What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-14 compared with 2025-11-13 · 145 added, 368 removed, 297 unchanged (63% of the section changed)

3 unchanged sentences

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

September 30,

Current assets:

19 unchanged sentences

Commitments and contingencies (Note 7)

Stockholders' equity (deficit)

Stockholders' equity

Preferred stock, $ 0.001 par value;

2 unchanged sentences

500,000,000 shares authorized;

49,498,576 and 3,378,895 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

5,336,350 and 3,199,228 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

234,079 220,997

Accumulated other comprehensive loss

( 44 ) ( 41 )

Accumulated other comprehensive income (loss)

Accumulated deficit

( 218,849 ) ( 206,004 )

Total stockholders’ equity (deficit)

Total stockholders’ equity

15,183 15,006

1 unchanged sentence

$ 23,363 $ 22,126

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to these condensed consolidated financial statements.

Moleculin Biotech, Inc.

1 unchanged sentence

(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:

10 unchanged sentences

Interest income, net

Warrant deemed dividend

Net loss available to common stockholders

Net loss per common share - basic and diluted

3 unchanged sentences

Comprehensive loss

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to these condensed consolidated financial statements.

Moleculin Biotech, Inc.

1 unchanged sentence

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

12 unchanged sentences

Cash flows from investing activities:

Purchase of fixed assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from exercise of warrants

Payment of tax liability for vested restricted stock units

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

Proceeds from exercise of warrants

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Supplemental disclosures of cash flow information:

Non-cash investing and financing activities:

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

Equity warrants issued in relation to liability classified warrant inducements

Reclassification of warrant liabilities to equity upon contractual reset of exercise price

Deemed dividend in connection with warrant amendment

Offering costs included in accounts payable and accrued liabilities

See accompanying notes to condensed consolidated financial statements.

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

See accompanying notes to these condensed consolidated financial statements.

Moleculin Biotech, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except for shares)

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Common stock - shares

3 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Total Stockholders' Equity (Deficit)

Stockholders' Equity

Balance, December 31, 2025

3,378,895 $ 3 $ 183,690 $ ( 172,444 ) $ ( 41 ) $ 11,208

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

5,828,570 6 — — — 6

Warrant inducement and exercise of common stock warrants

Issuance of common stock in connection with Consulting Agreements

Issuance of common stock under at-the-market equity program, net of transaction costs

Warrants exercised

3,770,029 4 — — — 4

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

1,150,000 1 — — — 1

Common stock issued upon vesting of restricted stock units (net of taxes)

Reclassification of warrant liabilities to equity upon contractual reset of exercise price

Warrant deemed dividend

Deemed dividend in connection with warrant amendment

Stock-based compensation

— — 485 — — 485

Consolidated net loss

— — — ( 5,904 ) — ( 5,904 )

Equity warrants issued

— — 7,988 — — 7,988

Cumulative translation adjustment

Balance, March 31, 2026

14,127,494 $ 14 $ 192,163 $ ( 178,348 ) $ ( 38 ) $ 13,791

Warrants exercised

6,107,974 6 — — — 6

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

9,972,026 10 — — — 10

Stock-based compensation

— — 417 — — 417

Consolidated net loss

— — — ( 17,809 ) — ( 17,809 )

Balance, June 30, 2025

30,207,494 $ 30 $ 192,580 $ ( 196,157 ) $ ( 38 ) $ ( 3,585 )

Warrant inducement and exercise of common stock warrants at $ 0.37 per share

16,216,216 16 1,748 — — 1,764

Warrants exercised

2,996,192 3 — — — 3

Common stock issued upon vesting of restricted stock units (net of taxes)

19,889 — — — — —

Issuance of common stock in connection with a consulting agreement

58,785 — — — — —

Stock-based compensation

— — 303 — — 303

Cumulative translation adjustment

— — — — ( 6 ) ( 6 )

Consolidated net loss

— — — ( 25,399 ) — ( 25,399 )

Balance, September 30, 2025

49,498,576 $ 49 $ 194,631 $ ( 221,556 ) $ ( 44 ) $ ( 26,920 )

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Common stock - shares

3 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Total Stockholders' Equity

Stockholders' Equity

Balance, December 31, 2024

Issuance of common stock to consultants

Reverse stock split

Stock-based compensation

Consolidated net loss

Cumulative translation adjustment

Balance, March 31, 2024

Common stock issued upon vesting of restricted stock units (net of taxes)

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

Warrants exercised

Stock-based compensation

Consolidated net loss

Cumulative translation adjustment

Balance, June 30, 2024

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

Common stock issued upon vesting of restricted stock units (net of taxes)

Warrants exercised

Stock-based compensation

2 unchanged sentences

Cumulative translation adjustment

Balance, September 30, 2024

See accompanying notes to condensed consolidated financial statements.

Balance, March 31, 2025

See accompanying notes to these condensed consolidated financial statements.

Moleculin Biotech, Inc.

3 unchanged sentences

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 relapsed/refractory (R/R) acute myeloid leukemia (AML).

The Company has two additional 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 treatment in several Phase 1B/2 clinical trial for treating AML and has begun treating subjects in its Phase 3 clinical trial for the treatment of R/R AML.

Annamycin was in two recently closed or concluded Phase 1B/2 clinical trials for treating Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS), with one physician-sponsored.

The Company announced a physician-sponsored trial for Annamycin for the treatment of pancreatic cancer intended to begin in 2026.

The one concluded trial has published its clinical study report.

MBI is a late-stage pharmaceutical development company currently conducting a pivotal Phase 2B/3 trial evaluating Annamycin, also known by its non-proprietary name "naxtarubicin", in combination with cytarabine for the treatment of subjects with relapsed/refractory (R/R) acute myeloid leukemia (AML).

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

In June 2018, we formed Moleculin Australia Pty.

Ltd., a wholly owned subsidiary to oversee pre-clinical development in Australia.

In April 2026, the board of directors of both MBI and the Australian subsidiary approved the closing of this subsidiary to reduce corporate overhead costs.

With the MIRACLE trial focused in the US, Europe, and, possibly, the Middle East future activities are not anticipated to include Australia.

Each of its three core technologies is based substantially on discoveries at, or in conjunction with and with rights originating 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 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 in planning, are currently in, or have been permitted to proceed in, eighteen clinical trials.

Annamycin, in a unique multilamellar lipid formulation, is the Company’s lead molecule, has completed several clinical trials in AML and soft tissue sarcoma and in March 2025 began treating subjects in its Phase 2B/3 clinical trial for the treatment of R/R AML.

The latter is the main focus the Company’s management and resources.

Annamycin was in two concluded Phase 1B/2 clinical trials for treating Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS), with one physician-sponsored.

The Company announced in 2025 a physician-sponsored trial for Annamycin for the treatment of pancreatic cancer intended to begin in the second half of 2026.

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 and there is another pediatric brain tumor trial also in the planning states for late 2026.

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

5 unchanged sentences

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

On May 23, 2025, the Company received a letter from the Nasdaq Stock Market LLC (Nasdaq), which notified the Company that it does not presently comply with Nasdaq’s Listing Rule 5550 (b)( 1 ) (the “Equity Rule”), which requires that the Company maintain a minimum of $2.5 million in stockholders’ equity, and that the Company also does not meet the alternatives of market value of listed securities or net income from continuing operations set forth in the Equity Rule.

The letter did not have any immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and the Company had 45 calendar days to submit a plan to regain compliance.

The Company’s plan was accepted and the Staff granted an extension of up to 180 calendar days from May 23, 2025 through November 19, 2025 to evidence compliance.

If the Company is not in compliance on that date, then the Company intends to submit an appeal to extend this date, however, there can be no assurance that such appeal would be successful.

On June 27, 2025, the Company received another deficiency letter from the Staff of Nasdaq notifying the Company that for the last 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 the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550 (a)( 2 ) (the “Bid Price Rule”).

The deficiency letter does not result in the immediate delisting of the Company’s common stock from the Nasdaq Capital Market.

In accordance with Nasdaq Listing Rule 5810 (c)( 3 )(A) (the “Compliance Period Rule”), the Company has been provided an initial period of 180 calendar days, or until December 24, 2025 ( the “Compliance Date”), to regain compliance with the Bid Price Rule.

If, at any time before the Compliance Date, the bid price for the Company’s common stock closes at $1.00 or more for a minimum of 10 consecutive business days as required under the Compliance Period Rule, the Staff is expected to 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 )(H).

If the Company is not in compliance with the Bid Price Rule by December 24, 2025, the Company may be afforded a second 180 calendar day period to regain compliance.

To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the minimum bid price requirement.

In addition, the Company would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency, which may include, if necessary, implementing a reverse stock split.

If the Company does not regain compliance with the Bid Price Rule by the Compliance Date and is not eligible for an additional compliance period at that time, the Staff will provide written notification to the Company that its common stock may be delisted.

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

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

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include effecting a reverse stock split.

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

On May 23, 2025, the Company received a letter from Nasdaq Stock Market LLC notifying the Company that it was not in compliance with Nasdaq Listing Rule 5550 (b)( 1 ) (the “Equity Rule”), which requires a minimum of $2.5 million in stockholders’ equity.

The letter also noted that the Company did not meet the alternative compliance standards of market value of listed securities or net income from continuing operations under the Equity Rule.

The notification had no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and the Company was provided 45 calendar days to submit a plan to regain compliance.

The Company’s compliance plan was subsequently accepted, and the Nasdaq staff granted an extension of up to 180 calendar days, through November 19, 2025, to demonstrate compliance.

On June 27, 2025, the Company received an additional deficiency letter from the staff of Nasdaq indicating that, for the previous 30 consecutive business days, the closing bid price of the Company’s common stock had been below the minimum $ 1.00 per share requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550 (a)( 2 ) (the “Bid Price Rule”).

On November 20, 2025, the Company received a delisting determination letter from Nasdaq stating that the Company had not regained compliance with the Equity Rule within the permitted timeframe.

The Company subsequently requested a hearing before a Nasdaq hearing panel (the “Panel”) to appeal the delisting determination.

On December 15, 2025, the Company received a letter from Nasdaq confirming that the Company had regained compliance with the Bid Price Rule because the closing bid price of the Company’s common stock was $ 1.00 per share or greater for the 10 consecutive business days from December 1, 2025 through December 12, 2025.

Accordingly, this matter was closed.

On January 6, 2026, Nasdaq informed the Panel that the Company had regained compliance with the Equity Rule and that the Company was in compliance with all applicable continued listing standards.

As a result, the hearing before the Panel was cancelled.

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 December 1, 2025, pursuant to authority granted by our stockholders, the Company effected a 1 -for- 25 reverse stock split of our common stock and the filing of an amendment to our amended and restated certificate of incorporation to effectuate the reverse stock split.

The amendment provides that, every twenty-five shares of our issued and outstanding common stock will automatically be combined into one issued and outstanding share of common stock, without any change in par value per share, which will remain at $0.001.

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

Certain amounts previously reported include rounding up of fractional shares as a result of the reverse stock split.

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

Basis of Presentation – Condensed Consolidated Financial Information - The accompanying condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the US (US GAAP) for financial information, and in accordance with the rules and regulations of the US Securities and Exchange Commission (SEC) with respect to Form 10 -Q and Article 8 of Regulation S- X.

17 unchanged sentences

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, 2025 .

There have been no material changes to the significant accounting policies during the nine months ended September 30, 2025 , except as discussed further below under Changes in Accounting Policy.

There have been no material changes to the significant accounting policies during the three months ended March 31, 2026 , except as discussed further below under Changes in Accounting Policy.

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.

8 unchanged sentences

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, 2025 , the Company had an accumulated defici t of $ 221.6 million since inception and had not yet generated any revenues from operations.

Additionally, management anticipates that its cash on hand of $ 6.7 million a s of September 30, 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.

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

As of March 31, 2026 , the Company had an accumulated defici t of $ 218.8 million since inception and had not yet generated any revenues from operations.

Additionally, management anticipates that its cash on hand of $ 10.3 million a s of March 31, 2026 , is not sufficient to fund its planned operations for a period of at least one year from when these condensed consolidated financial statements are issued.

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

3 unchanged sentences

There can be no assurance that such events or a combination thereof can be achieved.

In March 2022, the Company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals ( none of which are the Company's officers or directors) and entities, and materials related to the development of and statements regarding the Company's drug candidate for the treatment of COVID- 19.

The Company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter.

The Company is not aware of the specific nature of the underlying investigation by the SEC, and to the extent that this investigation relates to prior public disclosures that it has made, the Company believes in the accuracy and adequacy of such prior disclosures.

The correspondence from the SEC transmitting the subpoena to the Company states that the SEC is trying to determine whether there have been any violations of federal securities laws, but that its investigation does not mean that the SEC has concluded that anyone has violated the law or that the SEC has a negative opinion of any person, entity, or security.

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's expenses for the three and nine months ended September 30, 2025, were not material.

The Company expensed approximately $ 0.1 million and $ 0.2 million in related general and administrative fees and expenses for the three and nine months ended September 30, 2024, respectively.

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 September 30, 2025 .

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

10 unchanged sentences

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

September 30, 2025

March 31, 2026

December 31, 2025

2 unchanged sentences

Prepaid sponsored research

Related party receivables

Non-trade receivables

Total prepaid expenses and other current assets

$ 1,182 $ 916

Other Non-Current Assets - The Company provided a cash deposit on the MB- 108 trial that is expected to be held as a prepayment until the end of the study in 2029.

9 unchanged sentences

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, 2025 and December 31, 2024 (table in thousands):

Fair value of warrant liability as of September 30, 2025:

The following table provides the financial liabilities reported at fair value and measured on a recurring basis at March 31, 2026 and December 31, 2025 (table in thousands):

Fair value of warrant liability as of March 31, 2026:

$ 33 $ — $ — $ 33

1 unchanged sentence

$ 44 $ — $ — $ 44

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, 2025

Warrant Liability Long-Term

Balance, June 30, 2025

Warrants issued

Warrants exercised

Change in fair value - net

Balance, September 30, 2025

The table below of Level 3 liabilities (table in thousands) begins with the valuation as of December 31, 2024 and then is adjusted for changes in fair value that occurred during the nine months ended September 30, 2025 .

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, 2025

Three Months Ended March 31, 2026

Warrant Liability Long-Term

2 unchanged sentences

Warrants exercised

Warrants reclassification

Change in fair value - net

Balance, September 30, 2025

Balance, March 31, 2026

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.

2 unchanged sentences

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, 2025 and 2024 , approximately 85.7 million and 4.8 m illion, 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, 2025 and 2024 , approximately 41.7 mil lion and 2.7 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, 2026 and 2025 , approximately 10.0 million and 0.6 m illion, 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.

Subsequent Events included in these unaudited condensed financial statements.

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 ):

Recent Accounting Pronouncements - In December 2025, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2025 - 12, Codification Improvements, which clarifies various topics in the Accounting Standards Codification to improve consistency and address technical corrections.

Key improvements include (clarifying the calculation of diluted earnings per share (EPS) when a loss from continuing operations exists.

The amendments in this update are effective for the Company beginning January 1, 2027, with early adoption permitted.

Currently, the Company is assessing the potential impact of this guidance on its condensed consolidated financial statement disclosures.

In December 2025, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2025 - 11, Interim Reporting (Topic 270 ):

Narrow-Scope Improvements.

This standard clarifies current interim reporting requirements on topic 270 and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This standard will be effective for fiscal years beginning after December 15, 2027, with the option to apply it retrospectively.

Early adoption is allowed.

Currently, the Company is assessing.

the potential impact of this guidance on its condensed consolidated financial statement disclosures.

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.

3 unchanged sentences

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 ):

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, that would have a material effect on the accompanying financial statements.

10 unchanged sentences

As a result of the change in accounting policy, the Company adjusted accumulated deficit, and additional paid-in capital to reverse previously recorded mark-to-market fair value changes of the liability-classified warrants.

Warrants classified as liability warrants were adjusted retrospectively from January 2017 to June 2025, and beginning balances have been adjusted for the policy change to equity warrant classifications.

Warrants classified as liability warrants were adjusted retrospectively from January 2017 to June 2025, and the beginning balances have been adjusted for the policy change to equity warrant classifications.

Accumulated deficit as of January 1, 2024, changed from $ 131.6 million, as reported under the liability classification, to $ 146.4 million under the equity classification.

The following financial statement line items were impacted by the change in accounting policy, as shown in the tables below (in thousands, except per common share data):

September 30, 2025

December 31, 2024

Under Old Policy Under New Policy Change Under Old Policy Under New Policy Change

Condensed Consolidated Balance Sheets

Warrant liability - long-term

$ 48,660 $ 41,333 $ ( 7,327 ) $ 5,229 $ — $ ( 5,229 )

Total liabilities

54,600 47,273 ( 7,327 ) 10,946 5,717 ( 5,229 )

Additional paid-in capital

162,337 194,631 32,294 159,384 183,690 24,306

Accumulated deficit

( 196,589 ) ( 221,556 ) ( 24,967 ) ( 153,367 ) ( 172,444 ) ( 19,077 )

Total stockholders' equity (deficit)

( 34,247 ) ( 26,920 ) 7,327 5,979 11,208 5,229

Total liabilities and stockholders' equity (deficit)

20,353 20,353 — 16,925 16,925 —

Three Months Ended

March 31, 2025

June 30, 2025

Under Old Policy

Under New Policy

Under Old Policy

Under New Policy

Condensed Consolidated Balance Sheets

Warrant liability - long-term

$ 13,749 $ — $ ( 13,749 ) $ 20,553 $ 16,973 $ ( 3,580 )

Total liabilities

20,971 7,222 ( 13,749 ) 28,758 25,178 ( 3,580 )

Additional paid-in capital

159,869 192,163 32,294 160,286 192,580 32,294

Accumulated deficit

( 159,803 ) ( 178,348 ) ( 18,545 ) ( 167,443 ) ( 196,157 ) ( 28,714 )

Total stockholders' equity (deficit)

42 13,791 13,749 ( 7,165 ) ( 3,585 ) 3,580

Total liabilities and stockholders' equity (deficit)

21,013 21,013 — 21,593 21,593 —

Three Months Ended Three Months Ended

September 30, 2025

September 30, 2024

Under Old Policy

Under New Policy

Under Old Policy

Under New Policy

Condensed Consolidated Statement of Operations

10 unchanged sentences

( 6,433 ) ( 5,901 ) 532

Nine Months Ended Nine Months Ended

September 30, 2025

September 30, 2024

Under Old Policy

Under New Policy

Under Old Policy

Under New Policy

Condensed Consolidated Statement of Operations

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

$ 16,506 $ 1,031 $ ( 15,475 ) $ 1,423 $ — $ ( 1,423 )

Transaction costs allocated to warrant liabilities

( 3,525 ) ( 1,737 ) 1,788 ( 993 ) — 993

Loss on issuance of warrant liabilities

( 38,760 ) ( 30,962 ) 7,798 ( 847 ) — 847

( 43,223 ) ( 49,112 ) ( 5,889 ) ( 19,881 ) ( 19,464 ) 417

Net loss per common share - basic and diluted

( 2.08 ) ( 2.36 ) ( 0.28 ) ( 6.83 ) ( 6.69 ) 0.14

Other comprehensive income (loss)

( 43,226 ) ( 49,115 ) ( 5,889 ) ( 19,868 ) ( 19,451 ) 417

Three Months Ended

June 30, 2025

June 30, 2024

Under Old Policy

Under New Policy

Under Old Policy

Under New Policy

Condensed Consolidated Statement of Operations

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

$ 9,609 $ ( 560 ) $ ( 10,169 ) $ 1,696 $ — $ ( 1,696 )

Transaction costs allocated to warrant liabilities

( 1,207 ) ( 1,207 ) — — — —

Loss on issuance of warrant liabilities

( 10,352 ) ( 10,352 ) — — — —

( 7,640 ) ( 17,809 ) ( 10,169 ) ( 4,319 ) ( 6,015 ) ( 1,696 )

Net loss per common share - basic and diluted

( 0.49 ) ( 1.15 ) ( 0.66 ) ( 1.70 ) ( 2.37 ) ( 0.67 )

Other comprehensive loss

( 7,640 ) ( 17,809 ) ( 10,169 ) ( 4,311 ) ( 6,007 ) ( 1,696 )

Six Months Ended

June 30, 2025

June 30, 2024

Under Old Policy Under New Policy Change Under Old Policy Under New Policy Change

Condensed Consolidated Statement of Operations

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

$ 18,663 $ ( 560 ) $ ( 19,223 ) $ 3,151 $ — $ ( 3,151 )

Transaction costs allocated to warrant liabilities

( 2,995 ) ( 1,207 ) 1,788 — — —

Loss on issuance of warrant liabilities

( 18,150 ) ( 10,352 ) 7,798 — — —

( 14,076 ) ( 23,713 ) ( 9,637 ) ( 9,289 ) ( 12,440 ) ( 3,151 )

Net loss per common share - basic and diluted

( 1.13 ) ( 1.90 ) ( 0.77 ) ( 3.71 ) ( 4.97 ) ( 1.26 )

Other comprehensive loss

( 14,073 ) ( 23,710 ) ( 9,637 ) ( 9,290 ) ( 12,441 ) ( 3,151 )

Three Months Ended

March 31, 2025

March 31, 2024

Under Old Policy

Under New Policy

Under Old Policy

Under New Policy

Condensed Consolidated Statement of Operations

Gain from change in fair value of warrant liability

$ 9,054 $ — $ ( 9,054 ) $ 1,455 $ — $ ( 1,455 )

Transaction costs allocated to warrant liabilities

( 1,788 ) — 1,788 — — —

Loss on issuance of warrant liabilities

( 7,798 ) — 7,798 — — —

( 6,436 ) ( 5,904 ) 532 ( 4,970 ) ( 6,425 ) ( 1,455 )

Net loss per common share - basic and diluted

( 0.69 ) ( 0.63 ) 0.06 ( 2.02 ) ( 2.61 ) ( 0.59 )

Other comprehensive loss

( 6,433 ) ( 5,901 ) 532 ( 4,979 ) ( 6,434 ) ( 1,455 )

The change in accounting policy did not have a material effect on the statement of cashflows for any current or prior period presented.

1 unchanged sentence

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

September 30, 2025

March 31, 2026

December 31, 2025

Research and development

$ 1,413 $ 858

Payroll and bonuses

$ 2,166 $ 1,821

Research and development

Legal, regulatory, professional and other

Operating lease liability - current

Due to related party

Total accrued expenses and other current liabilities

$ 3,388 $ 3,346

Additionally, accounts payable - due to related party was $ 19,000 and $ 20,000 at September 30, 2025 and December 31, 2024 , respectively,

Warrants and Equity

Warrant and Stock Issuances

In August 2025, the Company entered into a warrant exercise inducement offer letter with holders of certain existing warrants pursuant to which the holders agreed to exercise Series E warrants to purchase up to 16,216,216 shares of common stock with an exercise price of $ 0.37 per shares in exchange for the Company issuing new Series F warrants to purchase 64,864,864 shares of the Company's common stock.

Each Series F warrant had an exercise price of $0.55 per share and is exercisable as of the date of issuance to October 16, 2030.

The Company received gross proceeds of $ 6.0 million.

In addition, during August and September 2025, 2,996,192 shares of Series E warrants were exercised for $ 1.1 million.

The Series F warrants are classified as liability warrants within these consolidated condensed interim financial statements.

In June 2025, the Company closed a public offering of (i) 9,972,026 shares of the Company’s common stock;

(ii) pre-funded warrants to purchase up to an aggregate of 6,107,974 shares of common stock;

and (iii) Series E warrants to initially purchase up to an aggregate of 48,240,000 shares of common stock (of which Series E warrants to purchase 16,216,216 shares of common stock were exercised as described in the above paragraph).

The combined purchase price for the securities was $ 0.37 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.

All of the pre-funded warrants were exercised during the three months ended June 30, 2025.

Each Series E warrant has an initial exercise price of $ 0.37 per share and became exercisable beginning on the effective date of stockholder approval on August 18, 2025, at the Company's Annual Meeting.

The Company also received approval at the Annual Meeting to increase its authorized shares of common stock to 500,000,000 , such that it can issue all shares of common stock required under the Series E warrants upon any future adjustments to the exercise price of the Series E warrants.

The Series E warrants provide that if, while the Series E warrants are outstanding, the Company sells any common stock and/or common stock equivalents other than in connection with certain exempt issuances (as defined in the Series E warrant agreement), at a purchase price per share less than the exercise price of the Series E warrants in effect immediately prior to such sale, then immediately after such sale the exercise price of the Series E warrants then in effect will be reduced to an amount equal to such new issuance price, and, the number of shares issuable upon exercise of the Series E warrants will be proportionately adjusted such that the aggregate price will remain unchanged, subject to the floor price of $ 0.12 (Down Round Feature).

In addition, the Series E warrants provide that if at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving the common stock and the lowest daily volume weighted average price during the period commencing five consecutive trading days immediately preceding and the five consecutive trading days commencing on the date of such event is less than the exercise price of the Series E common warrants then in effect, then the exercise price of the Series E warrants will be reduced to the lowest daily volume weighted average price during such period and, the number of shares issuable upon exercise will be proportionately adjusted such that the aggregate price will remain unchanged, subject to the floor price of $ 0.12 .

The Series E warrants expire on August 18, 2030.

As of November 10, 2025, the Company had received gross proc eeds of $7.5 million and may receive up to an additional approximately $ 10.3 million in gros s proceeds if the Series E warrants are fully exercised for cash.

Proceeds of offerings are allocated between common shares and Series E warrants first by allocating to the Series E 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.

The fair value of the Series E warrants was $ 16.3 million on the issuance date.

Because the fair value of the liability classified warrants issued in the June 2025 offering exceeded the total proceeds, no consideration was allocated to the common stock or pre-funded warrants.

The full proceeds from the June 2025 offering were recorded as warrant liabilities, and the Company recognized a $ 10.4 million loss on the issuance of the Series E warrants.

The Company also incurred $ 1.2 million in transaction costs related to the June 2025 public offering.

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.

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

Each Series D warrant will expire five years from the initial exercise date.

The Company received gross proceeds of $ 3.5 million.

Based on the change in accounting policy as noted in Note 2, these Series D warrants are classified within equity for all periods presented within these condensed consolidated interim financial statements.

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 Series C warrant has an exercise price of $ 0.75 and was 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 the two February 2025 transactions were $ 9.3 million.

Based on the change in accounting policy as noted in Note 2, these Series C warrants are classified within equity for all periods presented within these condensed consolidated interim financial statements.

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).

In August 2024, the Company entered into a warran t 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.

Based on the change in accounting policy as noted in Note 2, the August 2024 warrants are classified within equity for all periods presented within these condensed consolidated interim financial statements.

Liability Classified Warrants

The Company applies a Monte Carlo simulation model to appropriately reflect the impact of the Down Round Feature to both the Series E and Series F Warrants.

On February 19, 2026, the Company entered into warrant inducement agreements with certain holders of our existing equity-classified Series E and Series F warrants.

Pursuant to the agreements, the holders exercised warrants to purchase an aggregate of 2,122,652 shares of the Company’s common stock at an exercise price of $ 3.90 per share, resulting in aggregate gross proceeds of approximately $ 8.3 million.

In consideration for such exercises, the Company issued new Series H warrants to purchase up to 6,367,956 shares of common stock.

The Series H warrants have a five -year term and an exercise price of $ 2.3976 per share.

The warrants contain customary anti-dilution adjustments and beneficial ownership limitations and became exercisable upon stockholder approval in April 2026.

As a result of the completion of this transaction, the exercise price of the Company’s outstanding Series E warrants was adjusted to $ 3.00 per share, and the number of shares underlying the remaining outstanding Series E warrants increased, in each case pursuant to the anti-dilution provisions contained in such warrants.

In addition, the exercise price of the Company’s outstanding Series F warrants was adjusted to $ 2.75 per share, and the exercise price of the Company’s outstanding Series G warrants was adjusted to $ 2.3976 per share.

The Company recorded a deemed dividend of $ 1.8 million resulting from the downward adjustment to the exercise price of certain warrants and the increase in the number of shares underlying certain outstanding warrants, in each case triggered by the anti-dilution provisions contained in the original warrant agreements.

The deemed dividend was recorded within additional paid-in capital and recognized as a reduction to income available to common stockholders.

The Company uses the Monte Carlo simulation model to reflect the impact of the down round feature to the warrants and also uses a Black-Scholes option pricing model (BSM) to determine the fair value of its liability warrants at the at each reporting date, the date of issue and any other measurement date during the quarter.

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.

Liability Classified Warrants

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

September 30, 2025

March 31, 2026

December 31, 2025

Risk-free interest rate

3.7 % to 3.7 %

111.1 % to 112.7 %

121.4 % 114.3 %

Expected life (years)

Dividend yield

A summary of the Company's liability classified warrant activity during the nine months ended September 30, 2025 and related information follows:

A summary of the Company's liability classified warrant activity during the three months ended March 31, 2026 and related information follows:

Number of Shares

8 unchanged sentences

6,367,956 $ 2.40 $ 2.40 $ 2.40 5.2

Adjustment for VWAP

3,589 $ 3.00 $ 3.00 $ 3.00 4.4

Balance at September 30, 2025

( 2,279 ) $ 3.90 $ 3.90 $ 3.90 4.4

Exercisable at September 30, 2025

Reclassed to equity warrants

( 6,367,956 ) $ 2.40 $ 2.40 $ 2.40 5.2

For a summary of the changes in fair value and the impact of changes in accounting policy associated with the Company's warrant liability for the nine months ended September 30, 2025 , see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies.

Subsequent to September 30, 2025, Series E warrants to purchase 1,175,351 shares of common stock were exercised at $ 0.37 per share.

Balance at March 31, 2026

15,550 $ 3.00 $ 3.00 $ 3.00 4.4

Exercisable at March 31, 2026

15,550 $ 3.00 $ 3.00 $ 3.00 4.4

For a summary of the changes in fair value and the impact of changes in accounting policy associated with the Company's warrant liability for the three months ended March 31, 2026 , see Note 2 - Basis of presentation, principles of consolidation and significant accounting policies.

Equity Classified Warrants

A summary of the Company's equity classified warrant activity during the nine months ended September 30, 2025 and related information follows:

A summary of the Company's equity classified warrant activity during the three months ended March 31, 2026 and related information follows:

Number of Shares Range of Warrant Exercise

3 unchanged sentences

7,588,026 $ 2.75 $ 1,361.25

Granted and/or reclassed from liability warrants

6,367,956 $ 2.40 $ 2.40

Adjustment for VWAP

593,085 $ 3.00 $ 3.00

Expired warrants

(2,122,652 ) $ 3.90 $ 3.90

Balance at September 30, 2025

Balance at March 31, 2026

12,426,415 $ 2.40 $ 1,361.25

Exercisable at September 30, 2025

Exercisable at March 31, 2026

12,378,597 $ 2.40 $ 1,361.25

The equity awards granted primarily consist of Series C and Series D warrants granted during the quarter ended March 31, 2025.

Additionally, equity awards exercised during the nine months ended September 30, 2025 , primarily consisted of the Series A and B warrants exercised during the period.

In September 2025, the Company granted equity-classified warrants to purchase up to 375,000 shares of Company common stock with a ten -year term and an exercise price of $ 0.43 .

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

In July 2025, the Company issued 200,000 warrants to a consultant, of which 100,000 vested immediately and 100,000 will vest upon the signing of a letter of intent or the closing of a licensing deal with a value of $ 10 million or more.

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 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.

Other Components of Equity and Share Issuances

During the nine months ended September 30, 2025 , all remaining pre-funded warrants were exercised, leaving no remaining pre-funded warrants outstanding as of September 30, 2025 .

In July 2025, the Company issued 58,785 shares of common stock to a consultant in exchange for services provided.

The Company issued 19,889 shares of common stock upon the vesting of RSUs in July 2025 pertaining to the prior quarter.

At Market Issuance Sales Agreement (ATM)

In July 2025, the Company entered into a certain At Market Issuance Offering Agreement ( 2025 ATM Agreement) with Roth Capital Partners, LLC.

Pursuant to the terms of the 2025 ATM Agreement, the Company may offer and sell shares of our common stock having an aggregate offering price of up to $ 6.5 million from time to time through or to Roth acting as our sales agent or principal.

Roth may also sell shares of our common stock in negotiated transactions at market prices prevailing at the time of sale at prices related to such prevailing market prices and either party may cancel upon two business days notice.

The Company agreed to pay a commission to Roth of 3.0 % of the gross proceeds of any shares of common stock sold under the 2025 ATM Agreement, in addition to the reimbursement of certain expenses.

The 2025 ATM Agreement terminates upon the sale of shares in the aggregate amount in the agreement.

On December 23, 2025, the Company increased the maximum aggregate gross sales price of the Company’s common stock that may be offered, issued and sold under a certain At Market Offering Agreement ( 2025 ATM Agreement) with Roth Capital Partners, LLC (Roth), which the Company initially entered into in July 2025, from $ 6.5 million to $ 8.2 million.

Pursuant to the terms of the 2025 ATM Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 8.2 million from time to time through or to Roth, acting as sales agent or principal.

Roth may sell shares of the Company’s common stock in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices, and either party may terminate the 2025 ATM Agreement upon two business days’ notice.

The Company paid Roth a commission equal to 3.0 % of the gross proceeds from any shares of common stock sold under the 2025 ATM Agreement, in addition to reimbursing certain expenses.

The 2025 ATM Agreement will terminate upon the sale of shares having an aggregate offering price equal to the maximum amount authorized under the agreement.

During the first quarter of 2026, the Company sold 3,785 s hares of common stock pursuant to the 2025 ATM Agreement for gross proceeds of approximately $ 18,000 .

During May of 2026, the Company sold an additional 354,757 shares of common stock pursuant to the 2025 ATM Agreement for net proceeds of approximately $ 0.8 million.

The lowest price of the shares sold was $ 2.01 and reset the exercise price of Series G and Series H warrants from $ 2.40 to $ 2.01 per share.

Stock-Based Compensation

As of September 30, 2025 , there wer e 4,677,666 shar es remaining to be issued under the Company's equity compensation plans.

Stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 , respectively, is as follows (table in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Stock-based compensation expense for the three months ended March 31, 2026 and 2025 , respectively, is as follows (table in thousands):

Three Months Ended March 31,

General and administrative

$ 203 $ 259 $ 866 $ 980

Research and development

100 94 339 319

Total stock-based compensation expense

$ 303 $ 353 $ 1,205 $ 1,299

The Company recorded stock compensation expense for the equity classified warrants relating to non-employee consulting agreements o f $ 30,000 a nd $ 26,000 for the three months ended September 30, 2025 and 2024 , respectively, and $ 88,000 and $ 94,000 for the nine months ended September 30, 2025 and 2024 , respectively, which are included in the table above.

At September 30, 2025 , there was $ 440,000 of unrecognized stock compensation expense related to the Company's equity classified warrants.

In September 2025, the Company issued 1,441,500 stock options to employees and contractors at $ 0.43 per shares which have a ten -year term and vest over 4 years.

The Company recorded stock compensation expense for the equity classified warrants relating to non-employee consulting agreements o f $ 39,000 a nd $ 28,000 for the three months ended March 31, 2026 and 2025 , respectively, which are included in the table above.

As of March 31, 2026 and 2025 , there were $ 330,000 and $ 319,000 in unrecognized stock compensation expense, respectively, related to the Company's equity classified warrants.

As of March 31, 2026 , there wer e 14,105 shar es remaining to be issued under the Company's equity compensation plan.

On May 6, 2026, the Company entered into a consulting agreement with an entity to provide clinical services pursuant to which it issued the consultant a five -year warrant to purchase 100,000 shares of common stock at an exercise price of $ 2.48 vesting in twelve equal installments over a one -year period.

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 2025 as a result of the losses recorded during the three and nine months ended September 30, 2025 and the additional losses expected for the remainder of 2025 and cumulative net operating loss carryforwards.

The Company does not expect to pay any significant federal, state, or foreign income taxes in 2026 as a result of the losses recorded during the three months ended March 31, 2026 and the additional losses expected for the remainder of 2026 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, 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 and nine months ended September 30, 2025 and 2024 , respectively.

The effective tax rate for the nine months ended September 30, 2025 and 2024 is nil .

As a result, as of March 31, 2026 and December 31, 2025 , 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, 2026 and 2025 , respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 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.

2 unchanged sentences

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act, which changes existing US tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes.

The Company continues to evaluate the impact the new legislation will have on the consolidated financial statements, but does not anticipate a significant impact due to the Company’s valuation allowance position.

The Company continues to evaluate the impact the new legislation will have on the consolidated financial statements, but the Company does not anticipate a significant impact due to the Company’s valuation allowance position.

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, 2025 .

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, 2026 .

Lease Obligations Payable

The following summarizes quantitative information about the Company's operating leases for the three and nine months ended September 30, 2025 and 2024 , 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, 2026 and 2025 , respectively (table in thousands):

Three Months Ended March 31,

Operating lease cost

$ 38 $ 37 $ 112 $ 112

Variable lease cost

$ 45 $ 44 $ 134 $ 129

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.

Th e Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew.

The Company is required to remit base monthly rent of a pproximately $ 4,700 which will increase at an average approximate rate of 0 % each year.

The Company is also required to pay additional rent in the form of its pro-rata share of certain specified operating expenses of the building.

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 in sublease income from a related party for the three months ended September 30, 2025 and 2024 and $ 37,000 for each of the nine months ended September 30, 2025 and 2024 .

The Company has an extended lab lease until September 30, 2027, with no further right or option to renew.

The Company recorded approximately $ 12,000 in sublease income for the three months ended March 31, 2026 and 2025 .

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 $ 40,000 and $ 39,000 for the three months ended September 30, 2025 and 2024 , respectively, and $ 119,000 and $ 107,000 for the nine months ended September 30, 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 $ 32,000 and $ 63,000 for the three months ended September 30, 2025 and 2024 , respectively, and $ 115,000 and $$ 180,000 for the nine months ended September 30, 2025 and 2024 , respectively .

Operating cash flows from operating leases w as $ 41,000 and $ 39,000 for the three months ended March 31, 2026 and 2025 , respectively.

MD Anderson - Total expenses related to the Company's license agreements with MD Anderson w ere $ 32,000 and $ 50,000 for the three months ended March 31, 2026 and 2025 , respectively .

In October 2025, the Company entered into two separate options to license certain intellectual property related to WP1122 and a new formulation on WP1066.

Such licenses are tied to continue support of sponsored research at MD Anderson discussed below.

HPI - The Company has an agreement with Houston Pharmaceuticals, Inc.

(HPI), a related party, with total expenses o f $ 15,000 for each of the three months ended September 30, 2025 and 2024 , and $ 45,000 and $ 176,000 for the nine months ended September 30, 2025 and 2024 , respectively .

Sponsored Research Agreements - The expenses recognized under the agreements were $ 11,000 and $ 767,000 for the three months ended September 30, 2025 and 2024 , respectively, and $ 324,000 and $ 1,300,000 for the nine months ended September 30, 2025 and 2024 , respectively .

Sponsored Research Agreements - The expenses recognized under the agreements were $ 212,000 and $ 211,000 for the three months ended March 31, 2026 and 2025 , respectively .

The Company entered into a research agreement with MD Anderson until 2027.

1 unchanged sentence

Subsequent Events

On November 12, 2025, the Compensation Committee of our board of directors approved, and we issued, in connection with our 2024/2025 compensation year, to certain of our executive officers and board members and advisors, ten -year options to purchase an aggregate of 2,605,000 shares of our common stock pursuant to the Company’s 2024 Stock Plan with an exercise price of $ 0.49 per share, which vest in four equal annual, except installments subject to the respective individual’s continued service with us as of each such vesting date;

and performance stock units to acquire an aggregate of 1,550,000 shares of our common stock, which vest upon the attainment of performance milestones related to our lead clinical trial.

Subsequent to September 30, 2025, 736,549 shares were sold under the ATM Agreement for gross proceeds of $ 0.4 million at prices ranging from $ 0.4349 to $ 0.5601 .

Pursuant to the terms of the Series F warrants, the exercise price of the Series F warrants was lowered to $ 0.4349 per share on November 13, 2025, which was the sole date on which sales under the ATM Agreement were made at a price less than $ 0.55 per share.

Other than the subsequent events discussed elsewhere in these notes, no other subsequent events were noted as occurring after March 31, 2026.

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