LISATA THERAPEUTICS, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, 2026 December 31, 2025 ASSETS (Unaudited) Cash and cash equivalents $ 10,443 $ 15,956 Prepaid and other current assets 570 1,747 Total current assets 11,013 17,703 Property and equipment, net 14 18 Other assets — 23 Total assets $ 11,027 $ 17,744 LIABILITIES, NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY Liabilities Accounts payable $ 836 $ 1,019 Accrued liabilities 2,151 2,052 Total current liabilities 2,987 3,071 Other long-term liabilities 50 72 Total liabilities 3,037 3,143 Contingencies (Note 13) Stockholders' Equity Common stock, $ 0.001 par value, authorized 500,000,000 shares; issued 9,119,742 and 8,834,613 shares at June 30, 2026 and December 31, 2025, respectively; and outstanding, 9,119,004 and 8,833,875 shares at June 30, 2026 and December 31, 2025, respectively 9 9 Additional paid-in capital 581,030 580,243 Treasury stock, at cost; 738 shares at June 30, 2026 and December 31, 2025 ( 708 ) ( 708 ) Accumulated deficit ( 572,070 ) ( 564,652 ) Accumulated other comprehensive loss ( 17 ) ( 37 ) Total Lisata Therapeutics, Inc. stockholders' equity 8,244 14,855 Non-controlling interests ( 254 ) ( 254 ) Total equity 7,990 14,601 Total liabilities, non-controlling interests and stockholders' equity $ 11,027 $ 17,744 See accompanying notes to consolidated financial statements. 5 Index LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ — $ 70 $ — $ 70 Operating Expenses: Research and development 584 2,253 1,787 4,856 General and administrative 3,408 2,685 7,146 5,930 Total operating expenses 3,992 4,938 8,933 10,786 Operating loss ( 3,992 ) ( 4,868 ) ( 8,933 ) ( 10,716 ) Other income (expense): Investment income, net 79 216 199 482 Other income (expense), net 984 ( 7 ) 929 ( 111 ) Total other income 1,063 209 1,128 371 Net loss before benefit from income taxes and noncontrolling interests ( 2,929 ) ( 4,659 ) ( 7,805 ) ( 10,345 ) Benefit from income taxes — — ( 387 ) ( 962 ) Net loss $ ( 2,929 ) $ ( 4,659 ) $ ( 7,418 ) $ ( 9,383 ) Less - net income (loss) attributable to noncontrolling interests — — — — Net loss attributable to Lisata Therapeutics, Inc. common stockholders $ ( 2,929 ) $ ( 4,659 ) $ ( 7,418 ) $ ( 9,383 ) Basic and diluted loss per share Lisata Therapeutics, Inc. common stockholders $ ( 0.32 ) $ ( 0.54 ) $ ( 0.82 ) $ ( 1.09 ) Weighted average common shares outstanding Basic and diluted shares 9,106 8,605 9,056 8,604 See accompanying notes to consolidated financial statements. 6 Index LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net loss $ ( 2,929 ) $ ( 4,659 ) $ ( 7,418 ) $ ( 9,383 ) Other comprehensive gain (loss): Available for sale securities - net unrealized gain — 4 — 3 Cumulative translation adjustment arising during the period 4 24 20 28 Total other comprehensive gain 4 28 20 31 Comprehensive loss attributable to Lisata Therapeutics, Inc. common stockholders $ ( 2,925 ) $ ( 4,631 ) $ ( 7,398 ) $ ( 9,352 ) See accompanying notes to consolidated financial statements. 7 Index LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (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 March 31, 2025 $ 8,621 $ 9 $ 578,923 $ ( 78 ) $ ( 552,790 ) $ ( 708 ) $ 25,356 $ ( 254 ) $ 25,102 Net loss — — — — ( 4,659 ) — ( 4,659 ) — ( 4,659 ) Share-based compensation ( 22 ) — 230 — — — 230 — 230 Net proceeds from issuances of common stock 28 — 74 — — — 74 — 74 Unrealized gain on marketable securities — — — 4 — — 4 — 4 Foreign currency translation adjustment — — — 24 — — 24 — 24 Balance at June 30, 2025 8,627 $ 9 $ 579,227 $ ( 50 ) $ ( 557,449 ) $ ( 708 ) $ 21,029 $ ( 254 ) $ 20,775 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, 2024 8,410 $ 8 $ 578,418 $ ( 81 ) $ ( 548,066 ) $ ( 708 ) $ 29,571 $ ( 254 ) $ 29,317 Net loss — — — — ( 9,383 ) — ( 9,383 ) — ( 9,383 ) Share-based compensation 129 — 516 — — — 516 — 516 Net proceeds from issuances of common stock 84 1 285 — — — 286 — 286 Proceeds from option exercises 4 — 8 — — — 8 — 8 Unrealized gain on marketable securities — — — 3 — — 3 — 3 Foreign currency translation adjustment — — — 28 — — 28 — 28 Balance at June 30, 2025 8,627 $ 9 $ 579,227 $ ( 50 ) $ ( 557,449 ) $ ( 708 ) $ 21,029 $ ( 254 ) $ 20,775 8 Index 9 Index 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 March 31, 2026 9,108 $ 9 $ 580,787 $ ( 21 ) $ ( 569,141 ) $ ( 708 ) $ 10,926 $ ( 254 ) $ 10,672 Net loss — — — — ( 2,929 ) — ( 2,929 ) — ( 2,929 ) Share-based compensation ( 5 ) — 214 — — — 214 — 214 Net proceeds from issuances of common stock 17 — 29 — — — 29 — 29 Foreign currency translation adjustment — — — 4 — — 4 — 4 Balance at June 30, 2026 9,120 $ 9 $ 581,030 $ ( 17 ) $ ( 572,070 ) $ ( 708 ) $ 8,244 $ ( 254 ) $ 7,990 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, 2025 8,835 $ 9 $ 580,243 $ ( 37 ) $ ( 564,652 ) $ ( 708 ) $ 14,855 $ ( 254 ) $ 14,601 Net loss — — — — ( 7,418 ) — ( 7,418 ) — ( 7,418 ) Share-based compensation 114 — 418 — — — 418 — 418 Net proceeds from issuances of common stock 17 — 29 — — — 29 — 29 Proceeds from option exercise 79 — 124 — — — 124 — 124 Proceeds from warrant exercise 75 — 216 — — — 216 — 216 Foreign currency translation adjustment — — — 20 — — 20 — 20 Balance at June 30, 2026 9,120 $ 9 $ 581,030 $ ( 17 ) $ ( 572,070 ) $ ( 708 ) $ 8,244 $ ( 254 ) $ 7,990 10 Index LISATA THERAPEUTICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 7,418 ) $ ( 9,383 ) Adjustments to reconcile net loss to net cash used in operating activities: Share-based compensation 578 769 Depreciation and amortization 5 87 Amortization/accretion on marketable securities — ( 61 ) Changes in operating assets and liabilities: Accounts receivable — 399 Prepaid and other current assets 1,203 63 Other assets 21 90 Accounts payable, accrued liabilities and other liabilities ( 121 ) ( 1,322 ) Net cash used in operating activities ( 5,732 ) ( 9,358 ) Cash flows from investing activities: Purchase of marketable securities — ( 9,180 ) Sale of marketable securities — 19,144 Purchase of property and equipment — ( 28 ) Net cash provided by investing activities — 9,936 Cash flows from financing activities: Proceeds from exercise of options 124 8 Tax withholding payments on net share settlement equity awards ( 159 ) ( 253 ) Proceeds from exercise of warrants 216 — Net proceeds from issuance of common stock 29 286 Net cash provided by financing activities 210 41 Effect of exchange rate changes on cash 9 7 Net (decrease) increase in cash and cash equivalents ( 5,513 ) 626 Cash and cash equivalents at beginning of period 15,956 16,209 Cash and cash equivalents at end of period $ 10,443 $ 16,835 See accompanying notes to consolidated financial statements. 11 Index LISATA THERAPEUTICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED 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 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 has been 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 $ 10.4 million as of June 30, 2026. 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”). Investigator sponsored studies in glioblastoma, pancreatic, colon, and appendiceal cancers are ongoing or have completed with results reporting entirely under the auspices of the sponsors. 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 is seeking additional funding and considering strategic options. However, additional funding may not be available on terms acceptable to the Company or at all. The Company is also continuing to reduce current spending requirements. 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. 12 Index Termination of Merger Agreement On July 24, 2026, the Company terminated the previously announced Agreement and Plan of Merger, dated as of March 6, 2026, by and among Kuva Labs Inc., a Delaware corporation (“Kuva” or “Parent”) and Kuva Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”), and the Company (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 the outstanding shares of common stock, par value, $ 0.001 per share (the “Common Shares”), of the Company 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 the Company’s 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 the Company’s 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 follows 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 the Company that Parent has 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 is obligated under the Merger Agreement to pay the Company a termination fee of $ 2,000,000 . In addition, the Company 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, the Company 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, the Company is seeking payment of the termination fee and damages for the benefits its stockholders expected in connection with the transaction. There can be no assurance that the Company will be able to obtain damages from Parent or Purchaser, even to the extent legally available in any litigation that the Company may pursue, due to the Company’s 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 the Company might obtain. Review of Strategic Alternatives The Company’s 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 exploration of strategic alternatives will result in any agreements or transactions, or that, if completed, any agreements will be reached, or transactions will be successfully consummated or on attractive terms. Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying Consolidated Financial Statements of the Company and its subsidiaries, which are unaudited, include all normal and recurring adjustments considered necessary to present fairly the Company’s financial position as of June 30, 2026, and the results of its operations and its cash flows for the periods presented. The unaudited consolidated financial statements herein should be read together with the historical consolidated financial statements of the Company for the years ended December 31, 2025 and 2024 included in our 2025 Form 10-K. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. 13 Index 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. Segment Information The Company operates as one operating segment, the research and development of its investigational drug product. The Company's Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who manages the business on a consolidated basis. Principles of Consolidation 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 Translation 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. Note 2 – Summary of Significant Accounting Policies 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 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 issues are known to exist, such as pending bankruptcies. Account balances are written off against the allowance when it is determined that the receivable will not be recovered. As of June 30, 2026 and December 31, 2025, there was no allowance for credit losses. 14 Index 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 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 targets 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. 15 Index 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 consisted 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 was stated at fair value and amortized using the straight-line method over its estimated useful life of 5.00 years. Amortization expense was $ 0 and $ 0 for the three and six months ended June 30, 2026, respectively, and $ 18 thousand and $ 35 thousand for the three and six months ended June 30, 2025, 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 time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company recognized no revenue for the three and six months ended June 30, 2026 and $ 70 thousand for the three and six months ended June 30, 2025. 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 three and six months ended June 30, 2026 and June 30, 2025, the Company has not recognized revenue related to milestones. 16 Index 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 in the Company's Consolidated Balance Sheets (in thousands) June 30, 2026 December 31, 2025 Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 8,834 $ — $ — $ 8,834 $ 11,640 $ — $ — $ 11,640 Total $ 8,834 $ — $ — $ 8,834 $ 11,640 $ — $ — $ 11,640 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): June 30, 2026 December 31, 2025 Cash equivalents $ 8,834 $ 11,640 Total $ 8,834 $ 11,640 The following table summarizes the Company's portfolio of available-for-sale securities by contractual maturity (in thousands): June 30, 2026 Amortized Cost Estimated Fair Value Less than one year $ 8,834 $ 8,834 Greater than one year — — Total $ 8,834 $ 8,834 Note 4 – Property and Equipment Property and equipment consisted of the following (in thousands): June 30, 2026 December 31, 2025 Computer equipment 494 494 Accumulated depreciation ( 480 ) ( 476 ) Property and equipment, net $ 14 $ 18 The Company’s results included depreciation expense of approximately $ 5 thousand and $ 52 thousand for the six months ended June 30, 2026 and 2025, respectively. 17 Index Note 5 – Income (Loss) Per Share For the six months ended June 30, 2026 and 2025, the Company incurred net losses and therefore no common stock equivalents were utilized in the calculation of diluted loss per share as they are anti-dilutive in the periods presented. At June 30, 2026 and 2025, the Company excluded the following potentially dilutive securities (in thousands): June 30, 2026 2025 Stock options 1,244 1,511 Warrants 367 1,497 Restricted stock units 477 325 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. The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 8,834 $ — $ — $ 8,834 $ 11,640 $ — $ — $ 11,640 $ 8,834 $ — $ — $ 8,834 $ 11,640 $ — $ — $ 11,640 The carrying values of cash, cash equivalents, accounts payable and accrued expenses approximate fair value as of June 30, 2026 and December 31, 2025, due to the short maturity nature of these items. 18 Index Note 7 – Accrued Liabilities Accrued liabilities as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Salaries, employee benefits and related taxes $ 1,499 $ 812 Legal liabilities 100 115 Clinical and R&D related liabilities 375 1,022 Accounting & tax consulting liabilities 156 62 Other 21 41 Total $ 2,151 $ 2,052 Note 8 – Stockholders' Equity Equity Issuances At The Market Offering Agreement 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 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 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 six months ended June 30, 2026, the Company did not issue any shares of common stock under the ATM Agreement. Since inception, the Company has issued 330,938 shares of common stock under the ATM Agreement for net proceeds of $ 1,065,608 . 19 Index Stock Options and Warrants The following table summarizes the activity for stock options and warrants for the six months ended June 30, 2026: 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, 2025 1,502,881 $ 6.17 4.77 $ 24.6 1,276,962 $ 40.80 0.29 $ — Changes during the period: Granted 101,550 1.97 — — Exercised ( 79,295 ) 1.57 ( 75,000 ) 2.88 Forfeited ( 4,015 ) 2.78 — — Expired ( 276,679 ) 5.36 ( 835,302 ) 43.01 Outstanding at June 30, 2026 1,244,442 $ 6.31 5.15 $ 262.9 366,660 $ 43.50 0.07 $ — Vested at June 30, 2026 or expected to vest in the future 1,234,795 $ 6.34 5.12 $ 253.9 366,660 $ 43.50 0.07 $ — Vested at June 30, 2026 1,087,130 $ 6.83 4.62 $ 143.3 366,660 $ 43.50 0.07 $ — Restricted Stock During the six months ended June 30, 2026 and 2025, the Company issued restricted stock for services as follows (in thousands, except share data): Six Months Ended June 30, 2026 2025 Number of restricted stock issued 199,900 215,550 Value of restricted stock issued $ 394 $ 819 The weighted average estimated fair value of restricted stock issued for services in the six months ended June 30, 2026 and 2025 was $ 1.97 and $ 3.80 per share, respectively. The fair value of the restricted stock was determined using the Company’s closing stock price on the date of issuance. The vesting terms of restricted stock issuances are generally between one and four years . 20 Index The following is a summary of the changes in non-vested restricted stock for the six months ended June 30, 2026: Restricted Stock Shares Weighted Average Grant-Date Fair Value Non-vested at December 31, 2025 265,036 $ 3.46 Changes during the Year: Granted 199,900 $ 1.97 Vested ( 172,848 ) $ 2.95 Forfeited ( 5,348 ) $ 2.70 Non-vested at June 30, 2026 286,740 $ 2.75 Restricted Stock Units During the six months ended June 30, 2026 and 2025, the Company issued restricted stock units for services as follows (in thousands, except share data): Six Months Ended June 30, 2026 2025 Number of restricted stock units issued 152,280 78,945 Value of restricted stock units issued $ 300 $ 300 The weighted average estimated fair value of restricted stock units issued for services in the three months ended June 30, 2026 and 2025 was $ 1.97 and $ 3.80 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 six months ended June 30, 2026: Restricted Stock Units Weighted Average Grant-Date Fair Value Non-vested at December 31, 2025 78,945 $ 3.80 Changes during the Year: Granted 152,280 $ 1.97 Vested ( 78,945 ) $ 3.80 Forfeited — $ — Non-vested at June 30, 2026 152,280 $ 1.97 Note 9 – 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 three and six months ended June 30, 2026 and 2025 (in thousands): 21 Index Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Research and development $ 36 $ 27 $ 107 $ 153 General and administrative 178 212 471 616 Total share-based compensation expense $ 214 $ 239 $ 578 $ 769 Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at June 30, 2026 were as follows (in thousands): Stock Options Restricted Stock Units Restricted Stock Unrecognized compensation cost $ 224 $ 158 $ 598 Expected weighted-average period in years of compensation cost to be recognized 1.74 0.53 1.82 Total fair value of shares vested and the weighted average estimated fair values of shares granted for the six months ended June 30, 2026 and 2025 were as follows (in thousands): Stock Options Warrants Six Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total fair value of shares vested $ 218 $ 264 $ — $ 150 Weighted average estimated fair value of shares granted $ 1.34 $ 2.60 $ — $ — 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. Note 10 – Income Taxes 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. 22 Index 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. 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. In February 2026, 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 $ 4.3 million of its New Jersey net operating losses (“NJ NOLs”) for net proceeds of $ 349 thousand. The sale of NJ NOLs resulted in a $ 387 thousand deferred income tax benefit and a loss on sale of $ 38 thousand 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. The 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 December 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 elected the one-year recovery method to deduct in full, in its first taxable year beginning after December 31, 2024, the remaining unamortized amount of its pre-2025 domestic R&E expenditures. The Company also changed its tax accounting method for domestic R&E expenditures paid or incurred in taxable years beginning after December 31, 2024, to the Section 174A(a) deduction method, under which such expenditures are deducted in the taxable year paid or incurred. The Company evaluated the effects of OBBBA and related guidance, including the elections and method changes described above, on its income tax provision for the six months ended June 30, 2026. The Company concluded that these provisions did not materially affect its condensed consolidated financial statements. The Company continues to monitor additional implementation guidance and enacted state tax conformity changes. Note 11 – 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. 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 23 Index 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 and $ 0 for the three and six months ended June 30, 2026, respectively, and $ 70 thousand and $ 70 thousand for the three and six months ended June 30, 2025, respectively. Depreciation and amortization expense was $ 3 thousand and $ 5 thousand for the three and six months ended June 30, 2026, respectively and $ 44 thousand and $ 87 thousand for the three and six months ended June 30, 2025, respectively. The following table illustrates our segment information for significant operating expenses and includes a reconciliation to net loss for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ — $ 70 $ — $ 70 Operating Expenses: Research and development by significant expense: BOLSTER trial $ ( 270 ) $ 605 $ ( 320 ) 1,393 ASCEND trial 27 32 201 53 Chemistry, manufacturing and controls 199 167 390 387 Clinical department 586 991 1,354 2,148 Other (1) 42 458 162 875 Research and development 584 2,253 1,787 4,856 General and administrative by significant expense: Corporate 1,483 1,157 2,816 2,302 Investor relations/public relations/communications 214 309 451 640 Finance 598 538 1,183 1,167 Legal 760 327 1,854 551 Business development 156 140 305 267 Share based compensation expense 178 212 471 616 Other (2) 19 2 66 387 General and administrative 3,408 2,685 7,146 5,930 Operating loss ( 3,992 ) ( 4,868 ) ( 8,933 ) ( 10,716 ) Other income, net 1,063 209 1,128 371 Benefit from income taxes — — ( 387 ) ( 962 ) Net loss $ ( 2,929 ) $ ( 4,659 ) $ ( 7,418 ) $ ( 9,383 ) Cash and marketable securities $ 10,443 $ 21,970 (1) Included in Other are the GBM study, FORTIFIDE study and research oncology expenses (2) Included in Other are facilities expense, human resource and information technology expenses Note 12 – 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 June 30, 2026 and December 31, 2025, the Company had $ 0.2 million and $ 0.7 million, respectively, recorded 24 Index 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. Note 13 – Contingencies From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. 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. Note 14 – 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 15 - 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 June 30, 2026 and December 31, 2025, 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 15 – 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 June 30, 2026. 25 Index Note 16 – Research Collaboration and License Agreements Exclusive License and Collaboration Agreement - Qilu Pharmaceutical On January 23, 2026, the Company and Qilu Pharmaceutical Co., Ltd. (“Qilu”) entered into a Mutual Termination Agreement (the “Termination Agreement”) relating to the Exclusive License and Collaboration Agreement between the Company (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 the Company) and Qilu entered into the License and Collaboration Agreement, pursuant to which the Company 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, the Company was 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 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 has 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. Exclusive License and Collaboration Agreement - Kuva Labs In November 2024, the Company entered into an Exclusive License and Collaboration Agreement (the “Kuva License Agreement”) in which the Company granted an exclusive license to Kuva Labs, Inc. 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 Kuva License 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 defaulted for non-payment of its obligation under the Kuva License 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. 26 Index Note 17 – Subsequent Events Termination of Merger Agreement On July 24, 2026, the Company 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 the Company (as amended, the “Merger Agreement”), pursuant to Section 8.3(a) of the Merger Agreement (the “Termination”). Reduction in Force On August 3, 2026, the board of directors (the “Board”) of the Company approved a reduction in workforce by approximately 72 %, effective immediately. The decision was based on cost-reduction initiatives intended to reduce the Company’s ongoing operating expenses and maximize shareholder value as the Company plans to pursue strategic options. Affected employees were offered separation benefits, including severance payments along with temporary healthcare coverage assistance for certain employees. The Company estimates that it 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 the Company expects 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. The Company 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. Kristen K. Buck, M.D., the Company’s 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 the Company and Dr. Buck (the “Buck Employment Agreement”), Dr. Buck’s departure from the 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 the Company, Dr. Buck will be entitled to receive an amount equal to 12 months of her base salary and target bonus compensation and the Company shall pay COBRA premiums for Dr. Buck and her covered dependents for a period of up to 12 months. In addition, on August 3, 2026, the Board approved a cash retention bonus to James Nisco, the Company’s Senior Vice President, Finance and Treasury and Chief Accounting Officer, in the amount of $ 200,000 . The cash bonus is payable within thirty ( 30 ) days of, and subject to continued employment with the Company through, December 31, 2026; provided that if the applicable executive’s employment is terminated by the Company without “Cause”, then the retention bonus shall be payable within thirty ( 30 ) days of the executive’s execution and non-revocation of a release of claims. Litigation against Kuva On July 31, 2026, the Company 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, the Company is seeking payment of the termination fee and damages for the benefits its stockholders expected in connection with the transaction. 27 Index