LISATA THERAPEUTICS, INC. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements and notes thereto required to be filed under this Item are presented commencing on page 74 of this Annual Report. 74 Lisata Therapeutics, Inc. and Subsidiaries Table of Contents Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 76 Financial Statements: Consolidated Balance Sheets at December 31, 2025 and 2024 77 Consolidated Statements of Operations - Years Ended December 31, 2025 and 2024 78 Consolidated Statements of Comprehensive Loss - Years Ended December 31, 2025 and 2024 79 Consolidated Statements of Equity - Years Ended December 31, 2025 and 2024 80 Consolidated Statements of Cash Flows - Years Ended December 31, 2025 and 2024 81 Notes to Consolidated Financial Statements 79 75 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Lisata Therapeutics, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Lisata Therapeutics, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Going concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a history of net operating losses and negative cash flows from operating activities and has cash and cash equivalents of approximately $16 million as of December 31, 2025. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2011. New York, New York March 12, 2026 76 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) December 31, 2025 December 31, 2024 ASSETS Current Assets Cash and cash equivalents $ 15,956 $ 16,209 Marketable securities — 15,036 Accounts receivable — 900 Prepaid and other current assets 1,747 2,433 Total current assets 17,703 34,578 Property and equipment, net 18 72 Acquired license-intangible, net — 192 Other assets 23 160 Total assets $ 17,744 $ 35,002 LIABILITIES, NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 1,019 $ 1,284 Accrued liabilities 2,052 4,329 Total current liabilities 3,071 5,613 Other long-term liabilities 72 72 Total liabilities 3,143 5,685 Commitments and Contingencies (Note 14) Stockholders' Equity Common stock, $ 0.001 par value, authorized 500,000,000 shares; issued 8,834,613 and 8,409,582 shares, at December 31, 2025 and December 31, 2024, respectively; and outstanding, 8,833,875 and 8,408,844 shares, at December 31, 2025 and December 31, 2024, respectively 9 8 Additional paid-in capital 580,243 578,418 Treasury stock, at cost; 738 shares at December 31, 2025 and December 31, 2024 respectively ( 708 ) ( 708 ) Accumulated deficit ( 564,652 ) ( 548,066 ) Accumulated other comprehensive loss ( 37 ) ( 81 ) Total Lisata Therapeutics, Inc. stockholders' equity 14,855 29,571 Non-controlling interests ( 254 ) ( 254 ) Total equity 14,601 29,317 Total liabilities, non-controlling interests and stockholders' equity $ 17,744 $ 35,002 See accompanying notes to consolidated financial statements. 77 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended December 31, 2025 2024 Revenue $ 170 $ 1,000 Operating Expenses: Research and development 7,949 11,334 General and administrative 10,430 12,075 Operating expenses 18,379 23,409 Operating loss ( 18,209 ) ( 22,409 ) Other income (expense): Investment income, net 806 1,883 Other expense, net ( 145 ) ( 257 ) Total other income 661 1,626 Net loss before benefit from income taxes and noncontrolling interests ( 17,548 ) ( 20,783 ) Benefit from income taxes ( 962 ) ( 798 ) Net loss $ ( 16,586 ) $ ( 19,985 ) Less - net income (loss) attributable to noncontrolling interests — — Net loss attributable to Lisata Therapeutics, Inc. common stockholders $ ( 16,586 ) $ ( 19,985 ) Basic and diluted loss per share: Lisata Therapeutics, Inc. common stockholders $ ( 1.91 ) $ ( 2.40 ) Weighted average common shares outstanding: Basic and diluted shares 8,687 8,329 See accompanying notes to consolidated financial statements. 78 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands) Year Ended December 31, 2025 2024 Net loss $ ( 16,586 ) $ ( 19,985 ) Other comprehensive income (loss): Available for sale securities - net unrealized gain 4 1 Cumulative translation adjustment arising during the period 40 ( 40 ) Total other comprehensive income (loss) 44 ( 39 ) Comprehensive loss ( 16,542 ) ( 20,024 ) Comprehensive income (loss) attributable to noncontrolling interests — — Comprehensive loss attributable to Lisata Therapeutics, Inc. common stockholders $ ( 16,542 ) $ ( 20,024 ) See accompanying notes to consolidated financial statements. 79 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In thousands) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock Total Lisata Therapeutics, Inc. Stockholders' Equity Non- Controlling Interest in Subsidiary Total Equity Shares Amount Balance at December 31, 2023 8,151 $ 8 $ 576,971 $ ( 42 ) $ ( 528,081 ) $ ( 708 ) $ 48,148 $ ( 254 ) $ 47,894 Net loss — — — — ( 19,985 ) — ( 19,985 ) — ( 19,985 ) Share-based compensation 218 — 1,379 — — — 1,379 — 1,379 Net proceeds from issuance of common stock 28 — 68 — — — 68 — 68 Proceeds from option exercises 13 — — — — — — — — Unrealized gain on marketable securities — — — 1 — — 1 — 1 Foreign currency translation adjustment — — — ( 40 ) — — ( 40 ) — ( 40 ) Balance at December 31, 2024 8,410 $ 8 $ 578,418 $ ( 81 ) $ ( 548,066 ) $ ( 708 ) $ 29,571 $ ( 254 ) $ 29,317 Net loss — — — — ( 16,586 ) — ( 16,586 ) — ( 16,586 ) Share-based compensation 129 — 974 — — — 974 — 974 Net proceeds from issuance of common stock 292 1 843 — — — 844 — 844 Proceeds from option exercises 4 — 8 — — — 8 — 8 Unrealized gain on marketable securities — — — 4 — — 4 — 4 Foreign currency translation adjustment — — — 40 — — 40 — 40 Balance at December 31, 2025 8,835 $ 9 $ 580,243 $ ( 37 ) $ ( 564,652 ) $ ( 708 ) $ 14,855 $ ( 254 ) $ 14,601 See accompanying notes to consolidated financial statements. 80 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 16,586 ) $ ( 19,985 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation expense 1,226 1,653 Depreciation and amortization 146 174 Loss from equity method investment — 130 Impairment of non-financial asset 127 — Amortization/accretion on marketable securities ( 75 ) ( 455 ) Allowance for credit losses 500 — Changes in operating assets and liabilities: Accounts receivable 401 ( 900 ) Prepaid and other current assets 742 852 Other assets 140 170 Accounts payable, accrued liabilities and other liabilities ( 2,570 ) ( 995 ) Net cash used in operating activities ( 15,949 ) ( 19,356 ) Cash flows from investing activities: Purchase of marketable securities ( 9,180 ) ( 55,688 ) Sales of marketable securities 24,294 69,051 Investment in Impilo Therapeutics — ( 130 ) Purchases of property and equipment ( 28 ) — Net cash provided by investing activities 15,086 13,233 Cash flows from financing activities: Proceeds from exercise of options 8 — Tax withholding payments on net share settlement equity awards ( 253 ) ( 274 ) Net proceeds from issuance of common stock 844 68 Net cash provided by (used in) financing activities 599 ( 206 ) Effect of exchange rate changes on cash 11 ( 55 ) Net decrease in cash and cash equivalents ( 253 ) ( 6,384 ) Cash and cash equivalents at beginning of year 16,209 22,593 Cash and cash equivalents at end of year $ 15,956 $ 16,209 See accompanying notes to consolidated financial statements. 81 LISATA THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Description of Business Overview Lisata Therapeutics, Inc. (together with its subsidiaries, the “Company”) is a clinical-stage pharmaceutical company dedicated to the discovery, development, and commercialization of innovative therapies for the treatment of solid tumors and other serious diseases. The Company's investigational product, certepetide (formerly known as LSTA1 or CEND-1), is designed to activate a novel uptake pathway (the C-end rule active transport mechanism) that allows co-administered or tethered (i.e., molecularly bound) anti-cancer drugs to target and penetrate solid tumors more effectively. Certepetide actuates this active transport system in a tumor-specific manner, resulting in systemically co-administered anti-cancer drugs more efficiently penetrating and accumulating in the tumor, while normal tissues are expected to remain unaffected. 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, 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. In addition, certain preclinical data using certepetide in combination with antibody drug conjugates (ADCs) has been generated as part of the Company’s research collaboration with Catalent. These data were presented recently at a scientific meeting during the fourth quarter of 2025. 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, with and without added immunotherapy for pancreatic cancer. Certepetide is or has been the subject of several Phase 2 clinical studies 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. The Company's leadership team has amassed many decades of collective biopharmaceutical and pharmaceutical product development experience across a variety of therapeutic categories and at all stages of development from preclinical through to product registration and launch. The Company's goal is to develop and commercialize products that address important unmet medical needs. Liquidity and Capital Resources The Company has a history of net operating losses and negative cash flows from its operating activities, and has cash and cash equivalents of approximately $ 16.0 million as of December 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, as previously disclosed, the Company has delayed commencement of certain readiness activities for its planned Phase 3 study in metastatic pancreatic ductal adenocarcinoma (mPDAC), particularly those related to chemistry, manufacturing and controls (“CMC”). The Company’s ongoing trials continue to progress as planned. The Company’s continued operations are dependent on its ability to raise additional funding. Based on its current business plan and current capital resources, combined with the need to raise additional funding and the uncertainty regarding the availability of such additional funding, management has concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern for a period of twelve months after the date these consolidated financial statements are issued. Management's plans to alleviate the conditions that raise substantial doubt regarding the Company’s ability to continue as a going concern include obtaining additional funding through equity or debt offerings and/or pursuing collaboration or licensing arrangements. However, additional funding may not be available on terms acceptable to the Company or at all. The Company may also continue to reduce current spending requirements where necessary. If, for any reason, the Company utilizes its capital resources more quickly than anticipated or is unable to obtain additional funding on a timely basis, it may be required to revise its business plan and strategy. This may result in the Company significantly curtailing, delaying or discontinuing its research and development programs. As a result, the Company’s business, financial condition, and results of operations could be materially affected. The accompanying consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be necessary if the Company were unable to continue as a going concern. 82 Proposed Acquisition by Kuva Labs Inc. On March 6, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kuva Labs Inc. (“Kuva”), and Kuva Acquisition Corp., a wholly owned subsidiary of Kuva (“Purchaser”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Purchaser will commence a tender offer (the “Offer”) to purchase all of the issued and outstanding shares of common stock, par value $ 0.001 per share (the “Common Shares”), of the Company in exchange for (i) $ 5.00 per Common Share, net to the seller in cash, without interest, but subject to any applicable withholding of taxes (the “Closing Amount”) plus (ii) one non-tradeable contingent value right (each, a “CVR”), which represents the contractual right to receive a contingent cash payment of $ 1.00 per CVR if a New Drug Application or similar registration is filed or formally accepted for review by the FDA or any governmental authority in any jurisdiction with respect to any pharmaceutical product that contains or incorporates the product candidate referred to as of the date of the Merger Agreement as certepetide, alone or in combination with one or more other therapeutically active ingredients, including all formulations, dosages, or modes of delivery, for any indication or patient population prior to the earlier of (a) 11:59 p.m. New York City Time on the seventh (7th) anniversary of the Closing Date (as defined in the Merger Agreement), and (b) termination of the CVR Agreement (the “Milestone”), in accordance with the terms and subject to the conditions of a contingent value rights agreement (the “CVR Agreement”) to be entered into with a rights agent selected by Kuva and reasonably acceptable to the Company (the Closing Amount plus one CVR, collectively, the “Offer Price”). If certain conditions are satisfied and the Offer is consummated, Kuva would acquire any remaining Shares for the Offer Price by a merger of Purchaser with and into the Company (the “Merger”). Upon completion of these transactions, the Company would no longer be a publicly traded company and the listing of its common stock on Nasdaq will terminate. Under the Merger Agreement, the Offer and the Merger are subject to customary closing conditions for a transaction of this nature. Kuva will be required to close on the Offer so long as there shall be validly tendered a number of shares that represents (and will represent immediately following the consummation of the Offer) at least a majority of the aggregate voting power of all shares then outstanding. There can be no assurance that the Offer and the Merger will be consummated. The foregoing description of the Merger Agreement is only a summary of certain material provisions thereof, does not purport to be complete. The full text of the Merger Agreement is filed as Exhibit 2.1 to this Annual Report on Form 10-K. Basis of Presentation The accompanying consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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. Note 2 – Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. 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. 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. The Company makes critical estimates and assumptions in determining stock-based awards values. Accordingly, actual results could differ from those estimates and assumptions. Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning 83 after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. Recently adopted accounting pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. These amendments were effective for the Company in 2024 and retrospectively to all prior periods using the significant segment expense categories identified. The impact of the adoption of the amendments in this update was not material to the Company’s consolidated financial position and results of operations, as the requirements impact only segment reporting disclosures in the footnotes to the Company’s consolidated financial statements. See Note 12 Segment Information in the accompanying notes to the consolidated financial statements for further detail. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The Company adopted ASU 2023-09 during the year ended December 31, 2025. The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures. Principles of Consolidation The Consolidated Financial Statements include the accounts of Lisata Therapeutics, Inc. and its wholly owned and majority owned subsidiaries and affiliates. All intercompany activities have been eliminated in consolidation. Foreign Currency Remeasurement The Company’s reporting currency is the U.S. Dollar. The functional currency of Lisata Therapeutics Australia Pty Ltd., which is a foreign subsidiary of the Company, is the Australian Dollar. The assets and liabilities of Lisata Therapeutics Australia Pty Ltd. are translated into U.S. Dollars at the exchange rates in effect at each balance sheet date, and the results of operations are translated using the average exchange rates prevailing throughout the reporting period. Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income (loss) in stockholders' equity. Cash and Cash Equivalents Cash and cash equivalents include short-term, highly liquid, investments with maturities of ninety days or less when purchased. Concentration of Risks 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 had $ — million and $ 0.9 million in accounts receivable as of December 31, 2025 and 2024, respectively. 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. 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 84 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. The Company increased its allowance for credit losses during the quarter ended December 31, 2025 by $ 0.5 million. As of December 31, 2025, the associated accounts receivable was uncollectible and written off (See Note 17). As of December 31, 2025 and 2024, there were 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, 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. The Company regularly reviews all of its investments for other-than-temporary declines in fair value. The Company's review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that it will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its accounting basis and this decline is other-than-temporary, it reduces the carrying value of the security it holds and records a loss for the amount of such decline. Property and Equipment The cost of property and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed on the straight-line method. Repairs and maintenance expenditures that do not extend original asset lives are charged to expense as incurred. The estimated useful lives of property and equipment are as follows: Furniture and fixtures 10 years Computer equipment 3 years Software 3 years Leasehold improvements Shorter of useful life or lease term Long-lived Assets Long-lived assets consist of property and equipment. The assets are amortized on a straight-line basis over their respective useful lives. 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. Share-Based Compensation The Company expenses all share-based payment awards to employees, directors, and consultants, including grants of stock options, warrants, and restricted stock, over the requisite service period based on the grant date fair value of the awards. For awards with performance-based vesting criteria, the Company estimates the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest. The Company determines the fair value of option awards using the Black-Scholes option-pricing model which uses both historical and current market data to estimate the fair value. This method incorporates various assumptions such as the risk-free interest rate, expected volatility, expected dividend yield and expected life of the options or warrants. Share-based compensation expense also includes an estimate, which is made at the time of the grant, of the number of awards that are expected to be forfeited. The fair value of the Company’s restricted stock and restricted stock units is based on the closing market price of the Company’s common stock on the date of grant. Loss Per Share 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 85 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. Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains or losses on the subsequent reissuance of shares are credited or charged to additional paid in capital. Research and Development Costs Research and development (“R&D”) expenses include salaries, benefits, and other headcount related costs, clinical trial and related clinical manufacturing costs, contract and other outside service fees including sponsored research agreements, and facilities and overhead costs. The Company expenses the costs associated with research and development activities when incurred. To further drive the Company’s initiatives, the Company will continue targeting key governmental agencies and not-for-profit organizations to contribute funds for the Company’s research and development programs. The Company accounts for such grants as a deduction to the related expense in research and development operating expenses when earned. In-process Research and Development Expense Upfront payments that relate to the acquisition of a new drug compound, as well as pre-commercial milestone payments, are immediately expensed as IPR&D in the period in which they are incurred, provided that the new drug compound did not also include processes or activities that would constitute a “business” as defined under U.S. GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no established alternative future use. The Company accounts for contingent consideration payable upon achievement of certain regulatory, development or sales milestones in such asset acquisitions when the underlying contingency is probable and estimable. Milestone payments made to third parties subsequent to regulatory approval will be capitalized as intangible assets and amortized over the estimated remaining useful life of the related product. Intangible Asset The Company’s intangible asset consists of a single asset, a license agreement with Qilu Pharmaceutical, Co., Ltd. (“Qilu”) acquired in the Company's acquisition of Cend Therapeutics, Inc (the “Cend Merger”), with a value of $ 0.4 million. The intangible asset is stated at fair value and is amortized using the straight-line method over its estimated useful life of 5 years. Amortization expense was $ 65 thousand and $ 71 thousand for the years ended December 31, 2025 and December 31, 2024, respectively. The intangible asset is reviewed for potential impairment when events or circumstances indicate that carrying amounts may not be recoverable . As of December 31, 2025, the Company determined that the carrying amount of the asset was not recoverable and recorded an intangible asset impairment charge of $ 0.1 million in general and administrative expenses in the Consolidated Statements of Operations. Revenue Recognition The Company evaluates license and collaboration arrangements to determine whether units of account within the arrangement exhibit the characteristics of a vendor and customer relationship. For arrangements and units of account where a customer relationship exists, the Company applies the revenue recognition guidance. The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. At contract inception, the Company assesses the goods or services promised within each contract and assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Taxes imposed by governmental authorities on the Company's revenue, such as sales taxes and withholding taxes, are excluded from net revenue. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. 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 86 time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company recognized revenue of $ 0.2 million and $ 1.0 million for the years ended December 31, 2025 and 2024, respectively. Milestones 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. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company or the Company’s collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. 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 years ended December 31, 2025 and 2024 the Company has not recognized revenue related to milestones. Royalties 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). To date, the Company has not recognized any royalty revenue from any collaborative arrangement. 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 the Company's Consolidated Balance Sheets (in thousands): December 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 $ — $ — $ — $ — $ 16,025 $ — $ ( 4 ) $ 16,021 Money market funds 11,640 — — 11,640 6,614 — — 6,614 Agency bonds — — — — 613 — — 613 Treasury bills — — — — 1,496 — — 1,496 Municipal debt securities — — — — 905 — — 905 Total $ 11,640 $ — $ — $ 11,640 $ 25,653 $ — $ ( 4 ) $ 25,649 Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services. The following table summarizes the classification of the available-for-sale securities in the Company's Consolidated Balance Sheets (in thousands): December 31, 2025 December 31, 2024 Cash equivalents $ 11,640 $ 10,613 Marketable securities — 15,036 Total $ 11,640 $ 25,649 87 The following table summarizes the Company's portfolio of available-for-sale securities by contractual maturity (in thousands): December 31, 2025 December 31, 2024 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Less than one year $ 11,640 $ 11,640 $ 25,653 $ 25,649 Greater than one year — — — — Total $ 11,640 $ 11,640 $ 25,653 $ 25,649 Note 4 – Property and Equipment Property and equipment consisted of the following (in thousands): December 31, 2025 2024 Computer equipment 494 589 Leasehold improvements — 72 Property and equipment, gross 494 661 Accumulated depreciation ( 476 ) ( 589 ) Property and equipment, net $ 18 $ 72 The Company’s results included depreciation expense of approximately $ 0.1 million and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively. Note 5 – Income (Loss) Per Share For the years ended December 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 a s they are anti-dilutive in the periods presented. At December 31, 2025 and 2024, the Company excluded the following potentially dilutive securities (in thousands): December 31, 2025 2024 Stock options 1,503 1,441 Warrants 1,277 1,497 Restricted stock units 325 246 Note 6 – Fair Value Measurements Fair value of financial assets and liabilities that are being measured and reported are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories: Level 1 inputs are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. Level 3 inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. 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. 88 The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 were as follows (in thousands): December 31, 2025 December 31, 2024 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 11,640 $ — $ — $ 11,640 $ 10,613 $ — $ — $ 10,613 Marketable securities - available for sale — — — — — 15,036 — 15,036 $ 11,640 $ — $ — $ 11,640 $ 10,613 $ 15,036 $ — $ 25,649 The carrying values of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value at December 31, 2025 and December 31, 2024, due to the short maturity nature of these items. Note 7 – Accrued Liabilities Accrued liabilities were as follow (in thousands): December 31, 2025 2024 Salaries, employee benefits and related taxes $ 812 $ 2,640 Operating lease liabilities - current — 137 Clinical and R&D related liabilities 1,022 1,333 Accounting & tax consulting liabilities 62 55 Other 156 164 $ 2,052 $ 4,329 Note 8 – Operating Leases The Company had an operating lease for one office which expired in 2025, however, based on prior understanding with the building’s management, continue to occupy a portion of office space in the building on a non-committal basis. The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as the Company's lease did not provide an implicit rate of return. The Company recognized lease expense on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASU No. 2016-02, Leases (Topic 842), the Company elected to account for non-lease components associated with its leases and lease components as a single lease 89 component. The Company's lease included an option for the Company to extend the lease term and/or sub-lease space in whole or in part for which the Company has not exercised. Operating lease liabilities and right-of-use assets were recorded in the following captions of the Company's balance sheet as follows (in thousands): December 31, 2025 December 31, 2024 Right-of-Use Assets: Other assets $ — $ 138 Total Right-of-Use Asset $ — $ 138 Operating Lease Liabilities: Accrued liabilities $ — $ 137 Other long-term liabilities — — Total Operating Lease Liabilities $ — $ 137 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 leases was 9.625 %. Operating lease costs were $ 0.1 million and $ 0.2 million for the years ended December 31, 2025 and 2024, respectively and includes both cash and non-cash expenses for operating leases. The operating lease costs are recognized evenly over the lease term, therefore, the timing of the expense may differ from the timing of actual cash payments. Cash payments and lease costs can differ due to the timing of cash payments relative to the level expense. Operating lease costs are included in research and development and general and administrative expense in the accompanying consolidated statements of operations. Note 9 – Stockholders' Equity Equity Plans The Company has used long-term incentive plans for the purpose of granting equity awards to employees of the Company, including officers, and nonemployees, including consultants and nonemployee members of the Company's board of directors (collectively, the “Participants”). The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the “Committee”). The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the “2018 Plan”), as adopted by the stockholders of the Company in (i) June 2018, and subsequently increased by the stockholders of the Company in June 2024 with 600,000 shares authorized for issuance thereunder and 862,135 additional shares authorized for issuance thereunder pursuant to the automatic annual evergreen increase, in (ii) June 2023 with 400,000 shares authorized for issuance thereunder, in (iii) September 2022 with 333,333 shares authorized for issuance thereunder, in (iv) June 2021 with 400,000 shares authorized for issuance thereunder and in (v) June 2020 with 166,667 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the “2015 Plan”) or the Amended and Restated 2009 Equity Compensation Plan (the “2009 Plan”) that are not issued due to their subsequent forfeiture, cancellation, or other settlement thereof. Concurrent with the adoption of the 2018 Plan, no future awards will occur under the 2015 Plan or the 2009 Plan. The awards that may be made under the 2018 Plan include: (a) incentive stock options and nonqualified stock options, (b) shares of restricted stock, (c) restricted stock units, and (d) other kinds of equity-based compensation awards. All stock options under the 2015 Plan and 2009 Plan were granted and the 2018 Plan are granted at the fair market value of the common stock at the grant date. Stock options vest either on the date of grant, ratably over a period determined at time of grant (typically over 3 years) or upon the accomplishment of specified business milestones, and generally expire 2 , 3 , or 10 years from the grant date depending on the status of the recipient as a nonemployee, employee or director of the Company. As of December 31, 2025 and 2024 there were 463,373 shares and 744,514 shares, respectively available for future grants under the 2018 Plan. No additional awards may be made under the 2015 Plan or the 2009 Plan. The Company adopted an employee stock purchase plan effective January 1, 2013 and authorized 3,333 shares under the plan (the “2012 ESPP”). The plan has two six-month offering periods per year under which eligible employees may contribute 90 up to 15 % of their compensation toward the purchase of the Company's common stock per offering period (with a $ 25,000 fair market value cap per calendar year). The employee's purchase price is equal to (i) 85 % of the closing price of a share of the Company's common stock on the enrollment date of such offering period or (ii) 85 % of the closing price of a share of the Company's common stock on the Exercise Date of such Offering Period, whichever is lower. In May 2017, the Company's stockholders approved an amendment and restatement to the 2012 ESPP (the “2017 ESPP”) in order to effect an increase of authorized shares from 3,333 to 6,667 . In June 2018, the Company's stockholders approved an amendment to the 2017 ESPP (the “Amended 2017 ESPP”) in order to effect an increase of authorized shares from 6,667 to 33,333 . In June 2023, the Company's stockholders approved an amendment to the Amended 2017 ESPP in order to effect an increase of authorized shares from 33,333 to 68,333 . In June 2024, the Company's stockholders approved an amendment to the Amended 2017 ESPP in order to effect an increase of authorized shares from 68,333 shares to 113,333 shares. During the year ended December 31, 2025, 28,484 shares were issued under the Amended 2017 ESPP. At December 31, 2025 and 2024, the Company had 14,637 shares and 43,121 shares, respectively of the Company's common stock available for future grant in connection with this plan. Equity Issuances At The Market Offering Agree ment On June 4, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent, in connection with an “at the market offering” under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of up to $ 50.0 million. As of the date of this filing and so long as the Company’s public float remains below $75.0 million, the Company is subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount the Company can offer to up to one-third of its public float during any trailing 12-month period. Subsequent to the filing of a prospectus supplement to the Company's Registration Statement on Form S-3 (File No. 333-279034) relating to the at the market offering on August 21, 2024, the aggregate market value of its outstanding common stock held by non-affiliates was approximately $ 29.6 million. Pursuant to the Baby Shelf Limitation, since the aggregate market value of the Company's outstanding common stock held by non-affiliates was below $ 75.0 million at the time of such prospectus supplement filing, the aggregate amount of securities that the Company is permitted to offer and sell pursuant to the ATM Agreement as of the date of this Annual Report on Form 10-K, is $ 9,855,890 , which is equal to one-third of the aggregate market value of our common stock held by non-affiliates as of August 20, 2024. 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. During the year ended December 31, 2025, the Company issued 262,765 shares of common stock under the ATM Agreement for net proceeds of $ 784,761 . Since inception through December 31, 2025, the Company has issued 330,938 shares of common stock under the ATM Agreement for net proceeds of $ 1,065,608 . 91 Stock Options and Warrants The following table summarizes the activity for stock options and warrants for the year ended December 31, 2025: Stock Options Warrants Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands) Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In Thousands) Outstanding at December 31, 2024 1,440,535 $ 8.82 5.46 $ 157.0 1,496,744 $ 40.52 1.29 $ 7.5 Changes during the Year: Granted 111,400 $ 3.80 — — Exercised ( 4,329 ) $ 1.88 — — Forfeited ( 17,930 ) $ 3.53 131,628 43.50 Expired ( 26,795 ) $ 141.14 88,154 32.09 Outstanding at December 31, 2025 1,502,881 $ 6.17 4.77 $ 24.6 1,276,962 $ 40.80 0.29 $ — Vested at December 31, 2025 or expected to vest in the future 1,497,282 $ 6.18 4.76 $ 24.6 1,276,962 $ 40.80 0.29 $ — Exercisable at December 31, 2025 1,337,823 $ 6.51 4.33 $ 24.6 1,276,962 $ 40.80 0.29 $ — Restricted Stock During the years ended December 31, 2025 and 2024, the Company issued restricted stock for services as follows ($ in thousands, except share data): 2025 2024 Number of restricted stock issued 215,550 203,800 Value of restricted stock issued $ 819.1 $ 627.7 The weighted average estimated fair value of restricted stock issued for services in the years ended December 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 year and four years . The following is a summary of the changes in non-vested restricted stock for the year ended December 31, 2025: Restricted Stock Shares Weighted Average Grant-Date Fair Value Non-vested at December 31, 2024 228,428 $ 3.67 Changes during the Year: Granted 215,550 $ 3.80 Vested ( 161,492 ) $ 4.20 Forfeited ( 17,450 ) $ 3.50 Non-vested at December 31, 2025 265,036 $ 3.46 92 Restricted Stock Units During the years ended December 31, 2025 and 2024, the Company issued restricted stock units for services as follows ($ in thousands, except share data): 2025 2024 Number of restricted stock units issued 78,945 205,300 Value of restricted stock units issued $ 300.0 $ 632.3 The weighted average estimated fair value of restricted stock units issued for services in the years ended December 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 year ended December 31, 2025: Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested at December 31, 2024 103,800 $ 3.28 Changes during the Year: Granted 78,945 $ 3.80 Vested ( 103,800 ) $ 3.28 Forfeited — $ — Non-vested at December 31, 2025 78,945 $ 3.80 Note 10 – Share-Based Compensation Share-Based Compensation 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 years ended December 31, 2025 and 2024 ($ in thousands): Year Ended December 31, 2025 2024 Research and development $ 228 $ 270 General and administrative 998 1,383 Total share-based compensation expense $ 1,226 $ 1,653 Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at December 31, 2025 were as follows ($ in thousands): Stock Options Restricted Stock Units Warrants Restricted Stock Unrecognized compensation cost $ 216 $ 7 $ — $ 527 Expected weighted-average period in years of compensation cost to be recognized 1.65 0.02 0.00 1.74 93 Total fair value of shares vested and the weighted average estimated fair values of shares granted for the years ended December 31, 2025 and 2024 were as follows ($ in thousands): Stock Options Warrants Year Ended December 31, Year Ended December 31, 2025 2024 2025 2024 Total fair value of shares vested $ 267 $ 204 $ 150 $ — Weighted average estimated fair value of shares granted 2.60 2.15 — 1.99 Valuation Assumptions The fair value of stock options and warrants at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon historical volatility of the Company’s stock. The expected term for the options is based upon observation of actual time elapsed between date of grant and exercise of options for all employees. The expected term for the warrants is based upon the contractual term of the warrants. The range of assumptions made in calculating the fair values of stock options was as follows: Stock Options Year Ended December 31, 2025 2024 Expected term - minimum (in years) 6.3 6.0 Expected term - maximum (in years) 6.3 6.3 Expected volatility - minimum 73 % 73 % Expected volatility - maximum 73 % 77 % Weighted average volatility 73 % 77 % Expected dividend yield — — Risk-free interest rate - minimum 4.51 % 3.54 % Risk-free interest rate - maximum 4.51 % 4.30 % Note 11 – Income Taxes The provision (benefit) for income taxes is based on loss from operations before provision for income taxes and noncontrolling interests as follows ($ in thousands): Years Ended December 31, Pre-tax book income 2025 2024 United States $ ( 16,890 ) $ ( 19,474 ) Australia ( 658 ) ( 1,309 ) Total $ ( 17,548 ) $ ( 20,783 ) 94 The provision (benefit) from income taxes was as follows ($ in thousands): Years Ended December 31, 2025 2024 Current U.S. Federal $ — $ — State and local — — $ — $ — Deferred U.S. Federal $ — $ — State and local ( 962 ) ( 798 ) $ ( 962 ) $ ( 798 ) Total U.S. Federal $ — $ — State and local ( 962 ) ( 798 ) $ ( 962 ) $ ( 798 ) 95 The provision (benefit) for income taxes is determined by applying the U.S. Federal statutory rate of 21 % to income before income taxes, and the components are set forth below ($ in thousands): Years Ended December 31, 2025 % 2024 % U.S. Federal tax (benefit) at statutory rate $ ( 3,685 ) 21.00 % $ ( 4,364 ) 21.00 % Domestic Other true ups ( 2 ) 0.01 % ( 21 ) 0.10 % Change in Valuation Allowance US 2,756 ( 15.71 ) % 3,695 ( 17.78 ) % Non-taxable or non-deductible items Section 162(m) Limit on Compensation 67 ( 0.38 ) % 86 ( 0.41 ) % Share-based compensation 525 ( 2.99 ) % 172 ( 0.83 ) % Sale of NJ NOLs 202 ( 1.15 ) % 168 ( 0.81 ) % Other ( 1 ) 0.01 % ( 11 ) 0.05 % Domestic state and local income taxes, net of federal effect * ( 962 ) 5.48 % ( 798 ) 3.84 % Foreign Tax Effects Australia AUS Foreign Rate Differential ( 26 ) 0.15 % ( 52 ) 0.25 % Change in Valuation Allowance AUS 177 ( 1.01 ) % ( 35 ) 0.17 % Non-deductible R&D Expense 10 ( 0.06 ) % 188 ( 0.90 ) % AUS Others ( 23 ) 0.13 % 174 ( 0.84 ) % Total Tax Provision $ ( 962 ) 5.48 % $ ( 798 ) 3.84 % *State taxes in New Jersey made up the majority (greater than 50%) of the tax effect in this category. Deferred income taxes at December 31, 2025 and 2024 consist of the following ($ in thousands): December 31, 2025 2024 Deferred Tax Assets: Accumulated net operating losses (tax effected) $ 27,016 $ 16,062 Lease liability — 39 Share-based compensation 1,846 2,373 Intangibles 621 765 Capitalized research and development 548 7,717 Accumulated depreciation 18 21 Accrued payroll 197 219 Other 639 637 Deferred tax assets 30,885 27,833 Deferred Tax Liabilities: Right-of-use asset $ — $ ( 39 ) Deferred tax liabilities — ( 39 ) Net deferred tax asset 30,885 27,794 Valuation allowance ( 30,885 ) ( 27,794 ) Net deferred tax asset $ — $ — 96 The following table presents income taxes paid, net of refunds received, disaggregated by jurisdiction for the years ended December 31, 2025 and 2024 ($ in thousands): Years Ended December 31, Jurisdiction 2025 2024 U.S. Federal $ — $ — States — New Jersey 4 4 California 2 2 Foreign — — Total $ 6 $ 6 In assessing the realizability of deferred tax assets, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time. As of December 31, 2025 and 2024, the Company had approximately $ 99.0 million and $ 57.9 million, respectively, of Federal NOLs available to offset future taxable income expiring from 2030 through 2036. The Company performed an analysis and determined that they had an ownership change of greater than 50% on September 15, 2022. As a result of the ownership change, losses incurred before the ownership change on September 15, 2022 will be subject to an annual limitation while losses incurred after September 15, 2022 will not be subject to limitations. As of December 31, 2022, Cend Therapeutics, Inc. (“Cend”) had approximately $ 3.6 million of Federal NOLs available to offset future taxable income. The Company performed an analysis and determined that there was an ownership change of greater than 50% on September 15, 2022. As of September 15, 2022 Cend has approximately $ 3.1 million of Federal and $ 4.3 million of state NOLs. The state NOLs will expire from the 2036 through 2042 tax years. Using a fair market value of $ 36.1 million and applying an applicable federal rate of 2.54 % Cend will have an annual limitation of approximately $ 917 thousand each year. 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, 2025 and 2024, the Company’s wholly owned Australian subsidiary had approximately $ 3.0 million and $ 2.3 million, respectively, of NOLs which will be carried forward and do not expire. There is a full valuation allowance against the NOLs. As of December 31, 2025, the Company had federal research and development credit carryforwards of $ 0.5 million expiring from 2027 through 2034 if unutilized, and state research and development credit carryforwards of $ 0.1 million, which carryforward indefinitely. Utilization of these credits may be subject to an annual limitation based on changes in ownership. As of December 31, 2025 and 2024, the Company had State NOLs available in New Jersey of $ 54.8 million and $ 24.6 million, respectively, California of $ 9.2 million and $ 9.2 million, respectively, and New York City of $ 1.9 million and $ 1.9 million, respectively, to offset future taxable income expiring from 2032 through 2045. The usage of the Company’s NOLs is limited given the change in ownership. The Company applies the Financial Accounting Standards Board provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company recognizes interest and penalties associated with certain tax positions as a component of income tax expense. As of December 31, 2025 and 2024, 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 NOLs. The Company will continue to evaluate its uncertain tax positions in future periods. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year. 97 A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Years Ended December 31, 2025 2024 Gross unrecognized tax benefit, beginning of period $ 344 $ 344 Additions based on tax positions related to the current year — — Additions based on tax positions related to the prior years — — Reductions due to lapse in statute of limitations and settlements — — Gross unrecognized tax benefit, end of period $ 344 $ 344 For years prior to 2022 the federal statute of limitations is closed for assessing tax. 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. 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 $ 0.9 million. The sale of NJ NOLs resulted in a $ 1.0 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 July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the tax effects of changes in tax rates and tax law be recognized in the period in which the legislation is enacted. The Company completed its initial assessment of OBBBA for the year ended December 31, 2025. For the provisions effective in 2025, there was no material impact to the Company’s effective tax rate for the year ended December 31, 2025. The One Big Beautiful Bill Act (“OBBBA”) enacted new Section 174A, which permanently allows taxpayers to fully expense domestic research or experimental (R&E) expenditures paid or incurred in taxable years beginning after Dec. 31, 2024, and also provides transition rules permitting taxpayers to deduct unamortized domestic R&E expenditures paid or incurred in 2022 through 2024. The company anticipates deducting the remaining unamortized domestic R&E expenditures of $ 26.2 million entirely in 2025. 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 license and collaboration agreements. 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 revenue of $ 0.2 million during the year ended December 31, 2025, and $ 1.0 million during the year ended December 31, 2024 in connection with certain upfront license fees in the current year and the Exclusive License and Collaboration Agreement with Kuva Labs, Inc in the prior year (Note 17) who is based in the United States. Depreciation and amortization expense was $ 0.1 million and $ 0.2 million for the years ended December 31, 2025, and 2024, respectively. Equity method investment expense was $ 0.1 million for the year ended December 31, 2024. There was no equity method investment expense for the year ended December 31, 2025. 98 The following table illustrates our segment information for significant operating expenses and includes a reconciliation to net loss for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Revenue $ 170 $ 1,000 Operating Expenses: Research and development by significant expense: BOLSTER trial 2,540 3,581 ASCEND trial 41 754 Chemistry, manufacturing and controls 1,050 2,035 Clinical department 2,999 4,304 Other (1) 1,319 660 Research and development 7,949 11,334 General and administrative by significant expense: Corporate 3,026 3,693 Investor relations/public relations/communications 1,141 1,332 Finance 2,002 2,265 Legal 919 1,284 Business development 422 582 Share based compensation expense 999 1,383 Other (2) 1,921 1,536 General and administrative 10,430 12,075 Operating loss ( 18,209 ) ( 22,409 ) Other income (expense),net 661 1,626 Benefit from income taxes ( 962 ) ( 798 ) Net loss $ ( 16,586 ) $ ( 19,985 ) Cash and marketable securities $ 15,956 $ 31,245 (1) Included in other are GBM study, FORTIFIDE study and research oncology expenses (2) Included in other are facilities expense, human resource, information technology expenses, allowance for credit losses and impairment of non-financial asset 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 December 31, 2025 and 2024, the Company had $ 0.7 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. On February 4, 2026 the Company's Australian subsidiary received a $ 0.7 million tax refund from the Australian Taxation Office related to the 2024 tax year. 99 Note 14 – Commitments and Contingencies Second Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with David J. Mazzo, Ph.D., the Company’s Chief Executive Officer (the “Mazzo Second Amended and Restated Employment Agreement”). The Mazzo Second Amended and Restated Employment Agreement supplements and amends the Amended and Restated Employment Agreement, dated and effective as of March 19, 2021, between Dr. Mazzo and the Company. The Mazzo Second Amended and Restated Employment Agreement: (i) amended Dr. Mazzo’s base salary to $ 717,229 from $ 633,032 and removed the non-accountable expense allowance of $ 12,000 per year, (ii) clarified that a material reduction in Dr. Mazzo’s base salary is included in the definition of “Good Reason”, (iii) amended that in the event of Dr. Mazzo’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Mazzo’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Mazzo’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amended Dr. Mazzo’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Dr. Mazzo’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Dr. Mazzo a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (v) amends the form of payment of Dr. Mazzo’s bonus payments in the event of a termination not in connection to a Change in Control to a lump-sum payment, (vi) amended the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (vii) clarified that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”), comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarified that Dr. Mazzo may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment; and (viii) clarified other technical terms for compliance with Section 409A of the Code. Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with Kristen K. Buck, M.D., the Company’s Vice President, R&D and Chief Medical Officer (the “Buck Amended and Restated Employment Agreement”). The Buck Amended and Restated Employment Agreement supplemented and amended the Employment Agreement, dated and effective as of July 26, 2021, between Dr. Buck and the Company. The Buck Amended and Restated Employment Agreement: (i) amended Dr. Buck’s base salary to $ 599,342 from $ 550,000 , (ii) clarified that a material reduction in Dr. Buck’s base salary is included in the definition of “Good Reason”, (iii) amended that in the event of Dr. Buck’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Buck’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Buck’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amended Dr. Buck’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Dr. Buck's group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Dr. Buck a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (v) amended Dr. Buck’s bonus payments in the event of a termination not in connection to a Change in Control such that the amount will not be pro-rated for the number of days Dr. Buck was employed in the year of termination of employment, (vi) amended the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (vii) clarifies that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Code comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarified that Dr. Buck may receive such severance payments as a lump sum payment on the next payroll period following the date of her termination from employment; and (viii) clarified other technical terms for compliance with Section 409A of the Code. 100 Amended and Restated Separation Benefits Agreement On June 10, 2025, the Company entered into an amended and restated separation benefits agreement with James Nisco, Senior Vice President Finance and Treasury and Chief Accounting Officer of the Company (the “Nisco Amendment”). The Nisco Amendment supplemented and amended the separation benefits provided in the Non-Change in Control Separation Pay Agreement between the Company and Mr. Nisco, dated as of December 24, 2024, and the severance agreement between Mr. Nisco and the Company, dated and effective as of September 12, 2016, and further amended on March 25, 2022. The Nisco Amendment: (i) amended the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (ii) included a condition that Mr. Nisco’s right to the severance payments and benefits described therein are subject to Mr. Nisco’s timely execution and non-revocation of a general release of claims within sixty days following Mr. Nisco’s termination or such shorter time period set forth therein, (iii) amended Mr. Nisco’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Mr. Nisco’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Mr. Nisco a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (iv) amended that in the event of Mr. Nisco’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Mr. Nisco’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Mr. Nisco’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (v) clarified that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Code, comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Mr. Nisco may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment; and (vi) clarified other technical terms for compliance with Section 409A of the Code. Amended and Restated Separation Benefits Agreement On June 10, 2025, the Company entered into an amended and restated separation benefits agreement (the “Imam Amendment”) with Tariq Imam, Senior Vice President, Business Development and Operations and General Counsel of the Company. The Imam Amendment supplemented and amended the separation benefits provided in the Non-Change in Control Separation Pay Agreement between the Company and Mr. Imam, dated as of December 24, 2024, effective as of February 1, 2025 (the “Imam Non-Change in Control Separation Pay Agreement”) and the severance agreement between Mr. Imam and the Company, dated as of March 25, 2022 (the “Imam Severance Agreement”). Imam Severance Agreement Pursuant to the Imam Severance Agreement, Mr. Imam is entitled to receive certain payments following his termination from the Company in specific circumstances. If Mr. Imam terminates his employment for Good Reason (as defined in the Imam Severance Agreement) during the period commencing on the effective date of a Change in Control (as defined in the Imam Severance Agreement) and ending on the second anniversary of the effective date of a Change in Control (as defined in the Imam Severance Agreement), or the Company terminates Mr. Imam’s employment without Cause (as defined in the Imam Severance Agreement) (other than by reason of his death or disability), the Company will (a) continue to pay Mr. Imam’s current base salary of $ 356,000 (the “Imam Salary Payment”) for 12 months following the date the termination becomes effective (the "Imam Severance Period"), commencing on the next payroll period following the date the termination becomes effective and (b) pay Mr. Imam a lump-sum equal to 100 % of Mr. Imam’s then annual target bonus on the next payroll period following the date the termination becomes effective (the “Imam Cash Severance”) and (c) pay monthly the monthly premium amount for continued COBRA coverage. If the Company may not pay Mr. Imam’s COBRA premiums without incurring tax penalties or violating any requirement of law, the Company shall use its commercially reasonable best efforts to provide Mr. Imam with substantially similar assistance in an alternative manner (the “Imam COBRA Payments”), provided that the cost of doing so does not exceed the cost that the Company would have incurred had the Company been able to pay the COBRA premiums on Mr. Imam’s behalf. In addition to the Imam Salary Payment, Imam Cash Severance and the Imam COBRA Payments, the Company shall (i) fully vest as of the date the termination becomes effective, all outstanding unvested equity awards, including options granted to Mr. Imam; and (ii) extend the exercise date of the options to the earlier of the one-year anniversary of the date the termination becomes effective and the original expiration date of the options. 101 Imam Non-Change in Control Separation Pay Agreement Pursuant to the Imam Non-Change in Control Separation Pay Agreement, Mr. Imam is entitled to a salary continuation of his current base salary of $ 356,000 for 12 months from the date of his termination, as well as a lump-sum cash payment of 100 % of his then annual target bonus on the next payroll period following the date the termination becomes effective. Mr. Imam is also entitled to payment of accrued but unpaid paid time off and wages up to the date of termination and monthly COBRA coverage reimbursements for 12 months from the date of termination. The Imam Non-Change in Control Separation Pay Agreement also provides an extension of the time period for exercising any fully vested option awards to the earlier of the one-year anniversary of the date the termination becomes effective and the original expiration date of the options. The Imam Amendment: (i) amended the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (ii) included a condition that Mr. Imam’s right to the severance payments and benefits described therein are subject to Mr. Imam’s timely execution and non-revocation of a general release of claims within sixty days following Mr. Imam’s termination or such shorter time period set forth therein, (iii) amended Mr. Imam’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Mr. Imam’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Mr. Imam a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (iv) clarified that in the event of Mr. Imam’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Mr. Imam’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Mr. Imam’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (v) clarified that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of Code, comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Mr. Imam may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment and (vi) clarified other technical terms for compliance with Section 409A of the Code. Legal Proceedings and Claims 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. While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results. The Company has elected to recognize expense for legal fees as incurred when the legal services are provided. In May 2021, Cend received a written threat of litigation on behalf of a Chinese entity called Lingmed Limited (“Lingmed”) claiming Lingmed was entitled to a success fee based on Cend’s Collaboration and License Agreement with Qilu Pharmaceuticals. Cend responded by denying that Lingmed is entitled to a success fee under the terms of their agreement. In May 2022, Cend was served with a complaint filed by Lingmed in the San Diego County Superior Court, alleging claims for breach of contract, fraud and declaratory relief. Cend’s response to the complaint was filed on June 6, 2022 and denied all of Lingmed’s material allegations. Lingmed filed an answer to Cend’s response on July 11, 2022, denying all of the Company’s material allegations. On March 25, 2024 the Company entered into a settlement agreement whereby the Company was required to pay Lingmed $ 0.5 million within 30 days of the effective date and the Company effected payment on April 4, 2024. Lingmed is also entitled to 5.0 % of any future milestone payments received by the Company under the license agreement with Qilu in addition to a sum of $ 250 thousand with respect to the first future milestone received by the Company. On April 9, 2024, pursuant to the parties’ joint request, the Court entered a dismissal with prejudice of the entire action as to all parties and all claims and the matter was settled. On January 23, 2026, the Company entered into a mutual termination of the Collaboration and License Agreement with Qilu Pharmaceuticals. 102 Note 15 – Technology Transfer Agreement Impilo Therapeutics 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 (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 December 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. Note 16 – License Agreements Sanford Burnham Prebys In December 2015, Cend entered into a license agreement with Sanford Burnham Prebys (“SBP”) under which Cend was granted an exclusive, worldwide, royalty-bearing license to certain patent rights and know-how controlled by SBP related to the development of certepetide. At the time the license agreement was entered into, Cend’s founding shareholder was an executive at SBP. The agreement provides the Company with the rights to grant and authorize sublicenses to use, sell, and otherwise exploit the patent rights. As consideration for the license, SBP was issued a total of 382,030 shares of common stock. The Company is required to pay an annual license maintenance fee of $ 10 thousand increasing to $ 20 thousand on year seven of the agreement. The Company could also be required to make milestone payments to SBP upon completion of certain regulatory and commercial milestones. The aggregate potential milestone payments are approximately $ 10.6 million. 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 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. The agreement may be terminated in its entirety by the Company at any time by giving SBP sixty days ’ prior written notice. 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 . 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 December 31, 2025. Note 17 – Research Collaboration and License Agreements Exclusive License and Collaboration Agreement - Qilu Pharmaceutical 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). Under the terms of the agreement, Qilu is solely responsible for the development of certepetide in its Territory. In consideration for the license, Qilu made an upfront payment of $ 10.0 million to Cend, which was recognized as revenue by Cend prior to the Company's acquisition of Cend on September 15, 2022 (the “Cend Merger”). In addition, Cend received and recognized as revenue a $ 5.0 million development milestone prior to the Cend Merger. The Company is eligible to receive additional development and commercial milestone payments up to 103 $ 96.0 million and $ 125.0 million, respectively, tiered royalties on net sales ranging from 10 % to 15 %, and tiered sublicensing revenues ranging from 12 % to 35 %. On March 25, 2024 the Company entered into a settlement agreement with Lingmed whereby Lingmed is entitled to 5.0 % of any future milestone payments received by the Company under the Qilu Agreement. In addition, Lingmed is entitled to a sum of $ 250 thousand with respect to the first future milestone received by the Company. Unless terminated early, the Qilu Agreement will continue in effect until the expiration of all Qilu payment obligations. Either party may terminate the Qilu Agreement if an undisputed material breach by the other party is not cured within a defined period of time, or upon notice for insolvency-related events of the other party that are not discharged within a defined time period. Qilu may terminate the Qilu Agreement in its entirety, at any time with at least sixty days written notice. All rights and obligations of Qilu with respect to such licensed patents and patent applications would terminate simultaneously. On January 23, 2026 the Company entered into a mutual termination of the February 2021 Exclusive License and Collaboration Agreement with Qilu Pharmaceutical Co., Ltd. This action resulted in all licenses and other rights granted to Qilu reverting to the Company. Exclusive License and Collaboration Agreement - Kuva Labs In November 2024, the Company entered into an Exclusive License and Collaboration Agreement (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 was 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 % On November 30, 2025, Kuva Labs defaulted for non-payment of its obligation under the Agreement, and were unable to satisfy such obligation during the cure period that expired on December 31, 2025. As a result of the default and failure to cure such default, the Agreement was terminated. Non-Exclusive License Agreement - Catalent On October 8, 2025, the Company entered into a worldwide Non-Exclusive License Agreement (the “Non-Exclusive License Agreement” or the “Agreement”) with Catalent, Inc. (“Catalent”), pursuant to which the Company granted to Catalent, on a non-exclusive basis, certain of its intellectual property to exploit use of the Company’s novel iRGD cyclic peptide, certepetide, as an antibody drug conjugate (ADC) payload as part of Catalent’s SMARTag ® ADC platform. Under the Agreement, Catalent will assume full responsibility for research, development, and commercialization costs. In connection with entering into the Non-Exclusive License Agreement, the Company is eligible to receive pre-determined development milestone payments of up to $10.5 million in the aggregate. The Company is also eligible to receive tiered revenue sharing on future sales and/or partnerships, subject to specified royalty reductions as set forth in the Agreement, as well as a portion of any sublicense consideration received from the grant of any sublicense or similar rights under any of the rights or licenses granted to Catalent under the Agreement. The Agreement will remain in effect until it expires on a product-by-product and country-by-country basis at the end of the royalty term. Either party may terminate the Agreement upon the other party’s material breach, subject to specified notice and cure provisions, as well as resulting from the bankruptcy or insolvency of the other party. Catalent may also terminate the Agreement in its entirety at any time by giving the Company at least thirty (30) days prior written notice. In connection with the Agreement, Catalent has agreed to grant the Company a right of first negotiation for a license, in the event Catalent initiates a specific, organized out-licensing process of an asset resulting from the Agreement. Note 18 – Subsequent Events Proposed Acquisition by Kuva Labs Inc. On March 6, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kuva Labs Inc. (“Kuva”), and Kuva Acquisition Corp., a wholly owned subsidiary of Kuva (“Purchaser”). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Purchaser will commence a tender offer (the “Offer”) to purchase all of the issued and outstanding shares of common stock, par value $ 0.001 per share (the “Common Shares”), of the Company in exchange for (i) $ 5.00 per Common Share, net to the seller in cash, without interest, but subject to any applicable withholding of taxes (the “Closing Amount”) plus (ii) one non-tradeable contingent value right (each, a “CVR”), which represents the contractual right to receive a contingent cash payment of $ 1.00 per CVR if a New Drug Application or similar registration is filed or formally accepted for review by the FDA or any governmental authority in any jurisdiction with respect 104 to any pharmaceutical product that contains or incorporates the product candidate referred to as of the date of the Merger Agreement as certepetide, alone or in combination with one or more other therapeutically active ingredients, including all formulations, dosages, or modes of delivery, for any indication or patient population prior to the earlier of (a) 11:59 p.m. New York City Time on the seventh (7th) anniversary of the Closing Date (as defined in the Merger Agreement), and (b) termination of the CVR Agreement, (the Closing Amount plus one CVR, collectively, the “Offer Price”). If certain conditions are satisfied and the Offer is consummated, Kuva would acquire any remaining Shares for the Offer Price by a merger of Purchaser with and into the Company (the “Merger”). Upon completion of these transactions, the Company would no longer be a publicly traded company and the listing of its common stock on Nasdaq will terminate. Under the Merger Agreement, the Offer and the Merger are subject to customary closing conditions for a transaction of this nature. Kuva will be required to close on the Offer so long as there shall be validly tendered a number of shares that represents (and will represent immediately following the consummation of the Offer) at least a majority of the aggregate voting power of all shares then outstanding. There can be no assurance that the Offer and the Merger will be consummated. The foregoing description of the Merger Agreement is only a summary of certain material provisions thereof, does not purport to be complete. The full text of the Merger Agreement is filed as Exhibit 2.1 to this Annual Report on Form 10-K. Termination of Exclusive License and Collaboration Agreement with Qilu Pharmaceutical On January 23, 2026, the Company entered into a mutual termination of the February 2021 Exclusive License and Collaboration Agreement with Qilu Pharmaceutical Co., Ltd. This action resulted in all licenses and other rights granted to Qilu reverting to the Company. Sale of New Jersey Net Operating Losses On October 20, 2025, the Company received preliminary approval from the New Jersey Economic Development Authority ("NJEDA") to participate in the Technology Business Tax Certificate Transfer Program (the "Program"). The Program permits qualified companies to sell a percentage of their New Jersey net operating losses ("NJ NOLs") to unrelated profitable corporations. On February 15, 2026, the Company received final approval from the NJEDA, and it subsequently sold a portion of its NJ NOLs to a qualifying and approved buyer pursuant to the Program for net proceeds of $ 0.3 million. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable.