What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-11 · 108 added, 97 removed, 119 unchanged (63% of the section changed)

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In addition, certain preclinical data using certepetide in combination with antibody drug conjugates (ADCs) has been generated as part of our research collaboration with Catalent.

These data were presented recently at a scientific meeting during the fourth quarter of 2025.

These data were presented 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.

Our 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.

Our goal is to develop and commercialize products that address important unmet medical needs.

Recent Developments

Termination of Merger Agreement

On July 24, 2026, we terminated the previously announced Agreement and Plan of Merger, dated as of March 6, 2026, by and among Kuva Labs Inc., a Delaware corporation (“Parent”) and Kuva Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”), and us (as amended, the “Merger Agreement”), pursuant to Section 8.3(a) of the Merger Agreement (the “Termination”).

Pursuant to the Merger Agreement, Purchaser agreed to acquire all of our outstanding shares of common stock, par value, $0.001 per share (the “Common Shares”), validly tendered and not validly withdrawn through a tender offer (the “Offer”), at a purchase price of (i) $4.00 per Common Share, net to the seller in cash, without interest, plus (ii) one contingent value right (each, a “CVR”), representing the contractual right to receive two contingent cash payments up to an aggregate of $3.00 per CVR subject to the achievement of certain milestones, in accordance with the terms and subject to the conditions of a contingent value rights agreement.

The Offer was to be followed by a merger to acquire all remaining outstanding Common Shares for the same per share consideration paid in the Offer.

For a summary of the material terms of the Merger Agreement and the Offer, please see our Current Reports on Form 8-K filed with the Securities and Exchange Commission on March 9, 2026, April 3, 2026, May 4, 2026, May 29, 2026, June 9, 2026 and July 17, 2026 and our Solicitation/Recommendation Statement on Schedule 14D-9 and related amendments filed with the Securities and Exchange Commission on June 10, 2026, July 2, 2026, July 13, 2026, July 17, 2026 and July 21, 2026.

During the three and six months ended June 30, 2026, the Company received payments totaling $1,000,000 from Kuva related to the Merger Agreement, which are recorded in Other income (expense), net in the Consolidated Statements of Operations.

The Termination followed Parent and Purchaser’s failure to accept for payment all Common Shares validly tendered and not validly withdrawn pursuant to the Offer after the expiration of the Offer one minute after 11:59 p.m., New York City Time, on July 20, 2026.

Parent informed us that Parent had been unable to obtain sufficient financing for purposes of funding the Offer and instructed Equiniti Trust Company, LLC, in its capacity as depositary and paying agent for the Offer, to return the Common Shares tendered in the Offer to the holders thereof.

As a result of the Termination, Parent was obligated under the Merger Agreement to pay us a termination fee of $2,000,000.

In addition, we reserved all rights to seek all available legal remedies, including without limitation, damages for Willful Breach (as defined in the Merger Agreement) and any Enforcement Costs (as defined in the Merger Agreement).

On July 31, 2026, we commenced an action in the Court of Chancery of the State of Delaware suing Parent and Purchaser over their breach of the Merger Agreement.

Among other things, we are seeking payment of the termination fee and damages for the benefits our stockholders expected in connection with the transaction.

There can be no assurance that we will be able to obtain damages from Parent or Purchaser, even to the extent legally available in any litigation that we may pursue, due to our limited financial resources available to fund related litigation and to Parent’s or Purchaser’s potential inability to satisfy with its existing assets any judgment that we might obtain.

Reduction in Force

On August 3, 2026, our board of directors (the “Board”) approved a reduction in workforce by approximately 72%, effective immediately.

The decision was based on cost-reduction initiatives intended to reduce our ongoing operating expenses and maximize shareholder value as we plan to pursue strategic options.

Affected employees were offered separation benefits, including severance payments along with temporary healthcare coverage assistance for certain employees.

We estimate that we will incur approximately $1.2 million of costs in connection with the reduction in workforce related to severance pay and other related termination benefits, which are expected to be incurred through the quarter ending September 30, 2026.

This will be offset by a reversal of approximately $0.4 million in accrued bonus expense related to the terminated employees, as it was determined such bonuses will not be paid upon termination.

The charges we expect to incur in connection with this reduction in workforce are subject to a number of assumptions, risks and uncertainties, and actual results may materially differ.

We may also incur other material charges not currently contemplated due to events that may occur as a result of, or associated with, these actions.

In connection with the reduction in workforce approved by the Board on August 3, 2026, effective as of August 3, 2026, the employment of Dr.

Buck, M.D., our Executive Vice President of R&D and Chief Medical Officer was terminated.

Pursuant to the Amended and Restated Employment Agreement, dated as of June 10, 2025, between us and Dr.

Buck (the “Buck Employment Agreement”), Dr.

Buck’s departure from our company will constitute a termination without Cause (as defined in the Buck Employment Agreement), and, in accordance therewith, subject to Dr.

Buck executing a release in favor of us, Dr.

Buck will be entitled to receive an amount equal to 12 months of her base salary and target bonus compensation and we shall pay COBRA premiums for Dr.

Buck and her covered dependents for a period of up to 12 months.

Review of Strategic Alternatives

Our board of directors is assessing strategic options to enhance stockholder value, which may include, but are not limited to, an acquisition, merger, reverse merger, other business combination, sales of assets, liquidation and dissolution or other strategic transactions.

There can be no assurance that the process to identify strategic alternatives for our business will result in a successfully consummated transaction.

If we are unable to identify a viable strategic alternative or if such a transaction is not completed in a timely manner, or if we are unable to raise additional capital sufficient to fund our operations, our board of directors may determine to pursue liquidation and dissolution or other wind down of our business.

In such an event, the amount of cash available for distribution to our stockholders, if any, will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as we fund our operations while we evaluate our strategic options.

Development Programs

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Co-administration does not create a new chemical entity (“NCE”) with its attendant development and regulatory hurdles, thereby providing an anticipated faster-to-clinic and faster-to-market product opportunity for a range of combination therapies.

That said, an attractive life-cycle

management strategy for certepetide would be to molecularly bind it to a variety of anti-cancer agents (as an alternative to co-administration), thereby creating new NCEs with the potential for distinct patent protection, compositionally or otherwise.

That said, an attractive life-cycle management strategy for certepetide would be to molecularly bind it to a variety of anti-cancer agents (as an alternative to co-administration), thereby creating new NCEs with the potential for distinct patent protection, compositionally or otherwise.

Certepetide has demonstrated favorable safety, tolerability, and activity to date in clinical trials enhancing the selective delivery of standard-of-care chemotherapies for mPDAC.

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Certepetide was also the subject of a Phase 2b trial in first-line mPDAC patients, the ASCEND trial.

We collaborated with the academic sponsor of the ASCEND trial, the Australasian Gastrointestinal Clinical Trials Group (AGITG) along with the University of Sydney to conduct the study at 25 sites in Australia and New Zealand.

We collaborated with the academic sponsor of the ASCEND trial, the Australasian Gastrointestinal Clinical Trials Group (AGITG) now called GI Cancer Trials along with the University of Sydney to conduct the study at 25 sites in Australia and New Zealand.

The Phase 2 double-blind, randomized (2:1), placebo-controlled, multi-center ASCEND trial evaluated certepetide in combination with SoC chemotherapy (gemcitabine and nab-paclitaxel) for the treatment of mPDAC.

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Cohort A, where 95 patients received a single intravenous (IV) dose of certepetide 3.2 mg/kg or placebo in combination with SoC, and Cohort B, where 63 patients received two IV doses of certepetide 3.2 mg/kg or placebo administered 4 hours apart in combination with SoC.

The preliminary data from Cohort A were reported at the ASCO GI meeting on January 24, 2025, demonstrating a median overall survival (mOS) of 12.68 months for the certepetide treated group, compared to 9.72 months for the placebo treated group.

The preliminary data from Cohort A were reported at the ASCO GI meeting on January 24, 2025, demonstrating a median overall survival (mOS) of 12.68 months

for the certepetide treated group, compared to 9.72 months for the placebo treated group.

Despite a numerical trend in 6-month PFS favoring the certepetide treatment group, no significant improvement in median PFS was observed (mPFS of 5.5 months in both groups).

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The preliminary data from Cohort B were presented at the ESMO-GI meeting in July 2025, demonstrating a six-month progression-free survival (“6MPFS”) of 60.8% for the certepetide-treated group, whereas the 6MPFS in the placebo-treated group was 25%.

Median progression-free survival

(“mPFS”) was 7.5 months for the certepetide-treated group and 4.7 months for the placebo-treated group.

Median progression-free survival (“mPFS”) was 7.5 months for the certepetide-treated group and 4.7 months for the placebo-treated group.

Objective response rate (“ORR”) was 45.2% for the certepetide-treated group and 19% for the placebo-treated group.

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The adverse event profile of Cohorts A and B remain similar in subjects treated with certepetide compared to placebo, confirming previous observations of certepetide’s benign safety profile.

Additional data from Cohorts A and B was presented at the ESMO annual meeting in October 2025 with a final study report of the ASCEND study anticipated to be made available later this year.

Additionally, certepetide remains the subject of ongoing clinical trials being conducted globally in a variety of solid tumor types and in combination with several chemotherapy and immunotherapy anti-cancer regimens.

Additional data from Cohorts A and B was presented at the ESMO annual meeting in October 2025 with a final study report of the ASCEND study anticipated to be made available in 2026.

Additionally, certepetide is the subject of clinical trials being conducted globally in a variety of solid tumor types and in combination with several chemotherapy and immunotherapy anti-cancer regimens.

These include three investigator-initiated trials:

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Lisata’s Phase 2a BOLSTER trial, evaluating a single 3.2 mg/kg dose of certepetide in combination with standards of care in first and second-line cholangiocarcinoma completed and demonstrated no evidence of benefit or increase in adverse events when a single 3.2 mg/kg dose of certepetide was added to standard of care.

Recent Developments

Proposed Acquisition by Kuva Labs Inc.

On March 6, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kuva Labs Inc., 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 agreed to commence a tender offer (the “Offer”) to purchase all of our issued and outstanding shares of common stock in exchange for (i) $5.00 per 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 CVR, which represents the contractual right to receive a contingent cash payment of $1.00 per CVR if the Milestone is met as further described in the CVR Agreement.

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 us.

Following completion of the transaction, we will become part of Kuva, a privately-held company, and our common stock will be delisted from Nasdaq.

We will also apply to deregister our common stock and cease to be a reporting company under the United States Securities Exchange Act of 1934, as amended.

Under the Merger Agreement, the Offer and the Merger will be 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.

We cannot predict whether and when the conditions to closing will be satisfied.

Until these conditions are satisfied and we and Kuva complete the proposed transaction, our business, operating results and financial condition are exposed to certain risks due to the effect of the pending proposed transaction.

Refer to Item 1A.

“Risk Factors” in our 2025 Form 10-K for a summary of risks related to the proposed transaction.

On April 2, 2026, we agreed to extend the date by which Kuva was obligated to commence the tender offer for all of the outstanding shares of common stock of the Company pursuant to the Merger Agreement from April 3, 2026, to April 13, 2026, or such other date as may be agreed to between us and Kuva.

On May 3, 2026, we, Kuva and Purchaser entered into an amendment and waiver (the “Amendment and Waiver”) to the Merger Agreement pursuant to which we agreed to extend the date by which Purchaser is obligated to commence the Offer from April 13, 2026 to May 29, 2026, or such other date as may be agreed to between us and Kuva.

Under the Amendment and Waiver, Kuva has also agreed to pay certain of our expenses, up to $1.1 million in the aggregate, until commencement of the Offer.

From the date of the Amendment and Waiver until May 29, 2026, we have agreed not to pursue any claim against Kuva, Purchaser or their affiliates arising from or relating to the Merger Agreement or the transactions contemplated thereby.

Upon commencement of the Offer and payment by Kuva of all amounts then due under the Amendment and Waiver, we shall irrevocably waive any claims to the extent arising from or relating to the Purchaser’s failure to commence the Offer by April 13, 2026.

Our agreements not to pursue certain claims and to waive certain claims as described above are subject to termination by us if (i) Kuva fails to make any payment under the Amendment and Waiver when due or (ii) Kuva commits a material breach of the Amendment and Waiver (other than a payment default) that materially adversely affects the transactions contemplated by the Merger Agreement and fails to cure such breach within two business days after written notice thereof from us.

Purchaser has not yet commenced the Offer.

On May 4, 2026, Kuva announced its intention to commence the Offer by May 29, 2026.

There can be no assurance as to when the Offer will commence, if at all.

The foregoing description of the Merger Agreement is only a summary of certain material provisions thereof, and does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is filed as Exhibit 2.1 to our 2025 Form 10-K.

In addition, the foregoing description of the Amendment and Waiver does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment and Waiver, which is filed as Exhibit 2.1 to our Current Report on Form 8-K filed on May 4, 2026.

Termination of Qilu Exclusive License and Collaboration Agreement

On January 23, 2026, we and Qilu Pharmaceutical Co., Ltd.

(“Qilu”) entered into a Mutual Termination Agreement (the “Termination Agreement”) relating to the Exclusive License and Collaboration Agreement between us (formerly Cend Therapeutics, Inc.

(“Cend”)) and Qilu, relating to the research, development and commercialization of certepetide (formerly known as CEND-1), dated February 11, 2021, as amended on April 26, 2021, and further amended by the Side Letter Agreement, dated November 10, 2023 (collectively the “License and Collaboration Agreement”).

Previously, Cend (which was subsequently acquired by us) and Qilu entered into the License and Collaboration Agreement, pursuant to which we granted Qilu a royalty-bearing exclusive license for the research, development and commercialization of certepetide in the Greater China territory (including Mainland China, Hong Kong, Macau, and Taiwan).

Pursuant to the License and Collaboration Agreement, we were eligible to receive up to $200 million in development and commercial milestone payments and royalties ranging from 10% to 15% on licensed product sales.

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 our 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.

We have not received any additional development and commercial milestone payments since the Cend Merger.

Pursuant to the Termination Agreement, the License and Collaboration Agreement is terminated, effective as of January 23, 2026, and is no longer in effect, except that the termination does not relieve the parties from obligations under the License and Collaboration Agreement that accrued prior to the termination and certain other provisions expressly indicated to survive the termination.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and March 31, 2025 (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and June 30, 2025 (in thousands):

Three Months Ended June 30,

2026 2025 Change

Revenue $ — $ 70 $ (70)

Operating Expenses:

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Net loss $ (2,929) $ (4,659) $ 1,730

Overall, net losses were $4.5 million for the three months ended March 31, 2026, compared to $4.7 million for the three months ended March 31, 2025.

Overall, net losses were $2.9 million for the three months ended June 30, 2026, compared to $4.7 million for the three months ended June 30, 2025.

We did not have any revenue for the three months ended June 30, 2026.

For the three months ended June 30, 2025, revenue totaled $70 thousand in connection with an upfront license fee related to a research license agreement.

Operating Expenses

For the three months ended March 31, 2026, operating expenses totaled $4.9 million, compared to $5.8 million for the three months ended March 31, 2025, representing a decrease of $0.9 million or 15.5%.

For the three months ended June 30, 2026, operating expenses totaled $4.0 million, compared to $4.9 million for the three months ended June 30, 2025, representing a decrease of $0.9 million or 19.2%.

Operating expenses are comprised of the following:

• Research and development expenses were approximately $1.2 million for the three months ended March 31, 2026, compared to $2.6 million for the three months ended March 31, 2025, representing a decrease of $1.4 million or 53.7%.

• Research and development expenses were approximately $0.6 million for the three months ended June 30, 2026, compared to $2.3 million for the three months ended June 30, 2025, representing a decrease of $1.7 million or 74.1%.

This was primarily due to a reduction in expenses associated with our Phase 2a proof-of-concept Bolster trial which completed in the prior year and a reduction in clinical department expenses as a result of the elimination of several positions during the prior year.

• General and administrative expenses were approximately $3.7 million for the three months ended March 31, 2026, compared to $3.2 million for the three months ended March 31, 2025, representing an increase of $0.5 million or 15.2%.

• General and administrative expenses were approximately $3.4 million for the three months ended June 30, 2026, compared to $2.7 million for the three months ended June 30, 2025, representing an increase of $0.7 million or 26.9%.

This was primarily due to an increase in legal fees and consulting expenses in connection with the proposed acquisition by Kuva Labs Inc.

Historically, to minimize our use of cash, we have used a variety of equity instruments to compensate employees, consultants and other service providers.

The use of these instruments has resulted in charges to the results of operations, which have been significant in the past.

Total other income was $1.1 million for three months ended June 30, 2026, compared to $0.2 million for the three months ended June 30, 2025, representing an increase of $0.9 million primarily due to a $1.0 million receipt from Kuva related to the Merger Agreement partially offset by a reduction of investment income of $0.1 million from cash and cash equivalents as a result of lower investment balances.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and June 30, 2025 (in thousands):

Six Months Ended June 30,

2026 2025 Change

Revenue $ — $ 70 $ (70)

Operating Expenses:

Research and development 1,787 4,856 (3,069)

General and administrative 7,146 5,930 1,216

Total operating expenses 8,933 10,786 (1,853)

Loss from operations (8,933) (10,716) 1,783

Total other income 1,128 371 757

Benefit from income taxes (387) (962) (575)

Net loss $ (7,418) $ (9,383) $ 1,965

We did not have any revenue for the six months ended June 30, 2026.

For the six months ended June 30, 2025, revenue totaled $70 thousand in connection with an upfront license fee related to a research license agreement.

Operating Expenses

For the six months ended June 30, 2026, operating expenses totaled $8.9 million, compared to $10.8 million for the six months ended June 30, 2025, representing a decrease of $1.9 million or 17.2%.

Operating expenses are comprised of the following:

• Research and development expenses were approximately $1.8 million for the six months ended June 30, 2026, compared to $4.9 million for the six months ended June 30, 2025, representing a decrease of $3.1 million or 63.2%.

• General and administrative expenses were approximately $7.1 million for the six months ended June 30, 2026, compared to $5.9 million for the six months ended June 30, 2025, representing an increase of $1.2 million or 20.5%.

This was primarily due to an increase in legal fees and consulting expenses in connection with the proposed acquisition by Kuva Labs Inc.

partially offset by severance costs in the prior year and lower equity expense in the current year.

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Other Income (Expense)

Total other income (expense) is comprised primarily of investment income from cash, cash equivalents and marketable securities and losses on sales of our New Jersey net operating losses for the three months ended March 31, 2026 and 2025.

Total other income was $1.1 million for the six months ended June 30, 2026, compared to $0.4 million for the six months ended June 30, 2025, representing an increase of $0.8 million primarily due to a $1.0 million receipt from Kuva related to the Merger Agreement partially offset by a reduction of investment income of $0.3 million from cash and cash equivalents as a result of lower investment balances.

Income Tax Benefit

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Analysis of Liquidity and Capital Resources

As of March 31, 2026, we had cash and cash equivalents of approximately $13.1 million, working capital of approximately $10.7 million, and stockholders’ equity of approximately $10.9 million.

During the three months ended March 31, 2026, we met our immediate cash requirements through existing cash balances.

As of June 30, 2026, we had cash and cash equivalents of approximately $10.4 million, working capital of approximately $8.0 million, and stockholders’ equity of approximately $8.2 million.

During the six months ended June 30, 2026, we met our immediate cash requirements through existing cash balances.

Additionally, we used equity and equity-linked instruments to pay for services and compensation.

Net cash (used in) or provided by, operating, investing and financing activities were as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities $ (5,732) $ (9,358)

Net cash provided by investing activities — 9,936

Net cash provided by (used in) financing activities 181 (23)

Net cash provided by financing activities 210 41

Operating Activities

Our cash used in operating activities during the three months ended March 31, 2026 was $3.1 million, which is comprised of (i) our net loss of $4.5 million, adjusted for non-cash expenses totaling $0.4 million (which includes adjustments for equity-based compensation and depreciation), and (ii) changes in operating assets and liabilities providing approximately $1.0 million.

Our cash used in operating activities during the three months ended March 31, 2025 was $5.4 million, which is comprised of (i) our net loss of $4.7 million, adjusted for non-cash expenses totaling $0.5 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities) and (ii) changes in operating assets and liabilities using approximately $1.2 million.

Our cash used in operating activities during the six months ended June 30, 2026 was $5.7 million, which is comprised of (i) our net loss of $7.4 million, adjusted for non-cash expenses totaling $0.6 million (which includes adjustments for equity-based compensation and depreciation), and (ii) changes in operating assets and liabilities providing approximately $1.1 million.

Our cash used in operating activities during the six months ended June 30, 2025 was $9.4 million, which is comprised of (i) our net loss of $9.4 million, adjusted for non-cash expenses totaling $0.8 million (which includes adjustments for equity-based compensation, depreciation and amortization, and amortization/accretion of marketable securities) and (ii) changes in operating assets and liabilities using approximately $0.8 million.

Investing Activities

Our cash provided by investing activities during the three months ended March 31, 2026 totaled $0.

Our cash provided by investing activities during the three months ended March 31, 2025 totaled $9.4 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities).

Our cash provided by investing activities during the six months ended June 30, 2026 totaled $0.

Our cash provided by investing activities during the six months ended June 30, 2025 totaled $9.9 million and was primarily due to net sales of marketable securities (net of purchases of marketable securities).

Financing Activities

Our cash provided by financing activities during the three months ended March 31, 2026 totaled $0.2 million and consisted primarily of warrant exercise proceeds of $0.2 million, option exercise proceeds of $0.1 million partially offset by tax withholding-related payments on net share settlement equity awards to employees of $0.2 million.

Our cash used in financing activities during the three months ended March 31, 2025 totaled $23.0 thousand and consisted primarily of tax withholding-related payments on net share settlement equity awards to employees of $0.2 million partially offset by $0.2 million in proceeds from the issuance of shares through our ATM Agreement (as defined below).

Our cash provided by financing activities during the six months ended June 30, 2026 totaled $0.2 million and consisted primarily of warrant exercise proceeds of $0.2 million, option exercise proceeds of $0.1 million partially offset by tax withholding-related payments on net share settlement equity awards to employees of $0.2 million.

Our cash used in financing activities during the six months ended June 30, 2025 totaled $41.0 thousand and consisted of $0.3 million in proceeds primarily from the issuance of shares through our ATM Agreement (as defined below) partially offset by tax withholding-related payments on net share settlement equity awards to employees of $0.3 million.

Liquidity and Capital Requirements Outlook

As of March 31, 2026, we had cash and cash equivalents of approximately $13.1 million.

We will need to raise additional capital to fund our planned future operations.

As of June 30, 2026, we had cash and cash equivalents of approximately $10.4 million.

We will need to raise additional capital to fund our operations.

However, we cannot guarantee that we will be able to obtain sufficient additional funding or that if we do obtain additional funding, that such funding will be obtainable on terms satisfactory to us.

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The accompanying financial statements have been prepared on a going concern basis and do not include any adjustments to the carrying amounts and classification of assets and liabilities that may be necessary if we were unable to continue as a going concern.

To meet our short and long-term liquidity needs, we expect to use existing cash balances and a variety of other means.

To meet our short and long-term liquidity needs, including severance payments, we expect to use existing cash balances.

Other sources of liquidity could include additional potential issuances of debt or equity securities in public or private financings, partnerships and/or collaborations and/or sale of assets.

In addition, we have sued Kuva to receive the termination fee under the Merger Agreement and for damages for the benefits our stockholders expected in connection with the transaction.

However, there can be no assurance that we will be able to obtain the termination fee or damages from Kuva.

Our history of operating losses and liquidity challenges may make it difficult for us to raise capital on acceptable terms or at all.

The demand for the equity and debt of pharmaceutical companies like ours is dependent upon many factors, including the general state of the financial markets.

During times of

extreme market volatility, capital may not be available on favorable terms, if at all.

for the equity and debt of pharmaceutical companies like ours is dependent upon many factors, including the general state of the financial markets.

During times of extreme market volatility, capital may not be available on favorable terms, if at all.

Our inability to obtain such additional capital could materially and adversely affect our business operations.

We will also continue to seek, as appropriate, grants for scientific and clinical studies from various governmental agencies and foundations, and other sources of non-dilutive funding.

As discussed above under recent developments, on March 6, 2026, we entered into the Merger Agreement with Kuva.

Pursuant to the Merger Agreement, Kuva agreed to commence the Offer to purchase all of the issued and outstanding shares of common stock of the Company in exchange for (i) $5.00 per share, net to the seller in cash, without interest, but subject to any applicable withholding of taxes plus (ii) one non-tradeable 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.

On April 2, 2026, we agreed to extend the date by which Kuva was obligated to commence the Offer from April 3, 2026 to April 13, 2026.

On May 3, 2026, we, Kuva and Purchaser entered the Amendment and Waiver to the Merger Agreement pursuant to which we agreed to extend the date by which Purchaser is obligated to commence the Offer from April 13, 2026 to May 29, 2026, or such other date as may be agreed to between us and Kuva.

Under the Amendment and Waiver, Kuva has also agreed to pay certain of our expenses, up to $1.1 million in the aggregate, until commencement of the Offer.

Purchaser has not yet commenced the Offer.

On May 4, 2026, Kuva announced its intention to commence the Offer by May 29, 2026.

There can be no assurance as to when the Offer will commence, if at all.

If the proposed acquisition does not occur, we may pursue other strategic alternatives.

Our future capital requirements are difficult to forecast and will depend on many factors including the timing and nature of any other strategic transactions that we undertake;

and our ability to establish and maintain collaboration partnerships, in-license/out-license or other similar arrangements and the financial terms of such agreements.

On June 4, 2021, we entered into the ATM Agreement with H.C.

Wainwright & Co., LLC as sales agent, in connection with an “at the market offering” under which we from time to time may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million.

As of the date of this filing and so long as our public float remains below $75.0 million, we are subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the “Baby Shelf Limitation”), which limits the amount we can offer to up to one-third of our public float during any trailing 12-month period.

Subsequent to the filing of a prospectus supplement to our 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 our outstanding common stock held by non-affiliates was approximately $29.6 million.

Pursuant to the Baby Shelf Limitation, since the aggregate market value of our 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 we are permitted to offer and sell is now $9,855,890, which was equal to one-third of the aggregate market value of our common stock held by non-affiliates as of August 20, 2024.

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

During the three months ended March 31, 2026, we did not issue any shares of common stock under the ATM Agreement.

Since inception, we have issued 330,938 shares of common stock under the ATM Agreement for net proceeds of $1,065,608.

While we continue to seek capital through a number of means, there can be no assurance that additional financing will be available on acceptable terms, if at all, and our negotiating position in capital generating efforts may worsen as existing resources are used.

Additional equity financing may be dilutive to our stockholders;

debt financing, if available, may involve significant cash payment obligations and covenants that restrict our ability to operate as a business;

our stock price may not reach levels necessary to induce option or warrant exercises;

and asset sales may not be possible on terms we consider acceptable.

If we are unable to access capital necessary to meet our long-term liquidity needs, we may have to delay the expansion of our business or raise funds on terms that we currently consider unfavorable.

On July 24, 2026, following the termination of the Merger Agreement, we announced that our board of directors initiated a process to explore a range of strategic options to enhance stockholder value, which may include, but are not limited to, an acquisition, merger, reverse merger, other business combination, sales of assets, dissolution or other strategic transactions.

Our board of directors continues to evaluate potential strategic alternatives.

We expect to continue devoting significant time and resources and to incur expenses in identifying and evaluating strategic alternatives for our company, which could have a material adverse effect on our business.

A considerable portion of these expenses will be incurred regardless of whether a transaction is completed.

Any such expenses will decrease the remaining cash available for use in our business.

As a result of our reduction in force of approximately 72% of our employees, we estimate that we will incur approximately $1.2 million of costs in connection with the reduction in workforce related to severance pay and other related termination benefits.

The charges we expect to incur in connection with this reduction in workforce are subject to a number of assumptions, risks and uncertainties, and actual results may materially differ.

We may also incur other material charges not currently contemplated due to events that may occur as a result of, or associated with, these actions.

In the event that we do not successfully identify a viable strategic alternative, or consummate such a transaction, or if we are unable to raise sufficient capital to fund our operations, our board of directors may determine to pursue a liquidation and dissolution or other wind down of our business.

In such an event, the amount of cash available for distribution to our stockholders, if any, will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

Off-Balance Sheet Arrangements

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Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and estimates during the three months ended March 31, 2026, compared to those reported in our 2025 Form 10-K.

There have been no material changes in our critical accounting policies and estimates during the six months ended June 30, 2026, compared to those reported in our 2025 Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis