What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-21 compared with 2024-03-22 · 211 added, 128 removed, 831 unchanged (29% of the section changed)

51 unchanged sentences

(incorporated by reference to exhibit 3.1 of the Form 8-K filed December 17, 2021)

Form of Warrant Agreement issued in March 2019 offering (incorporated by reference to Exhibit 4.1 of the Form 8-K filed March 28, 2019)

Form of Underwriter Warrant Agreement issued in March 2019 offering (incorporated by reference to Exhibit 4.2 of the Form 8-K filed March 28, 2019)

Form of Warrant Agreement issued in April 2019 offering (incorporated by reference to Exhibit 4.1 of the Form 8-K filed April 24, 2019)

Form of Placement Agent Warrant Agreement issued in April 2019 offering (incorporated by reference to Exhibit 4.2 of the Form 8-K filed April 24, 2019)

Form of Warrant Agreement issued in February 2020 offering (incorporated by reference to Exhibit 4.1 of the Form 8-K filed February 6, 2020)

3 unchanged sentences

Form of Common Warrant Agreement issued in December 2023 offering (incorporated by reference to Exhibit 4.2 of the Form 8-K filed December 21, 2023)

Form of Pre-Funded Warrant issued in August 2024 offering (incorporated by reference to Exhibit 4.9 of the Form S-1/A filed August 15, 2024)

Form of Series A Common Warrant issued in August 2024 offering (incorporated by reference to Exhibit 4.10 of the Form S-1/A filed August 15, 2024)

Form of Series B Common Warrant issued in August 2024 offering (incorporated by reference to Exhibit 4.11 of the Form S-1/A filed August 15, 2024)

Form of Placement Agent Warrant issued in August 2024 offering (incorporated by reference to Exhibit 4.12 of the Form S-1/A filed August 15, 2024)

Form of Inducement Warrant (incorporated by reference to Exhibit 4.1 of the Form 8-K filed February 13, 2025)

Form of Pre-Funded Warrant issued in February 2025 offering (incorporated by reference to Exhibit 4.1 of the Form 8-K filed February 26, 2025)

Form of Common Warrant issued in February 2025 offering (incorporated by reference to Exhibit 4.2 of the Form 8-K filed February 26, 2025)

Moleculin Biotech, Inc.

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Scientific Advisory Board Agreement, dated February 28, 2020, entered into between the Company and Waldemar Priebe, PhD (incorporated by reference to Exhibit 10.26 of the Form 10-K filed March 19, 2020)

Purchase Agreement dated June 25, 2021 by and between Moleculin Biotech, Inc.

and Lincoln Park Capital Fund, LLC.

(incorporated by reference to Exhibit 10.1 of the Form 8-K filed June 25, 2021)

Registration Rights Agreement dated June 25, 2021 by and between Moleculin Biotech, Inc.

and Lincoln Park Capital Fund, LLC.

(incorporated by reference to Exhibit 10.2 of the Form 8-K filed June 25, 2021)

Amendment No.

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First Amendment to Commercial Lease Agreement (incorporated by reference to Exhibit 10.1 of the Form 10-Q filed November 13, 2023)

Form of Securities Purchase Agreement from December 2023 offering (incorporated by reference to Exhibit 10.1 of the Form 8-K filed December 21, 2023)

Form of Placement Agency Agreement from December 2023 offering (incorporated by reference to Exhibit 10.2 of the Form 8-K filed December 21, 2023)

Amended and Restated Employment Agreement between Moleculin Biotech, Inc.

6 unchanged sentences

and Donald Picker dated January 4, 2024 (incorporated by reference to Exhibit 10.3 of the Form 8-K filed January 5, 2024)

Engagement Agreement between Moleculin Biotech, Inc.

Wainwright & Co., LLC dated June 8, 2024 (incorporated by reference to Exhibit 1.1 of the Form S-1/A filed August 15, 2024)

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.32 of the Form S-1/A filed August 15, 2024)

Form of Warrant Amendment Agreement (incorporated by reference to Exhibit 10.2 of the Form 8-K filed August 16, 2024)

Moleculin Biotech, Inc.

2024 Stock Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K filed October 25, 2024)

Form of Inducement Letter (incorporated by reference to Exhibit 10.1 of the Form 8-K filed February 13, 2025)

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Form 8-K filed February 26, 2025)

Placement Agency Agreement between Moleculin Biotech, Inc.

and Roth Capital Partners, LLC (incorporated by reference to Exhibit 10.2 of the Form 8-K filed February 26, 2025)

Moleculin Biotech, Inc.

Insider Trading Policy

Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 of the Form 10-K filed March 22, 2023)

7 unchanged sentences

Moleculin Biotech, Inc.

Restatement Recoupment Policy

Restatement Recoupment Policy (incorporated by reference to Exhibit 97 of the Form 10-K filed March 22, 2024)

Inline XBRL Instance Document

51 unchanged sentences

We have audited the accompanying consolidated balance sheets of Moleculin Biotech, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has incurred an accumulated deficit of $131.6 million since inception and has not generated any revenue from operations.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has incurred an accumulated deficit of $153.4 million since inception and has not generated any revenue from operations.

These conditions, along with other matters as set forth in Note 2, raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

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Total current assets

26,273 45,596

Furniture and equipment, net of accumulated depreciation of $ 1,022 and $ 896 , respectively

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Total Liabilities

10,946 12,144

Commitments and contingencies (Note 8)

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159,384 157,653

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Accumulated deficit

1 unchanged sentence

Total stockholders' equity

26,073 52,191

Total liabilities and stockholders' equity

9 unchanged sentences

General and administrative

10,017 11,542

Depreciation and amortization

4 unchanged sentences

Other income:

(Loss) gain from change in fair value of warrant liability

Gain (loss) from change in fair value of warrant liability

6,125 ( 1,044 )

Transaction costs allocated to warrant liabilities

( 993 ) ( 510 )

Loss on issuance of warrant liabilities

Other income, net

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$ ( 21,763 ) $ ( 29,769 )

Other comprehensive (loss) income:

Other comprehensive loss:

Foreign currency translation

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( 6,125 ) 1,044

Loss on issuance of warrant liabilities

Operating lease, net

Transaction costs allocated to warrant liabilities

Changes in operating assets and liabilities:

3 unchanged sentences

Accrued expenses and other current liabilities

( 1,108 ) 1,491

Net cash used in operating activities

6 unchanged sentences

Cash flows from financing activities:

Proceeds from exercise of warrants

Payment of tax liability for vested restricted stock units

( 26 ) ( 25 )

Proceeds from sale of common stock, pre-funded and common warrants, net of issuance costs

Transaction costs allocated to warrant liabilities

Net cash provided by (used in) financing activities

Proceeds from sale of common stock, pre-funded and common warrants, net of issuance and transaction costs

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

8 unchanged sentences

Non-cash investing and financing activities:

Transaction costs related to the sale of common stock, pre-funded and common warrants

Purchases of property and equipment in accounts payable and accrued liabilities

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1,908,523 $ 29 $ 153,985 $ ( 101,835 ) $ 12 $ 52,191

Issued for cash - sale of common stock, pre-funded and common warrants, net of allocated issuance costs of $ 57

240,151 3 728 — — 731

Issuance of common stock with equity purchase agreement

15,038 — 210 — — 210

Common stock issued for license rights

54,808 1 771 — — 772

Common stock issued upon vesting of restricted stock units (net of shares withheld for payment of tax liability)

7 unchanged sentences

2,227,516 $ 33 $ 157,653 $ ( 131,604 ) $ ( 9 ) $ 26,073

Issued for cash - sale of common stock, pre-funded and common warrants, net of allocated issuance costs of $ 57

Issued for cash - sale of common stock, pre-funded and common warrants

283,000 — — — — —

Issuance of common stock with equity purchase agreement

Issuance of common stock in connection with Consulting Agreements

6,834 — 37 — — 37

Common stock issued for license rights

Reverse stock split

77,186 ( 31 ) 31 — — —

Warrants exercised

763,874 1 — — — 1

Common stock issued upon vesting of restricted stock units (net of shares withheld for payment of tax liability)

12 unchanged sentences

The terms “MBI” or “the Company”, “we”, “our” and “us” are used herein to refer to Moleculin Biotech, Inc.

MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015, with clinical programs for hard-to-treat cancers and viruses.

The Company has three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas.

The Company has two wholly owned subsidiaries, Moleculin Australia Pty.

Ltd., which was set up to perform certain preclinical development and Moleculin Amsterdam B.V., which acts as its legal representative for clinical trials in Europe.

The Company utilizes its own internal resources and funds to conduct some of these trials and also has trials being conducted via physician-sponsored trials.

MBI is a clinical-stage pharmaceutical company, organized as a Delaware corporation in July 2015.

MBI is a late-stage pharmaceutical development company currently conducting a pivotal Phase 3 trial evaluating Annamycin, a non-cardiotoxic anthracycline, in combination with Cytarabine for the treatment of subjects with released/refractory acute myeloid leukemia.

Additionally, the Company has two portfolios of technologies for hard-to-treat cancers and viruses with clinical and preclinical research funded by investigators at academic institutions.

Each of its three core technologies is based substantially on discoveries made at and licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas, and features one or more drugs that have successfully completed a Phase 1 clinical trial.

Three of its six drug candidates have shown human activity in clinical trials and are currently or have been in Phase 1B/2 or Phase 2 clinical trials.

Since MBI’s inception, its drugs have completed, are currently in, or have been permitted to proceed in, fourteen clinical trials.

Annamycin, in a unique multilamellar lipid formulation, is the Company’s lead molecule, and MBI has recently concluded one Phase 1B/2 clinical trial for treating Acute Myeloid Leukemia (AML) and is embarking on a Phase 3 clinical trial for the treatment of AML.

Annamycin is also in two Phase 1B/2 clinical trials for treating Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS), on physician sponsored.

Additionally, there is another phase 1B/2 clinical trial that is physician sponsored which is investigating using WP1066 in combination with radiation for the treatment of glioblastoma, a form of brain cancer.

The physician-sponsored trials utilize primarily external funds, such as grant funds, which are not presented in these financial statements.

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On November 2, 2023, the Company received a 180 -calendar day extension, until April 29, 2024, from the Nasdaq to regain compliance with Bid Price Rule.

On October 3, 2023, the Company held a Special Meeting of Stockholders (special meeting).

The Company's stockholders granted the Board of Directors the authority to effect an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse stock split of the outstanding shares of the Company’s common stock, at a reverse stock split ratio of between 1 -for- 5 and 1 -for- 20 as determined by the Board in its sole discretion, prior to the one -year anniversary of the Special Meeting.

On March 5, 2024, the Board of Directors approved a reverse 1-for- 15 reverse stock split effective 11:59 P.M.

(Eastern time) on March 21, 2024, with trading to commence on a split-adjusted basis on March 22, 2024.

If, at any time before April 29, 2024, the bid price for the Company's common stock closes at $ 1.00 or more for a minimum of 10 consecutive business days, the Nasdaq Staff will provide written notification to the Company that it complies with the Bid Price Rule, unless the Staff exercises its discretion to extend this 10 day period pursuant to Nasdaq Listing Rule 5810 (c)( 3 )(G).

If the Company does not regain compliance with the Bid Price Rule by April 29, 2024, the Nasdaq Staff will provide written notification to the Company that its common stock may be delisted.

The Company would then be entitled to appeal the Nasdaq Staff’s determination to a NASDAQ Listing Qualifications Panel and request a hearing.

There can be no assurance that, if the Company does appeal a delisting determination by the Nasdaq Staff to the NASDAQ Listing Qualifications Panel, that such appeal would be successful.

There can be no assurance that the Company will be able to regain compliance with the Bid Price Rule.

On April 8, 2024, the Company received a letter from Nasdaq notifying the Company that it had regained compliance with Bid Price Rule 5550(a)(2) as a result of the closing bid price of the Company's common stock being at $ 1.00 per share or greater for the 10 consecutive business days from March 22, 2024 through April 5, 2024.

Accordingly, the Company is in compliance with the Bid Price Rule and Nasdaq considers the matter closed.

Basis of presentation, principles of consolidation and significant accounting policies

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Certain amounts in the financial statements, the notes thereto, and elsewhere in the Form 10-K may be slightly different than previously reported due to rounding up of fractional shares as a result of the reverse stock split.

Correction of immaterial error – During the year ended December 31, 2024, the Company determined that an error existed in our previously issued consolidated financial statements.

Specifically, the Company identified that it had not properly categorized the transaction costs allocated to warrant liabilities in the consolidated statement of cash flows in the fourth quarter of 2023.

The error was evaluated under the U.S.

SEC’s Staff Accounting Bulletin (“SAB”) Topic 1M, “Materiality,” and SEC SAB Topic 1N, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements” to determine the materiality of prior period misstatements to the Company’s financial statements.

The Company has evaluated the error and concluded that it was not material to the previously issued consolidated financial statements.

Although the error was not material, the Company has reclassified the transaction costs allocated to warrant liabilities in the amount of $ 0.5 million from the operating section to the financing section of the consolidated statement of cash flows for the year ended December 31, 2023, for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations or stockholder’s equity for the years presented.

The effects of the adjustment to our December 31, 2023 consolidated statements of cash flow were as follows (in thousands):

December 31, 2023

Net cash provided by financing activities

$ 4,651 $ ( 510 ) $ 4,141

Net cash used in operating activities

$ ( 24,101 ) $ 510 $ ( 23,591 )

Basis of Presentation - The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP), and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the SEC).

5 unchanged sentences

As a result, the financial information disclosed herein represents all of the material financial information related to its principal operating segment.

Segment Information - Management has determined that the Company operates in one reportable segment, which is the development and commercialization of drug products.

The Company's chief operating decision maker (CODM) is its Chief Executive Officer and Chairman, who reviews financial information presented on a consolidated basis.

The CODM primarily uses consolidated net loss, which is also reported on the Consolidated Statements of Operations and Comprehensive Loss as net loss, to assess financial performance and allocate resources.

These financial metrics are used by the CODM to make key operating decisions, such as the assessment of segment performance and allocation of resources.

The significant expense categories within net loss from operations that the CODM regularly reviews are research and development expenses, general and administrative expenses, and depreciation and amortization.

The significant expense categories and subcategories are reported on the Consolidated Statements of Operations and Comprehensive Loss.

Other expenses included in the Company’s net loss include change in fair value of warrant liabilities, other income (expense), interest income, net, and any additional non-operating expenses that are reported on the Consolidated Statements of Operations and Comprehensive Loss.

Use of Estimates - The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

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As of December 31, 2024, the Company had an accumulated defic it of $153.4 million since inception and had not yet generated any revenues from operations.

Additionally, management anticipates that its cash on hand of $ 23.6 million a s of December 31, 2023 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued.

Additionally, management anticipates that its cash on hand of $ 4.3 million a s of December 31, 2024, along with $ 9.3 million in gross cash received via our financing activities in February 2025, is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

10 unchanged sentences

The Company is in the process of filing a claim with its insurance carriers related to this loss which may cover a portion of the related expenses but not all.

The claim is currently under review by the insurance company.

The claim has not yet been approved nor has a reimbursement amount been determined.

The Company has not yet hit the retention limits, so no reimbursement is currently expected.

Accordingly, the Company has not recorded any provision for insurance reimbursement as of December 31, 2024.

5 unchanged sentences

The Company’s management does not believe the Company is exposed to significant credit risk at this time due to the financial condition of the financial institution where its cash is held.

As of December 31, 2023 , there was $ 0.3 million of cash on hand in a bank account in Australia and there is no known limitations impacting the Company's liquidity in Australia.

As of December 31, 2024, there was $ 0.6 million of cash on hand in a bank account in Australia and there are no known limitations impacting the Company's liquidity in Australia.

Prepaid Expenses and Other Current Assets - Prepaid expenses and other current assets consist of the following (in thousands):

Prepaid sponsored research

$ 1,515 $ 1,028

Prepaid insurance

Vendor prepayments and deposits

Prepaid sponsored research

Non-trade receivables

2 unchanged sentences

$ 916 $ 2,723

Property and equipment - Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line depreciation method as follows:

Furniture and equipment - Furniture and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line depreciation method as follows:

Leasehold improvements

8 unchanged sentences

Intangible assets are tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist, using a fair-value-based approach.

The Company evaluates the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists.

The Company evaluates the recoverability of intangible assets periodically and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists.

No impairments of intangible assets have been identified during any of the periods presented.

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Management evaluates this investment for possible impairment quarterly.

Fair Value of Financial instruments - The Company's financial instruments consist primarily of non-trade receivables, account payables, accrued expenses and a warrant liability.

The carrying amount of non-trade receivables, accounts payables, and accrued expenses approximates their fair value because of the short-term maturity of such.

Fair Value of Financial instruments - The Company's financial instruments consist primarily of non-trade receivables, accounts payable, accrued expenses and a warrant liability.

The carrying amount of non-trade receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such.

The Company has categorized its assets and liabilities that are valued at fair value on a recurring basis into three-level fair value hierarchy in accordance with US GAAP.

19 unchanged sentences

December 31, 2022

Issuances of warrants

Change in fair value - net

1 unchanged sentence

Issuances of warrants

Warrant amendment

Change in fair value - net

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Recent Accounting Pronouncements

In November 2024 and January 2025, FASB issued ASU 2024-03 and ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses.

The amendments to the standards are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures, but expects additional disclosures upon adoption.

In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2023-09, Income Taxes (Topic 740):

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It also includes certain other amendments to improve the effectiveness of income tax disclosures.

This guidance will be effective for the annual periods beginning the year ended December 31, 2025.

Early adoption is permitted.

This guidance will be effective for the annual periods beginning after the year ended December 31, 2024.

The Company is currently assessing the impact of ASU 2023-09 on its disclosures.

In November 2023, the FASB issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures (ASU 2023-07) which is intended to improve reportable segment disclosures primarily through enhanced disclosure of reportable segment expenses and requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280.

The new guidance is required to be applied retrospectively to all prior periods presented in the financial statements and is effective for the Company for fiscal periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

There was no impact upon adoption of ASU 2023-07.

The Company views its operations and manages its business in one operating segment.

There are no other effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

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Accrued expenses and other current liabilities at December 31, 2024 and 2023 consist of the following components (in thousands):

Accrued research and development

$ 2,845 $ 1,337

Accrued payroll and bonuses

$ 1,817 $ 765

Accrued research and development

Accrued legal, regulatory, professional and other

Operating lease liability - current

Accrued liabilities due to related party

Operating lease liability - current

Total accrued expenses and other current liabilities

1 unchanged sentence

Additionally, accounts payable includ es $ 20,000 an d $ 67,000 as of December 31, 2024 and 2023, respectively, for related party payables (operating costs reimbursements).

Warrants and Equity

Warrant and Stock Issuances

In February 2025, the Company entered into a securities purchase agreement with an institutional investor for the sale by the Company of 1,150,000 shares of common stock, and 2,121,029 pre-funded warrants to purchase shares of common stock, and series D warrants to purchase up to 6,543,058 shares of common stock.

The combined purchase price for the securities was $ 1.07 per share of common stock (or pre-funded warrant in lieu thereof).

Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $ 0.001 per share.

The pre-funded warrants are exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full, subject to the beneficial ownership limitation.

Each common warrant will be exercisable upon the receipt of shareholder approval, will have an exercise price of $ 1.07 per share, and expire five years from the initial exercise date.

The Company received gross proceeds of $ 3.5 million.

In February 2025, the Company entered into a warrant exercise inducement offer letter with a holder of certain existing warrants to receive new warrants to purchase up to a number of shares of common stock equal to 200% of the number of warrant shares issued pursuant to the exercise of such existing warrants to purchase up to 5,828,570 shares of common stock (series C warrants) pursuant to which the Holder agreed to exercise for cash their existing warrants at a reduced exercise price of $ 1.00 in exchange for the Company's agreement to issue the inducement warrants to purchase up to 11,657,140 shares of the Company's common stock.

Each inducement warrant will have an exercise price of $ 0.75 , and will be exercisable as of the date of issuance and may be exercised for a period of five years therefrom.

The Company received gross proceeds of $ 5.8 million.

This brings the total gross proceeds received in February 2025 to $ 9.3 million.

In August 2024, the Company entered into a securities purchase agreement with an institutional investor for the sale by the Company of 283,000 shares of common stock, and 2,183,368 pre-funded warrants to purchase shares of common stock, series A warrants to purchase up to 2,466,368 shares of common stock, series B warrants to purchase up to 2,466,368 shares of common stock, and placement agent warrants.

The combined purchase price for the securities was $ 2.23 per share of common stock (or pre-funded warrant in lieu thereof).

Each pre-funded warrant is exercisable for one share of common stock at an exercise price of $ 0.001 per share.

The pre-funded warrants are exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full, subject to the beneficial ownership limitation.

Each common warrant has an exercise price of $ 2.23 per share and will be exercisable beginning on the effective date of shareholder approval.

The series A warrants expire on the earlier of (i) two years from the initial exercise date, or (ii) 60 days from the Company's public announcement that it has achieved the series A milestone event.

The series B warrants expire on the earlier of (i) five years from the initial exercise date, or (ii) six months from the Company's public announcement that it has achieved the series B milestone event.

The series A milestone event means the Company releases interim data for the first subject group from the MIRACLE trial whereby the complete remission rate for either dose of the Company's study drug is greater than placebo;

and series B milestone event means the Company releases final topline data from the MIRACLE trial and documented a statistically significant improvement in the primary efficacy endpoint.

In addition, in August 2024, the Company entered into a warrant amendment agreement, pursuant to which the Company agreed that effective upon closing of the offering, and subject to shareholder approval, to amend 895,834 existing warrants originally issued on December 26, 2023 at an exercise price of $ 9.60 per share and a termination date of February 14, 2029, so that the amended warrants would have a reduced exercise price of $ 2.23 per share and would expire five years from the date of shareholder approval.

The Company calculated the valuation of the warrant amendment immediately prior to the offering, as well as the valuation of the warrant amendment with the repriced terms, and a 91% probability of obtaining shareholder approval.

The loss on modification of the warrants of $0.4 million was recorded as a loss on issuance of warrant liabilities during the year ended December 31, 2024.

In October 2024, the Company’s shareholders approved the issuance of both the August 2024 warrants, as well as the warrant amendment.

The Company received gross proceeds of $ 5.5 million, before deducting the placement agent's fees and other offering expenses payable by the Company.

Proceeds of offerings are allocated between common shares and warrants first by allocating to the warrants classified as a liability based on their fair value and then allocating the residual to the equity instruments, which would include pre-funded warrants.

As the fair value of the liability classified warrants in the August 2024 offering exceeded the total proceeds, no consideration was allocated to the Common Shares or Pre-Funded Warrants.

The full proceeds of the August 2024 offering were recorded to warrant liabilities, with an initial liability of $ 6.1 million, and a loss on initial recognition of $ 0.8 million.

Transaction costs related to the offering were correspondingly fully allocated to warrant liabilities, and $ 1.0 million in related transaction costs were expensed for the year ended December 31, 2024.

In February 2025, the warrants associated with the August 2024 agreement were exercised in full as part of the warrant inducement, as discussed above.

In December 2023, the Company entered into a Securities Purchase Agreement with an institutional investor and certain of the Company's executive officers, employees, advisors and a member of its board of directors for the sale by the Company of 240,151 shares ( t aking into account the reverse stock splits we have completed) of the Company's common stock, and pre-funded warrants to purchase 229,506 shares of common stock ( t aking into account the reverse stock splits we have completed) in lieu thereof in a registered direct offering (Pre-Funded Warrants).

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 939,312 shares of common stock.

Subject to certain ownership limitations, each of the Common Warrants will become exercisable on the effective date of such stockholder approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market with respect to issuance of all of the Common Warrants and the common stock upon the exercise thereof.

Subject to certain ownership limitations, each Common Warrant will have an exercise price of $ 9.60 per share, expire five years from the date of stockholder approval and will become exercisable beginning on the effective date of stockholder approval for the shares issuable upon the exercise of the Common Warrants.

Subject to certain ownership limitations, each Pre-Funded Warrant is exercisable into one share of common stock at a price per share of $ 0.001 (as adjusted from time to time in accordance with the terms thereof).

The combined purchase price of one share of common stock (or pre-funded warrant in lieu thereof) and accompanying Common Warrant was $ 9.60 for the institutional investor, and $ 10.35 for the executive officers, employees, advisors and the member of the Company's board of directors who participated in the offering.

The Company received gross proceeds of $ 4.5 million, before deducting the placement agent's fees and other offering expenses payable by the Company.

Proceeds of the December 2023 Offering were allocated between common shares and warrants first by allocating proceeds to the warrants classified as a liability based on their fair value and then allocating the residual to the equity instruments, which includes the Pre-Funded Warrants.

Transaction costs related to the issuance of shares were recognized in stockholder's equity (deficit), while costs of $ 510,000 allocated to warrant liabilities were expensed for the year ended December 31, 2023.

Lincoln Park Equity Line

The Company did not utilize the 2021 Lincoln Park purchase agreement during the year ended December 31, 2024.

The 2021 Lincoln Park Agreement terminated in June 2024.

Other Components of Equity

In March 2024, the Company issued 6,834 shares of common stock to consultants in exchange for services to be provided.

In addition, during the year ended December 31, 2024, the Company issued 20,485 shares of common stock related to the vesting of restricted stock units.

Preferred Stock

The Company's certificate of incorporation authorizes the Company to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series.

No preferred stock was issued or outstanding as of December 31, 2024.

Warrant Background

Upon its issuance of warrants to purchase shares of common stock, the Company evaluates the terms of the warrant issue to determine the appropriate accounting and classification of the warrant issue pursuant to FASB ASC Topic 480, Distinguishing Liabilities from Equity, FASB ASC Topic 505, Equity, FASB ASC 815, Derivatives and Hedging, and ASC 718, Compensation - Stock Compensation.

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Liability Classified Warrants (1)

Issued February 2018

— 25,264 $ — —

Issued June 2018 (2)

Issued March 2019

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Issued April 2019

58,334 58,334 157.50 0.3

Issued February 2020

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939,316 939,316 2.57 4.8

Issued August 2024

5,056,054 — 2.24 3.4

6,063,040 1,082,895 $ 3.32

Equity Classified Warrants

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— 229,506 — —

Issued March 2024 - Consulting

3,334 — 9.15 9.2

Issued August 2024 - Pre-Funded Warrants

1,649,000 — 0.001 n/a

Issued October 2024 - Consulting

36,000 — 2.36 9.8

1,746,993 289,277 $ 0.99

Balance outstanding

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Additionally, if the Company combines (by combination, reverse stock split or otherwise) its outstanding shares of common stock into a smaller number of shares, the warrant exercise price is proportionately increased and the number of shares under outstanding warrants is proportionately decreased.

Also, the Company may voluntarily reduce the warrant exercise price for its warrants issued in March 2019.

( 2 ) Taking into account the reverse stock splits we have completed, includes warrants to purchase 7,892 shares at an exercise price of $ 181.80 , expiring December 22, 2023, and warrants to purchase 365 shares at an exercise price of $ 208.80 , expiring June 21, 2023.

In March 2024, the Company issued a consultant a ten -year warrant to purchase up to 3,334 shares of common stock (taking into account the reverse stock splits we have completed).

The warrants vest annually over a four -year term.

Liability Classified Warrants

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Dividend yield

In addition, for the Series A and Series B warrants issued in August 2024, the assumptions used for the probability of the milestone events successfully occurring were 75% and 25%, respectively, as of December 31, 2024.

A summary of the Company's liability classified warrant activity during the year ended December 31, 2024 and related information follows:

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Equity Classified Warrants

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 939,312 shares of common stock.

The Company received gross proceeds of $ 4.5 million, before deducting the placement agent's fees and other offering expenses payable by the Company.

In January 2025, the Company granted equity-classified warrants to two consultants to purchase up to 50,000 shares each of Company common stock with a ten -year term and an exercise price of $ 1.64 .

The first 50,000 of these warrants vest based on performance of certain services, and the other 50,000 vest annually over four years.

In October 2024, the Company issued consultants ten -year warrants to purchase up to 36,000 shares of common stock (taking into account the reverse stock splits we have completed).

30,000 warrants vest annually over a four -year term, 5,000 warrants vest monthly over a three -year term, and 1,000 warrants vested immediately.

In March 2024, the Company issued a consultant a ten -year warrant to purchase up to 3,334 shares of common stock (taking into account the reverse stock splits we have completed).

The warrants vest annually over a four -year term.

In August 2023, the Company granted equity-classified warrants to a consultant to purchase up to 6,667 shares ( t aking into account the reverse stock splits we have completed) of Company common stock with a five -year term and an exercise price of $ 9.30 .

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In June 2023, the Company granted equity-classified warrants to purchase 10,000 shares of common stock with a ten -year term and an exercise price of $ 9.00 vesting annually over four years while services are being performed.

In September 2022, the Company entered into a portfolio advisory agreement with a related party entity, associated with Dr.

Waldemar Priebe, and in connection with the agreement, the Company granted equity-classified warrants to purchase 16,667 shares of common stock ( t aking into account the reverse stock splits we have completed) with a ten -year term and an exercise price of $ 18.60 .

The September 2022 warrants vest as follows:

(a) 50% vests upon execution of the agreement, provided the advisor does not terminate the agreement prior to the first anniversary of the agreement;

and (b) 50% vests 60 days after the end of the one -year term, subject to the Company's Board of Directors determining that the services provided have been adequately performed.

In June 2022, the Company granted equity-classified warrants to purchase 3,334 shares of common stock with a ten -year term and an exercise price of $ 22.35 vesting annually over four years while services are being performed.

At December 31, 2023 the Company had 289,276 equity classified warrants outstanding of which 266,350 w arrants were exercisable ( t aking into account the reverse stock splits we have completed).

At December 31, 2022 , the Company had 43,103 equity classified warrants outstanding of which 26,724 were exercisable ( t aking into account the reverse stock splits we have completed).

The Company recorded stock compensation expense for the non-employee consulting agreements of $ 196,000 a nd $ 398,000 for the years ended December 31, 2023 and 2022 , respectively.

At December 31, 2023 , there wa s $ 353,000 of u nrecognized stock compensation expense related to the Company's equity-classified warrants.

Preferred Stock

No preferred stock was issued or outstanding as of December 31, 2023 .

2023 Stock Issuances

In December 2023, the Company entered into a Securities Purchase Agreement with an institutional investor and certain of the Company's executive officers, employees, advisors and a member of its board of directors for the sale by the Company of 240,151 shares of the Company's common stock, and pre-funded warrants to purchase 229,506 shares of common stock in lieu thereof in a registered direct offering.

In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 939,312 shares of common stock.

The Company received gross proceeds of $ 4.5 million, before deducting the placement agent's fees and other offering expenses payable by the Company.

All figures herein are taking into account the one -for- fifteen reverse stock split completed March 22, 2024.

Lincoln Park Equity Line

During the year ended December 31, 2023 , pursuant to the 2021 Lincoln Park purchase agreement, the Company issued to Lincoln Park 15,038 shares of common stock ( t aking into account the reverse stock splits we have completed) for gross proceeds of $ 0.2 million.

The 2021 Lincoln Park Agreement, which has $ 19.8 million available as of December 31, 2023 , terminates on July 1, 2024.

The Company is in discussions with Lincoln Park Capital to effect the extension of this agreement.

The Company intends to seek an extension of this agreement prior to termination, however no agreement has been reached through to the date that these consolidated financial statements were issued.

In the December 2023 Offering, the Company agreed not to utilize the Lincoln Park Agreement or any such extension thereof, until after June 26, 2024.

At December 31, 2024 the Company had 1,746,993 equity classified warrants outstanding of which 1,697,744 warrants were exercisable (taking into account the reverse stock splits we have completed).

At December 31, 2023, the Company had 289,277 equity classified warrants outstanding of which 266,350 were exercisable (taking into account the reverse stock splits we have completed).

Stock Based Compensation

Stock Plan, Stock-based Compensation and Outstanding Awards

In December 2015, the Board of Directors of the Company approved the Company’s 2015 Stock Plan, which was amended in April 2016, April 2018, June 2020, May 2022, and May 2023.

The expiration date of the plan is December 5, 2025.

In October 2024, the Board of Directors of the Company approved the Company’s 2024 Stock Plan (the "2024 Stock Plan"), which replaced the 2015 Stock Plan.

The awards under the 2024 Stock Plan can be in the form of stock options, stock awards, stock unit awards, or stock appreciation rights.

In May 2023 and 2022, the 2015 Stock Plan (Plan) was amended to authorize an additional 116,667 shares and 133,334 shares, respectively, such that 366,667 total shares may be issued under the Plan.

In March 2024, the Company issued 3,334 shares of common stock to a consultant.

All figures herein are taking into account the one-for-fifteen reverse stock split completed March 22, 2024.

Under the terms of the Company’s 2015 Stock Plan, as amended, and approved by its stockholders in May 2023, 366,667 shares of the Company’s common stock ( t aking into account the reverse stock splits we have completed) are available for grant to employees, non-employee directors and consultants.

Under the terms of the Company’s 2024 Stock Plan, as amended, and approved by its stockholders in October 2024, 1,000,000 shares of the Company’s common stock are available for grant to employees, non-employee directors and consultants.

The 2024 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, or stock appreciation rights.

As of December 31, 2023 , there wer e 3,794 shares ( t aking into account the reverse stock splits we have completed) re maining to be granted under the 2015 Stock Plan.

As of December 31, 2024, there wer e 119,166 shares re maining to be granted under the 2024 Stock Plan.

Stock-based compensation expense for the years ended December 31, 2024 and 2023 is as follows (in thousands):

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At December 31, 2024 , total compensation cost not yet recognized was $ 1.9 million and the weighted average period over which this amount is expected to be recognized is 2.7 years.

The aggregate fair value of options vested was $ 1.3 milli on and $ 1.5 million in the years ended December 31, 2023 and 2022 , respectively.

Restricted Stock

Restricted stock units are granted with a grant date fair value determined using the closing price of the Company's common stock on the grant date.

The aggregate fair value of options vested was $ 1.2 million and $ 1.3 million in the years ended December 31, 2024 and 2023, respectively.

The Company recorded stock compensation expense for the non-employee consulting agreements of $ 120,000 and $ 196,000 for the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024, there was $ 234,000 of unrecognized stock compensation expense related to the Company's equity-classified warrants.

Restricted Stock Units and Performance Restricted Stock Units

Restricted stock units (RSU) are granted with a grant date fair value determined using the closing price of the Company's common stock on the grant date.

Restricted stock units vest annually in four equal installments.

Additionally, the Company's restricted stock unit agreements provide for full vesting of the restricted stock award in the event of a change of control of the Company.

Restricted stock unit activity for the year ended December 31, 2023 is as follows:

Performance-based restricted stock units (PSU) are granted primarily to our executive officers and only vest when specific conditions are met based on pre-established performance goals for the Company.

PSUs are expensed only when meeting those conditions are deemed probable.

RSU and PSU activity for the year ended December 31, 2024 is as follows:

Number of Shares

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As of December 31, 2024, total compensation cost not yet recognized was $ 1.3 million and the weighted average period over which this amount is expected to be recognized is 2.9 years.

In June 2023, the Company granted 65,292 shares of restricted stock units with a weighted average fair value of $ 9.00 per share at the date of grant (t aking into account the reverse stock splits we have completed ), which vest annually in four installments.

In June 2022, the Company granted 30,156 shares of restricted stock units with a weighted average fair value of $ 22.35 per share (t aking into account the reverse stock splits we have completed ) at the date of grant, which vest annually in four equal installments.

In December 2023, the Company granted to the Company's executive officers 73,334 performance-based restricted stock units (t aking into account the reverse stock splits we have completed ) (PSU).

Each PSU will vest upon both (A) the approval of a plan amendment by the Company's stockholders;

and (B) the first of the following to occur:

In June 2023, the Company granted 65,292 shares of restricted stock units with a weighted average fair value of $ 9.00 per share at the date of grant (taking into account the reverse stock splits we have completed), which vest annually in four installments.

In June 2022, the Company granted 30,156 shares of restricted stock units with a weighted average fair value of $ 22.35 per share (taking into account the reverse stock splits we have completed) at the date of grant, which vest annually in four equal installments .

In December 2023, the Company granted to the Company's executive officers 73,334 performance-based restricted stock units (t aking into account the reverse stock splits we have completed ) .

Each PSU will vest upon the first of the following to occur:

(a) a licensing transaction with a valuation, at the time, in excess of $150 million, which valuation shall be determined by the Board;

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17 0.1 % 59 0.2 %

Change in deferred tax rates

34 0.2 % — — %

Stock warrant costs

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Additionally, because federal tax laws limit the time during which the net operating loss carryforwards may be applied against future taxes, if the Company fails to generate taxable income prior to the expiration dates of the carry forwards the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes.

Under the new tax laws, net operating loss carry forwards will not expire beginning for losses generated in the 2018 tax year.

However, these net operating losses will only be able to offset 80% of future taxable income.

However, the Company believes that this matter is not material to the overall tax position within the financial statements due to the full valuation allowance against the net operating losses and the lack of utilization of the net operating losses during tax years open under statute.

Net operating loss carry forwards generated in the 2018 and later years do not expire, but will only be able to offset 80% of future taxable income.

Finally, the Company has not undertaken a detailed analysis of the application of IRC Section 382 with respect to limitations on the utilization of net operating loss carryforwards and other deferred tax assets as management does not believe an ownership change has occurred within the meaning of IRC Section 382.

Management intends to undertake a Section 382 analysis prior to the utilization of any net operating loss carryforwards in the future.

Based on current and ongoing losses, there is a full valuation allowance against the deferred tax asset for these carryforwards.

The Company conducts business in various locations and, as a result, files income tax returns in the United States federal jurisdiction, in multiple state jurisdictions, and internationally as required.

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As a result the Company capitalized such costs in its 2024 and 2023 income tax provision, resulting in an increase in deferred tax assets.

Australia R&D Tax Incentive

The Australian government provides an incentive for research and development carried out in their country in the form of refundable tax credits if certain conditions are met.

Management assesses the Company's R&D activities and expenditures to determine which activities and expenditures are likely to be eligible under the Australian tax incentive.

Annually, management estimates the refundable tax credit available to the Company based on available information and submits an application to the Australian tax authority for R&D credit approval.

The Company recognizes the refundable R&D tax credits when there is reasonable assurance that the terms have been met, the refund will be received, the relevant expenditures have been incurred, and the consideration can be reliably measured.

In December 2024, the Company received $ 0.2 million as a refundable R&D tax credit for its 2023 R&D activities in Australia, which was recorded as a reduction to research and development expense in the consolidated statements of operations when the aforementioned criteria were met.

Commitments and Contingencies

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Although HPI has access to the Company's Lab Lease space, it is the intent of the parties that they equally share the Lab Lease space for research purposes.

The Company recorded approximately $ 49,000 a nd $ 45,000 in sublease income from the related party for the years ended December 31, 2023 and December 31, 2022 , respectively.

The Company recorded approximately $ 49,000 in sublease income from the related party for the years ended December 31, 2024 and December 31, 2023.

Sublease income is recorded as other income on the Company's consolidated statement of operations and comprehensive loss.

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The term of the 2012 agreement extends until the later of 15 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

In addition, MD Anderson may terminate the 2012 agreement if the Company fails to commence a Phase 2 study for licensed product prior to November 20, 2024.

In addition, MD Anderson may terminate the 2012 agreement if the Company fails to commence a Phase 2 study for licensed product prior to November 20, 2024, which has not occurred.

The term of the 2021 agreement extends until the later of 20 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

In an effort to reduce costs, the Company is in the process of replacing its licenses on WP1122 with an option on WP1122 with MD Anderson.

Such discussions are being held in conjunction with extending our sponsored research with MD Anderson.

There can be no assurance that this process will result to the Company’s satisfaction.

WP1066 Portfolio

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Sponsored Research Agreements with MD Anderson

MBI has a Sponsored Laboratory Study Agreement with MD Anderson expiring December 31, 2025.

In October 2023, the Company entered into an amendment to the Sponsored Research Agreement with MD Anderson for total payments to MD Anderson of $ 0.8 million to support the continuation of the project.

MBI has a Sponsored Laboratory Study Agreement with MD Anderson expiring March 31, 2025, and is expected to be extended, however there can be no assurance that this effort will be successful.

In January and February 2025, the Company entered into an amendments to the Sponsored Research Agreement with MD Anderson for total additional payments to MD Anderson of $ 0.3 million to support the continuation of the project.

In addition, the Company also has Sponsored Research Agreements with other universities, one in the US and one in Europe.

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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-K

Item 9A. Controls and Procedures