September 30, 2025, compared to $2.2 million during the three months

ended September 30, 2024.

The increase in general and administrative expenses was mainly due to the Company incurring $0.6 million higher

stock-based compensation during 2025, partially offset by $0.2 million lower professional fees.

Other Expense, net

During the three months ended

June 30, 2025, and 2024, the Company recorded $0.1 million of other income due to the Company earning interest income on its cash investments.

of the Six Months Ended June 30, 2025 and 2024

September 30, 2025, the Company recorded $1.0 million of other income, of which approximately $0.6 million was gain on forgiveness of

payables from two vendors and approximately $0.4 million was due to interest income.

During the three months ended

September 30, 2024, the Company’s other income consisted of interest income partially offset by interest expense.

Comparison of the Nine Months Ended September

30, 2025 and 2024

The following table summarizes

our results of operations for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Other income, net

During the six months ended

June 30, 2025, the Company recognized revenue from a license agreement that was terminated during 2025.

During the six months ended June

30, 2024, the Company recognized revenue from the sale of MSC’s.

During the nine months ended

September 30, 2025, the Company recognized revenue from a license agreement that was terminated during 2025.

During the nine months ended

September 30, 2024, the Company recognized revenue from the sale of MSC’s.

Research and Development

Research and development expenses

were approximately $13.4 million and $15.7 million during the six months ended June 30, 2025 and 2024, respectively.

The change in

research and development expenses during the six months ending June 30, 2025 compared to the six months ending June 30, 2024 is mainly

due to the Company incurring $3.0 million less Alzheimer’s clinical program expenses due to the trial being completed in 2025, partially

offset by the Company recording $0.9 million less accrued rebate during the six months ended June 30, 2025.

General and Administrative

Research and development expenses were approximately $18.3 million

and $25.8 million during the nine months ended September 30, 2025 and 2024, respectively.

The change in research and development

expenses during the nine months ending September 30, 2025 compared to the nine months ending September 30, 2024 is mainly due to

the Company incurring $9.5 million less Alzheimer’s clinical program expenses due to the trial being completed in 2025, partially

offset by the Company incurring $1.3 million of additional compensation expense primarily in connection with the termination of employees

and recording $1.0 million less accrued rebate during the nine months ended September 30, 2025.

General and Administrative

expenses were approximately $4.6 million and $5.2 million during the six months ended June 30, 2025 and 2024, respectively.

The $0.6 million

decrease in general and administrative expenses was mainly due to $0.3 million lower stock-based compensation and $0.3 million lower investor

relations expense.

General and administrative expenses were approximately $7.1 million

and $7.4 million during the nine months ended September 30, 2025 and 2024, respectively.

The decrease in general and administrative expenses

during the nine months ended September 30, 2025 was mainly due to the Company incurring $0.3 million lower investor relations expense

and $0.1 million lower professional fees, partially offset by $0.3 million higher stock-based compensation.

Impairment of acquired in-process research

and development intangible assets

During the six months ended

June 30, 2025, the Company released the Phase 2 clinical trial results for our Alzheimer’s drug candidate, XPro, which failed to

meet the primary endpoint, though a subgroup showed potential benefits.

During the nine months ended

September 30, 2025, the Company released the Phase 2 clinical trial results for our Alzheimer’s drug candidate, XPro, which failed

to meet the primary endpoint, though a subgroup showed potential benefits.

Due to insufficient resources to fund further trials, the Company

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Following a quantitative impairment assessment, the Company estimated the

asset’s fair value at $0 as of June 30, 2025, resulting in a recorded impairment of $16.5 million.

asset’s fair value at $0, resulting in a recorded impairment of $16.5 million during the second quarter of 2025.

Other Income, net

During the six months ended

June 30, 2025, the Company recorded $0.3 million of other income due to the Company earning interest income on its cash investments.

the six months ended June 30, 2024, the Company earned $0.1 million of other income consisting of interest income partially offset by

interest expense.

During the nine months ended

September 30, 2025, the Company recorded $1.2 million of other income, of which $0.6 million was due to the Company earning interest income

on its cash investments and $0.6 million was gain on forgiveness of payables.

During the nine months ended September 30, 2024, the Company

earned $0.3 million of other income consisting of interest income partially offset by interest expense.

Liquidity and Capital Resources

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We incurred a net loss of

$34.2 million and $20.8 million for the six months ended June 30, 2025 and 2024, respectively.

Net cash used in operating activities was

$14.2 million and $15.4 million for the six months ended June 30, 2025 and 2024, respectively.

Since inception, we have funded our operations

primarily with proceeds from the sales of our common stock.

As of June 30, 2025, we had cash and cash equivalents of $33.4 million.

anticipate that operating losses and net cash used in operating activities will increase over the next few years as we advance our products

under development.

During the six months ending

June 30, 2025, the Company sold 1,304,707 shares of common stock at an average price of $8.01 for gross proceeds of approximately $10.4

$40.7 million and $32.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Net cash used in operating activities

was $19.6 million and $22.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Since inception, we have funded

our operations primarily with proceeds from the sales of our common stock.

As of September 30, 2025, we had cash and cash equivalents

of $27.7 million.

We anticipate that operating losses and net cash used in operating activities will increase over the next few years

as we advance our products under development.

During the nine months ending

September 30, 2025, the Company sold 1,304,707 shares of common stock at an average price of $8.01 for gross proceeds of approximately

$10.4 million under the ATM offering.

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that strategy is appropriate.

As of June 30, 2025, the cash balance held by our foreign subsidiaries with currencies other than the United

States dollar was approximately $0.2 million.

Our recurring net losses and negative cash flows from operations, as

well as forecast of continued losses and negative cash flows from operations, raised substantial doubt regarding our ability to continue

as a going concern within one year after the issuance of our unaudited condensed consolidated financial statements for the six months

ended June 30, 2025.

Until we can generate sufficient revenue from the commercialization of our product candidates, we expect to finance

our operations through the public or private sale of equity, debt financing or other capital sources, such as government funding, collaborations,

strategic alliances, divestment of non-core assets, or licensing arrangements with third parties.

Our cash and cash equivalents were $33.4

million and total current assets were $36.0 million at June 30, 2025, which the Company is projecting will be insufficient to sustain

its operations through one year following the date that the financial statements are issued.

As of September 30, 2025, the cash balance held by our foreign subsidiaries with currencies other than the

United States dollar was approximately $0.2 million.

recurring net losses and negative cash flows from operations, as well as forecast of continued losses and negative cash flows from operations,

raised substantial doubt regarding our ability to continue as a going concern within one year after the issuance of our unaudited condensed

consolidated financial statements for the nine months ended September 30, 2025.

Until we can generate sufficient revenue from the commercialization

of our product candidates, we expect to finance our operations through the public or private sale of equity, debt financing or other capital

sources, such as government funding, collaborations, strategic alliances, divestment of non-core assets, or licensing arrangements with

third parties.

Our cash and cash equivalents were $27.7 million and total current assets were $30.7 million at September 30, 2025, which

the Company is projecting will be insufficient to sustain its operations through one year following the date that the financial statements

capital may not be available on reasonable terms, if at all.

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our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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Operating Activities

Operating activities used approximately $14.2 million of cash during

the six months ended June 30, 2025, resulting mainly from our loss of $34.2 million, partially offset by an intangibles impairment expense

of $16.5 million and non-cash stock-based compensation of $3.6 million.

Operating activities used

approximately $15.4 million of cash during the six months ended June 30, 2024, resulting from our loss of $20.8 million, partially offset

by changes in our net operating assets and liabilities of $1.2 million and non-cash stock-based compensation of $4.1 million.

in our net operating assets and liabilities was mainly due to an increase in accounts payable and accrued liabilities of $1.4 million,

a decrease in prepaid expenses of $0.5 million and a decrease in other tax receivable of $0.3 million, partially offset by an increase

in research and development tax receivable of $1.2 million.

approximately $19.6 million of cash during the nine months ended September 30, 2025, resulting mainly from our loss of $40.7 million,

changes in our net operating assets and liabilities of $1.5 million, and gain on forgiveness of accounts payable of $0.6 million, partially

offset by an intangibles impairment expense of $16.5 million and non-cash stock-based compensation of $6.6 million.

The change in our

net operating assets and liabilities was mainly due to an increase in other assets of $0.7 million, an increase in research and development

tax credit receivable of $0.5 million, an increase in other tax receivable of $0.5 million and a decrease in deferred liabilities of $0.5

million, partially offset by a decrease in accounts payable and accrued liabilities of $1.0 million.

Operating activities used

approximately $22.3 million of cash during the nine months ended September 30, 2024, resulting from our loss of $32.9 million, partially

offset by changes in our net operating assets and liabilities of $4.6 million and non-cash stock-based compensation of $5.8 million.

change in our net operating assets and liabilities was mainly due to an increase in accounts payable and accrued liabilities of $2.7 million,

a decrease in research and development tax receivable of $0.8 million, a decrease in prepaid expenses of $0.6 million and a decrease in

other tax receivable of $0.2 million.

Investing Activities

During the six months ended

June 30, 2025, the Company acquired $0.7 million of equipment to be used in its CORDStrom clinical program.

During the nine months ended

September 30, 2025, the Company acquired $0.9 million of equipment to be used in its CORDStrom clinical program.

Financing Activities

During the six months ended

June 30, 2025, the Company sold 1,304,707 shares of common stock under its ATM program for net proceeds of $10.1 million.

During the nine months ended

September 30, 2025, the Company sold 1,304,707 shares of common stock under its ATM program for net proceeds of $10.1 million.

During June 2025, the Company

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of $17.4 million).

the six months ended June 30, 2024, the Company sold 198,364 shares of its common stock under its ATM program for net proceeds of approximately

$2.0 million.

the six months ended June 30, 2024, the Company sold 1,557,692 shares of its common stock and 1,557,592 warrants to purchase its common

stock for net proceeds of $13.5 million.

the six months ended June 30, 2024, the Company repaid $5.0 million of its debt.

During the nine months ended

September 30, 2024, the Company sold 247,126 shares of its common stock under its ATM programs for net proceeds of approximately $2.4

During the nine months ended

September 30, 2024, the Company sold 3,898,852 shares of its common stock and 3,898,852 warrants to purchase its common stock in registered

direct offerings for net proceeds of approximately $25.4 million.

During the nine months ended

September 30, 2024, the Company repaid $7.5 million of its debt.

Critical Accounting Estimates

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Our critical accounting estimates are discussed in our Annual Report on Form 10-K for the fiscal year

ended December 31, 2024, and there have been no material changes during the six months ended June 30, 2025.

and Qualitative Disclosures About Market Risk

ended December 31, 2024, and there have been no material changes during the nine months ended September 30, 2025.

Quantitative and Qualitative Disclosures About Market Risk

Pursuant to Item 305(e) of

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis