What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-15 · 101 added, 41 removed, 107 unchanged (57% of the section changed)

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On April 30, 2025 (the “Closing Date”), the Company consummated the business combination contemplated by the Business Combination Agreement, pursuant to which (a) Liminatus Merger Sub merged with and into Liminatus (the “Liminatus Merger”), with Liminatus surviving the Liminatus Merger as a direct wholly-owned subsidiary of the Company, and (b) simultaneously with the Liminatus Merger, SPAC Merger Sub merged with and into Iris (the “SPAC Merger” and, together with the Liminatus Merger, the “Mergers”), with Iris surviving the SPAC Merger as a direct wholly-owned subsidiary of the Company (the transactions contemplated by the foregoing clauses (a) and (b) the “Business Combination”) , and in connection therewith the Company changed its name from “Iris Parent Holding Corp.” to “Liminatus Pharma, Inc.

Pursuant to the Business Combination Agreement, among other matters, at the effective time of the Business Combination (the “Effective Time”), (i) every issued and outstanding security issued by Iris during its initial public offering (each, an “Iris Unit”) was automatically separated and broken out into its constituent parts and the holder thereof was deemed to hold one share of Iris Class A common stock, par value $0.0001 per share (the “Iris Class A Shares”) and one-fourth of one redeemable warrant that was included as part of each Iris Unit (the “Public Warrants”), and such underlying constituent securities of Iris were converted in accordance with the applicable terms of the Business Combination Agreement, (ii) at the Effective Time, each issued and outstanding Iris Class A Share was converted automatically into and thereafter represent the right to receive one share of common stock, par value $0.0001 per share (“Common Stock”), of the Company, following which all Iris Class A Shares ceased to be outstanding and were automatically canceled and ceased to exist, (iii) at the Effective Time, each issued and outstanding Public Warrant immediately and automatically represented the right to purchase shares of Common Stock on the same terms and conditions as are set forth in the applicable warrant agreement, (iv) at the Effective Time, each issued and outstanding non-redeemable warrant of Iris that was issued by Iris in a private placement at the time of the consummation of its initial public offering, entitling the holder thereof to purchase one Iris Class A Share at $11.50 per share, except those issued to Cantor Fitzgerald & Co.

Pursuant to the Business Combination Agreement, among other matters, at the effective time of the Business Combination (the “Effective Time”), (i) every issued and outstanding security issued by Iris during its initial public offering (each, an “Iris Unit”) was automatically separated and broken out into its constituent parts and the holder thereof was deemed to hold one share of Iris Class A common stock, par value $0.0001 per share (the “Iris Class A Shares”) and one-fourth of one redeemable warrant that was included as part of each Iris Unit (the “Public Warrants”), and such underlying constituent securities of Iris were converted in accordance with the applicable terms of the Business Combination Agreement, (ii) at the Effective Time, each issued and outstanding Iris Class A Share was converted automatically into and thereafter represent the right to receive one share of common stock, par value $0.0001 per share, of the Company, following which all Iris Class A Shares ceased to be outstanding and were automatically canceled and ceased to exist, (iii) at the Effective Time, each issued and outstanding Public Warrant immediately and automatically represented the right to purchase shares of common stock on the same terms and conditions as are set forth in the applicable warrant agreement, (iv) at the Effective Time, each issued and outstanding non-redeemable warrant of Iris that was issued by Iris in a private placement at the time of the consummation of its initial public offering, entitling the holder thereof to purchase one Iris Class A Share at $11.50 per share, except those issued to Cantor Fitzgerald & Co.

(“Cantor”), were forfeited, and (v) the private placement warrants issued to Cantor immediately and automatically represented the right to purchase shares of common stock.

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The net assets of Iris were stated at fair value, with no goodwill or other intangible assets recorded.

Upon the consummation of the Business Combination, the Iris Class A Shares, Iris Units and Public Warrants ceased trading on the OTC Pink Marketplace, and the Common Stock and Public Warrants began trading on The Nasdaq Stock Market (“Nasdaq”) under the trading symbols “LIMN” and “LIMNW,” respectively.

Upon the consummation of the Business Combination, the Iris Class A Shares, Iris Units and Public Warrants ceased trading on the OTC Pink Marketplace, and the Company’s common stock and Public Warrants began trading on The Nasdaq Stock Market (“Nasdaq”) under the trading symbols “LIMN” and “LIMNW,” respectively.

February 2026 Public Offering

On February 18, 2026, we closed a best efforts public offering for the sale of (i) 8,270,000 shares of our common stock, (ii) 5,543,000 pre-funded warrants to purchase up to 5,543,000 shares of our common stock and (iii) 13,813,000 common stock purchase warrants to purchase up to 20,719,500 shares of common stock, at a combined public offering price of $0.29 per share (or $0.2899 per pre-funded warrant) and accompanying warrant (the “Offering”), for aggregate net proceeds of approximately $3.44 million after deducting the estimated offering expenses, including the placement agent fees.

On February 18, 2026, we closed a best efforts public offering for the sale of (i) 8,270,000 shares of our common stock, (ii) 5,543,000 pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 5,543,000 shares of our common stock and (iii) 20,719,500 common stock purchase warrants (the “Common Stock Warrants”) to purchase up to 20,719,500 shares of common stock, at a combined public offering price of $0.29 per share (or $0.2899 per pre-funded warrant) and accompanying warrant (the “Offering”), for aggregate net proceeds of approximately $3.44 million after deducting the estimated offering expenses, including the placement agent fees.

Each pre-funded warrant has an exercise price of $0.0001 per share upon issuance for one share of common stock and will not expire prior to exercise.

Each warrant has an exercise price of $0.29 per share, is exercisable upon issuance for one and a half shares of common stock, and will expire five years following the date of issuance.

Each warrant has a reduced exercise price of $0.18 per share, is exercisable upon issuance for one and a half shares of common stock and will expire five years following the date of issuance.

The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the common stock and the exercise price.

Maxim Group LLC acted as the placement agent in connection with the Offering.

Maxim Group LLC (“Maxim”) acted as the placement agent in connection with the Offering.

In connection with the Offering, on February 17, 2026, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain purchasers party thereto.

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We also agreed not to effect or enter into an agreement to effect any issuance of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock involving a Variable Rate Transaction (as defined in the Purchase Agreement) until 180 days after the closing date of the Offering, subject to certain exceptions.

In connection with the Offering, on February 17, 2026, we entered into a placement agency agreement with Maxim Group LLC, as placement agent in connection with the Offering (the “Placement Agent”).

We paid the Placement Agent a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering.

We also agreed to reimburse the Placement Agent for all reasonable out-of-pocket costs and expenses incurred in connection with the Offering in an aggregate amount up to $100,000.

In addition, we issued to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase 690,650 shares of common stock (representing 5.0% of the number of shares of common stock sold in the Offering).

In connection with the Offering, on February 17, 2026, we entered into a placement agency agreement with Maxim, as placement agent in connection with the Offering.

We paid Maxim a cash fee of 8.0% of the aggregate gross proceeds raised in the Offering.

We also agreed to reimburse Maxim for all reasonable out-of-pocket costs and expenses incurred in connection with the Offering in an aggregate amount up to $100,000.

In addition, we issued to Maxim warrants (the “Placement Agent Warrants”) to purchase 690,650 shares of common stock (representing 5.0% of the number of shares of common stock sold in the Offering).

The Placement Agent Warrants are immediately exercisable at an exercise price of $0.319 (or 110% of the public offering price for the shares of common stock and common warrants offered in the Offering) and will expire on the fifth anniversary of the commencement of sales of the Offering.

June 2026 Warrant Inducement

On June 3, 2026, we entered into a warrant exercise inducement offer letter (the “Inducement Letter Agreement”) with a holder of our existing common stock warrants exercisable for an aggregate of 10,344,000 shares of our common stock (collectively, the “Existing Warrants”), to exercise its Existing Warrants at a reduced exercise price of $0.18 per share, in exchange for our agreement to issue new common stock warrants to purchase an aggregate of up to 20,688,000 shares of common stock, consisting of (i) warrants to purchase up to 10,344,000 shares of common stock at an exercise price per share of $0.18 (the “New Black-Scholes Warrants”) and (ii) warrants to purchase up to 10,344,000 shares of common stock at an exercise price per share of $0.18 (the “New Change of Control Warrants” and, together with the New Black-Scholes Warrants, the “Inducement Warrants”) (the “Warrant Inducement”).

The aggregate gross proceeds

from the exercise of the Existing Warrants is approximately $1,861,921, before deducting financial advisory fees.

The fair value of the Inducement Warrants was $2,211,295 at inducement, or $0.18 per instrument.

In connection with the transaction described above, we entered into a financial advisory services agreement, dated June 3, 2026, with Maxim, pursuant to which we agreed to pay Maxim for its services a cash fee of up to 8% of the gross proceeds received by us in connection with the exercise of the Existing Warrants.

The Warrant Inducement, which resulted in the issuance of the Company’s common stock in exchange for the cash exercise of the Existing Warrants, is considered a modification of the Existing Warrants under the guidance of ASC 815-40.

The modification is consistent with the “Equity Issuance” classification under that guidance as the reason for the modification was to induce the holders of the Existing Warrants to cash exercise their warrants, resulting in the imminent exercise of the Existing Warrants, which raised equity capital and generated net proceeds for the Company.

As the Existing Warrants were classified as equity instruments before and after the exchange, and as the exchange is directly attributable to an equity offering, the Company recognized the effect of the modification of $117,806 as an equity issuance cost.

The amount of the equity issuance cost recognized for the warrant modification was determined at the incremental fair value of the modified Existing Warrants immediately before and after the warrant modification.

InnocsAI Acquisition

On May 17, 2026, we entered into a Merger Agreement (the “Original Merger Agreement”) with InnocsAI LLC, a Delaware limited liability company (“InnocsAI”), and NamChul Jung, in his capacity as the representative of the members of InnocsAI.

Under the Original Merger Agreement, the aggregate consideration payable to the members of InnocsAI consisted of (i) 1,600,000,000 shares of our common stock, valued at an issuance price of $0.20 per share (the “Closing Payment Shares”), and (ii) contingent value rights, on terms to be agreed upon by the parties, representing in the aggregate the right to receive 20% of the net proceeds from any future strategic sale, out-license, transfer or other disposition of, or exit transaction involving, the assets acquired from InnocsAI.

Upon completion of the transactions contemplated by the Original Merger Agreement, all issued and outstanding membership interests of InnocsAI were to be canceled and automatically converted into the right to receive the Closing Payment Shares.

The assets to be acquired included a portfolio of oncology-focused biologic and cellular therapy programs centered on CAR-T and antibody-related technologies.

These technologies are designed to address certain limitations observed in current approaches to hematologic malignancies and solid tumors, including antigen escape, tumor heterogeneity, limited T-cell persistence, tumor microenvironment-mediated suppression and lineage-restricted target coverage.

Chris Kim, our Chief Executive Officer and a member of our board of directors, is also a director of InnocsAI and the Chief Executive Officer and controlling member of Valetudo Therapeutics LLC, a member of InnocsAI.

On June 29, 2026, we, InnocsAI and Mr.

Jung amended and restated the Original Merger Agreement (as so amended and restated, the “Amended and Restated Merger Agreement”).

The Amended and Restated Merger Agreement revised the structure of the transaction to allow closing prior to obtaining stockholder approval and provided that the 1,600,000,000 shares of our common stock comprising the merger consideration would instead be paid in a combination of shares of common stock and shares of newly designated non-voting convertible preferred stock.

As contemplated by the Original Merger Agreement, and subject to the terms and conditions of the Amended and Restated Merger Agreement, InnocsAI would merge with and into a new wholly-owned Delaware subsidiary (“Merger Sub”), with InnocsAI ceasing to exist as a separate legal entity and Merger Sub continuing as the surviving entity (the “InnocsAI Merger”).

Pursuant to the Amended and Restated Merger Agreement, upon completion of the InnocsAI Merger, the members of InnocsAI would receive shares of our common stock up to the maximum number that could be issued without prior stockholder approval under applicable Nasdaq listing rules (or an estimated 19.99% of the outstanding common stock immediately prior to the closing of the InnocsAI Merger).

The balance of the merger consideration would be paid in shares of our newly designated Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”), having the rights, preferences, powers and privileges set forth in the applicable Certificate of Designation (as defined below).

Each share of Series A Preferred Stock would be convertible into 10,000 shares of common stock.

The Series A Preferred Stock would not become convertible unless and until we obtained stockholder approval for the issuance of the underlying shares of common stock to the extent required under applicable Nasdaq listing rules.

On July 2, 2026, the InnocsAI Merger was completed, pursuant to which we acquired InnocsAI.

In connection with the closing of the InnocsAI Merger, we issued to the former members of InnocsAI an aggregate of 11,188,729 shares of common stock and an aggregate of 158,881.1271 shares of Series A Preferred Stock.

Pursuant to the Amended and Restated Merger Agreement, we acquired InnocsAI which is primarily composed of intangible assets (i.e.

its portfolio of oncology-focused biologic and cellular therapy program).

The InnocsAI Merger is further considered an asset acquisition under ASC 805 as it does not meet the definition of a business since substantially all of the fair value of the assets acquired are concentrated in a group of similarly identifiable assets.

Furthermore, the InnocsAI Merger was deemed to be an asset acquisition as InnocsAI did not meet the definition of a business under SEC Rule 11-01 (d) of Regulation S-X (“Rule 11-01 (d)”), where a business, for purposes of Rule 11-01 (d), is identified by the continuity of operations before and after the transaction.

InnocsAI has no substantive revenue producing activities, employee base, sales force, customer base, operating rights or production techniques, thus, not meeting the definition of a business under Rule 3-05.

On June 29, 2026, in connection with the Amended and Restated Merger Agreement, we entered into a registration rights agreement (the “Registration Rights Agreement”) with the existing members of InnocsAI, pursuant to which we have agreed to provide such holders with “piggy-back” and Form S-3 registration rights, covering shares of common stock (including shares issuable upon conversion of preferred stock) received in the InnocsAI Merger.

We have agreed to bear the registration expenses.

On June 29, 2026, in connection with the Amended and Restated Merger Agreement, InnocsAI, for the benefit of the Company and its affiliates, successors and subsidiaries, entered into a non-competition and non-solicitation agreement (the “Non-Compete Agreement”) with certain key employees of InnocsAI, pursuant to which each subject party has agreed not to compete with or solicit the employees, customers, or suppliers of InnocsAI and its affiliates for two years after the merger closing, and to maintain confidentiality regarding company information.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following is a comparative of our results of operations for the three months ended March 31, 2026 and 2025:

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

The following is a comparative of our results of operations for the three months ended June 30, 2026 and 2025:

For the three months ended June 30,

General and administrative

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Loss from operations

Other expense, net

Other (expense) income, net

Net (loss) income

Operating Expenses

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General and administrative expenses consists primarily of professional service fees, including accounting and legal services and other general operating expenses.

General and administrative expenses increased by $436,678 during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 primarily due to increases in accounting and legal expenses incurred in connection with the Company now operating as publicly traded company.

General and administrative expenses decreased by $339,303 during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to accounting and legal expenses incurred in connection with the Business Combination during the three months ended June 30, 2025, as compared to no such costs during the three months ended June 30, 2026.

Research and Development Expenses

Research and development expenses consist of costs incurred by InnoBation Bio Co, Ltd.

(“Innobation”) who was performing the research and development activities for the Company in accordance with the license agreements with Innobation.

Research and development expenses increased by $400,000 as a result of costs incurred under the CD47 license agreement during the three months ended March 31, 2026 as compared no such costs incurring during the three months ended March 31, 2025.

Other Expenses, net

The other expense, net decreased by $40,490 from $63,306 of other expense for the three months ended March 31, 2025 to $22,816 of other expense for the three months ended March 31, 2026.

The Company recognized interest expense of $18,638 on related party promissory notes during the three months ended March 31, 2026 as compared to interest expense of $115,512 during the three months ended March 31, 2025 due to a decrease in the related party promissory notes principal balance following the closing of the Business Combination.

Further, the Company recognized no interest income on loans receivable with Iris during the three months ended March 31, 2026 as compared to interest income of $52,206 during the three months ended March 31, 2025.

In connection with the closing of the Business Combination on April 30, 2025, the loans receivable with Iris were terminated, thus no interest income is expected in future periods.

(“Innobation”) who is performing the research and development activities for the Company in accordance with the license agreements with Innobation.

Research and development expenses increased by $600,000 as a result of costs incurred under the CD47 license agreement during the three months ended June 30, 2026 as compared no such costs incurring during the three months ended June 30, 2025.

Other (Expenses) Income, net

The other (expense) income, net decreased by $1,259,849 from $1,231,498 of other income for the three months ended June 30, 2025 to $28,351 of other expense for the three months ended June 30, 2026.

The decrease in other (expenses) income, net is primarily

due to a decrease in amounts of unrelated vendor payables forgiven of $2,130,782.

Furthermore, the Company recognized an unrealized loss on the change in the fair value of deferred underwriting fee common stock payable of $756,000 during the three months ended June 30, 2025 as compared to no such loss during the three months ended June 30, 2026.

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

The following is a comparative of our results of operations for the six months ended June 30, 2026 and 2025:

For the six months ended June 30,

General and administrative

Research and development

Total operating expenses

Loss from operations

Other (expense) income, net

Operating Expenses

General and Administrative Expenses

General and administrative expenses consists primarily of professional service fees, including accounting and legal services and other general operating expenses.

General and administrative expenses increased by $97,375 during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 primarily due to higher accounting and legal expenses incurred as a result of the Company operating as a publicly traded company following the closing of the Business Combination, whereas the Company was not publicly traded prior to the Business Combination.

Research and Development Expenses

Research and development expenses consist of costs incurred by Innobation who is performing the research and development activities for the Company in accordance with the license agreements with Innobation.

Research and development expenses increased by $1,000,000 as a result of costs incurred under the CD47 license agreement during the six months ended June 30, 2026 as compared to no such costs incurring during the six months ended June 30, 2025.

Other (Expenses) Income, net

The other (expense) income, net decreased by $1,219,359 from $1,168,192 of other income for the six months ended June 30, 2025 to $51,167 of other expense for the six months ended June 30, 2026.

The decrease in other (expenses) income, net is primarily due to a decrease in amounts of unrelated vendor payables forgiven of $2,130,782 during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Furthermore, the Company recognized an unrealized loss on the change in the fair value of deferred underwriting fee common stock payable of $756,000 during the six months ended June 30, 2025 as compared to no such loss during the six months ended June 30, 2026.

Liquidity and Capital Resources

The Company is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern for one year after the date that the condensed consolidated financial statements are issued.

Through March 31, 2026, the Company has funded its operations mainly through equity and debt financings, including the proceeds from the Mergers and the PIPE Financing, and the Offering (as described below).

As of March 31, 2026, the Company had $1,907,674 of cash in its bank accounts.

As of March 31, 2026 and December 31, 2025, there was $1,442,500 of related party debts, which are included in Short-term debt, related parties in the accompanying unaudited condensed consolidated balance sheets.

The Company has an accumulated deficit of $39,995,447 as of March 31, 2026.

The Company had a loss from operations and net loss of $1,100,898 and $1,123,714, respectively, for the three months ended March 31, 2026.

The Company had a loss from operations and net loss of $264,220 and $327,526, respectively, for the three months ended March 31, 2025.

On February 18, 2026, the Company completed a “best efforts” public offering of (i) 8,270,000 shares of its common stock, (ii) 5,543,000 pre-funded warrants to purchase up to 5,543,000 shares of common stock (the “Pre-Funded Warrants”) and (ii) 13,813,000 common stock purchase warrants to purchase up to 20,719,500 shares of common stock, at a combined public offering price of $0.29 per share (or $0.2899 per Pre-Funded Warrant) and accompanying warrant (the “Offering”).

In connection with the Offering, the Company received net proceeds of approximately $3.44 million, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.

Through June 30, 2026, the Company has funded its operations mainly through equity and debt financings, including the proceeds from the Mergers, the PIPE Financing, the Offering and the Warrant Inducement.

As of June 30, 2026, the Company had $3,017,096 of cash in its bank accounts.

As of June 30, 2026, there was $1,442,500 of related party debts, which are included in short-term debt, related parties in the accompanying unaudited condensed consolidated balance sheets (see Note 4).

The Company has an accumulated deficit of $41,402,706 as of June 30, 2026.

The Company had a loss from operations and net loss of $2,479,806 and $2,530,973, respectively, for the six months ended June 30, 2026.

The Company had a loss from operations and net loss of $1,378,908 and $1,407,259, respectively, for the three months ended June 30, 2026.

On February 18, 2026, the Company completed a “best efforts” public offering of (i) 8,270,000 shares of its common stock, (ii) 5,543,000 Pre-Funded Warrants to purchase up to 5,543,000 shares of common stock and (ii) 20,719,500 Common Stock Warrants to purchase up to 20,719,500 shares of common stock, at a combined public offering price of $0.29 per share (or $0.2899 per Pre-Funded Warrant) and accompanying warrant.

In connection with the Offering, the Company received net proceeds of $3,444,427, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.

On June 3, 2026, the Company entered into the Inducement Letter Agreement with a holder of its Existing Warrants to exercise 10,344,000 of its Existing Warrants at a reduced exercise price of $0.18 per share for an aggregate of 10,344,000 shares of its common stock.

In connection with the Warrant Inducement, the Company received net proceeds of $1,622,967, after deducting the estimated offering expenses payable by the Company including the placement agent fees.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) ASC 205-40, Presentation of Financial Statements—Going Concern , management has concluded that there is substantial doubt about its ability to continue as a going concern for one year after the date that the accompanying unaudited condensed consolidated financial statements are issued.

The Company’s unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Management’s plans relating to the above include raising additional cash through equity and debt financings or other arrangements to fund operations.

Management’s plans relating to the above include raising additional cash through further equity and debt financings or other arrangements to fund operations.

There can be no assurance that the Company will be able to raise adequate capital under acceptable terms, if at all.

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If the Company is unable to obtain such additional financing, future operations would need to be reevaluated.

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:

For the six months ended June 30,

Net cash used in operating activities

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Net change in cash

Net cash used in operating activities for the three months ended March 31, 2026 increased by $1,855,896 as compared to the three months ended March 31, 2025.

The increase in cash used in operating activities is primarily due to an increase in net loss during the three months ended March 31, 2026 of $935,688, when compared to the net loss for the three months ended March 31, 2025, an increase in prepaid expenses of $657,107 and an increase in payment of accounts payable and accrued expenses of $173,923 for the three months ended March 31, 2026 as compared to the same period in the prior year.

The increase is further a result of operating activities, adjusted for non-cash transactions including deprecation expense of $518 and a change in fair value of warrant liabilities of $4,178 for the three months ended March 31, 2026 as compared to no such activity during the three months ended March 31, 2025

Net cash used in investing activities for the three months ended March 31, 2026 decreased by $575,000 as compared to the three months ended March 31, 2025.

The decrease in cash used in investing activities is primarily to less issuances of loans to Iris prior to the Business Combination.

Net cash provided by financing activities for the three months ended March 31, 2026 increased by $2,872,308 as compared to the three months ended March 31, 2025.

The increase in cash provided by financing activities is primarily due to proceeds received of $3,585,308 from the Offering, net of offering costs.

Further, the Company received no proceeds from related party debt during the three months ended March 31, 2026 as compared to proceeds of $713,000 during the three months ended March 31, 2025.

Net cash used in operating activities for the six months ended June 30, 2026 decreased by $5,990,571 as compared to the six months ended June 30, 2025.

The decrease in cash used in operating activities is primarily due to decreases in due from related parties of $3,427,000, a decrease in amounts of unrelated vendor payables forgiven of $2,142,297, payment of accounts payable and accrued expenses of $1,812,806 and amounts due to research and development partner of $1,782,297 offset by an increase in net loss of $2,391,734 and increase in the fair value of deferred underwriting fees of common stock payable of $756,000, for the six months ended June 30, 2026 as compared to the same period in the prior year.

The decrease is further a result of operating activities, adjusted for non-cash transactions including forgiveness of unrelated vendor payables of $2,142,297 offset by the change in the fair value of deferred underwriting fees of common stock payable of $756,000 for the six months ended June 30, 2026 as compared to no such activity during the six months ended June 30, 2025

Net cash used in investing activities for the six months ended June 30, 2026 decreased by $775,000 as compared to the six months ended June 30, 2025.

The decrease in cash used in investing activities is primarily due to less issuances of loans to Iris due to the completion of the Business Combination.

Net cash provided by financing activities for the six months ended June 30, 2026 decreased by $5,368,033 as compared to the six months ended June 30, 2025.

The decrease in cash provided by financing activities is primarily due to gross proceeds received of $10,556,500, offset by $2,563,738 in payments for transaction costs in connection with the Business Combination during the six months ended June 30, 2025 as compared to the aggregate gross proceeds of $5,664,729 received from the Offering, the Warrant Inducement and the exercise of warrants during the six months ended June 30, 2026.

Further, the Company had proceeds from related party debt of $4,340,000, which is offset by payments of related party debt of $1,300,000 during the six months ended June 30, 2025.

No such payments occurred during the six months ended June 30, 2026.

Critical Accounting Policies and Estimates

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This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance, modification, and as of each subsequent quarterly period end date while the warrants are outstanding.

As of March 31, 2026, 13,813,000 of the Company’s Common Stock Warrants, 690,650 Placement Agent Warrants and 5,094,623 of the Company’s Public Warrants were accounted for as equity-classified instruments and 835,555 private placement warrants were accounted for as liability-classified instruments.

As of June 30, 2026, 20,688,000 Inducement Warrants, 9,625,500 Common Stock Warrants, 690,650 Placement Agent Warrants and 5,094,623 Public Warrants were accounted for as equity-classified instruments and 835,555 private placement warrants were accounted for as liability-classified instruments.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

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The Company assesses the classification of its warrants at each reporting date to determine whether a change in classification between equity and liability is required.

During the three months ended March 31, 2026, the Company had an unrealized gain on the change in fair value of the warrant liabilities of $4,178.

During the three months ended March 31, 2025, the Company had no unrealized gain or loss on the change in fair value of the warrant liabilities.

During the three and six months ended June 30, 2026, the Company had an unrealized gain on the change in fair value of the warrant liabilities of $29,245 and $33,423, respectively.

During the three and six months ended June 30, 2025, the Company had an unrealized gain on the change in fair value of the warrant liabilities of $116,894.

Recently Issued Accounting Pronouncements – Not Yet Adopted

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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