Kairos Pharma, LTD. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (in thousands, except for share amounts and per share data) You should read the following discussion and analysis of our financial condition and results of operations (the “MD&A”) together with our unaudited consolidated financial statements and related notes appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q (the “Quarterly Report”), and with our audited financial statements and notes thereto for the year ended December 31, 2025, included in our annual report on Form 10-K filed with the Securities Exchange Commission (the “SEC”) on March 31, 2026 (the “2025 Annual Report”) . Kairos Pharma, Ltd. may be referred to herein as “Kairos Pharma,” “the Company,” “we,” “us” or “our.” Special Note Regarding Forward-Looking Statements In addition to historical information, some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and any projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report, the “Risk Factor” section in the 2025 Annual Report, and in our other filings with the Securities Exchange Commission (the “SEC”). We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. Statements made herein are as of the date of the filing of this Quarterly Report with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Overview Kairos Pharma, Ltd. is a clinical-stage biopharmaceutical company advancing therapeutics for cancer patients that are designed to overcome key hurdles in immune suppression and drug resistance. Our mission is to advance our portfolio of innovative therapeutics to reverse key mechanisms of therapeutic resistance and immune suppression and transform the way cancer is treated. We have leveraged molecular insights of the mechanisms of therapeutic resistance and immune suppression to develop a new class of novel drugs that are designed to target drug resistance and checkpoints of immune suppression. As of the date of this Quarterly Report, our product candidates have not been approved as safe or effective by the FDA or any other comparable foreign regulator. Since inception, our operations have focused on organizing and staffing our Company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates, and undertaking preclinical and clinical studies and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales. Since inception, we have incurred significant operating losses. Our net losses were $3,042 and $2,684 for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $17,304. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel, and operate as a public company. 17 We will not generate revenue from product sales unless and until we successfully complete our clinical trials and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we will likely incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings and other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Our failure to raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing. Recent Developments At the Market (ATM) Offering In January 2026, we filed a shelf registration statement on Form S-3, registering up to $75,000 in aggregate securities and, in conjunction therewith, filed a prospectus supplement for the sale of up to $4,500 of common stock pursuant to an At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright and Co., LLC (the “Placement Agent”). Under the ATM Agreement, the Placement Agent will be entitled to 3.0% of the gross proceeds of any sales made under the ATM Agreement. As a result of the ATM offering, during the six months ended June 30, 2026, we raised gross proceeds of $392 through the sale of 601,947 shares of its common stock. Net proceeds were $374 after the deduction of offering costs. Subsequent to June 30, 2026, the Company raised gross proceeds of $911 through the sale of 2,359,326 shares of its common stock under the ATM. Services Agreement with Brammer Bio MA, LLC On May 11, 2026, we entered into a Pharmaceutical Development Services Agreement with Brammer Bio MA, LLC (“Patheon”), under which Patheon agrees to transfer and manufacture clinical supply of ENV-105 sterile liquid vials in compliance with applicable regulations and cGMP to support Phase II clinical trials. The agreement also covers related analytical and microbiology methods, stability studies, and regulatory support, and includes customary terms on confidentiality, intellectual property ownership, quality audits, fees and cancellation, term, and termination. The total amount committed by the Company under the agreement is $783. Components of Results of Operations Net Sales We have not generated any sales to date. No revenue was recorded from any source during the six months ended June 30, 2026 and 2025. 18 Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses. Research and Development Expenses Dr. Ramachandran Murali is our Vice President of Research and Development. Dr. Murali is a doctor and scientist at Cedars-Sinai Medical Center, and is the inventor, with others, of three of the patented technologies that are subject to the Kairos-Cedars license agreements. We are engaged in rolling out our Phase 1 and Phase 2 clinical trials for ENV 105 and a Phase 1 trial for KROS 201. In addition, we are continuously performing preclinical research including animal models of disease, medicinal chemistry laboratory studies, formulation, and toxicology and biodistribution studies. Our clinical development costs may vary significantly based on factors such as: per patient trial costs; the number of trials required for approval; the number of sites included in the trials; the location where the trials are conducted; the length of time required to enroll eligible patients; the number of patients that participate in the trials; the number of doses that patients receive; the drop-out or discontinuation rates of patients; potential additional safety monitoring requested by regulatory agencies; the duration of patient participation in the trials and follow-up; the cost and timing of manufacturing our product candidates; the phase of development of our product candidates; and the efficacy and safety profile of our product candidates. The successful development and commercialization of product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following: the timing and progress of nonclinical and clinical development activities; the number and scope of nonclinical and clinical programs we decide to pursue; raising necessary additional funds; the progress of the development efforts of parties with whom we may enter into collaboration arrangements; our ability to maintain our current development program and to establish new ones; our ability to establish new licensing or collaboration arrangements; the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; the receipt and related terms of regulatory approvals from applicable regulatory authorities; the availability of drug substance and drug product for use in production of our product candidate; establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally; our ability to protect our rights in our intellectual property portfolio; the commercialization of our product candidates, if and when approved; obtaining and maintaining third-party insurance coverage and adequate reimbursement; the acceptance of our product candidate, if approved, by patients, the medical community and third-party payors; competition with other products; the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from any pandemic or public health crisis; and a continued acceptable safety profile of our therapies following approval. A change in the outcome of any of these variables with respect to the development of our product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates. General and administrative expenses General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, corporate and business development, as well as administrative functions. General and administrative expenses also include legal fees relating to patent, corporate, IPO-related matters, and SEC reporting matters; professional fees for accounting, auditing, tax and administrative consulting services; insurance costs; administrative travel expenses; marketing expenses and other operating costs. We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our business operations. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs, as well as investor and public relations expenses associated with being a public company. 19 Results of Operations Comparison of the Three Months Ended June 30, 2026 and 2025 The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025: June 30, 2026 June 30, 2025 Revenues $ - $ - Operating expenses: Research and development 619 496 General and administrative 798 960 Total operating expenses 1,417 1,456 Loss from operations (1,417 ) (1,456 ) Other income: Interest income 29 34 Total other income 29 34 Net loss $ (1,388 ) $ (1,422 ) Research and Development Expenses The table below summarizes our research and development expenses for the three months ended June 30, 2026 and 2025: Research and Development Expenses: June 30, 2026 June 30, 2025 Clinical trial and related expenses $ 619 $ 496 Total research and development expenses $ 619 $ 496 Research and development expenses were $619 and $496 for the three months ended June 30, 2026 and 2025, respectively. The increase in R&D expenses in the second quarter of 2026 compared to the second quarter of 2025 primarily related to our Phase 2 trial in prostate cancer beginning in 2024. General and Administrative Expenses The table below summarizes our general and administrative expenses for the three months ended June 30, 2026 and 2025: General and Administrative Expenses: June 30, 2026 June 30, 2025 Stock-related expenses $ 144 $ 60 Officer and board compensation and wages 141 59 Patent related expenses 18 31 Legal expenses 89 78 Accounting expenses 20 93 Other professional service expenses and fees 109 98 Insurance expenses 99 98 Vendor advances amortization expense 112 265 Intangible amortization expense 22 40 Other expenses 44 138 Total general and administrative expenses $ 798 $ 960 General and administrative expenses were $798 and $960 for the three months ended June 30, 2026 and 2025, respectively. There were no significant changes in expense categories between periods. 20 Other Income Other income was $29 and $34 for the three months ended June 30, 2026 and 2025, respectively. In both periods, other income was interest income earned from our money market account. Comparison of the Six Months Ended June 30, 2026 and 2025 The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025: June 30, 2026 June 30, 2025 Revenues $ - $ - Operating expenses: Research and development 1,303 989 General and administrative 1,804 1,733 Total operating expenses 3,107 2,722 Loss from operations (3,107 ) (2,722 ) Other income: Interest income 65 38 Total other income 65 38 Net loss $ (3,042 ) $ (2,684 ) Research and Development Expenses The table below summarizes our research and development expenses for the six months ended June 30, 2026 and 2025: Research and Development Expenses: June 30, 2026 June 30, 2025 Clinical trial and related expenses $ 1,303 $ 989 Total research and development expenses $ 1,303 $ 989 Research and development (“R&D”) expenses were $1,303 and $989 for the six months ended June 30, 2026 and 2025, respectively. The increase in R&D expenses in the first six months of 2026 primarily related to our Phase 2 trial in prostate cancer beginning in 2024. 21 General and Administrative Expenses The table below summarizes our general and administrative expenses for the six months ended June 30, 2026 and 2025: General and Administrative Expenses: June 30, 2026 June 30, 2025 Stock-related expenses $ 288 $ 136 Officer and board compensation and wages 281 115 Patent related expenses 43 53 Legal expenses 162 78 Accounting expenses 88 160 Other professional service expenses and fees 312 136 Insurance expenses 184 203 Vendor advances amortization expense 232 505 Intangible amortization expense 62 80 Other expenses 152 267 Total general and administrative expenses $ 1,804 $ 1,733 General and administrative expenses were $1,804 and $1,733 for the six months ended June 30, 2026 and 2025, respectively. Significant changes between periods consisted of the decrease in the amortization of vendor advances in 2026, primarily related to the amount, timing and duration of each advance. Other Income Other income was $65 and $38 for the six months ended June 30, 2026 and 2025, respectively. In both periods, other income was interest income earned from our money market account. Liquidity and Capital Resources The Company has experienced recurring losses from operations since inception and incurred a net loss of $3,042 and used cash in operations of $2,048 during the six months ended June 30, 2026. These factors raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2025 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its strategies. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As of June 30, 2026, the Company had cash and short-term investments of $2,626. Until the Company can generate sufficient product revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings and debt financings, or other capital sources such as potential collaborations, strategic alliances, licensing arrangements and other arrangements. Based on our research and development plans, we expect that our existing cash balance may not enable us to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the date of filing of this report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. In addition, because the design and outcome of our anticipated and any future clinical trials is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our current products or any future product candidates. Additionally, although we have the ability to raise funds through our Form S-1 (which registers shares for resale under our equity line of credit agreement (“ELOC”) and Form S-3 (which registers shares underlying an at-the-market offering (“ATM Offering”) agreement, which registration statements were filed in 2025 and 2026, respectively, we may not receive some or all of these available proceeds due to certain factors. The failure to receive all or some of the proceeds available under these offerings would exhaust our available capital resources sooner than expected and will require us to obtain further funding to achieve our business objectives. 22 No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our shareholders, in the event of an equity financing. Cash Flows The table below summarizes our cash flow activities for the six months ended June 30, 2026 and 2025: Net cash provided by (used in): June 30, 2026 June 30, 2025 Operating activities $ (2,048 ) $ (1,519 ) Investing activities - - Financing activities 183 3,281 Net increase (decrease) in cash and cash equivalents $ (1,865 ) $ 1,762 Operating Activities During the six months ended June 30, 2026, we used cash from operating activities of $2,048, compared to $1,519 used during the six months ended June 30, 2025. During the six months ended June 30, 2026, we incurred a net loss of $3,042 and had non-cash expenses of $1,013, compared to a net loss of $2,684 and non-cash expenses of $1,531 during the six months ended June 30, 2025. The primary non-cash expense in the first six months of 2026 was the amortization of vendor advances of $433 and the fair value of vested restricted stock units of $518. The primary non-cash expense in the same period of 2025 was the amortization of vendor advances of $1,298 and the fair value of vested restricted stock units of $153. The net change in operating assets and liabilities during the six months ended June 30, 2026 used cash of $19, compared to $366 used during the six months ended June 30, 2025. The primary use of cash relating to operating assets and liabilities during the six months ended June 30, 2026, was the increase in prepaid expenses. The primary use of cash during the six months ended June 30, 2025, was the decrease in accounts payable and accrued expenses. Financing Activities During the six months ended June 30, 2026, we provided cash from financing activities of $183, compared to $3,281 provided during the six months ended June 30, 2025. For the six months ended June 30, 2026, cash provided by financing activities consisted of proceeds from our ATM Offering of $392. Net cash provided in the same period of 2025 was from net proceeds from the sale and exercise of prefunded warrants of $3,058 and proceeds from our ELOC of $223. Net cash used in the first six months of 2026 consisted of the payment of deferred offering costs of $209. Contractual Obligations and Commitments Kairos Exclusive License Agreements with Cedars-Sinai Medical Center (Cedars) We entered into four Exclusive License Agreements with Cedars, each of which grants the Company licensing rights with respect to certain patent rights owned by Cedars as follows: 1. Methods of use of compounds that bind to RelA of NFkB; 2. Composition and methods for treating fibrosis; 3. Compositions and methods for treating cancer and autoimmune diseases; and 4. Method of generating activated T cells for cancer therapy. 23 For each of the exclusive license agreement in items 1, 2 and 3, the Company was required to pay an initial license fee of $5, reimburse Cedars for patent protection costs ranging from approximately $9 to $61, pay an annual maintenance fee of $10, and pay royalties based on 3.75% of net sales and pay other non-royalty sublicense fees ranging from 5% to 35% of sales of products. In addition, for items 1, 2 and 3, the Company is required to pay Cedars based on the following milestones: ● $150 upon the successful completing of Phase I clinical trial; ● $250 (for items 1 and 2) and $500 (for item 3) upon the successful completing of Phase II clinical trial for a product and receipt of Food and Drug Administration (“FDA”) approval for a Phase III clinical trial; ● $1,500 upon receipt of FDA approval of a new drug application or equivalent foreign regulatory approval in a non-United States major commercial market; and ● $250 upon cumulative net sales exceeding $5,000. For the exclusive license agreement in item 4, the Company is required to pay an initial license fee of $50 upon raising $500 in capital, pay an annual maintenance fee of $10, pay royalties based on 4.25% of patent product sales and 0.5% of other sales and pay other non-royalty sublicense fees ranging from 5% to 35%. In addition, the Company is required to pay Cedars based on the following milestones: ● $150 upon the successful completing of Phase I clinical trial; ● $250 upon the successful completing of Phase II clinical trial and receipt of Food and Drug Administration (“FDA”) or equivalent regulatory agency in another jurisdiction approval for a Phase III clinical trial; ● $1,500 upon receipt of FDA approval of a new drug application; and ● $2,500 upon cumulative net sales exceeding $50,000. As of June 30, 2026, no amounts were due under the Exclusive License Agreements between Cedars and the Company. Enviro Therapeutics On June 2, 2021, our then-wholly owned subsidiary, Enviro, entered into two Exclusive License Agreements with Cedars, which granted Enviro exclusive licensing rights (which include the right to sublicense) with respect to certain patent rights owned by Cedars, as follows: ● an Exclusive License Agreement (the “Enviro-Cedars License Agreement (Mitochondrial DNA)”) for Enviro to develop, manufacture, use and sell products utilized or derived from patent rights worldwide related to the “Compositions and Methods for Treating Diseases and Conditions by Depletion of Mitochondrial DNA from Circulation and for Detection of Mitochondrial DNA” invented by Dr. Neil Bhowmick and others; and ● an Exclusive License Agreement (the “Enviro-Cedars License Agreement (Endoglin Antagonism)” and, collectively with the Enviro-Cedars License Agreement (Mitochondrial DNA), the “Enviro-Cedars License Agreements”) for Enviro to develop, manufacture, use and sell products utilized or derived from the patent rights and technical information worldwide related to the “Sensitization of Tumors to Therapies Through Endoglin Antagonism” invented by Dr. Neil Bhowmick and others. In exchange for each of the licenses, pursuant to the terms of the Exclusive License Agreements, Enviro was required to pay an upfront license fee in the mid four-figures and low-five figures, respectively. Enviro was also required to reimburse Cedars for the costs in the mid-to-high six figures incurred in the prosecution of the patent rights subject to the Enviro-Cedars License Agreements prior to the date of execution of such agreements, and certain costs and fees then outstanding aggregating in the low-six figures owed by Kairos pursuant to the Kairos-Cedars License Agreements. Pursuant to the Enviro-Cedars License Agreements, Cedars was also to receive royalty payments of a mid-single-digit percentage of net sales of products associated with the licensed patent right and less than one percent of net sales of other products derived from Cedars’ technical information, with a minimum annual royalty fee in the low five-digits due beginning on the third anniversary of the effective date of the Enviro-Cedars License Agreements. To the extent Enviro derived non-royalty sublicensing revenues, a high single-digit to low double-digit percentage of such revenues would be due and payable to Cedars, with the actual percentage of such revenues dependent on the stage of FDA authorization at the time the sublicense revenue is generated. Enviro was also required to pay Cedars in connection with achieving the following Payment Milestones relating to products derived from the patent rights: successful completion of a Phase I clinical trial; successful completion of a Phase II clinical trial, receipt of FDA approval, and approval for a Phase III clinical trial; FDA approval of an NDA or BLA; cumulative net sales exceeding $50,000; and cumulative net sales exceeding $100,000. If all of these payment milestones are met among both of the Exclusive License Agreements, the required milestone payments would total in the mid-to-high seven-figures. 24 Pursuant to the Exclusive License Agreements, Enviro was obligated to meet the following Commercialization Milestones. Pursuant to the Enviro-Cedars License Agreement (Endoglin Antagonism), Enviro was obligated to (1) obtain an IND for a patent product within 1 year of the effective date of the agreement, (2) commence a Phase II trial within 2 years of the effective date of the agreement, and (3) submit an NDA or BLA to the FDA or equivalent regulatory agency in another jurisdiction within 7 years of the effective date of the agreement. Pursuant to the Enviro-Cedars License Agreement (Mitochondrial DNA), Enviro was obligated to (1) complete preclinical studies of a patent product within 2 years of the effective date of the agreement, (2) complete toxicology studies within 2.5 years of the effective date of the agreement, (3) obtain IND within 3 years of the effective date of the agreement, (4) begin a Phase I trial within 4 years of the effective date of the agreement, and (5) submit an NDA or BLA to the FDA or equivalent regulatory agency in another jurisdiction within 7 years of the effective date of the agreement. If the Commercialization Milestones are not met or extended, Cedars may convert the exclusive licenses into non-exclusive licenses or to a co-exclusive licenses or terminate the licenses. The Exclusive License Agreements will, unless sooner terminated, continue in effect on a country-by-country basis until the last of the patents covering the patent rights or future patent rights expires. Under the terms of the Enviro-Cedars License Agreements, unless waived by Cedars, the agreements would automatically terminate: (a) if Enviro ceases, dissolves or winds up its business operations; (b) if performance by either party jeopardizes the licensure, accreditation or tax exempt status of Cedars or the agreement is deemed illegal by a governmental body; (c) within 30 days for non-payment of royalties or if Enviro fails to undertake commercially reasonable efforts to exploit the patent rights or future patent rights; (d) within 60 days of Cedars’ failure to cure any breach or default of a material obligation under the agreements; (e) within 90 days of Enviro’s failure to cure any breach or default of a material obligation under the agreements; or (f) upon mutual written agreement of the parties. Novation Agreements On October 1, 2025, the Board of Directors approved the entry of Kairos and Enviro into a novation agreement (the “Cedars Novation Agreement”) with Cedars. The Cedars Novation Agreement was entered into on October 1, 2025, but effective as of April 17, 2025, for purposes of transferring the exclusive license of two patents from Enviro, as the original licensee, to Kairos, as the new licensee. As the new licensee of the two patents, Kairos accepted and assumed all obligations and liabilities that may arise under the Exclusive License Agreements from Enviro and Enviro is relieved of all of its liabilities and obligations under the license agreements. In addition, on October 1, 2025, the Board approved the Company’s entry into a novation agreement (the “Tracon Novation Agreement”) with Tracon Pharmaceuticals, Inc. (“Tracon”) and Enviro pursuant to which Enviro’s rights and obligations under the license and supply agreement between Tracon, Enviro and Kairos, originally dated May 21, 2021, as amended to date (the “Tracon License Agreement”), were transferred from Enviro to Kairos and Enviro was relieved of any further liabilities or obligations under the license and supply agreement. Under the Tracon License Agreement, Tracon had granted Enviro exclusive access to its TRC105 and CD105 technologies, which Kairos has now assumed pursuant to the Tracon Novation Agreement. Agreements with Lonza Sales AG On November 12, 2025, we entered into an amendment (the “Lonza Amendment”) to the sales agreement with Lonza Sales AG (“Lonza”), originally dated February 14, 2008, pursuant to which the Company agreed to purchase and Lonza agreed to testing of standards and the preparation to manufacture ENV105 antibody to be used in the Company’s Phase 2 clinical trial. The Company agreed to pay a total of $1,143 in consideration, which will be paid over time as each of the 13 stages of the Lonza Amendment are completed. On March 27, 2026, we entered into an additional statement of work to the sales agreement with Lonza pursuant to which the Company agreed to pay an additional amount of approximately $2,000, which will also be paid over time as each of the 13 stages of the Lonza Amendment are completed. 25 Agreement with Brammer Bio MA, LLC On May 11, 2026, we entered into a Pharmaceutical Development Services Agreement with Brammer Bio MA, LLC (“Patheon”), under which Patheon agrees to transfer and manufacture clinical supply of ENV-105 sterile liquid vials in compliance with applicable regulations and cGMP to support Phase II clinical trials. The agreement also covers related analytical and microbiology methods, stability studies, and regulatory support, and includes customary terms on confidentiality, intellectual property ownership, quality audits, fees and cancellation, term, and termination. The total amount committed by the Company under the agreement is $783. Agreement with Celyn Therapeutics, Inc. On March 2, 2026, we entered into a binding term sheet with Celyn Therapeutics, Inc., a privately held biotechnology company, regarding a proposed asset acquisition of CL-273, an investigational, reversible, wild type sparing pan EGFR small molecule inhibitor being developed by Eilean Therapeutics for EGFR mutant non-small cell lung cancer. Pursuant to the term sheet, the Company will receive 100% of the development, manufacturing, commercialization rights, patent prosecution and patent filing rights worldwide to CL-273 in exchange for upfront payment of 16.5% of the Company’s outstanding capital stock, with such stock to be issued in the form of Common Stock or convertible preferred stock, and milestone payments of (i) $15 million payable at NDA or BLA FDA, with such payment to be made in combination of cash and stock and (ii) 2% royalties from net revenue generated from sales in the U.S. for the life of the intellectual property. As of June 30, 2026, the CL-273 asset acquisition was no longer under negotiation. Funding Requirements We expect our expenses to increase substantially in connection with our ongoing research activities, particularly as we pursue the advancement of our product candidates through clinical trials. In addition, we expect to incur additional costs associated with operating as a public company. The timing and amount of our operating expenditures will depend on numerous variables, including: the initiation, progress, timing, costs and results of the clinical trials for our product candidates or any future product candidates we may develop; the initiation, progress, timing, costs and results of nonclinical studies for our product candidates or any future product candidates we may develop; our ability to maintain our relationships with key collaborators; the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more nonclinical studies or clinical trials than those that we currently expect or change their requirements on studies that had previously been agreed to; the cost to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; the effect of competing technological and market developments; the costs of continuing to grow our business, including hiring key personnel and maintain or acquiring operating space; market acceptance of any approved product candidates, including product pricing, as well as product coverage and the adequacy of reimbursement by third-party payors; the cost of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; the cost and timing of selecting, auditing and potentially validating a manufacturing site for commercial-scale manufacturing; the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval and that we determine to commercialize; and our need to implement additional internal systems and infrastructure, including financial and reporting systems. We expect that we will continue to require additional funding to complete the clinical development and commercialization of our product candidates, if we receive regulatory approval, and pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approval for our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize ourselves. 26 Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity and debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our current common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Commitments and Contingencies From time to time, we may have certain contingent liabilities that arise in the ordinary course of business. We evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and record a loss contingency on an undiscounted basis when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These judgments are subjective and based on the status of such legal proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal proceedings may differ materially from our estimates. We estimate accruals for legal expenses when incurred as of each balance sheet date based on the facts and circumstances known to us at that time. Off-Balance Sheet Arrangements During the six months ended June 30, 2026 and 2025, we did not have, and we do not currently have, any off-balance sheet arrangements (as defined under SEC rules). Recent Accounting Pronouncements For a description of recently issued accounting standards that may have a material impact on our financial statements or will otherwise apply to our operations, please see Note 2 to our unaudited financial statements appearing elsewhere in this Quarterly Report. Emerging Growth Company Status As an “emerging growth company,” the Jumpstart Our Business Startups Act of 2012 permits us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have irrevocably elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies that are not emerging growth companies. 27 Item 3. Quantitative and Qualitative Disclosures about Market Risks. As a “smaller reporting company,” we are not required to provide the information required by this Item.