What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 80 added, 41 removed, 246 unchanged (33% of the section changed)

24 unchanged sentences

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding - -

Common stock, $ 0.001 par value, 200,000,000 shares authorized, 26,585,258 shares issued and outstanding 27 27

Common stock, $ 0.001 par value, 200,000,000 shares authorized, 27,653,789 and 26,585,258 shares issued and outstanding, respectively 28 27

Additional paid-in capital 237,688 233,271

Subscription receivable ( 814 ) -

Accumulated other comprehensive loss ( 823 ) ( 737 )

9 unchanged sentences

For the Three Months Ended

For the Six Months Ended

REVENUE $ - $ - $ - $ 50

2 unchanged sentences

Research and development ( 803 ) 5,804 2,838 13,443

Impairment of acquired in-process research and development intangible assets - 16,514 - 16,514

Total operating expenses 1,476 24,571 7,288 34,526

6 unchanged sentences

Net loss $ ( 1,273 ) $ ( 24,458 ) $ ( 6,680 ) $ ( 34,197 )

Other comprehensive income (loss) – foreign currency translation 10 ( 35 )

Other comprehensive loss – foreign currency translation ( 96 ) ( 153 ) ( 86 ) ( 188 )

Total comprehensive loss $ ( 1,369 ) $ ( 24,611 ) $ ( 6,766 ) $ ( 34,385 )

4 unchanged sentences

IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

(In thousands, except share amounts)

6 unchanged sentences

Balance as of March 31, 2026 26,585,258 27 234,768 - ( 727 ) ( 214,444 ) 19,624

Common stock issued for cash 370,417 - 584 - - - 584

Stock-based compensation - - 1,358 - - - 1,358

Exercise of warrants for cash 674,155 1 943 ( 814 ) - - 130

Exercise of stock options for cash 23,959 - 35 - - - 35

Loss on foreign currency translation - - - - ( 96 ) - ( 96 )

Net loss - - - - - ( 1,273 ) ( 1,273 )

Balance as of June 30, 2026 27,653,789 $ 28 $ 237,688 ( 814 ) $ ( 823 ) $ ( 215,717 ) $ 20,362

The accompanying notes are an integral part of

3 unchanged sentences

IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2025

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

(In thousands, except share amounts)

8 unchanged sentences

Balance as of March 31, 2025 22,930,411 23 203,103 ( 610 ) ( 172,843 ) 29,673

Stock-based compensation - - 1,534 - - 1,534

Sale of common stock for cash 3,654,847 4 22,267 - - 22,271

Loss on foreign currency translation - - - ( 153 ) - ( 153 )

Net loss - - ( 24,458 ) ( 24,458 )

Balance as of June 30, 2025 26,585,258 $ 27 $ 226,904 $ ( 763 ) $ ( 197,301 ) $ 28,867

The accompanying

3 unchanged sentences

(In thousands)

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Depreciation expense 118 -

Impairment of acquired research and development intangible assets - 16,514

Changes in operating assets and liabilities:

8 unchanged sentences

Net cash used in operating activities ( 6,578 ) ( 14,199 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of equipment ( 430 ) ( 706 )

Net cash used in investing activities ( 430 ) ( 706 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Exercise of warrants for cash 130 1

Exercise of stock options for cash 35 -

Net cash provided by financing activities 749 27,545

Impact on cash from foreign currency translation ( 81 ) ( 188 )

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 3,393 ) ( 1,585 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 6,340 ) 12,452

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 24,751 20,922

2 unchanged sentences

Cash paid for income taxes $ - $ -

Cash paid for interest expense $ - $ -

Cash paid for interest $ - $ -

SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES

26 unchanged sentences

Significant Accounting Policies

Our significant accounting policies have not changed during the three months ended March 31, 2026 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

The Company’s significant accounting policies have not changed during the six months ended June 30, 2026 from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.

Going concern

1 unchanged sentence

The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue from the commercialization of its product candidates.

During the three months ended March 31, 2026, the Company incurred a net loss of $ 5.4 million and had net cash flows used in operating activities of $ 3.4 million.

During the six months ended June 30, 2026, the Company incurred a net loss of $ 6.7 million and had net cash flows used in operating activities of $ 6.6 million.

Given the Company’s projected operating requirements and its existing cash and cash equivalents, the Company is projecting insufficient liquidity to sustain its operations through one year following the date that the financial statements are issued.

11 unchanged sentences

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.

At March 31, 2026, the Company had 9,733,841 potentially issuable shares of common stock upon the exercise of stock options and 3,944,138 potentially issuable shares of common stock upon the exercise of warrants

At June 30, 2026, the Company had 9,659,882 potentially issuable shares of common stock upon the exercise of stock options and 3,060,706 potentially issuable shares of common stock upon the exercise of warrants.

At December 31, 2025, the Company had 9,759,882 potentially issuable shares of common stock upon the exercise of stock options and 3,944,138 potentially issuable shares of common stock upon the exercise of warrants.

18 unchanged sentences

NOTE 2 – RESEARCH AND DEVELOPMENT ACTIVITY

According to AUS tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in AUS for expenses incurred in R&D subject to certain requirements.

According to Australian tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in Australia for expenses incurred in R&D subject to certain requirements.

The Company’s Australian subsidiary submits R&D tax credit requests annually for research and development expenses incurred.

At March 31, 2026 and December 31, 2025, the Company recorded a research and development tax credit receivable of $ 479,000 and $ 3,897,000 , respectively, for R&D expenses incurred in Australia.

During the three months ended March 31, 2026, the Company received approximately $ 3.6 million in tax credit reimbursements from Australia.

At June 30, 2026 and December 31, 2025, the Company recorded a research and development tax credit receivable of $ 4,080,000 and $ 3,897,000 , respectively, for R&D expenses incurred in Australia.

During the six months ended June 30, 2026, the Company received approximately $ 3.6 million in tax credit reimbursements from Australia.

During July 2026, the Company received an additional $ 4.2 million in tax credit reimbursements from Australia.

According to UK tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in the UK for expenses incurred in R&D subject to certain requirements.

At March 31, 2026 and December 31, 2025, the Company had a research and development tax credit receivable of $ 0 and $ 387,000 , respectively, for R&D expenses incurred in the UK.

During the three months ended March 31, 2026, the Company received approximately $ 382,000 in tax credit reimbursements from the UK.

At June 30, 2026 and December 31, 2025, the Company had a research and development tax credit receivable of $ 333,000 and $ 387,000 , respectively, for R&D expenses incurred in the UK.

During the six months ended June 30, 2026, the Company received approximately $ 0.8 million in tax credit reimbursements from the UK.

CORDStrom License Agreement

During February 2025, the Company and Great Ormond Street Hospital for Children NHS Foundation Trust (“GOSH”) entered into a license agreement for the exclusive commercial use to clinical trial data associated with a GOSH study investigating the potential of CORDStrom to treat RDEB in pediatric patients (the “MissionEB study”).

The Company owns the intellectual property covering CORDStrom, the investigational medicinal product used in the Mission EB study.

The Company owns the intellectual property covering CORDStrom, the investigational medicinal product used in the MissionEB study.

In addition, the Company owns intellectual property and maintains trade secret protections covering the manufacturing of CORDStrom.

With this license to the clinical trial data, the Company intends to prepare applications seeking marketing authorization of CORDStrom for treatment of pediatric RDEB in each of the FDA, EMA, and MHRA.

Terms of the license agreement include a milestone payment of up to £ 6,000,000 (approximately $ 7.9 million as of March 31, 2026) due on the first to occur marketing authorization to be granted by the FDA, EMA or MHRA, which had not occurred as of March 31, 2026.

With this license to the clinical trial data, the Company intends to prepare applications seeking regulatory approval of CORDStrom for treatment of pediatric RDEB from the FDA, EMA, and MHRA.

Terms of the license agreement include a milestone payment of up to £ 6,000,000 (approximately $ 8.0 million as of June 30, 2026) due on the first to occur marketing authorization to be granted by the FDA, EMA or MHRA, which had not occurred as of June 30, 2026.

Under the license agreement, the Company was previously obligated to provide CORDStrom for use in the MissionEB clinical study at no cost.

1 unchanged sentence

As a result, the Company has no remaining contractual product supply obligations related to the MissionEB study under the license agreement.

The Company intends to provide CORDStrom at no cost for use in a contemplated follow-on clinical study referred to as “MissionEB II” however, no definitive agreement governing such study has been executed, and the Company has no present contractual obligation to supply product for MissionEB II.

License Agreement

6 unchanged sentences

No sales have occurred under the license.

As of March 31, 2026 and December 31, 2025, the Company recorded a $ 25,000 milestone payable to Immune Ventures, which is included in accounts payable and accrued liabilities – related parties.

As of June 30, 2026 and December 31, 2025, the Company recorded a $ 25,000 milestone payable to Immune Ventures, which is included in accounts payable and accrued liabilities – related parties.

NOTE 3 – FAIR VALUE MEASUREMENTS

3 unchanged sentences

(Level 2) Significant

March 31, 2026:

June 30, 2026:

Cash equivalents

9 unchanged sentences

Total cash equivalents $ 24,298 $ 24,298 $ - $ -

NOTE 4 – EQUIPMENT, NET

Equipment, net consisted of the following (in thousands):

2026 December 31,

Lab equipment $ 1,473 $ 1,042

Accumulated Depreciation ( 211 ) ( 87 )

Total $ 1,262 $ 955

Depreciation expense was approximately $ 0.1 million for both the three and six months ended June 30, 2026.

No depreciation expense was recognized during the corresponding periods in 2025.

NOTE 5 – LEASE

4 unchanged sentences

Base rent under the extension will be approximately $ 17,000 per month during the first year, increasing by approximately 3 % annually over the term.

As of March 31, 2026, the maturities of our lease liabilities are as follows:

As of June 30, 2026, the maturities of our lease liabilities are as follows:

(in thousands, except years)

4 unchanged sentences

Long-term operating lease liabilities $ 593

The weighted average lease term as of March 31, 2026 and December 31, 2025 was 2.8 years and 1.5 years, respectively.

As of March 31, 2026 and March 31, 2025, the weighted-average discount rate for operating leases was 12.0 %.

During the three months ended March 31, 2026 and 2025, the Company recognized $ 147,000 and $ 40,000 , respectively, of lease expense.

The weighted-average lease term as of June 30, 2026 and December 31, 2025 was 2.5 years and 1.5 years, respectively.

As of June 30, 2026 and 2025, the weighted-average discount rate for operating leases was 12.0 %.

During the three and six months ended June 30, 2026, the Company recognized $ 206,000 and $ 353,000 , respectively, in operating lease expense.

During the three and six months ended June 30, 2025, the Company recognized $ 55,000 and $ 95,000 , respectively, in operating lease expense.

NOTE 6 – STOCKHOLDERS’ EQUITY

2 unchanged sentences

The Company was required to pay the Sales Agents a commission of 3 % of the gross proceeds from the sale of shares.

During the three months ended March 31, 2025, the Company issued and sold 649,860 shares of common stock at an average price of $ 8.37 per share under the ATM program.

During the six months ended June 30, 2025, the Company issued and sold 1,304,707 shares of common stock at an average price of $ 8.01 per share under the ATM program.

The aggregate net proceeds were approximately $ 10.1 million after commission expenses.

1 unchanged sentence

On December 19, 2025, the Company entered into a sales Agreement with A.G.P./Alliance Global Partners (“AGP”), as sales agent, pursuant to which the Company may offer and sell, from time to time, up to $ 65,000,000 of shares of its common stock through AGP in exchange for a 3 % commission on gross proceeds.

There were no sales of stock pursuant to this agreement during the three months ended March 31, 2026.

During the six months ended June 30, 2026, the Company sold 370,417 shares of common stock at an average price of $ 1.63 per share under the ATM program.

The aggregate net proceeds were approximately $ 0.6 million after expenses.

Subsequent to the quarter ending June 30, 2026, the Company sold 100,000 shares of common stock at an average price of $ 2.09 per share for aggregate net proceeds of approximately $ 0.2 million.

Registered Direct Offerings

During June 2025, the Company entered into securities purchase agreements with investors whereby the Company sold 3,000,000 shares of the common stock in a registered direct offering in exchange for gross proceeds of $ 18.9 million (net proceeds of approximately $ 17.4 million).

Stock options

The following table summarizes stock option activity during the three months ended March 31, 2026:

At the Company’s Annual Meeting of Stockholders held on June 16, 2026, the Company’s stockholders approved the Third Amended and Restated 2021 Stock Incentive Plan, which increased the number of shares of common stock authorized for issuance under the plan from 6,500,000 shares to 9,158,525 shares.

The plan includes an annual evergreen provision under which the common stock reserved for grant may increase on the first trading day of each calendar year beginning with calendar year 2027 through and including the first trading day of calendar year 2031 by the lesser of (i) 10 % of the Company's common stock outstanding as of December 31 of the immediately preceding calendar year or (ii) such lesser amount as determined by the Board of Directors.

As of June 30, 2026, 2,799,234 shares remained available for future grants under the Third Amended and Restated 2021 Stock Incentive Plan.

The following table summarizes stock option activity during the six months ended June 30, 2026:

(in thousands, except share and per share amounts) Number of

6 unchanged sentences

Options cancelled ( 76,041 ) $ 1.49 - -

Outstanding at March 31, 2026 9,733,841 $ 2.63 6.58 $ -

Exercisable at March 31, 2026 5,562,827 $ 3.19 4.57 $ -

During the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of approximately $ 1.5 million and $ 2.1 million, respectively, related to the vesting of stock options.

As of March 31, 2026, there was approximately $ 8.4 million of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.27 years.

Outstanding at June 30, 2026 9,659,882 $ 2.64 6.32 $ 1,104

Exercisable at June 30, 2026 5,681,578 $ 3.18 4.44 $ 560

During the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense of approximately $ 1.4 million and $ 2.9 million, respectively, related to the vesting of stock options.

During the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of approximately $ 1.5 million and $ 3.6 million, respectively, related to the vesting of stock options.

As of June 30, 2026, there was approximately $ 7.1 million of total unrecognized compensation cost related to non-vested stock options which is expected to be recognized over a weighted-average period of 2.0 years.

The Company issued warrants to the Company’s lenders upon obtaining a loan in June 2021.

The warrants expire in June 2031 and have an exercise price of $ 14.05 .

At March 31, 2026 and December 31, 2025, 45,386 of these warrants are outstanding and the intrinsic value of these warrants is $ 0 .

At June 30, 2026 and December 31, 2025, 45,386 of these warrants are outstanding and the intrinsic value of these warrants is $ 0 .

April 2024 Warrants

In April 2024, the Company issued an aggregate of 1,557,592 warrants in connection with the sale of common stock.

Of these warrants, 1,348,415 have an exercise price of $ 1.95 per share and expire in June 2026, and 209,277 have an exercise price of $ 9.152 per share and were scheduled to expire in April 2026.

As of March 31, 2026 and December 31, 2025, all 1,557,592 warrants were outstanding and exercisable, with a weighted-average exercise price of $ 2.92 per share.

The aggregate intrinsic value of these warrants was $ 0 as of March 31, 2026.

Subsequent to March 31, 2026, in April 2026, 209,277 warrants expired unexercised.

On June 30, 2026, the Company entered into a warrant inducement agreement with certain holders of its April 2024 common stock purchase warrants.

Under the agreements, the holders exercised an aggregate of 674,155 warrants, representing 50 % of their holdings, at a reduced exercise price of $ 1.40 per share (original exercise price of $ 1.95 ), resulting in gross proceeds to the Company of approximately $ 0.9 million, of which approximately $ 0.1 million was received on June 30, 2026 and $ 0.8 million was received on July 1, 2026.

In consideration for the exercise, the expiration date of the holders' remaining 674,160 April 2024 warrants was extended from June 30, 2026 to December 31, 2027.

All other terms of the remaining warrants, including the $ 1.95 exercise price, remained unchanged.

The aggregate intrinsic value of these warrants was $ 0 at June 30, 2026.

September 2024 Warrants

During September 2024, the Company issued 2,341,260 warrants to investors in connection with the sale of common stock.

At March 31, 2026 and December 31, 2025, 2,341,160 of these warrants are outstanding and are exercisable for cash at a weighted average price of $ 6.40 per share and expire in March 2030.

The intrinsic value of these warrants was $ 0 as of March 31, 2026.

At June 30, 2026 and December 31, 2025, 2,341,160 of these warrants are outstanding and are exercisable for cash at a weighted average price of $ 6.40 per share and expire in March 2030.

The intrinsic value of these warrants was $ 0 as of June 30, 2026.

Stock-based Compensation by Class of Expense

The following summarizes the components of stock-based compensation expense in the consolidated statements of operations for the three months ended March 31, 2026 and 2025 respectively:

The following summarizes the components of stock-based compensation expense in the consolidated statements of operations for the six months ended June 30, 2026 and 2025 respectively:

(in thousands) Three Months

2026 Three Months

2025 Six Months

2026 Six Months

Research and development $ 319 $ 627 $ 667 $ 1,457

5 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 1. Financial Statements