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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 163 added, 136 removed, 438 unchanged (41% of the section changed)

4 unchanged sentences

(In thousands, except share data)

September 30,

2025 December 31,

2 unchanged sentences

Marketable securities

16,347 27,942

Accounts receivable 750 900

Prepaid and other current assets 2,034 2,433

14 unchanged sentences

issued 8,620,900

and 8,150,635 shares at September 30, 2024 and December 31, 2023, respectively;

outstanding, 8,319,600 and 8,149,897 shares at September 30, 2024 and December 31, 2023,

and 8,409,582 shares at March 31, 2025 and December 31, 2024, respectively;

outstanding, 8,620,162 and 8,408,844 shares at March 31, 2025 and December 31, 2024,

Additional paid-in capital 578,923 578,418

Treasury stock, at cost;

738 shares at September 30, 2024 and December 31, 2023

738 shares at March 31, 2025 and December 31, 2024

( 708 ) ( 708 )

11 unchanged sentences

(In thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Operating Expenses:

18 unchanged sentences

Basic and diluted shares

8,321 8,141 8,307 8,050

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net loss $ ( 4,724 ) $ ( 5,401 )

Other comprehensive gain (loss):

Available for sale securities - net unrealized gain 12 — 3 1

Available for sale securities - net unrealized loss ( 2 ) ( 13 )

Cumulative translation adjustment arising during the period 5 ( 49 )

17 unchanged sentences

Shares Amount

Balance at June 30, 2023 8,133 $ 8 $ 576,173 $ ( 50 ) $ ( 517,455 ) $ ( 708 ) $ 57,968 $ ( 254 ) $ 57,714

Net loss — — — — ( 5,261 ) — ( 5,261 ) — ( 5,261 )

Share-based compensation 7 — 301 — — — 301 — 301

Foreign currency translation adjustment — — — ( 50 ) — — ( 50 ) — ( 50 )

Balance at September 30, 2023 8,140 $ 8 $ 576,474 $ ( 100 ) $ ( 522,716 ) $ ( 708 ) $ 52,958 $ ( 254 ) $ 52,704

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Treasury

Lisata Therapeutics,

Stockholders'

Subsidiary Total

Shares Amount

Balance at December 31, 2023 8,151 $ 8 $ 576,971 $ ( 42 ) $ ( 528,081 ) $ ( 708 ) $ 48,148 $ ( 254 ) $ 47,894

1 unchanged sentence

Share-based compensation 157 — 312 — — — 312 — 312

Net proceeds from issuances of common stock 76 — 297 — — — 297 — 297

Proceeds from option exercises 83 — 155 — — — 155 — 155

Unrealized gain on marketable securities — — — 1 — — 1 — 1

Foreign currency translation adjustment — — — ( 72 ) — — ( 72 ) — ( 72 )

Balance at September 30, 2023 8,140 $ 8 $ 576,474 $ ( 100 ) $ ( 522,716 ) $ ( 708 ) $ 52,958 $ ( 254 ) $ 52,704

See accompanying notes to consolidated financial statements.

Common Stock Additional

Capital Accumulated

Comprehensive Loss Accumulated

Deficit Treasury

Lisata Therapeutics,

Stockholders'

Subsidiary Total

Shares Amount

Balance at June 30, 2024 8,322 $ 8 $ 577,552 $ ( 77 ) $ ( 538,526 ) $ ( 708 ) $ 38,249 $ ( 254 ) $ 37,995

Net loss — — — — ( 4,930 ) — ( 4,930 ) — ( 4,930 )

Share-based compensation ( 2 ) — 326 — — — 326 — 326

Unrealized gain on marketable securities — — — 12 — — 12 — 12

Unrealized loss on marketable securities — — — ( 13 ) — — ( 13 ) — ( 13 )

Foreign currency translation adjustment — — — ( 49 ) — — ( 49 ) — ( 49 )

Balance at September 30, 2024 8,320 $ 8 $ 577,878 $ ( 32 ) $ ( 543,456 ) $ ( 708 ) $ 33,690 $ ( 254 ) $ 33,436

Balance at March 31, 2024 8,308 $ 8 $ 577,283 $ ( 104 ) $ ( 533,482 ) $ ( 708 ) $ 42,997 $ ( 254 ) $ 42,743

Common Stock Additional

10 unchanged sentences

Net proceeds from issuances of common stock 56 1 211 — — — 212 — 212

Unrealized gain on marketable securities — — — 3 — — 3 — 3

Proceeds from option exercise 4 — 8 — — — 8 — 8

Unrealized loss on marketable securities — — — ( 2 ) — — ( 2 ) — ( 2 )

Foreign currency translation adjustment — — — 5 — — 5 — 5

Balance at September 30, 2024 8,320 $ 8 $ 577,878 $ ( 32 ) $ ( 543,456 ) $ ( 708 ) $ 33,690 $ ( 254 ) $ 33,436

Balance at March 31, 2025 8,621 $ 9 $ 578,923 $ ( 78 ) $ ( 552,790 ) $ ( 708 ) $ 25,356 $ ( 254 ) $ 25,102

LISATA THERAPEUTICS, INC.

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization 43 46

Loss on disposal of fixed assets — 3

Loss from equity method investment — 100

1 unchanged sentence

Changes in operating assets and liabilities:

Accounts receivable 150 —

Prepaid and other current assets 405 ( 872 )

5 unchanged sentences

Sale of marketable securities 14,514 25,360

Purchase of property and equipment ( 28 ) —

Investment in Impilo Therapeutics — ( 100 )

4 unchanged sentences

Net proceeds from issuance of common stock 212 —

Net cash (used in) provided by financing activities ( 110 ) 361

Net cash used in financing activities ( 23 ) ( 142 )

Effect of exchange rate changes on cash 2 ( 55 )

Net (decrease) increase in cash and cash equivalents ( 3,084 ) 274

Net increase (decrease) in cash and cash equivalents 4,008 ( 788 )

Cash and cash equivalents at beginning of period 16,209 22,593

4 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – The Business

Note 1 – Description of Business

Lisata Therapeutics, Inc.

3 unchanged sentences

Certepetide has also been shown to modify the tumor microenvironment (“TME”) by reducing T-regulatory cells and augmenting cytotoxic T cells, thereby making tumors more susceptible to immunotherapies while also inhibiting the metastatic cascade (i.e., the spread of cancer to other parts of the body).

The Company and its collaborators have amassed significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics.

The Company, its collaborators and other researchers have amassed and continue to amass significant non-clinical data demonstrating enhanced delivery of a range of existing and emerging anti-cancer therapies, including chemotherapeutics, immunotherapies, and RNA-based therapeutics.

To date, certepetide has also demonstrated favorable safety, tolerability and activity in completed and ongoing clinical trials designed to enhance delivery of standard-of-care chemotherapy for pancreatic cancer.

The Company is exploring certepetide as a means to enable a variety of treatment modalities to treat a range of solid tumors more effectively.

The Company is exploring certepetide as a means to enable a variety of therapeutic modalities to treat a range of solid tumors more effectively.

Currently, certepetide is the subject of several Phase 2 clinical studies being conducted globally in a variety of solid tumor types, including metastatic pancreatic ductal adenocarcinoma (mPDAC), cholangiocarcinoma, appendiceal cancer, colon cancer and glioblastoma multiforme in combination with a variety of anti-cancer regimens.

1 unchanged sentence

The Company's goal is to develop and commercialize products that address important unmet medical needs.

The Company has a history of net operating losses and negative cash flows from operating activities, and has cash, cash equivalents and marketable securities of approximately $ 25.8 million as of March 31, 2025.

The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenues from its products currently in development.

To manage capital for operating needs in the short-term, initiation of the FORTIFIDE study remains on hold as the Company is investigating a potentially faster and more cost-effective approach to achieving the study objective.

The Company has similarly decided to delay commencement of certain phase 3 readiness activities for chemistry, manufacturing and controls (“CMC”).

The Company believes that, as a result, it currently has sufficient cash to meet its funding requirements over the next year.

To meet our long-term liquidity needs, the Company expects that it will need additional financing, which could result in additional potential issuances of debt or equity securities in public or private financings, partnerships and/or collaborations and/or sale of assets.

Basis of Presentation

2 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of September 30, 2024, and the results of its operations and its cash flows for the periods presented.

In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of March 31, 2025, and the results of its operations and its cash flows for the periods presented.

The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2024 and 2023 included in our 2024 Form 10-K.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements.

Estimates also affect the reported amounts of expenses during the reporting period.

Estimates also affect the reported amounts of expenses during the reporting

The Company bases its estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

1 unchanged sentence

Accordingly, actual results could differ from those estimates and assumptions.

Segment Information

The Company operates as one operating segment, the research and development of its investigational drug product.

The Company's Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who manages the business on a consolidated basis.

Principles of Consolidation

14 unchanged sentences

Concentration of Risks

The Company is subject to credit risk from its portfolio of cash, cash equivalents and marketable securities.

The Company is subject to credit risk from its portfolio of cash, cash equivalents, accounts receivable and marketable securities.

Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S.

government, thereby reducing credit risk exposure.

Cash is held at major banks in the United States and may exceed federally insured limits.

The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The goals of the Company's investment policy, in order of priority, are as follows:

safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements, and a competitive after-tax rate of return.

The Company’s accounts receivable balance as of March 31, 2025 and December 31, 2024 is derived from its license agreement dated November 30, 2024, more fully described in Note 17.

The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements.

Accounts Receivable

Accounts receivable is stated at historical cost, less allowance for credit losses.

The Company records an expense based on a forward-looking current expected credit loss model to maintain its allowance for credit losses, which replaced the

allowance for doubtful accounts.

When determining its allowance for trade accounts receivable, the Company considers the probability of recoverability of accounts receivable based on experience, taking into account current collection trends and general economic factors, including bankruptcy rates.

The Company also considers future economic trends to estimate expected

credit losses over the lifetime of the asset.

Credit risks are assessed based on historical write-offs, net of recoveries, as well as an analysis of the aged accounts receivable balances with allowances generally increasing as the receivable ages.

Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as pending bankruptcies.

Account balances are written off against the allowance when it is determined that the receivable will not be recovered.

As of March 31, 2025 and December 31, 2024, there was no allowance for credit losses.

Marketable Securities

The Company determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation at each balance sheet date.

All of the Company's marketable securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents and marketable securities.

Unrealized gains and losses on available-for-sale securities are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity.

Other income (expense), net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any.

All of the Company's marketable securities are considered as available-for-sale and

carried at estimated fair values and reported in cash equivalents and marketable securities.

Unrealized gains and losses on available-for-sale securities, that are not the result of credit losses, are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity.

Other income (expense), net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and credit losses recognized through an allowance for credit losses, if any.

The cost of securities sold is based on the specific identification method.

10 unchanged sentences

Software 3 years

Leasehold improvements Life of lease

Leasehold improvements Shorter of useful life or lease term

Long-lived Assets

2 unchanged sentences

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset exceeds the fair value of the asset.

If other events or changes in circumstances indicate that the carrying amount of an asset that the Company expects to hold and use may not be recoverable, the Company will estimate the undiscounted future cash flows expected to result from the use of the asset and/or its eventual disposition, and recognize an

impairment loss, if any.

The impairment loss, if determined to be necessary, would be measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

7 unchanged sentences

Loss Per Share

Basic loss per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period.

Diluted loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding.

Basic loss per share is based on the weighted effect of all shares of common stock issued and outstanding and is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period.

Diluted loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock used in the basic loss per share calculation plus the number of shares of common stock that would be issued assuming conversion of all potentially dilutive securities outstanding.

Diluted loss per share is not presented as such potentially dilutive securities are anti-dilutive to losses incurred in all periods presented.

16 unchanged sentences

The intangible asset is stated at fair value and is amortized using the straight-line method over its estimated useful life of 5.00 years.

Amortization expense was $ 18 thousand and $ 53 thousand for the three and nine months ended September 30, 2024, respectively, and $ 18 thousand and $ 53 thousand for the three and nine months ended September 30, 2023, respectively.

Amortization expense was $ 17 thousand for the three months ended March 31, 2025, and $ 17 thousand for the three months ended March 31, 2024, respectively.

The intangible asset is reviewed for potential impairment when events or circumstances indicate that carrying amounts may not be recoverable.

15 unchanged sentences

If licenses are bundled with other performance obligations, the Company would utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

There was no revenue recognized for the three and nine months ended September 30, 2024 and 2023.

The Company recognized no revenue for the three months ended March 31, 2025 and 2024.

At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method.

4 unchanged sentences

Any such adjustments are allocated on a cumulative catch-up basis to satisfied and partially satisfied performance obligations, with the consideration allocated to an ongoing performance obligation being recognized over the period of performance.

For the three and nine months ended September 30, 2024 and September 30, 2023, the Company has not recognized revenue related to milestones.

For the three months ended March 31, 2025 and March 31, 2024, the Company has not recognized revenue related to milestones.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

1 unchanged sentence

Note 3 – Available-for-Sale Securities

The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in our Consolidated Balance Sheets (in thousands):

September 30, 2024 December 31, 2023

The following table is a summary of available-for-sale securities recorded in cash and cash equivalents or marketable securities in the Company's Consolidated Balance Sheets (in thousands):

March 31, 2025 December 31, 2024

Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Corporate debt securities $ 10,301 $ — $ ( 6 ) $ 10,295 $ 16,025 $ — $ ( 4 ) $ 16,021

Commercial paper — — — — 1,981 — — 1,981

Money market funds 12,129 — — 12,129 6,614 — — 6,614

5 unchanged sentences

The following table summarizes the classification of the available-for-sale securities in the Company's Consolidated Balance Sheets (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash equivalents $ 17,368 $ 10,613

1 unchanged sentence

Total $ 22,984 $ 25,649

The following table summarizes our portfolio of available-for-sale securities by contractual maturity (in thousands):

September 30, 2024

The following table summarizes the Company's portfolio of available-for-sale securities by contractual maturity (in thousands):

March 31, 2025

Amortized Cost Estimated Fair Value

4 unchanged sentences

Property and equipment consisted of the following (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Computer equipment 617 589

3 unchanged sentences

Property and equipment, net $ 74 $ 72

The Company’s results included depreciation expense of approximately $ 79 thousand and $ 89 thousand for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s results included depreciation expense of approximately $ 26 thousand and $ 29 thousand for the three months ended March 31, 2025 and 2024, respectively.

Note 5 – Income (Loss) Per Share

For the nine months ended September 30, 2024 and 2023, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive in the periods presented.

At September 30, 2024 and 2023, the Company excluded the following potentially dilutive securities (in thousands):

For the three months ended March 31, 2025 and 2024, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive in the periods presented.

At March 31, 2025 and 2024, the Company excluded the following potentially dilutive securities (in thousands):

Stock options 1,529 1,454

9 unchanged sentences

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

2 unchanged sentences

$ 17,368 $ 5,616 $ — $ 22,984 $ 10,613 $ 15,036 $ — $ 25,649

The carrying values of cash, cash equivalents, accounts payable and accrued expenses approximate fair value as of September 30, 2024 and December 31, 2023, due to the short maturity nature of these items.

The carrying values of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value as of March 31, 2025 and December 31, 2024, due to the short maturity nature of these items.

Note 7 – Accrued Liabilities

Accrued liabilities as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

Accrued liabilities as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Salaries, employee benefits and related taxes $ 1,532 $ 2,640

5 unchanged sentences

Note 8 – Operating Leases

The Company has an operating lease for one office which expires in 2025.

The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as most of the Company's leases do not provide an implicit rate of return.

The Company has an operating lease for one office which expires on September 30, 2025.

The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as the Company's lease does not provide an implicit rate of return.

The Company recognizes lease expense on a straight-line basis over the lease term.

2 unchanged sentences

The Company's lease includes an option for the Company to extend the lease term and/or sub-lease space in whole or in part.

Operating lease liabilities and right-of-use assets were recorded in the following captions of our balance sheet as follows (in thousands):

September 30, 2024 December 31, 2023

Operating lease liabilities and right-of-use assets were recorded in the following captions of the Company's balance sheet as follows (in thousands):

March 31, 2025 December 31, 2024

Right-of-Use Assets:

3 unchanged sentences

Accrued liabilities $ 92 $ 137

Other long-term liabilities — 137

Total Operating Lease Liabilities $ 92 $ 137

As of September 30, 2024, the weighted average remaining lease term for our operating lease was 1.00 year, and the weighted average discount rate for our operating lease was 9.625 %.

As of December 31, 2023, the weighted average remaining lease term for our operating leases was 1.75 years, and the weighted average discount rate for our operating leases was 9.625 %.

Future minimum lease payments under the lease agreement as of September 30, 2024 were as follows (in thousands):

As of March 31, 2025, the weighted average remaining lease term for the Company's operating lease was 0.50 years, and the weighted average discount rate for the Company's operating lease was 9.625 %.

As of December 31, 2024, the weighted average remaining lease term for the Company's operating lease was 0.75 years, and the weighted average discount rate for the Company's operating lease was 9.625 %.

Future minimum lease payments under the lease agreement as of March 31, 2025 were as follows (in thousands):

Years ended Operating Leases

12 unchanged sentences

If the Company’s public float exceeds $75.0 million on a future measurement date, it will no longer be subject to the Baby Shelf Limitation.

There were no issuances of common stock under the ATM Agreement for the three and nine months ended September 30, 2024.

During the three months ended March 31, 2025, the Company issued 55,578 shares of common stock under the ATM Agreement for net proceeds of $ 211,369 .

Since inception, the Company has issued 123,751 shares of common stock under the ATM Agreement for net proceeds of $ 492,216 .

Stock Options and Warrants

The following table summarizes the activity for stock options and warrants for the nine months ended September 30, 2024:

The following table summarizes the activity for stock options and warrants for the three months ended March 31, 2025:

Stock Options Warrants

6 unchanged sentences

Expired ( 18,215 ) 198.23 — —

Outstanding at September 30, 2024 1,454,492 $ 8.78 5.68 $ 199.2 1,496,744 $ 40.52 1.55 $ 9.0

Vested at September 30, 2024

Outstanding at March 31, 2025 1,529,391 $ 6.22 5.62 $ 79.0 1,496,744 $ 40.52 1.05 $ —

Vested at March 31, 2025

or expected to vest in the future 1,517,488 $ 6.24 5.59 $ 79.0 1,496,744 $ 40.52 1.05 $ —

Vested at September 30, 2024 1,287,104 $ 9.46 5.26 $ 196.3 1,421,744 $ 42.51 1.50 $ —

Vested at March 31, 2025 1,344,298 $ 6.60 5.14 $ 78.0 1,496,744 $ 40.52 1.05 $ —

Restricted Stock

During the nine months ended September 30, 2024 and 2023, the Company issued restricted stock for services as follows (in thousands, except share data):

Nine Months Ended September 30,

During the three months ended March 31, 2025 and 2024, the Company issued restricted stock for services as follows (in thousands, except share data):

Three Months Ended March 31,

Number of restricted stock issued 215,550 203,800

Value of restricted stock issued $ 819 $ 628

The weighted average estimated fair value of restricted stock issued for services in the three months ended March 31, 2025 and 2024 was $ 3.80 and $ 3.08 per share, respectively.

The fair value of the restricted stock was determined using the Company’s closing stock price on the date of issuance.

The vesting terms of restricted stock issuances are generally between one and four years .

The following is a summary of the changes in non-vested restricted stock for the nine months ended September 30, 2024:

The following is a summary of the changes in non-vested restricted stock for the three months ended March 31, 2025:

Restricted Stock Shares Weighted Average Grant-Date Fair Value

4 unchanged sentences

Forfeited — $ —

Non-vested at September 30, 2024 228,428 $ 3.67

Non-vested at March 31, 2025 294,611 $ 3.47

Restricted Stock Units

During the nine months ended September 30, 2024 and 2023, the Company issued restricted stock units for services as follows (in thousands, except share data):

Nine Months Ended September 30,

During the three months ended March 31, 2025 and 2024, the Company issued restricted stock units for services as follows (in thousands, except share data):

Three Months Ended March 31,

Number of restricted stock units issued 78,945 205,300

Value of restricted stock units issued $ 300 $ 632

The weighted average estimated fair value of restricted stock units issued for services in the nine months ended September 30, 2024 and 2023 was $ 3.08 and $ 3.00 per share, respectively.

The weighted average estimated fair value of restricted stock units issued for services in the three months ended March 31, 2025 and 2024 was $ 3.80 and $ 3.08 per share, respectively.

The fair value of the restricted stock units was determined using the Company’s closing stock price on the date of issuance.

The vesting terms of restricted stock unit issuances are generally one year , or upon the achievement of performance-based milestones.

The following is a summary of the changes in non-vested restricted stock units for the nine months ended September 30, 2024:

The following is a summary of the changes in non-vested restricted stock units for the three months ended March 31, 2025:

Restricted Stock Units Weighted Average Grant-Date Fair Value

4 unchanged sentences

Forfeited — $ —

Non-vested at September 30, 2024 210,900 $ 3.18

Non-vested at March 31, 2025 85,345 $ 3.98

Note 10 – Share-Based Compensation

1 unchanged sentence

The Company utilizes share-based compensation in the form of stock options, restricted stock, restricted stock units and warrants.

The following table summarizes the components of share-based compensation expense for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

The following table summarizes the components of share-based compensation expense for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Research and development $ 126 $ 86

1 unchanged sentence

Total share-based compensation expense $ 530 $ 454

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at September 30, 2024 were as follows (in thousands):

Stock Options Restricted Stock Units Warrants Restricted Stock

Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at March 31, 2025 were as follows (in thousands):

Stock Options Restricted Stock Units Restricted Stock

Unrecognized compensation cost $ 393 $ 251 $ 925

Expected weighted-average period in years of compensation cost to be recognized 2.21 0.75 2.32

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Total fair value of shares vested and the weighted average estimated fair values of shares granted for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Stock Options Warrants

Nine Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31, Three Months Ended March 31,

2025 2024 2025 2024

12 unchanged sentences

As a result of the ownership change, $ 88.2 million of Federal NOLs will expire unutilized.

The Company wrote off that portion of the deferred tax asset and reduced the corresponding valuation allowance resulting in approximately $ 34.0 million of remaining Federal NOLs as of December 31, 2022.

The write off of the deferred tax asset and the corresponding reduction in valuation allowance has no impact to the balance sheet or income statement.

The Company wrote off that portion of the deferred tax asset and reduced the corresponding valuation allowance resulting in $ 34.0 million of remaining Federal NOLs as of December 31, 2022.

The write-off of the deferred tax asset and the corresponding reduction in valuation allowance has no impact to the consolidated balance sheet or income statement.

Losses incurred before the ownership change on September 15, 2022 will be subject to an annual limitation of zero while losses incurred after September 15, 2022 will not be subject to limitations.

6 unchanged sentences

The Federal NOL of $ 459 thousand incurred in the post-acquisition period September 15, 2022 to December 31, 2022 is not subject to limitation, and does not expire.

As of December 31, 2023 and 2022, Cend’s wholly owned Australian subsidiary had approximately $ 2.4 million and $ 1.8 million, respectively, of NOLs which will be carried forward and do not expire.

As of December 31, 2024 and 2023, the Company's wholly owned Australian subsidiary had approximately $ 2.3 million and $ 2.4 million, respectively, of NOLs which will be carried forward and do not expire.

There is a full valuation allowance against the NOLs.

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As of December 31, 2024 and 2023, the Company’s uncertain tax positions were $ 344 thousand and $ 344 thousand, respectively.

The uncertain tax positions are due to the acquisition of Cend related to Federal and state credits and certain state

The uncertain tax positions are due to the acquisition of Cend related to Federal and state credits and certain state NOLs.

The Company will continue to evaluate its uncertain tax positions in future periods.

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The Company’s state tax returns remain open to examination for a period of three to four years from the date of the tax return filing.

On March 4, 2024, the Company received final approval from the New Jersey Economic Development Authority (“NJEDA”) under the Technology Business Tax Certificate Transfer Program (“Program”) to sell $ 8.9 million of its New Jersey net operating losses (“NJ NOLs”), which were subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 0.7 million.

The sale of NJ NOLs resulted in a $ 0.8 million deferred income tax benefit and a loss on sale of $ 0.1 million recorded in other income (expense) in the consolidated financial statements.

On August 16, 2022, the Inflation Reduction Act was signed into law.

The Inflation Reduction Act includes various tax provisions, which are effective for tax years beginning on or after January 1, 2023.

For tax years beginning after December 31, 2021, the Tax Cuts & Jobs Act of 2017 eliminated the option to deduct research and development expenditures as incurred and instead required taxpayers to capitalize and amortize them over five or 15 years beginning in 2022.

Since the Company is in a net operating loss position, the capitalization of research and development costs did not have a material impact on the Company’s results of operations for the year ended December 31, 2023.

The Company will continue to monitor the possible future impact of changes in tax legislation.

In January 2025, the Company sold a portion of their unused New Jersey net operating losses through the State of New Jersey Economic Development Authority's (“NJEDA”) Technology Business Tax Certificate Transfer Program (“Program”).

Under the Program, the Company sold $ 10.7 million of its New Jersey net operating losses (“NJ NOLs”) for net proceeds of $ 871 thousand.

The sale of NJ NOLs resulted in a $ 962 thousand deferred income tax benefit and a loss on sale of $ 91 thousand recorded in other income (expense) in the consolidated financial statements.

Note 12 – Segment Information

The Company operates as one operating segment, the research and development of its investigational drug product.

The Company used the management approach to determine its reportable operating segment.

The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis.

The Company is a clinical-stage pharmaceutical company and has limited revenue associated with a license and collaboration agreement.

The CODM uses net loss as a measure of profit and loss, and assesses Company performance through the achievement of its clinical development goals.

The CODM is regularly provided with budgeted and forecasted expense information which is used to determine the Company’s liquidity needs and cash allocation to its development programs.

The CODM uses cash and marketable securities as a measure of segment assets in managing the enterprise.

The Company had no revenue during the three months ended March 31, 2025 and 2024.

Depreciation and amortization expense was $ 43 thousand and $ 46 thousand for the three months ended March 31, 2025 and 2024, respectively.

Equity method investment expense was $ 0 and $ 100 thousand for the three months ended March 31, 2025 and 2024, respectively.

The following table illustrates our segment information for significant operating expenses and includes a reconciliation to net loss for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31

Operating Expenses:

Research and development by significant expense:

BOLSTER trial $ 788 $ 1,270

ASCEND trial 21 44

Chemistry, manufacturing and controls 220 655

Clinical department 1,156 1,133

Research and development 2,602 3,241

General and administrative by significant expense:

Corporate 1,144 1,132

Investor relations/public relations/communications 331 285

Finance 629 580

Legal 224 671

Business development 127 172

Share based compensation expense 404 368

General and administrative 3,245 3,360

Operating loss ( 5,847 ) ( 6,601 )

Other income, net 161 402

Benefit from income taxes ( 962 ) ( 798 )

Net loss $ ( 4,724 ) $ ( 5,401 )

Cash and marketable securities $ 25,833 $ 43,349

(1) Included in Other are the GBM study, FORTIFIDE study and research

oncology expenses

(2) Included in Other are facilities expense, human resource

and information technology expenses

Note 13 – Australia Research and Development Tax Incentive

The Company’s Australian subsidiary, which conducts core research and development activities, is eligible to receive a refundable tax incentive between 43.5 % to 48.5 % (depending upon the income tax rate) for qualified research and development activities.

As of September 30, 2024 and December 31, 2023, the Company had $ 0.2 million and $ 1.0 million, respectively, recorded as an income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

On July 26, 2024, the Company's Australian subsidiary received a $ 0.9 million tax refund from the Australian Taxation Office related to the 2023 tax year.

As of March 31, 2025 and December 31, 2024, the Company had $ 0.6 million and $ 0.6 million, respectively, recorded as an income tax incentive receivable in prepaid and other current assets in the consolidated balance sheets, as the Company determined that the expenses met the eligibility criteria and the amounts claimed are expected to be received shortly after the related tax returns are filed.

Note 14 – Contingencies

Contingencies

From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.

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In July 2023, the Company entered into a technology transfer agreement with Impilo Therapeutics (“Impilo”) under which the Company transferred its rights to its tumor penetrating nanocomplex (TPN) platform to Impilo.

As consideration for the

technology transfer, Impilo issued a total of 766,000 shares of its pre-seed preferred stock to the Company.

On October 3, 2023 in connection with the Sanford Burnham Prebys license agreement (Note 15) Impilo cancelled the original stock certificate for 766,000 shares and reissued 574,500 shares of its pre-seed preferred stock to the Company.

As consideration for the technology transfer, Impilo issued a total of 766,000 shares of its pre-seed preferred stock to the Company.

On October 3, 2023, in connection with the Sanford Burnham Prebys license agreement (see Note 16 - License Agreements) Impilo cancelled the original stock certificate for 766,000 shares and reissued 574,500 shares of its pre-seed preferred stock to the Company.

On March 15, 2024, the Company purchased a Simple Agreement for Future Equity ("SAFE") from Impilo for $ 100 thousand.

On July 12, 2024, the Company purchased an additional SAFE from Impilo for $ 30 thousand.

As of September 30, 2024 and December 31, 2023 the Company owned 38.6 % of Impilo.

These investments were expensed under the equity method of accounting for the nine months ended September 30, 2024 in other expense, net in the accompanying statement of operations.

As of March 31, 2025 and December 31, 2024, the Company owned 38.6 % of Impilo.

These investments were expensed under the equity method of accounting in the prior year in other expense, net in the accompanying statement of operations.

The SAFE has a valuation cap of $ 30.0 million and an 80 % discount rate.

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The Company has also agreed to pay SBP royalties of 4 % of net sales of products sold by the Company, or through a sublicense, subject to certain reductions.

Additionally, the Company is obligated to pay SBP 25 % of any sublicensing income, which, pursuant to the technology transfer agreement with Impilo, resulted in SBP receiving 191,500 shares of the Company’s pre-seed preferred stock in Impilo on October 3, 2023.

Additionally, the Company is obligated to pay SBP 25 % of any sublicensing income received, which, pursuant to the technology transfer agreement with Impilo, resulted in SBP receiving 191,500 shares of the Company’s pre-seed preferred stock in Impilo on October 3, 2023.

The agreement will expire upon the later of (i) the final abandonment of all pending patent applications within the licensed patents or (ii) the expiration of the last to expire patent within the licensed patents.

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The agreement may be terminated in its entirety by SBP if the Company, at any time, defaults in the payment of any sum when due and fails to make such payment within thirty days after receipt of written notice.

The agreement may be terminated in its entirety by either SBP or the Company (i) in the event of an uncured material breach by the other party, or (ii) in the event the other party (a) files for, or is involuntarily petitioned with, bankruptcy (other than dissolution or winding up for the purposes of reconstruction or amalgamation), (b) makes an assignment of all or substantially all of its assets for the benefit of creditors, or (c) has a receiver or trustee is appointed and is unable to secure a dismissal, stay or other suspension of such proceedings within thirty days.

involuntarily petitioned with, bankruptcy (other than dissolution or winding up for the purposes of reconstruction or amalgamation), (b) makes an assignment of all or substantially all of its assets for the benefit of creditors, or (c) has a receiver or trustee is appointed and is unable to secure a dismissal, stay or other suspension of such proceedings within thirty days.

Upon termination of the agreement for any reason, all rights and obligations of the Company with respect to the patents and patent applications shall terminate and revert to SBP.

SBP did no t own shares of the Company’s common stock as of September 30, 2024.

Note 16 – Research Collaboration and License Agreement

Exclusive License and Collaboration Agreement

SBP did no t own shares of the Company’s common stock as of March 31, 2025.

Note 17 – Research Collaboration and License Agreements

Exclusive License and Collaboration Agreement - Qilu Pharmaceuticals

In February 2021, Cend entered into an Exclusive License and Collaboration Agreement (the “Qilu Agreement”) in which Cend granted an exclusive license to Qilu for the development and commercialization of certepetide in the Territory (defined as the Greater Area of China including China, Macau, Hong Kong, and Taiwan).

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All rights and obligations of Qilu with respect to such licensed patents and patent applications would terminate simultaneously.

Exclusive License and Collaboration Agreement - Kuva Labs

In November 2024, the Company entered into an Exclusive License and Collaboration Agreement in which the Company granted an exclusive license to Kuva Labs, Inc.

(Kuva) to explore the synergistic potential of the Company's certepetide as a targeting and delivery agent for Kuva’s NanoMark™ imaging technology in solid tumors.

Under the Agreement, Kuva will assume full responsibility for research, development, and commercialization costs, while the Company will be responsible for supplying certepetide for additional consideration pursuant to a Clinical Supply Agreement.

In consideration for the license, the Company recognized $ 1.0 million as revenue upon delivery of the license in November 2024.

The Company is eligible to receive additional development and commercial milestone payments up to $ 1.5 million and $ 17.5 million, respectively, a 5.0 % percent royalty on net sales, and sublicensing revenues of 50 %.

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

What changed 10-Q

Item 1. Financial Statements