What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 89 added, 191 removed, 70 unchanged (80% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

You should read the following discussion

and analysis of financial condition and operating results together with our financial statements and the related notes thereto and

other financial information included elsewhere in this quarterly report on Form 10-Q, as well as our audited consolidated financial

statements and related notes thereto as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed

on March 30, 2026.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of financial condition and operating results together with our financial statements and the related notes thereto and other financial information included elsewhere in this quarterly report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed on March 30, 2026.

This discussion contains forward-looking statements that involve risks and uncertainties.

As a result of many

factors, such as those set forth in the section of this report captioned “Risk Factors” and elsewhere in this Quarterly

Report on Form 10-Q as well as the risk factors set forth in the section titled “Risk Factors” included in our most

recent Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking

As a result of many factors, such as those set forth in the section of this report captioned “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q as well as the risk factors set forth in the section titled “Risk Factors” included in our Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.

For convenience of presentation some of the numbers have been rounded in the text below.

Throughout this report, the terms

“our,” “we,” “us,” and the “Company” refer to Pasithea Therapeutics Corp.

subsidiaries, Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc., Alpha-5 Integrin, LLC, AlloMek

Therapeutics, LLC and Pasithea MacroMEK Pty Ltd.

Pasithea Clinics Inc., legally dissolved as of September 3, 2025, was incorporated

Throughout this report, the terms “our,” “we,” “us,” and the “Company” refer to Pasithea Therapeutics Corp.

and its subsidiaries, Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc., Alpha-5 Integrin, LLC, AlloMek Therapeutics, LLC and Pasithea MacroMEK Pty Ltd.

Pasithea Clinics Inc., legally dissolved as of September 3, 2025, was incorporated in Delaware.

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, is a private limited company registered in Portugal.

Integrin, LLC and AlloMek Therapeutics, LLC are both Delaware limited liability companies.

Pasithea MacroMEK Pty Ltd is registered

in Australia.

The operations of Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, and Pasithea Clinics Inc.

discontinued.

Alpha-5 Integrin, LLC and AlloMek Therapeutics, LLC, are both Delaware limited liability companies.

Pasithea MacroMEK Pty Ltd is registered in Australia.

The operations Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, and Pasithea Clinics Inc.

have been discontinued.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”).

These statements are generally identified by the use of such words as “may,”

“could,” “should,” “would,” “believe,” “anticipate,” “forecast,”

“estimate,” “expect,” “intend,” “plan,” “continue,” “outlook,”

“will,” “potential” and similar statements of a future or forward-looking nature.

These forward-looking statements

speak only as of the date of filing this Quarterly Report with the SEC, and include, without limitation, statements about the following:

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These statements are generally identified by the use of such words as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,” “expect,” “intend,” “plan,” “continue,” “outlook,” “will,” “potential” and similar statements of a future or forward-looking nature.

These forward-looking statements speak only as of the date of filing this Quarterly Report with the SEC, and include, without limitation, statements about the following:

● our lack of operating history;

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● the impact of global economic and market conditions and political developments on our business, including, among others, rising inflation and capital market disruptions, economic sanctions, bank failures, regional conflicts around the world, and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our Common Stock and our ability to access capital markets.

Because forward-looking statements are inherently

subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should

not rely on these forward-looking statements as predictions of future events.

The events and circumstances reflected in our forward-looking

statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

You should refer to the “Risk Factors” section of this Quarterly Report as well as the section titled “Risk Factors”

included in our most recent Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ

materially from those expressed or implied by our forward-looking statements.

We operate in an evolving environment and new risk factors

and uncertainties may emerge from time to time.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events.

The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

You should refer to the “Risk Factors” section of this Quarterly Report as well as the section titled “Risk Factors” included in our most recent Annual Report on Form 10-K for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements.

We operate in an evolving environment and new risk factors and uncertainties may emerge from time to time.

It is not possible for management to predict all risk factors and uncertainties.

result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether

as a result of any new information, future events, changed circumstances or otherwise.

You should review the factors and risks and other

information we describe in the reports we file from time to time with the SEC.

As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should review the factors and risks and other information we describe in the reports we file from time to time with the SEC.

Company Summary

We are a clinical-stage biotechnology company focused on the discovery,

research and development of innovative treatments for RASopathies, MAPK pathway-driven tumors and other diseases, including central nervous

system (CNS) disorders.

Our primary operations (the “Therapeutics”

segment) are focused on developing our lead product candidate, PAS-004, a next-generation macrocyclic mitogen-activated protein kinase,

or MEK inhibitor that we believe may address the limitations and liabilities associated with existing drugs targeting a similar mechanism

In December 2023, the U.S.

Food and Drug Administration (the “FDA”) cleared our Investigational New Drug application

(the “IND”) for PAS-004 and we received a study may proceed letter from the FDA for our Phase 1 multicenter, open-label, dose

escalation trial of PAS-004 in patients with MAPK pathway-driven advanced tumors with a documented RAS, NF1 or RAF mutation or patients

who have failed BRAF/MEK inhibition (the “FIH Phase 1 Advanced Cancer Study”).

We are currently conducting the FIH Phase 1

Advanced Cancer Study at four clinical sites in the United States and three additional sites in Eastern Europe.

We have completed the

initial eight cohorts through 45 mg capsule and have not reached the maximum tolerated dose.

We have filed a protocol amendment to continue

dose escalation in the FIH Phase 1 Advanced Cancer Study using our tablet formulation of PAS-004 in an effort to continue to explore the

safety, PK, and early signals of efficacy at higher dose levels of PAS-004.

Simultaneously, a pilot food effect assessment is planned

in a subset of patients who agree to participate in this optional component of the study.

As such, we expect to complete the trial in

In May 2025, we initiated our Phase 1/1b multicenter,

open-label, dose escalation trial of PAS-004 in adult patients with neurofibromatosis type 1 (“NF1”) with symptomatic and

inoperable, incompletely resected, or recurrent plexiform neurofibromas (“PN”).

We are currently conducting the trial at

a total of five sites in the United States, Australia, and South Korea.

The initial indication we plan to seek FDA marketing

approval for PAS-004 is the treatment of symptomatic PNs in both adult and pediatric patients with NF1.

As such, we aim to conduct a Phase

1 trial for pediatric NF1-PN patients and ultimately complete registrational clinical trials in both adult and pediatric NF1-PN populations.

Additionally, we have one program, PAS-001, in

the discovery stage, which we believe addresses limitations in the treatment paradigm for schizophrenia.

During the year ended December

31, 2025, we determined to cease further development of our PAS-003 program for ALS due to several factors including the significant capital,

resources and time required to develop the program.

Our ability to generate product revenue will depend

on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates.

time we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity,

debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions.

funding may not be available to us on acceptable terms, or at all.

If we fail to raise capital or enter into such agreements as and when

needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

We expect to continue to incur significant expenses

and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials

and, ultimately, seek regulatory approval.

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

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

We expect our expenses

and capital requirements will increase significantly in connection with our ongoing activities as we:

We are a clinical-stage biotechnology company focused on the discovery, research and development of innovative treatments for RASopathies, MAPK pathway-driven tumors and other diseases, including central nervous system (CNS) disorders.

Our lead product candidate, PAS-004, is a next-generation oral once-daily macrocyclic mitogen-activated protein kinase, or MEK inhibitor being developed for the long-term treatment of chronic diseases, including the neurocutaneous manifestations of neurofibromatosis type 1 (“NF1“).

Following the U.S.

Food and Drug Administration (the “FDA”) clearance of our Investigational New Drug application (the “IND”) in December 2023, we are conducting a Phase 1 open-label, dose escalation trial of PAS-004 in patients with MAPK pathway-driven advanced tumors at sites in the United States and in Eastern Europe.

In May 2025, we initiated a Phase 1/1b open-label, dose escalation trial of PAS-004 in adult patients with NF1 with symptomatic and inoperable, incompletely resected, or recurrent plexiform neurofibromas (“PN”) that is being conducting at sites in the United States, Australia, and South Korea.

Our initial planned indication for FDA and other regulatory approval is symptomatic and inoperable NF1-PN in adult and pediatric patients, and it aims to conduct a pediatric Phase 1 trial and registrational trials in both populations.

Additionally, we have one program, PAS-001, in the discovery stage, for treatment of schizophrenia.

During the year ended December 31, 2025, we determined to cease further development of our PAS-003 program for ALS due to several factors including the significant capital, resources and time required to develop the program.

Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates.

Until such time we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions.

Adequate funding may not be available to us on acceptable terms, or at all.

If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution.

We expect our expenses and capital requirements will increase significantly in connection with our ongoing activities as we:

● establish a sales, marketing and distribution infrastructure to commercialize our drugs, if approved, and for any other product candidates for which we may obtain marketing approval;

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Impact of Inflation

We have recently experienced

higher costs across our business as a result of inflation, including higher costs related to employee compensation and outside services.

We expect inflation to continue to have a negative impact throughout 2026, and it is uncertain whether we will be able to offset the

impact of inflationary pressures in the near term.

We have recently experienced higher costs across our business as a result of inflation, including higher costs related to employee compensation and outside services.

We expect inflation to continue to have a negative impact throughout 2026, and it is uncertain whether we will be able to offset the impact of inflationary pressures in the near term.

Results of Operations

Comparison of the Three Months Ended March

31, 2026, and 2025

Our financial results for the three months ended

March 31, 2026, and 2025 are summarized as follows:

For the Three Months Ended March 31,

Comparison of the Three and Six Months Ended June 30, 2026, and 2025

Our financial results for the three and six months ended June 30, 2026, and 2025 are summarized as follows:

For the Three Months Ended

2026 2025 Change % Change

General and administrative $ 2,027,664 $ 1,662,223 $ 365,441 22.0 %

2 unchanged sentences

Other income, net 439,430 94,742 344,688 363.8 %

$ (2,869,482 )

$ (3,563,238 )

Net loss (5,273,852 ) (3,716,157 ) (1,557,695 ) 41.9 %

For the Six Months Ended

2026 2025 Change % Change

General and administrative $ 3,961,988 $ 3,612,551 $ 349,437 9.7 %

General and administrative expenses

decreased by approximately $16,000, or 0.8%, for the three months ended March 31, 2026, compared to the three months ended March 31,

The decrease was primarily driven by (i) a decrease in income tax expenses and tax credits of approximately $165,000, (ii) a

decrease in accounting and business development expenses of approximately $24,000, (iii) a decrease in legal expenses of

approximately $154,000, (iv) a decrease in insurance costs of approximately $22,000 and (v) a decrease in board fees of

approximately $40,000, offset by (vi) an increase of approximately $240,000 in personnel costs, (vii) an increase in office expenses

of approximately $49,000, (viii) an increase in stock-based compensation expense for employees and consultants of approximately

$42,000, and (ix) an increase in public company and corporate communication costs of approximately $62,000.

We expect general and administrative expenses to continue to decrease

in fiscal year 2026 as compared to fiscal year 2025 primarily due to a decrease in impairment expenses offset by a ramp up in operational

activity, public company and corporate communications expenses, and non-cash stock-based compensation.

Research and development 6,627,938 3,878,527 2,749,411 70.9 %

Research and development expenses relate to activities

primarily focused on the development of PAS-004 for the three months ended March 31, 2026 and 2025.

Research and development expenses increased by

approximately $1,212,000, or 70.1%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

increase was primarily due to (i) an increase in clinical trial and regulatory expenses of approximately $472,000, (ii) an increase in

chemistry, manufacturing and controls (“CMC”) expenses of approximately $507,000, (iii) an increase in preclinical research

expense of approximately $130,000, and (iv) an increase in non-clinical research and development expense of approximately $109,000, offset

by (vi) a decrease in other expenses of approximately $5,000.

We expect research and development expenses to

continue to increase in fiscal year 2026 as compared to fiscal year 2025 primarily due to (i) an increase in clinical trial and regulatory

expenses related to our ongoing clinical trials for PAS-004, (ii) an increase in CMC costs related to PAS-004 drug product and drug supply

for our clinical trials, as well as the development of a liquid formation of PAS-004, (iii) the initiation of non-clinical absorption,

distribution, metabolism and excretion (“ADME”) studies, non-clinical developmental and reproductive toxicology studies, and

clinical human ADME studies, (iv) an increase in preclinical research for PAS-004, and (v) an increase in personnel costs related to anticipated

new workforce hires to support our research and development activities.

Loss from operations (10,589,926 ) (7,491,078 ) (3,098,848 ) 41.4 %

Other income (expense), net 2,446, 592 211,683 2,234,909 1055.8 %

Net loss (8,143,334 ) (7,279,395 ) (863,939 ) 11.9 %

General and Administrative

General and administrative expenses increased by approximately $365,000, or 22.0%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

The increase was primarily driven by increases in (i) insurance expenses of $205,000, (ii) non-cash stock-based expense of approximately $142,000, (iii) accounting and business development of approximately $110,000, (iv) office and other expenses of approximately $44,000, and (v) public company expenses of $30,000.

These increases were partially offset by decreases in (i) legal expenses of approximately $138,000, (ii) personnel and board expenses of approximately $24,000, and (iii) non-cash amortization of approximately $4,000.

General and administrative expenses increased by approximately $349,000, or 9.7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The increase was primarily driven by increases in (i) personnel and board expenses of approximately $285,000, (ii) non-cash stock-based expense of approximately $278,000, (iii) accounting and business development of approximately $87,000, and (iv), public company expenses of approximately $68,000.

These increases were partially offset by decreases in (i) legal expenses of approximately $292,000, (ii) office and other expenses of $55,000 (iii) insurance expenses of approximately $14,000, and (iv) non-cash amortization of approximately $8,000.

We expect general and administrative expenses to continue to decrease slightly in fiscal year 2026 as compared to fiscal year 2025 primarily due to a decrease in impairment expenses offset by a ramp up in operational activity, public company and corporate communications expenses, and non-cash stock-based compensation.

Research and Development

Research and development expenses relate to activities primarily focused on the development of PAS-004 for the three and six months ended June 30, 2026 and 2025.

Research and development expenses increased by approximately $1,537,000, or 71.5%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

The increase was primarily due to (i) an increase in clinical trial and regulatory expenses of approximately $299,000, (ii) an increase in chemistry, manufacturing and controls (“CMC”) expenses of approximately $877,000, (iii) an increase in non-clinical research and development expense of approximately $199,000, (iv) an increase in preclinical research expense of approximately $144,000 and (v) non-cash stock expense of approximately $33,000.

These increases were partially offset by a decrease in other expenses of approximately $15,000.

Research and development expenses increased by approximately $2,749,000, or 70.9%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

The increase was primarily due to (i) an increase in clinical trial and regulatory expenses of approximately $771,000, (ii) an increase in chemistry, manufacturing and controls (“CMC”) expenses of approximately $1,290,000, (iii) an increase in non-clinical research and development expense of approximately $401,000, and (iv) an increase in preclinical research expense of approximately $272,000, and (v) non-cash stock expense of approximately $35,000 offset by (vi) a decrease in other expenses of approximately $20,000.

We expect research and development expenses to continue to increase in fiscal year 2026 as compared to fiscal year 2025 primarily due to (i) an increase in clinical trial and regulatory expenses related to our ongoing clinical trials for PAS-004, (ii) an increase in CMC costs related to PAS-004 drug product and drug supply for our clinical trials, as well as the development of a liquid formation of PAS-004, (iii) the ongoing non-clinical absorption, distribution, metabolism and excretion (“ADME”) studies, and non-clinical developmental and reproductive toxicology studies, (iv) the initiation of clinical human ADME studies, (v) an increase in preclinical research for PAS-004, and (vi) an increase in personnel costs related to new workforce hires to support our research and development activities.

Other Income, Net

For the three months ended March 31, 2026, other income, net increased

by approximately $1,890,000, or 1,616.4%, as compared to the three months ended March 31, 2025.

The increase during the three months ended

March 31, 2026, was primarily driven by (i) an approximate $1,465,000 increase in the change of the fair value of warrant liabilities

during the three months ended March 31, 2026, (ii) an increase in interest and dividends, net of approximately $403,000, (iii) a decrease

in foreign currency gain of approximately $9,000, (iv) an increase in other income of approximately $24,000, and (v) an increase in realized

foreign currency translation loss from dissolution of subsidiaries of approximately $7,000 due to the fact that it did not exist this

For the three months ended June 30, 2026, other income, net increased by approximately $344,000, or 363.8%, as compared to the three months ended June 30, 2025.

The increase during the three months ended June 30, 2026, was primarily driven by (i) an increase in interest and dividends, net of approximately $356,000, (ii) a decrease in other income of approximately $19,000, (iii) an approximate $29,000 increase in the change of the fair value of warrant liabilities, offset by (iv) a increase in foreign currency gain of approximately $59,000.

For the six months ended June 30, 2026, other income, net increased by approximately $2,235,000, or 1,055.8%, as compared to the six months ended June 30, 2025.

The increase during the six months ended June 30, 2026, was primarily driven by (i) an approximate $1,494,000 increase in the change of the fair value of warrant liabilities, (ii) an increase in interest and dividends, net of approximately $759,000, (iii) a decrease in other income of approximately $43,000, and (iv) an increase in realized foreign currency translation loss from dissolution of subsidiaries of approximately $7,000, offset by (v) a decrease in foreign currency gain of approximately $69,000.

Working Capital

June 30, As of

Current assets $ 48,244,041 $ 56,459,084

1 unchanged sentence

Working capital $ 46,406, 124 $ 51,485,123

Working capital decreased by approximately $245,000

from December 31, 2025, to March 31, 2026, due primarily to net cash used to fund operations for the three months ended March 31, 2026,

offset by the December 2025 Placement Agents Warrant liabilities reclassified to equity.

Working capital decreased by approximately $5,078,000 from December 31, 2025, to June 30, 2026, due primarily to net cash used to fund operations for the six months ended June 30, 2026, offset by the December 2025 Placement Agents Warrant liabilities reclassified to equity.

Liquidity and Capital Resources

For the Three Months Ended

$ (2,869,482 )

$ (3,563,238 )

For the Six Months Ended

Net loss $ (8,143,334 ) $ (7,279,395 )

Net cash used in operating activities $ (9,494,736 ) $ (6,924,643 )

$ (4,787,220 )

$ (3,055,757 )

Net cash provided by financing activities 9,226 7,213,335

Effect of foreign currency translation on cash (9,196 ) 5,631

Decrease in cash, cash equivalents and restricted cash

$ (4,758,338 )

$ (1,581,451 )

Cash, cash equivalents and restricted cash decreased by approximately

$4.8 million for the three months ended March 31, 2026, compared to a decrease of approximately $1.6 million for the three months ended

March 31, 2025.

The decrease for the three months ended March 31, 2026, was primarily attributable to cash used to fund operations and

an increase in prepaid expenses.

The decrease for the three months ended March 31, 2025, was primarily attributable to cash used to fund

operations which was partially offset by at-the-market sales of common stock of approximately $1.7 million.

Increase (decrease) in cash, cash equivalents and restricted cash $ (9,494,706 ) $ 294,323

Cash, cash equivalents and restricted cash decreased by approximately $9.5 million for the six months ended June 30, 2026, compared to an increase of approximately $0.3 million for the six months ended June 30, 2025.

The decrease for the six months ended June 30, 2026, was primarily attributable to cash used to fund operations, an increase in prepaid expenses and a decrease in other current assets and accounts payable and accrued liabilities.

The increase in cash and cash equivalents for the six months ended June 30, 2025 was primarily attributable to cash provided by financing activities related to proceeds from at-the-market sales of common stock of $2.0 million, proceeds from the issuance of common stock through a May 2025 Public Offering of $4.2 million and proceeds from the exercise of warrants of $1.3 million, which was partially offset by payments on director and officer insurance of $0.3 million.

Liquidity & Capital Resources Outlook

As of March 31, 2026, we had approximately $50.4

million in operating bank accounts and money market funds, with working capital of approximately $51.2 million.

We are dependent on obtaining

additional working capital funding from the sale of equity and/or debt securities in order to continue to execute our development plans

and continue operations.

Our primary use of cash is to fund operating

expenses, primarily general and administrative and research and development expenditures.

Cash used to fund operating expenses is impacted

by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid

Because of the numerous risks and uncertainties

associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of

our operating capital requirements.

As of June 30, 2026, we had approximately $45.7 million in operating bank accounts and money market funds, with working capital of approximately $46.4 million.

We are dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute our development plans and continue operations.

Our primary use of cash is to fund operating expenses, primarily general and administrative and research and development expenditures.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.

Our future funding requirements will depend on many factors, including, but not limited to:

8 unchanged sentences

● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

We believe that our current available cash and

cash equivalents will be sufficient to meet our working capital needs for at least the next twelve months and beyond.

However, we will

need significant additional funds to meet operational needs and capital requirements for clinical trials, other research and development

expenditures, and business development activities.

We believe that our current available cash and cash equivalents will be sufficient to meet our working capital needs for at least the next twelve months and beyond.

However, we will need significant additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities.

We currently have no credit facility or committed sources of capital.

Because of the

numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate

the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

Contractual Obligations

See Note 9 – Commitments and Contingencies

in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a summary of our contractual

See Note 9 – Commitments and Contingencies in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a summary of our contractual obligations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31,

2026, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Exchange Act.

We did not have any off-balance sheet arrangements as of June 30, 2026, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Exchange Act.

Critical Accounting Estimates

Our critical accounting estimates, which include

(1) stock-based compensation and (2) fair value measurements, are more fully described in the Notes to our Consolidated Financial Statements

included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed on March 30, 2026.

During the three months

ended March 31, 2026, there were no material changes to our critical accounting policies and estimates from those described in our most

recent Annual Report on Form 10-K.

Our critical accounting estimates, which include (1) stock-based compensation and (2) fair value measurements, are more fully described in the Notes to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed on March 30, 2026.

During the six months ended June 30, 2026, there were no material changes to our critical accounting policies and estimates from those described in our most recent Annual Report on Form 10-K.

Recent Accounting Pronouncements

See Note 2 - Summary of Significant Accounting Policies in the Notes

to our Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a description of recent accounting

pronouncements applicable to our financial statements.

See Note 2 - Summary of Significant Accounting Policies in the Notes to our Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.

Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

As a smaller reporting company, we are not required

to provide the information required by this Item.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis