What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-13 compared with 2024-11-08 · 144 added, 159 removed, 274 unchanged (53% of the section changed)

3 unchanged sentences

(in thousands, except for share and per share data)

September 30,

Current assets:

3 unchanged sentences

Total current assets

11,606 26,273

Furniture and equipment, net

19 unchanged sentences

100,000,000 shares authorized;

3,001,895 and 2,227,516 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

14,127,494 and 3,378,895 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

159,869 159,384

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

( 38 ) ( 41 )

Accumulated deficit

7 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Operating expenses:

4 unchanged sentences

Loss from operations

( 5,943 ) ( 6,677 )

Other income (loss):

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

Gain from change in fair value of warrant liability

Transaction costs allocated to warrant liabilities

2 unchanged sentences

Interest income, net

$ ( 6,436 ) $ ( 4,970 )

Net loss per common share - basic and diluted

$ ( 0.69 ) $ ( 2.02 )

Weighted average common shares outstanding, basic and diluted

9,343,771 2,466,174

$ ( 6,436 ) $ ( 4,970 )

Other comprehensive income (loss):

1 unchanged sentence

Comprehensive loss

$ ( 6,433 ) $ ( 4,979 )

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

$ ( 6,436 ) $ ( 4,970 )

Adjustments to reconcile net loss to net cash used in operating activities:

1 unchanged sentence

Stock-based compensation

License rights expense settled in stock

Change in fair value of warrant liability

( 9,054 ) ( 1,455 )

Loss on issuance of warrant liabilities

5 unchanged sentences

Accrued expenses and other current liabilities

738 ( 1,121 )

Net cash used in operating activities

( 4,564 ) ( 6,717 )

Cash flows from investing activities:

2 unchanged sentences

Cash flows from financing activities:

Payment of tax liability for vested restricted stock units

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

Proceeds from exercise of warrants

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

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

3,438 ( 6,726 )

Cash and cash equivalents, - beginning of period

Cash and cash equivalents, - end of period

$ 7,716 $ 16,824

Supplemental disclosures of cash flow information:

1 unchanged sentence

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

Transaction costs included in accounts payable and accrued liabilities

Offering costs included in accounts payable and accrued liabilities

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except for shares)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common Stock Accumulated

Par Value Amount

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Balance, December 31, 2024

Issuance of common stock in connection with Consulting Agreements

Reverse stock split

Stock-based compensation

Cumulative translation adjustment

Balance, March 31, 2024

3,378,895 $ 3 $ 159,384 $ ( 153,367 ) $ ( 41 ) $ 5,979

Warrant inducement and exercise of repriced common stock warrants at $ 1.00 per share

5,828,570 6 — — — 6

Warrants exercised

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

Stock-based compensation

Consolidated net loss

Cumulative translation adjustment

Balance, June 30, 2024

3,770,029 4 — — — 4

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

Warrants exercised

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

1,150,000 1 — — — 1

Stock-based compensation

Consolidated net loss

— — 485 — — 485

— — — ( 6,436 ) — ( 6,436 )

Cumulative translation adjustment

Balance, September 30, 2024

Nine Months Ended September 30, 2023

Balance, March 31, 2025

14,127,494 $ 14 $ 159,869 $ ( 159,803 ) $ ( 38 ) $ 42

Three Months Ended March 31, 2024

Common Stock Accumulated

6 unchanged sentences

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

Issuance of common stock with equity purchase agreement

Issuance of common stock to consultants

6,834 — 37 — — 37

Common stock issued for license rights

Reverse stock split

77,186 ( 31 ) 31 — — -

6 unchanged sentences

2,311,536 $ 2 $ 158,177 $ ( 136,574 ) $ ( 18 ) $ 21,587

Issuance of common stock in connection with equity purchase agreement

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

7,588 — ( 21 ) — — ( 21 )

Stock-based compensation

— — 513 — — 513

Consolidated net loss

— — — ( 5,976 ) — ( 5,976 )

Cumulative translation adjustment

— — — — ( 1 ) ( 1 )

Balance, June 30, 2023

1,985,957 $ 30 $ 155,957 $ ( 115,726 ) $ 7 $ 40,268

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

1,409 — ( 4 ) — — ( 4 )

Stock-based compensation

— — 493 — — 493

Consolidated net loss

— — — ( 5,609 ) — ( 5,609 )

Cumulative translation adjustment

— — — — ( 10 ) ( 10 )

Balance, September 30, 2023

1,987,366 $ 30 $ 156,446 $ ( 121,335 ) $ ( 3 ) $ 35,138

See accompanying notes to condensed consolidated financial statements.

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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.

In July 2024 the Company’s lead program Annamycin completed a Phase 2 trial and has held it End-of-Phase 1/2 meeting with the Food and Drug Administration in the US and in August 2024 announced the preparations for a Phase 3 trial.

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, also known by its non-proprietary name "naxtarubicin", 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 has begun treating subjects in its 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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Additionally, the Company does not have a sales organization.

The Company’s overall strategy is to seek potential outlicensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

The Company’s overall strategy is to seek potential out-licensing or outsourcing opportunities with development/commercialization strategic partners who are better suited for the marketing, sales and distribution of its drugs, if approved.

In 2019, the Company sublicensed its technologies to Animal Life Sciences, Inc.

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As part of this agreement, ALI issued to the Company a 10 % equity interest in ALI.

On May 5, 2023, the Company received a letter from the Nasdaq Capital Market (Nasdaq) notifying the Company that for the prior 30 consecutive business days the bid price for the Company's common stock had closed below the minimum $ 1.00 per share requirement for continued inclusion on Nasdaq pursuant to Nasdaq Listing Rule 5550 (a)( 2 ) (Bid Price Rule).

The deficiency letter did not result in the immediate delisting of the Company's common stock from the Nasdaq.

In accordance with Nasdaq Listing Rule 5810 (c)( 3 )(A), the Company was provided an initial period of 180 calendar days, until November 1, 2023, to regain compliance with the Bid Price Rule.

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 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.

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 and liquidity

Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding shares of the Company's common stock at a ratio of 1 to 15 .

Reverse Stock Split - On March 22, 2024, the Company completed a reverse stock split of all the issued and outstanding share of the Company’s common stock at a ratio of 1 to 15 .

The accompanying consolidated financial statements and notes to the consolidated financial statements gives retroactive effect to the reverse stock split for all periods presented.

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All intercompany balances and transactions have been eliminated in consolidation.

Any reference in these notes to applicable guidance is meant to refer to U.S.

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

All material long-lived assets of the Company reside in the U.S.

All material long-lived assets of the Company reside in the United States.

In accordance with FASB ASC Topic 280, Segment Reporting, the Company views its operations and manages its business as one segment.

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 and general and administrative expenses.

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.

Significant Accounting Policies - The Company's significant accounting policies are described in Note 2, Basis of Presentation, principles of consolidation and significant accounting policies , to the consolidated financial statements included in the Company's Annual Report on Form 10 -K for the year ended December 31, 2024 .

There have been no material changes to the significant accounting policies during the nine months ended September 30, 2024 .

There have been no material changes to the significant accounting policies during the three months ended March 31, 2025 .

Use of Estimates - The preparation of these condensed 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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fair value estimates on intangible assets, warrants, and stock-based compensation expense, as well as accrued expenses and taxes.

Intangible Assets – Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit.

Acquired intangible assets identified as in-process research and development (IPR&D) assets, are considered indefinite lived until the completion or abandonment of the associated research and development efforts.

If the associated research and development effort is abandoned, the related IPR&D assets will be written-off and the Company will record a noncash impairment loss on its statements of operations.

For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives.

Intangible assets are tested for impairment on an annual basis, which was completed as of September 30, 2024, 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.

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

Going Concern and Liquidity - These condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.

As of September 30, 2024 , the Company had an accumulated defici t of $ 151.5 million since inception and had not yet generated any revenues from operations.

Additionally, management anticipates that its cash on hand of $ 9.4 million a s of September 30, 2024 is not sufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued.

As of March 31, 2025 , the Company had an accumulated defici t of $ 159.8 million since inception and had not yet generated any revenues from operations.

Additionally, management anticipates that its cash on hand of $ 7.7 million a s of March 31, 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.

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The Company cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation.

The company expensed approximately $ 0.1 million and $ 0.4 million in related general and administrative fees and expenses for the three months ended September 30, 2024 and 2023 , respectively, and $ 0.2 million and $ 1.4 milli on for the nine months ended September 30, 2024 and 2023 , respectively .

The Company expensed approximately $ 0.02 million and $ 0.1 million in related general and administrative fees and expenses for the three months ended March 31, 2025 and 2024 , respectively.

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 which, if any, would be limited by the applicable retention as defined under the policy .

Accordingly, the Company has not recorded any provision for insurance reimbursement.

The Company expects to record the insurance reimbursement at the time that the amount to be reimbursed is determined and approved by the insurance carrier.

Any insurance reimbursement receivable will be recorded at an amount not to exceed the recorded loss and only if the terms of the legally enforceable insurance contracts support that the insurance recovery will not be disputed and is deemed collectible, or if recovery of the loss is probable.

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

Accordingly, the Company has not recorded any provision for insurance reimbursement as of March 31, 2025 .

Cash and Cash Equivalents - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents.

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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.

Intangible Assets – Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit.

If the associated research and development effort is abandoned, the related IPR&D assets will be written-off and the Company will record a noncash impairment loss on its statements of operations.

For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives.

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

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

March 31, 2025

December 31, 2024

Vendor prepayments and deposits

Prepaid insurance

Prepaid sponsored research

Related party receivables

Non-trade receivables

Total prepaid expenses and other current assets

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

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The Company’s financial assets and liabilities recorded at fair value on a recurring basis include the fair value of warrant liability discussed in Note 4.

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at September 30, 2024 and December 31, 2023 (table in thousands):

Fair value of warrant liability as of September 30, 2024:

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2025 and December 31, 2024 (table in thousands):

Fair value of warrant liability as of March 31, 2025:

$ 13,749 $ — $ — $ 13,749

1 unchanged sentence

$ 5,229 $ — $ — $ 5,229

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the third quarter and then is adjusted for changes in fair value that occurred during the third quarter.

The ending balance of the Level 3 financial instrument presented above represents the Company's best estimates and may not be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments.

Three Months Ended September 30, 2024

Warrant Liability Long-Term

Balance, June 30, 2024

Issuances of warrants

Warrant amendment

Change in fair value - net

Balance, September 30, 2024

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of December 31, 2023 and then is adjusted for changes in fair value that occurred during the nine months ended September 30, 2024 .

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of the beginning of the first quarter and then is adjusted for changes in fair value that occurred during the first quarter.

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Warrant Liability Long-Term

Balance, December 31, 2024

Issuances of warrants

Warrant amendment

Warrants issued

Warrants exercised

Change in fair value - net

Balance, September 30, 2024

Balance, March 31, 2025

Loss Per Common Share - Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period.

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In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

For the three months ended September 30, 2024 and 2023 , approximatel y 4.8 million and 0.6 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

For the nine months ended September 30, 2024 and 2023 , approximately 2.7 million and 0.5 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

For the three months ended March 31, 2025 and 2024 , approximatel y 14.0 million and 1.7 million, respectively, of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their anti-dilutive effect.

Subsequent Events - The Company’s management reviewed all material events through the date of these unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements - In November 2024, FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Recent Accounting Pronouncements - In November 2024 and January 2025, FASB issued ASU 2024 - 03, 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.

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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.

There are no other recently issued accounting standards updates that are currently expected to have a material impact on the Company.

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

Improvements to Income Tax Disclosures.

ASU 2023 - 09 improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

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

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

There was no material impact upon adoption of ASU 2023 - 09 on the Company's interim disclosures.

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.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following components (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

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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

$ 4,190 $ 3,329

Additionally, accounts payable inclu des $ 20,000 and $ 67,000 as of September 30, 2024 and December 31, 2023 , respectively, for related party payables.

Additionally, accounts payable inclu des $ 20,000 as of March 31, 2025 and December 31, 2024 , respectively, for related party payables.

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 was 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.

All of the pre-funded warrants were exercised during the three months ended March 31, 2025.

Each common warrant will be exercisable upon the receipt of shareholder approval (which is anticipated to occur in the near term), 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 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 (Series C warrants) of the Company's common stock.

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

The Company received gross proceeds of $ 5.8 million.

Total gross proceeds received in February 2025 were $ 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.

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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 in the three and nine months ended September 30, 2024.

The Company also considered a 50% probability of obtaining shareholder approval in the valuation for the August 2024 warrants in the three and nine months ended September 30, 2024.

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.

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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 during the three and nine months ended September 30, 2024 .

Lincoln Park Equity Line

The Company did not utilize the 2021 Lincoln Park purchase agreement during the nine months ended September 30, 2024 .

The 2021 Lincoln Park Agreement terminated in June 2024.

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.

Other Components of Equity

During the three months ended March 31, 2025, all remaining pre-funded warrants were exercised, leaving no remaining pre-funded warrants outstanding as of March 31, 2025.

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 nine months ended September 30, 2024 , the Company issued 20,485 shares of common stock related to the vesting of restricted stock units.

Liability Classified Warrants

The Company uses the Black-Scholes option pricing model (BSM) to determine the fair value of its warrants at the date of issue and outstanding at each reporting date.

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S.

Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants.

The risk-free interest rate assumption is based upon observed interest rates on zero coupon US Treasury bonds linearly interpolated to obtain a maturity period commensurate with the term of the warrants.

Estimated volatility is a measure of the amount by which the Company's stock price is expected to fluctuate each year during the expected life of the warrants.

Only the volatility of the Company's own stock is used in the Black-Scholes option pricing mode l.

Certain assumptions, including the expected term, are subjective and require judgment to develop.

As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our warrant liability could be materially different.

The assumptions used in determining the fair value of the Company's outstanding liability classified warrants are as follows:

September 30, 2024

March 31, 2025

December 31, 2024

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Dividend yield

A summary of the Company's liability classified warrant activity during the nine months ended September 30, 2024 and related information follows:

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2025 and related information follows:

Number of Shares

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18,654,178 $ 0.75 $ 1.34 $ 0.88 —

Expired warrants

( 5,828,570 ) $ 1.00 $ 1.00 1.00 —

Balance at September 30, 2024

Balance at March 31, 2025

18,888,648 $ 2.79 $ 94.50 $ 1.24 4.9

Exercisable at September 30, 2024

Exercisable at March 31, 2025

12,346,590 $ 0.75 $ 94.50 $ 1.33 4.8

For a summary of the changes in fair value associated with the Company's warrant liability for the nine months ended September 30, 2024 , see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

For a summary of the changes in fair value associated with the Company's warrant liability for the three months ended March 31, 2025 , see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies - Fair Value of Financial Instruments.

Equity Classified Warrants

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.

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 granted equity-classified warrants to purchase up to 3,334 shares of Company common stock with a ten -year term and an exercise price of $9.15.

The warrants vest annually over four years while services are being performed.

At September 30, 2024 , the Company had 2,089,105 equity classified warrants outstanding (including the remaining August 2024 pre-funded warrants) an d 2,066,894 w arrants were exercisable.

At March 31, 2025 , the Company had 197,993 equity classified warrants outstanding an d 50,512 w arrants were exercisable.

At December 31, 2024 , the Company had 1,746,993 equity classified warrants outstanding and 1,697,744 warrants were exercisable.

Stock Based Compensation

The 2015 Stock Plan provides for the grant of stock options, stock awards, stock unit awards, and stock appreciation rights to employees, non-employee directors and consultants.

In May 2023 and 2022, the 2015 Stock Plan (the 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.

As of September 30, 2024 , there wer e 2,853 shar es remaining to be issued under the 2015 Stock Plan.

In October 2024, the Company's shareholders approved the 2024 Stock Plan, which authorizes a total of 1,000,000 shares of common stock, which will replace the 2015 Stock Plan.

Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 , respectively, is as follows (table in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

As of March 31, 2025 , there wer e 119,116 shar es remaining to be issued under the Company's equity compensation plans.

Stock-based compensation expense for the three months ended March 31, 2025 and 2024 , respectively, is as follows (table in thousands):

Three Months Ended March 31,

General and administrative

$ 259 $ 346 $ 980 $ 1,094

Research and development

94 147 319 411

Total stock-based compensation expense

$ 353 $ 493 $ 1,299 $ 1,505

The Company recorded stock compensation expense for the equity classified warrants relating to non-employee consulting agreements o f $ 26,000 a nd $ 50,000 for the three months ended September 30, 2024 and 2023 , respectively, and $ 94,000 a nd $ 142,000 for the nine months ended September 30, 2024 and 2023 , respectively, which are included in the table above.

At September 30, 2024 , there was $ 283,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

In October and November 2024, the Company granted 545,000 stock options, 267,500 shares of restricted stock units, 73,334 shares of performance based restricted stock units, and 36,000 in warrants to employees and contractors.

These stock options have an exercise price ranging from $ 2.45 to $ 2.54 and vest over a one -to- four year period from the grant date on a straight-line basis over the requisite service period.

The restricted stock units vest annually in four equal installments.

The Company recorded stock compensation expense for the equity classified warrants relating to non-employee consulting agreements o f $ 28,000 a nd $ 34,000 for the three months ended March 31, 2025 and 2024 , respectively, which are included in the table above.

At March 31, 2025 , there was $ 348,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2024 as a result of the losses recorded during the three and nine months ended September 30, 2024 and the additional losses expected for the remainder of 2024 and cumulative net operating loss carryforwards.

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2025 as a result of the losses recorded during the three months ended March 31, 2025 and the additional losses expected for the remainder of 2025 and cumulative net operating loss carryforwards.

Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized.

As a result, as of September 30, 2024 and December 31, 2023 the Company maintained a full valuation allowance for all deferred tax assets.

The Company recorded no income tax provision for the three and nine months ended September 30, 2024 and 2023 , respectively.

The effective tax rate for the nine months ended September 30, 2024 and 2023 is nil.

As a result, as of March 31, 2025 and December 31, 2024 the Company maintained a full valuation allowance for all deferred tax assets.

The Company recorded no income tax provision for the three months ended March 31, 2025 and 2024 , respectively.

The effective tax rate for the three months ended March 31, 2025 and 2024 is nil.

The income tax rates vary from the federal and state statutory rates primarily due to the change in fair value of the stock warrants, Internal Revenue Code Section 162 (m) limitations and ISO activity, as well as the valuation allowances on the Company’s deferred tax assets.

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Commitments and Contingencies

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of September 30, 2024 .

In addition to the commitments and contingencies described elsewhere in these notes, see below for a discussion of the Company's commitments and contingencies as of March 31, 2025 .

Lease Obligations Payable

The following summarizes quantitative information about the Company's operating leases for the three and nine months ended September 30, 2024 and 2023 , respectively (table in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

The following summarizes quantitative information about the Company's operating leases for the three months ended March 31, 2025 and 2024 , respectively (table in thousands):

Three Months Ended March 31,

Operating lease cost

$ 37 $ 34 $ 112 $ 99

Variable lease cost

$ 44 $ 39 $ 129 $ 118

I n September 2023, th e Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew.

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In June 2022, the Company extended the lab lease until September 30, 2027, with no further right or option to renew.

The Company recorded approximately $ 12,000 i n sublease income from a related party for the three months ended September 30, 2024 and 2023 , and $ 37,000 for the nine months ended September 30, 2024 and 2023 .

The Company recorded approximately $ 12,000 i n sublease income from a related party for the three months ended March 31, 2025 and 2024 .

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

Operating cash flows from operating leases w as $ 39,000 and $ 34,000 for the three months ended September 30, 2024 and 2023 , respectively, and $ 107,000 and $ 109,000 for the nine months ended September 30, 2024 and 2023 , respectively .

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson w ere $ 63,000 and $ 64,000 for the three months ended September 30, 2024 and 2023 , respectively, and $ 180,000 and $ 193,000 for the nine months ended September 30, 2024 and 2023 , respectively .

Operating cash flows from operating leases w as $ 39,000 and $ 29,000 for the three months ended March 31, 2025 and 2024 , respectively .

I n March 2025, the Company terminated the WP1122 license with MD Anderson.

The upcoming annual maintenance fee on this license was previously expensed and accrued, as the annual fee is due annually in April.

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson w ere $ 50,000 and $ 54,000 for the three months ended March 31, 2025 and 2024 , respectively .

HPI - The Company has two agreements with a related party, Houston Pharmaceuticals, Inc.

(HPI) with total expenses o f $ 59,000 for e ach of the three months ended September 30, 2024 and 2023 , respectively, and $ 176,000 for the nine months ended September 30, 2024 and 2023 , respectively.

Sponsored Research Agreements - The expenses recognized under the agreements were $ 767,000 and $ 221,000 for the three months ended September 30, 2024 and 2023 , respectively, and $ 1,300,000 and $ 552,000 for the nine months ended September 30, 2024 and 2023 , respectively .

(HPI) with total expenses o f $ 59,000 for e ach of the three months ended March 31, 2025 and 2024 , respectively.

Sponsored Research Agreements - The expenses recognized under the agreements were $ 261,000 and $ 156,000 for the three months ended March 31, 2025 and 2024 , respectively .

Subsequent Events

In addition to the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after September 30, 2024 .

In addition to the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after March 31, 2025 .

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

What changed 10-Q

Item 1. Financial Statements