INTENSITY THERAPEUTICS, INC. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and financing needs, includes forward-looking statements that involve risks and uncertainties and should be read together with the “Risk Factors” section of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report and in other reports we file with the Securities and Exchange Commission, particularly those under “Risk Factors.” Overview Intensity Therapeutics, Inc. is a late-stage clinical biotechnology company passionately committed to applying scientific leadership in the field of localized cancer reduction leading to anti-cancer immune activation. Our new approach involves the direct injection into tumors of a unique product created from our DfuseRx SM discovery platform. IT treatment, or treatment designed to contain a drug inside a tumor without spreading to the rest of the body, has been an objective of clinicians since discovery of chemotherapeutic agents. The challenge with IT treatment approaches is 81 Table of Contents that a tumor’s lipophilic, high fat, dense and pressurized microenvironment is incompatible with and does not absorb water-based products. We believe that this drug delivery challenge limits the effectiveness of prior and current IT treatments, which involve injecting aqueous drugs into a tumor without sufficient consideration of the tumor environment (regardless of the drug’s mechanism or approach, i.e. the stimulation of an inflammatory response or efforts to attract immune cells into a hostile live tumor). Accordingly, there remains a continued unmet need for the development of direct IT therapies for solid tumors that provide high local killing efficacy coupled with nontoxic systemic anti-cancer effects. We believe we have created a product candidate, using our non-covalent conjugation chemistry, with the necessary physical properties to overcome this local delivery challenge. Evidence shows the mechanism of tumor killing achieved by our drug candidate also leads to systemic immune activation and T-cell repertoire expansion in certain cancers. Our platform creates patented anti-cancer product candidates comprising active anti-cancer agents and amphiphilic molecules. Amphiphilic molecules have two distinct components: one part is soluble in water and the other is soluble in fat or oils. When an amphiphilic compound is mixed with therapeutic agents, such as chemotherapies, the agents also become soluble in both fat and water. Our product candidates include novel formulations consisting of potent anti-cancer drugs mixed together with these amphiphilic agents. Our lead product candidate, INT230-6, is primarily comprised of three components: (i) cisplatin, a proven anti-cancer cytotoxic agent, (ii) vinblastine sulfate, also a proven anti-cancer cytotoxic agent, and (iii) SHAO which enables the two cytotoxic agents to disperse through a tumor and diffuse into cancer cells following a direct intratumoral injection. These three components are mixed and combined into one vial at a fixed ratio. Cisplatin and vinblastine sulfate are both generic and available to purchase in bulk supply commercially. The FDA has approved both drugs as intravenous agents for several types of cancers. Cisplatin was first approved in 1978 for testicular cancer, and is also approved in ovarian and bladder cancer. The drug is also used widely in several other cancers including pancreatic and bile duct cancer. Vinblastine sulfate was first approved in 1965 and is also approved in generalized Hodgkin’s disease, lymphocytic lymphoma, advanced carcinoma of the testis, and certain types of sarcomas. The drug is also used in breast and lung cancer. Our Clinical Programs In 2017, we initiated the IT-01 Study, a Phase 1/2 dose escalation study using INT230-6 in the United States under an IND authorized by the FDA and in Canada under a CTA approved by Health Canada. The study tested the safety and efficacy of INT230-6 in patients with refractory or metastatic cancers, and enrolled 110 patients in three arms: (i) INT230-6 used as a monotherapy, (ii) INT230-6 in combination with Merck’s Keytruda® (pembrolizumab), and (iii) INT230-6 in combination with BMS’s Yervoy® (ipilimumab). We completed enrollment of the IT-01 Study in June 2022, locked the IT-01 Study database in February 2023 and finalized the clinical study report in September 2023. We delivered the combination-specific reports and other information to our partners in the fourth quarter of 2023. In 2021, we initiated the INVINCIBLE-2 Study, a Phase 2 randomized study that tested INT230-6 as a monotherapy treatment in early-stage breast cancer for patients not suitable for presurgical chemotherapy. The study enrolled 91 subjects and the database was locked in November 2023. The key endpoint was whether INT230-6 could reduce a patient’s cancer compared to no treatment, which is the current SOC for the majority of patients with early-stage breast cancer, or a saline injection. Substantial reduction of cancer presurgically in aggressive forms of cancer has been shown to correlate with delaying disease recurrence. The key endpoints of the INVINCIBLE 2 Study were to understand the percentage of necrosis that can be achieved in tumors of varying sizes for a given dose, especially for tumors larger than 2 centimeters in longest diameter. We also sought to determine whether a local or whole-body anti-cancer immune response could be induced. The INVINCIBLE-2 Study demonstrated a high order of necrosis in presurgical breast cancer tumors in the period from diagnosis to surgery, with some patients experiencing greater than 95% necrosis of the tumor. Data from the INVINCIBLE-2 Study demonstrated that INT230-6 had a favorable safety profile. There was also an increase of certain types of immune cells (CD4+ and NK T-cells) in the tumor and blood. Additionally, there was an increase in the T-cells repertoire relative to control. In July 2024, we initiated and dosed our first patient in the INVINCIBLE-3 Study, a Phase 3 open-label, randomized study testing INT230-6 as a monotherapy compared to the SOC drugs in second-and third-line treatment for certain soft tissue sarcoma subtypes. This 333-patient study with an endpoint of overall survival has been authorized by the FDA, Health Canada, the European Medicines Authority, and Australia's Therapeutic Goods Administration. In March 2025, we paused new site activations and patient enrollments due to funding constraints. Prior to this pause, the trial had enrolled 21 patients. We will continue to treat all patients enrolled in this study in cooperation with our third-party contract research organizations to reduce ongoing costs during this pause. Once sufficient funding is obtained, we plan to restart site activations and patient enrollment in the INVINCIBLE-3 Study. In October 2024, in collaboration with the Swiss Cancer Group, formerly the Swiss Cancer Group for Clinical Cancer Research (SAKK), we initiated and dosed our first patient in the INVINCIBLE-4 Study, a Phase 2 study to treat 82 Table of Contents patients with localized TNBC. The endpoint is the change in the pathological complete response rate for the combination compared to the SOC alone. In September 2025, we paused new patient enrollment to revise the dosing regimen for patients receiving INT230-6 in Cohort A due to some patients in Cohort A experiencing localized skin irritation near the tumor site. In March 2026, a protocol amendment was submitted to the Swissmedic and the Swiss Ethics Committee to use a lower drug volume per tumor volume ratio and a single injection of INT230-6. Full approval to resume enrollment was granted on March 26, 2026, and we plan to resume enrollment in the second quarter of 2026. We are currently targeting to complete enrollment by the end of 2027 and will likely add resources to help sites enroll new patients. In the event we are unable to obtain sufficient additional funding, we may have to delay the completion of the INVINCIBLE-4 Study until such funding is obtained. We have also successfully developed Phase 3 quality analytical methods for the three INT230-6 components and successfully manufactured a large-scale batch of INT230-6. In a meeting with the FDA in the fourth quarter of 2023, we agreed on a CMC plan for Phase 3 and product registration for our three key ingredients and INT230-6. If we successfully execute the agreed upon plan, and expect that the CMC portion of an NDA should be acceptable to the FDA for product approval and registration (subject to final NDA review). Since our inception in 2012, our operations have included business planning, hiring personnel, raising capital, building our intellectual property portfolio, and performing both research and development on our product candidates. We have incurred net losses since inception and expect to incur net losses in the future as we continue our research and development activities. To date, we have funded our operations primarily through net proceeds received from issuances of our Common Stock , preferred stock and convertible notes. As of December 31, 2025, we had approximately $11.9 million of cash and cash equivalents. Since our inception, we have incurred significant operating losses. We incurred net losses of $11.6 million and $16.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had an accumulated deficit of approximately $78.4 million and $66.8 million, respectively. We expect to incur significant expenses and operating losses for the next several years as we continue to: • Fund our INVINCIBLE-3 and INVINCIBLE-4 clinical studies; • Incur manufacturing costs for additional GMP batches of our product candidates and enhancer molecules; • Seek regulatory approvals for any of our product candidates that successfully complete clinical trials; • Hire additional personnel; • Expand our operational, financial, and management systems; • Invest in measures to protect our existing and new intellectual property; and • Establish a sales, marketing, medical affairs, and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize. Our ability to ultimately generate revenue to achieve profitability will depend heavily on the development, approval, and subsequent commercialization of our product candidates. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financing, or other capital sources, which may include collaborations with other companies or other strategic transactions. We may not be able to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we would have to significantly delay, reduce, or eliminate the development and commercialization of one or more of our product candidates. 83 Table of Contents Components of Results of Operations Revenue To date, we have not generated any revenue from product sales and we do not expect any revenue from the sale of product in the foreseeable future. We have not generated any revenue from licensing of our technology or product candidates yet either. If our development efforts for any of our product candidates are successful and result in regulatory approval, then we may generate revenue in the future from product sales or licensing. We cannot predict if, when, or to what extent we will generate revenue from the commercialization, licensing or sale of any of our product candidates. We may never succeed in obtaining regulatory approval for any of our product candidates. Research and Development Expenses • Salaries and Benefits Related Costs include employee-related expenses such as salaries and related benefits for employees engaged in research and development functions. • Clinical Trial Expenses includes payments to third parties in connection with the clinical development of our product candidates, including CROs, and costs due to clinical trials for patient care. • Contract Manufacturing includes: ◦ Manufacturing of products for use in our preclinical studies and clinical trials, including payments to CMOs; ◦ Manufacture of new enhancer compounds; ◦ Manufacture and labelling of GMP product candidate; ◦ Product candidate stability testing of GMP batches; and ◦ Other costs such as shipping, storage, and analytical testing. • Consulting costs related to non-employees involved in research, including statistical analysis, clinical trial operations, development of product manufacturing techniques, and internet research related to oncology and chemistry issues that may impact our preclinical or clinical research. • Stock-based Compensation relates to stock options granted to employees and warrants granted to independent consultants engaged in research and development functions. General and Administrative Expenses • Salaries and Benefits Related Costs include employee-related expenses such as salaries, bonuses and related benefits for employees engaged in fund raising, management, and corporate administration functions. • Legal Fees include expenses for corporate, patent and trademark fees with outside law firms. • Audit Fees consist of fees billed for professional services rendered for the audit of our annual financial statements, review of our interim financial statements, comfort and consent letters. • Consulting services provided by non-employees for general and administrative tasks, includes accounting, tax, human resources, finance, investor relations, board compensation, and internet support. • Insurance includes directors and officers’ insurance, workers compensation insurance, product liability insurance, business insurance, employee and cyber liability insurance. • Other includes facility expenses, office supplies, computer related costs, public relations costs, recruiting costs and conferences. • Stock-based Compensation relates to stock options granted to our employees and board members and warrants granted to our independent consultants who work in the general and administrative aspects. Other income and expenses We earned interest income on our cash balances and investments in U.S. Treasury bills. 84 Table of Contents Results of Operations The following tables summarize our results of operations for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Operating expenses: Research and development $ 6,785 $ 10,496 $ (3,711) General and administrative 5,187 6,089 (902) Total operating expenses 11,972 16,585 (4,613) Loss from operations (11,972) (16,585) 4,613 Interest income 180 314 (134) Other income, net 186 3 183 Net loss $ (11,606) $ (16,268) $ 4,662 Years Ended December 31, 2025 2024 Change Research and development expenses: Clinical trial expenses: IT-01 Study (Phase 1/2 Metastatic Cancers) $ — $ (128) $ 128 INVINCIBLE-2 Study (Phase 2 Breast) — 233 (233) INVINCIBLE-3 Study (Phase 3 Sarcoma) 3,806 6,225 (2,419) INVINCIBLE-4 Study (Phase 2 Breast) 461 524 (63) Other 18 223 (205) Clinical trial expenses 4,285 7,077 (2,792) Contract manufacturing 71 657 (586) Salaries and benefits related costs 1,521 1,379 142 Consulting 135 143 (8) Stock-based compensation 773 1,240 (467) $ 6,785 $ 10,496 $ (3,711) Years Ended December 31, 2025 2024 Change General and administrative expenses: Salaries and benefits related costs $ 1,417 $ 884 $ 533 Legal fees 451 728 (277) Audit fees 310 349 (39) Consulting 609 768 (159) Insurance 670 874 (204) Other 503 653 (150) Stock-based compensation 1,227 1,833 (606) $ 5,187 $ 6,089 $ (902) Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Research and development expenses decreased $3.7 million or 35%, and were primarily due to the following: • Clinical trial expenses decreased $2.8 million, primarily due to lower INVINCIBLE-3 Study costs. In March 2025, we paused new site activations and patient enrollments in the INVINCIBLE-3 Study, due to funding constraints. Prior to this pause, the trial had enrolled 21 patients. We will continue to treat all patients enrolled in this study in cooperation with our third-party contract research organizations during this pause, and once sufficient funding is obtained, we plan to restart site activations and patient enrollment. 85 Table of Contents • Contract manufacturing costs declined by $0.6 million, as there were no new manufacturing batches of INT230-6 in 2025. • Salaries and benefits related costs increased due to an estimated bonus accrual of $0.3 million in 2025 compared to zero in 2024, which was partially offset by a decrease of $0.1 million due to a minor reduction in employee headcount in 2025. • Stock-based compensation decreased due to lower fair value per share of option awards granted to employees in 2025. General and administrative expenses decreased $0.9 million or 15%, and were primarily due to the following: • Salaries and benefits related costs increased due to an estimated bonus accrual of $0.5 million in 2025 compared to zero in 2024. • Insurance decreased by $0.2 million due to the favorable directors and officers insurance renewal terms obtained in 2025 compared to the prior policy year. • Legal, accounting, consulting and other expenses decreased as a result of cost saving from the integration of new systems and other cost-efficient activities in the administrative areas. • Stock-based compensation decreased due to lower fair value per share of option awards granted to employees in 2025. Interest income in 2025 and 2024 related to interest earned on cash and investment balances. Liquidity and Capital Resources Our financial statements have been prepared assuming we will continue as a going concern. We have incurred losses from operations and negative cash flows from operations that raise substantial doubt about our ability to continue as a going concern. We have financed our operations primarily through an initial investment from our founder, the issuance and sale of convertible debt notes, and private and public equity financings. Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the clinical development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with conducting clinical trials for our product candidates, developing our manufacturing capabilities and building and qualifying our manufacturing facility to support clinical trials and commercialization and providing general and administrative support for our operations, including the cost associated with operating as a public company. As a result, we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements or other sources. The sale of equity and convertible debt securities may result in dilution to our stockholders. Additional capital may not be available on reasonable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, scale back or discontinue the development of our product candidates. On March 23, 2026, we filed a prospectus supplement to adjust the maximum the Company may sell and issue under the ATM Sales Agreement to $60.0 million of our common stock, not including the shares previously sold under the ATM Sales Agreement. Since inception through March 22, 2026, we have issued 1,297,655 shares of common stock under the ATM Sales Agreement for net proceeds of $11.5 million. On October 30, 2025, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the Company issued and sold in a registered direct offering by the Company directly to the investor 200,000 shares of common stock at a price of $20.00 per share, for aggregate gross proceeds of $4.0 million before deducting the placement agent’s fees and related offering expenses. On June 11, 2025, we entered into an underwriting agreement (the “Underwriting Agreement”) with ThinkEquity LLC (the “Underwriter”) relating to the issuance and sale of an aggregate of 267,000 shares (the “Firm Shares”) of our common stock to the Underwriter at a price to the public of $7.50 per share (the “June 2025 Offering”). Pursuant to the terms of the Underwriting Agreement, we granted to the Underwriter a 45-day option to purchase up to an additional 40,050 shares of common stock in the June 2025 Offering (the “Option Shares” and together with the Firm Shares, the “Shares”). The Underwriter exercised its option in full to purchase the 40,050 Option Shares at the public offering price on June 12, 2025. 86 Table of Contents The June 2025 Offering, including the exercise of the Underwriter’s over-allotment option, closed on June 13, 2025. All of the Shares were sold by us. Pursuant to the Underwriting Agreement, we also agreed to issue to the Underwriter and/or its designees warrants to purchase up to 15,352 shares of common stock (the “Representative’s Warrants”), which equals 5% of the Shares purchased in the June 2025 Offering, such warrants to be exercisable as set forth in the Representative’s Warrant Agreement. The net proceeds from the June 2025 Offering, including the exercise of the Underwriter’s over-allotment option, were approximately $1.8 million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. On April 24, 2025, we commenced a best efforts public offering (the “April 2025 Offering”) of an aggregate of (i) 125,333 shares (the “Shares”) of the our common stock, (ii) 125,333 Series B-1 Common Warrants (the “Series B-1 Common Warrants”) to purchase up to 125,333 shares of common stock (the “Series B-1 Common Warrant Shares”), (iii) 125,333 Series B-2 Common Warrants (the “Series B-2 Common Warrants” and together with the Series B-1 Warrants, the “Warrants”) to purchase up to 125,333 shares of common stock (the “Series B-2 Common Warrant Shares” and together with the Series B-1 Common Warrant Shares, the “Warrant Shares”). In connection with the April 2025 Offering, we entered into a Securities Purchase Agreement on April 24, 2025 with certain institutional investors participating in the April 2025 Offering. The April 2025 Offering closed on April 28, 2025. Each Share was sold together with one Series B-1 Common Warrant to purchase one share of common stock and one Series B-2 Common Warrant to purchase one share of common stock. The combined offering price for each Share and accompanying Warrants was $18.75. Each Warrant has an exercise price of $21.25 and was immediately exercisable upon issuance. The Series B-1 Common Warrants will expire on the five-year anniversary of the date of issuance, and the Series B-2 Common Warrants will expire on the eighteen-month anniversary of the date of issuance. We raised an aggregate of $2.35 million in the April 2025 Offering, and net proceeds of the April 2025 Offering, after deducting the fees and expenses were approximately $1.9 million. On November 21, 2024, we entered into a Securities Purchase Agreement with a single healthcare focused institutional investor (the “Investor”), pursuant to which we agreed to issue and sell, in a registered direct offering directly to the Investor, 49,484 shares of common stock to the Investor, at a price of $60.625 per share, for aggregate gross proceeds of approximately $3.0 million before deducting the placement agents’ fees and related offering expenses. In a concurrent private placement, we agreed to issue to the Investor common stock warrants to purchase up to 49,484 shares (the “Common Warrants”) at an exercise price of $73.75 per share. Each Common Warrant is exercisable six months from the issuance date and will expire five and one-half years from the issuance date. On July 3, 2024, we filed a universal shelf registration statement on Form S-3, which was declared effective by the SEC on July 11, 2024, on which we registered for sale up to $150 million of any combination of our c ommon stock , preferred stock, debt securities, warrants, and/or units from time to time and at prices and on terms that we may determine, which included up to $15 million of c ommon stock that we may issue and sell from time to time, through H.C. Wainwright & Co., LLC (“Wainwright”) acting as our sales agent, pursuant to the sales agreement that we entered into with Wainwright on July 3, 2024 for our “at-the-market” equity program (the “ATM Sales Agreement”). As of December 31, 2025, our cash and cash equivalents were approximately $11.9 million. Based on our balances in cash and cash equivalents, we project to have sufficient cash to fund our current operating plan into the second quarter of 2027. Accordingly, we will need to obtain substantial additional funding to continue our operations. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. The following table summarizes the net cash provided by (used in) operating activities and financing activities for the periods indicated (in thousands): Years Ended December 31, 2025 2024 Net cash used in operating activities $ (9,233) $ (15,220) Net cash provided by investing activities — 6,354 Net cash provided by financing activities 18,564 2,900 Net increase (decrease) in cash and cash equivalents $ 9,331 $ (5,966) Operating Activities Our cash used in operating activities for the year ended December 31, 2025 was $9.2 million, comprising of (i) our net loss of $11.6 million, as adjusted for $2.0 million in non-cash expenses (primarily $2.0 million for non-cash stock based compensation), and (ii) net changes in operating assets and liabilities of $0.3 million. 87 Table of Contents Our cash used in operating activities for the year ended December 31, 2024 was $15.2 million, comprising of (i) our net loss of $16.3 million, as adjusted for $3.1 million in non-cash expenses (primarily $3.1 million non-cash stock based compensation), and (ii) net changes in operating assets and liabilities of $2.1 million. Investing Activities There were no investing activities during the year ended December 31, 2025. Our cash provided by investing activities during the year ended December 31, 2024 totaled approximately $6.4 million and was primarily due to net redemptions of marketable debt securities (net of purchases of marketable debt securities). Financing Activities Our cash provided by financing activities during the year ended December 31, 2025 was $18.6 million, primarily comprising of (i) $1.9 million in net proceeds received from the issuance of common stock and warrants in the April 2025 Offering, (ii) $1.8 million in net proceeds received from the issuance of common stock in the June 2025 Offering, (iii) $3.6 million in net proceeds received from the issuance of common stock in the October 2025 Offering, and (iv) $11.2 million in net proceeds received from the issuance of common stock under the ATM Sales Agreement. Our cash provided by financing activities during the year ended December 31, 2024 was $2.9 million, primarily comprising of net proceeds of $2.4 million from our registered direct offering, net proceeds of $0.2 million from issuances of Common Stock from our ATM, and $0.3 million in proceeds from exercises of options and warrants. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2025. Seasonality Our business experiences limited seasonality. Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may materially differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most significant to the judgments and estimates used in the preparation of our financial statements. Accrued Research and Development Expenses Research and development costs are expensed as incurred. We record the estimated CRO, CMO, and patient care costs as services are provided but not yet invoiced and include these costs in the accrued expenses in the balance sheet and within research and development expense in the statement of operations. Equity-Based Compensation We recognize compensation costs related to stock option grants to employees and board members and warrant grants to nonemployees based on the estimated fair value of the awards on the date of grant. We estimate the grant date fair value and the resulting stock-based compensation expense using the Black-Scholes option-pricing model. The grant date fair 88 Table of Contents value of the stock-based awards is recognized on a straight-line basis over the requisite service periods, which are generally the vesting period of the respective awards. Forfeitures are accounted for as they occur. We historically have been a private company and lack company-specific historical and implied volatility information for our shares. Therefore, we estimate our expected share price volatility based on the historical volatility of publicly traded peer companies and expect to continue to do so until such time as we have adequate historical data regarding the volatility of our own traded share price. Recent Accounting Pronouncements The Financial Accounting Standards Board has issued certain accounting pronouncements as of December 31, 2025 that will become effective in subsequent periods; however, we do not believe that any of those pronouncements would have significantly affected our financial accounting measurements or disclosures had they been in effect during 2025, or that they will have a significant impact on us at the time they become effective. JOBS Act Accounting Election We are an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are not required to provide the information required by this Item as we are a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item is set forth beginning on page F-1 of this report and is incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.