Moleculin Biotech, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Forward-looking statements include, but are not limited to, statements about: • Our ability to obtain additional funding to commence or continue our clinical trials, fund operations and develop our product candidates; • The success or the lack thereof, including the ability to recruit subjects and onboard new clinical trial sites on a timely basis, for a variety of reasons, of our clinical trials through all phases of clinical development; • Our ability to continue our relationship with the University of Texas MD Anderson Cancer Center (MD Anderson), including, but not limited to, our ability to maintain current licenses and license future intellectual property resulting from our sponsored research agreements with MD Anderson; • Our ability to satisfy any requirements imposed by the United States (US) Food & Drug Administration (FDA) (or its foreign equivalents) as a condition of our clinical trials proceeding or beginning as planned; • World-wide events including geopolitical conflicts, public health emergencies, and global supply chain disruptions that may affect our clinical trials, clinical drug candidate supplies, preclinical activities and our ability to raise future financing; • The need to obtain and retain regulatory approval of our drug candidates, both in the US and in Europe, and in countries deemed necessary for future trials; • Our ability to complete our clinical trials in a timely fashion in line with our stated milestones and within our expected budget and resources; • Our ability to regain and then maintain compliance with the continued listing requirements of the Nasdaq Capital Market; • Our ability to source our drug products at reasonable prices; • Compliance with obligations under intellectual property licenses with third parties; • Any delays in regulatory review and approval of drug candidates in clinical development; • Potential efficacy of our drug candidates; • Our ability to commercialize our drug candidates; • Market acceptance of our drug candidates; • Competition from existing therapies or new therapies that may emerge; • Potential product liability claims; • Our dependency on third-party manufacturers to successfully, and timely, supply or manufacture our drug candidates for our preclinical work and our clinical trials; • Our ability to establish or maintain collaborations, licensing or other arrangements; • Our ability and third parties’ abilities to protect intellectual property rights; • Our ability to adequately support future growth; and • Our ability to attract and retain key personnel to manage our business effectively. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. Our Business Moleculin is a late-stage pharmaceutical development company currently evaluating Annamycin, also known as L-Annamycin and by its generic name "naxtarubicin”, which we believe is a "next-generation” anthracycline and, with it, are conducting a pivotal Phase 2/3 trial in combination with cytarabine for the treatment of subjects with relapsed/refractory (R/R) acute myeloid leukemia (AML). We call this the "MIRACLE” trial (derived from Moleculin R/R AML AnnAraC Clinical Evaluation). We released interim unblinded data on June 30, 2026 for the first 45 subjects of Part A of MIRACLE where the Annamycin arms demonstrated a complete remission (CR) rate at least three times greater than the control arm’s CR rate. The unblinding of Part A’s full 90 subjects (including the first 45 subjects already released) is expected in the December 2026 to February 2027 timeframe, thereby concluding Part A of the two-part trial. Since results from Part A will be combined with Part B to determine the trial outcome, this means that preliminary primary endpoint results for approximately 20% of the total trial will be disclosed with the completion of Part A. We believe such early visibility for a pivotal registration-enabling trial is unique in that stakeholders will receive preliminary safety and efficacy data long before the conclusion of the trial. 13 Table of Contents We have two additional portfolios of technologies for hard-to-treat cancers and viruses with clinical and preclinical research funded by investigators at academic institutions. One of these portfolios has an ongoing investigator-initiated trial, another one planned and additional active preclinical testing. Since our inception, drug candidates from each of the three core portfolios are in active planning for, have approval to begin, are currently in or have successfully completed eighteen clinical trials. Each of our three core technologies is based substantially on discoveries made at, made in conjunction with, and/or licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas. For each of the core technologies, one or more drug candidates have successfully completed a Phase 1 or greater clinical trial. Three of our drug candidates have shown human activity in clinical trials and are currently or have been in Phase 1B/2, Phase 2, Phase 2/3 clinical trials. One of those drug candidates is Annamycin, which is currently in the MIRACLE trial. We believe Annamycin is a first-in-class, next-generation anthracycline and DNA-binding agent designed to overcome key limitations associated with currently approved anthracyclines. Whereas first- and second-generation anthracyclines are currently used to treat approximately half of all cancers, they carry with them the burden of dangerous cardiotoxicity and efficacy limitations associated with multidrug resistance mechanisms and poor tissue/organ distribution. Later generation anthracyclines are comprised mainly of attempts to reduce cardiotoxicity or enhance anticancer activity, but we believe have failed to deliver the necessary safety and efficacy profiles to win approval or gain market acceptance. Annamycin is an entirely new chemical entity integrating a new molecular structure intended to enhance its ability to selectively kill cancer cells and reduce toxic side effects. Annamycin possesses a unique and innovative multilamellar lipid-based delivery system designed to improve bioavailability and to increase therapeutic window. The result is a next-generation anthracycline that we believe effectively addresses critical problems associated with currently used anthracyclines. It is our lead drug candidate, and we have concluded a Phase 1B/2 clinical trial for treating AML and are now conducting a Phase 3 clinical trial for R/R AML, which we believe will be registration enabling. We have also sponsored two Phase 1B/2 clinical trials of Annamycin for treating soft tissue sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS), the results of which we believe support further clinical development beyond Phase 1 and further evaluation of Annamycin’s therapeutic potential in this indication. We believe that our lead drug candidate Annamycin has: • The following advantages over early-generation anthracyclines which in their totality support Annamycin’s classification as a “next-generation” anthracycline: 1) demonstrated across five clinical trials to be non-cardiotoxic (n=90) with some patients being safely dosed at five times the typical lifetime maximum allowable anthracycline dose, (which potentially enables repeated dosing, consolidation and even use as a maintenance therapy); 2) exhibits no vesicant activity as well as greater tolerability, making it safer to handle and administer and easier on patients; 3) shown in preclinical models to circumvent multidrug resistance by avoiding MDR1 mechanisms and also to avoid cross-resistance with some of the most commonly used drugs for the treatment of AML (as well as many other cancers), including currently prescribed anthracyclines, cytarabine and venetoclax and, 4) exhibited in preclinical models substantially improved tissue/organ distribution; • Demonstrated positive clinical activity in our MB-106 trial with a CR rate of 50% and a composite complete remission (CRc) rate of 60% in combination with cytarabine for the treatment of R/R AML as second line therapy (n=10). On an all-comer’s basis (no limit on prior lines of therapy), the population of subjects who achieved a CR (n=8) demonstrated durability of approximately 13 months with median overall survival of 15 months and developing at the time of analysis (the median OS was still immature/not reached), with 4 of 8 subjects (50%) censored; • Exhibited positive preliminary unblinded efficacy results from the first 45 patients enrolled in Part A of the Company's pivotal Phase 2/3 MIRACLE trial, analyzed on a full intent-to-treat basis with no patient exclusions with both Annamycin treatment arms demonstrating favorable efficacy trends compared with the control arm in patients with relapsed or refractory acute myeloid leukemia (R/R AML). The interim analysis in a difficult to treat population (increased age and prior venetoclax therapies included) demonstrated an efficacy advantage for both Annamycin treatment arms, 190 mg/m² plus HiDAC and 230 mg/m² plus HiDAC, over the HiDAC control arm. CR reached 43% and 36% in the respective Annamycin cohorts, compared with 12% for control, while CRc reached 50% and 57%, respectively, versus 29% for the control arm; • Shown encouraging activity in a total of five different clinical trials, which are now complete with clinical study reports for internally funded trials, funded both internally and externally (through investigator-initiated trials); specifically including relapsed and refractory AML with complete remission rates significantly above currently approved second line therapies and STS lung mets with overall survival as a median seventh line therapy comparable to overall survival seen with approved first line monotherapies; and • Composition of matter patent protection through 2040 with the potential to extend as far as 2045 as well as Orphan Drug and Fast Track designation. A core management belief is that anthracyclines represent one of the most important treatments available for AML and Advanced STS, as well as many other cancers, and we believe Annamycin may, for the first time ever, allow a majority of these patients to benefit from Annamycin’s improved safety and efficacy by allowing increased dosing (and even maintenance dosing), improved tolerability and allowing access for patients who otherwise would not be eligible for an anthracycline (including the elderly and those with impaired cardiac function). We believe that such benefits will be disruptive to the competitive landscape for these markets. This belief leads us to focus our available resources mainly on the development of Annamycin. We seek to advance our other drug candidates via investigator led studies, both clinically and preclinically, and as available resources will allow. Core Technologies and Focus Our core technologies consist of the following programs: a) Annamycin is what we believe to be a “next-generation” anthracycline (one of the most widely used classes of chemotherapy), designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks, tolerability, their susceptibility to multidrug resistance mechanisms and a lack of efficacy in certain tumor models. b) Our WP1066 Portfolio includes WP1066, WP1193 and WP1220, three of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription) among other transcription factors associated with tumor activity. These also stimulate a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs). c) Our WP1122 Portfolio contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG). We believe such compounds may provide an opportunity to cut off the energy supply of tumors by taking advantage of their high degree of dependence on glucose in comparison to healthy cells, as well as viruses that also depend upon glycolysis and glycosylation to infect and replicate. 14 Table of Contents Our Current Clinical Trial Focus We are focused on the development of Annamycin and WP1066 through internally and externally funded programs (“internally” and “externally” are defined in the Funding Strategy section below) as follows: 1. Annamycin: a. Internally funded – In combination with cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of R/R AML, the aforementioned MIRACLE trial, and b. Externally funded – Advancing beyond our initial Phase 1B/2 internally funded trial for the treatment of STS metastasized to the lungs. c. Externally funded – Based on sponsored research, we intend to begin in 2026 a Phase 1B/2 clinical trial with Annamycin as a monotherapy treating 3 rd line pancreatic cancer. d. Internally funded – MB-109 utilizing AnnAraC for R/R AML as 3 rd line therapy in adults is planned for 2027. e. Externally funded – MB-110 utilizing AnnAraC for R/R AML as 2 nd line therapy in pediatrics is planned for 2027. We are researching potential sites for a grant funded trial. 2. WP1066: a. Externally funded - An improved formulation for delivery intravenously (IV) of a molecule from the WP1066 portfolio to possibly further support future externally funded oncology clinical trials. Such a formulation requires additional preclinical work prior to a clinical trial. b. Externally funded - Phase 1B/2 trial for WP1066 oral formulation in combination with radiation treating glioblastoma (GBM) both in adults and pediatrics. An adult clinical trial is in process, and a pediatric trial is in the planning stage. We have established a Recommended Phase 2 Dose for WP1122 to potentially enable future externally funded oncology and virology trials. Beyond this, we support development of our core technologies through sponsored (internally funded) non-clinical research at MD Anderson. Recent Business Developments Annamycin Clinical, Market Research and Scientific/Regulatory Updates Clinical Blinded data update (n=62): On July 31, 2026, we announced updated preliminary blinded results from Part A of our MIRACLE trial. With 62 subjects evaluable to date in Part A, the preliminary blinded CR rate was 24% and the CRc rate was 37%. Of those 62 subjects, 30, or 48%, had previously received a venetoclax-based regimen. Among that subgroup, the preliminary blinded CR and CRc rates were 23% and 37%, respectively, essentially identical to the evaluable population as a whole. Because this analysis remains blinded, it includes subjects randomized to the control arm and is therefore expected to be lower than the unblinded Annamycin-arm results reported at the June 2026 interim analysis, stated below. The two sets of response rates – blinded data versus unblinded data - are not directly comparable. Across three successive blinded analyses, at 30, 45 and 62 evaluable subjects, the blinded CRc has remained within a narrow band of approximately 37% to 40%, while the proportion of subjects entering the trial after failure of a first-line venetoclax-based regimen has risen from 31.1% in the n=45 population to 48% in the latest blinded data readout. As of August 6, 2026, enrollment stands at 76 of 90 subjects, and additional subjects continue to be identified by site investigators. The Company expects to treat the 90th subject in September 2026, with unblinding of the comprehensive Part A data anticipated in the December 2026 to February 2027 timeframe. The trial continues with no evidence of drug-related cardiotoxicity. Unblinded data update (n=45): On June 30, 2026, we announced positive preliminary unblinded efficacy results from the first 45 patients enrolled in Part A of the Company's pivotal Phase 2/3 MIRACLE trial, analyzed on a full intent-to-treat basis with no patient exclusions. Both Annamycin treatment arms demonstrated favorable efficacy trends compared with the control arm in patients with relapsed or refractory acute myeloid leukemia (R/R AML). The interim analysis demonstrated a clear efficacy advantage for both Annamycin treatment arms, 190 mg/m² plus HiDAC and 230 mg/m² plus HiDAC, over the HiDAC control arm. CR reached 43% and 36% in the respective Annamycin cohorts, compared with 12% for control, while CRc reached 50% and 57%, respectively, versus 29% for the control arm. The n=45 population contained 75.6% over 60 years of age, 55.6% 7 days of cytarabine plus 3 days of an anthracycline (7+3) and 31.1% venetoclax regimens for first line (1L) therapies. Importantly, the remission rates for all three arms, including the control arm, reflect outcomes measured after only a single cycle of therapy, as specified by the MIRACLE protocol. The most commonly cited historical benchmarks in this setting, including the MIRROS and CLASSIC I studies, as well as Moleculin’s own MB-106 study, permitted multiple cycles of treatment. The Company therefore expected absolute remission rates for both the control and Annamycin arms in this single-cycle interim analysis to be lower than those reported in such multi-cycle datasets and believes the most meaningful comparison is the performance of the Annamycin arms relative to the concurrent, randomized control arm evaluated on the same single-cycle basis. Blinded data update (n=45): On May 13, 2026, we reported that preliminary blinded efficacy data for the first 45 subjects treated continue to approximate previously disclosed results, including a composite complete remission rate (CRc) exceeding 40% and a complete remission (CR) rate of approximately 30%. These results compare favorably to historical CR rates from two major independent trials of approximately 17–18% observed with cytarabine alone in similar patient populations. Cytarabine monotherapy is considered a standard of care for second line treatment of AML. Recruitment Update March 2026: On March 23, 2026, we announced that the 45th subject was enrolled in the MIRACLE trial, a milestone triggering the final phase of preparation for the trial’s highly anticipated interim 45 subject data unblinding, which remains on track for mid-2026. Market Research On June 5, 2026, we announced results from an independent market landscape assessment evaluating Annamycin in relapsed/refractory acute myeloid leukemia (R/R AML). The research demonstrated strong physician interest in Annamycin, with oncologists reporting an average likelihood-to-prescribe score of 6 out of 7. Physicians cited Annamycin's reported complete remission rates, MRD-negative responses, potential to bridge patients to bone marrow transplant, biomarker-agnostic applicability and no evidence of cardiotoxicity as key factors supporting potential adoption. 15 Table of Contents The study included perspectives from academic and community hematologist-oncologists, medical oncologists and pediatric AML specialists. Respondents consistently identified significant unmet need in R/R AML, particularly for patients without actionable mutations and those who relapse or progress following venetoclax-based therapy. Separately, interviews with hospital administrators and insurers revealed that payers view Annamycin as a potentially meaningful value proposition, driven by its efficacy and safety profile and applicability to a broad patient population. Scientific/Regulatory Poster on Cardiac Safety of Annamycin at ASCO On May 29, 2026, new data were presented at the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting further reinforcing the differentiated cardiac safety profile of our lead drug candidate, Annamycin (also known as “L-Annamycin” or “naxtarubicin”). The poster presentation, titled “Cardiac safety of L-annamycin at high cumulative anthracycline exposure: Pooled analysis,” highlighted findings from a pooled analysis across five completed clinical trials evaluating Annamycin in patients with acute myeloid leukemia (AML) and soft tissue sarcoma. The analysis demonstrated no detectable cardiotoxicity despite cumulative exposure levels that substantially exceeded traditional lifetime anthracycline dose limitations. The pooled analysis included 90 patients treated with Annamycin across five completed clinical trials, with source-verified paired pre- and post-treatment left ventricular ejection fraction (LVEF) assessments available for 78 patients. Patients received a median cumulative Annamycin dose of 660 mg/m², with exposure ranging from 210 mg/m² to 2,970 mg/m² – levels that, in many cases, substantially exceeded conventional anthracycline lifetime dose thresholds. Abstract on Cardiac Safety of Annamycin at EHA On May 12, 2026, we announced the publication of an abstract at the European Hematology Association (EHA) 2026 Congress highlighting the cardiac safety profile of Annamycin (or as known in scientific journals "L-Annamycin"). The abstract titled, " Cardiac Safety of L-Annamycin Across High Cumulative Anthracycline Exposure: Implications for Relapsed/Refractory AML ," highlighted pooled cardiac safety findings from five completed clinical trials evaluating Annamycin in heavily pretreated patients, including those with substantial prior anthracycline exposure. Importantly, the analysis demonstrated no clinically significant treatment-related cardiotoxicity across cumulative anthracycline-equivalent doses that exceeded conventional lifetime exposure limits associated with traditional anthracyclines. The independent cardiac review, conducted by a cardio-oncology laboratory at the Cleveland Clinic, analyzed comprehensive cardiac monitoring data from 90 patients treated with Annamycin. Among 78 patients with source-data verified pre- and post-treatment ejection fraction assessments, no patients met criteria for clinically significant left ventricular dysfunction. Mean ejection fraction remained stable, and no association was observed between cumulative dose and cardiac function decline. Additional analyses of serial ECGs, troponins, and global longitudinal strain assessments similarly demonstrated no evidence of drug-induced cardiotoxicity. Data Presented at AACR 2026 Annamycin Extends Survival in Metastatic Pancreatic Cancer Preclinical Models On April 23, 2026, we announced the presentation of new preclinical data at the American Association for Cancer Research (AACR) Annual Meeting 2026 highlighting the potential of our lead drug candidate, Annamycin, in pancreatic cancer. The data demonstrate that liposomal Annamycin (L-ANN or naxtarubicin), a novel, non-cardiotoxic anthracycline, produced significant tumor growth inhibition across multiple pancreatic ductal adenocarcinoma (PDAC) models, including orthotopic human PDAC and syngeneic systems, with strong statistical significance (p < 0.001). These findings were accompanied by a meaningful survival benefit in a metastatic model, where treatment extended median survival by more than 60% compared to control (29 days versus 18 days; p = 0.0003), underscoring the potential clinical relevance of L-ANN in aggressive disease settings. Pharmacokinetic analyses further demonstrated enhanced tumor penetration and retention of Annamycin compared to doxorubicin, with significantly higher accumulation observed in pancreatic tissue and tumors (p<0.0001). These data provide a mechanistic basis for the observed anti-tumor activity and highlight a key differentiating feature of Annamycin relative to traditional anthracyclines, which have historically shown limited efficacy in pancreatic cancer. In addition to its direct cytotoxic effects, L-ANN was shown to induce immune activation within the tumor microenvironment, including increased infiltration of CD8+ cytotoxic T cells and CD4+ helper T cells. These findings suggest the potential for Annamycin to convert immunologically “cold” pancreatic tumors into more responsive phenotypes, supporting its evaluation both as a monotherapy and in combination with other drugs, including immune checkpoint and KRAS inhibitors. Consistent with prior studies, Annamycin also demonstrated a favorable safety profile, including the absence of cardiotoxicity, a well-documented limitation of conventional anthracyclines such as doxorubicin. This differentiated safety profile may enable broader therapeutic use and synergistic combination strategies. Abstract Accepted for Poster Presentation at the 2026 ASCO Annual Meeting On April 21, 2026, we announced that an abstract highlighting data on our lead drug candidate, Annamycin, was accepted for poster presentation at the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting, was held May 29 – June 2, 2026, in Chicago, Illinois. The abstract, titled “ Cardiac safety of L-annamycin at high cumulative anthracycline exposure: Pooled analysis, ” was presented in a poster session focused on Symptom Science and Palliative Care. The abstract presented a pooled analysis evaluating the cardiac safety profile of Annamycin in patients with high cumulative exposure to anthracyclines, an important consideration given the known risk of cardiotoxicity associated with this class of chemotherapeutic agents. Other Corporate Financing in August 2026 On August 3, 2026, we completed a public offering of (i) 12,376,667 shares of common stock, or pre-funded warrants in lieu thereof, and (ii) Series I Warrants to purchase up to 37,130,001 shares of common stock. The combined public offering price was $0.75 per share of common stock (or pre-funded warrant in lieu thereof) and accompanying warrant. Each pre-funded warrant is exercisable into one share of common stock at an exercise price of $0.001 per share and expires when exercised in full. The Series I Warrants are exercisable into one share of common stock at an exercise price of $0.75 per share and expire on the five-year anniversary of the closing date. The Series I Warrants contain anti-dilution provisions that reduce the exercise price (subject to a floor price of $0.21) in the event we issue common stock or common stock equivalents at a price below the then-current exercise price, other than in connection with certain exempt issuances. In connection with the offering, we agreed not to issue any shares of common stock or securities convertible into common stock for 45 days after the closing date, subject to certain exceptions, and agreed not to effect any variable rate transaction for 180 days after the closing date. We received gross proceeds of approximately $9.3 million in the offering, before deducting placement agent fees and other offering expenses. We paid total placement agent fees and other offering expenses of approximately $0.8 million. Due to the pricing of the offering, and certain provisions, the exercise price of our outstanding Series G warrants was adjusted to $1.326 per share, and the exercise price of our outstanding Series H warrants was adjusted to $0.962 per share. We issued 11,088,334 common shares, and prefunded warrants for 1,288,333 shares, which were exercised shortly after the offering. 16 Table of Contents Closing Australian Subsidiary In June 2018, we formed Moleculin Australia Pty. Ltd., a wholly owned subsidiary to oversee pre-clinical development in Australia. In April 2026, we began the process of closing this subsidiary to reduce corporate overhead costs. Both the board of directors of Moleculin and the subsidiary approved the closing of the subsidiary. The subsidiary did not have any employees or conduct a separate line of business. With the MIRACLE trial focused in the US, Europe, and, possibly, the Middle East, future activities are not anticipated to include Australia. Patents for Annamycin Globally We announced on May 8, 2026, an advancement in our intellectual property portfolio with the issuance of a Hong Kong patent covering our proprietary method of reconstituting liposomal Annamycin. The newly granted patent (No. 40073244), titled “Method of Reconstituting Liposomal Annamycin,” extends protection through June 25, 2040, further reinforcing Moleculin’s long-term global exclusivity strategy. The invention is jointly owned with The University of Texas System. Other Corporate In May 2026, we sold 354,757 shares under the 2025 ATM Agreement for net proceeds of approximately $0.8 million where the lowest price sold was $2.01 per share which reset the Series G and H warrants' exercise price from $2.40 to $2.01 per share. These warrants were reset subsequent to the period to $1.326 and $0.962, respectively. Results of Operations The following table sets forth, for the periods indicated, data derived from our condensed consolidated statement of operations (table in thousands) and such changes in the periods are discussed below in approximate amounts: Moleculin Biotech, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues $ — $ — $ — $ — Operating expenses: Research and development 5,450 3,600 10,828 7,036 General and administrative 2,103 2,091 4,591 4,568 Depreciation and amortization 8 29 16 59 Total operating expenses 7,561 5,720 15,435 11,663 Loss from operations (7,561 ) (5,720 ) (15,435 ) (11,663 ) Other income (loss): Gain (loss) from change in fair value of warrant liability (7 ) (560 ) 10,763 (560 ) Transaction costs allocated to warrant liabilities (2 ) (1,207 ) (695 ) (1,207 ) Loss on issuance of warrant liabilities — (10,352 ) (15,158 ) (10,352 ) Other income, net 13 4 88 13 Interest income (expense), net (78 ) 26 (43 ) 56 Net loss $ (7,635 ) $ (17,809 ) $ (20,480 ) $ (23,713 ) Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 Research and Development Expense. Research and development (R&D) expense was $5.5 million and $3.6 million for the three months ended June 30, 2026 and 2025 , respectively. The increase of $1.9 million is mainly related to the MIRACLE clinical trials of $1.1 million, additional nonclinical studies of $0.4 million, and $0.4 million in other research costs during the current quarter as compared to the prior year quarter. Loss from Change in Fair Value of Warrant Liability. We recorded a net loss of $7 thousand in the second quarter of 2026 as compared to a net loss of $560 thousand in the second quarter of 2025, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings. Changes in fair value are reflected in the statement of operations as a gain or loss from the change in fair value of the warrant in the period in which the change occurred. A gain results principally from a decline in our share price during the period and a loss will result principally from an increase in our share price. Transaction costs allocated to warrant liabilities and Loss on issuance of warrant liabilities. Proceeds of offerings are allocated between common shares and warrants first by allocating to the warrants classified as a liability based on their fair value and then allocating the residual to the equity instruments. There were no offerings during the second quarter of 2026, therefore, there was no loss as compared to $10.4 million loss for the prior quarterly period in 2025. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 Research and Development Expense. Research and development (R&D) expense was $10.8 million and $7.0 million for the six months ended June 30, 2026 and 2025 , respectively. The increase of $3.8 million is primarily related to the MIRACLE clinical trials of $2.7 million, additional nonclinical studies of $0.7 million and other research costs of $0.4 million during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. 17 Table of Contents Gain (loss) from Change in Fair Value of Warrant Liability. We recorded a net gain of $10.8 million in the six months ended June 30, 2026 as compared to a net loss of $0.6 million in the six months ended June 30, 2025, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings. Changes in fair value are reflected in the statement of operations as a gain or loss from the change in fair value of the warrant in the period in which the change occurred. A gain results principally from a decline in our share price during the period and a loss will result principally from an increase in our share price. Transaction costs allocated to warrant liabilities and Loss on issuance of warrant liabilities. Proceeds of offerings are allocated between common shares and warrants first by allocating to the warrants classified as a liability based on their fair value and then allocating the residual to the equity instruments. Transaction costs on the Series H warrants in February 2026 amounted to $0.7 million. The loss on issuance of the warrant liabilities for the Series H warrants was $15.2 million as compared to a $10.4 million loss for the prior six month period in 2025. Liquidity and Capital Resources The following table sets forth our primary sources and uses of cash for the period indicated (table in thousands): Six Months Ended June 30, 2026 2025 Net cash used in operating activities $ (12,768 ) $ (10,146 ) Net cash provided by financing activities 11,225 13,422 Effect of exchange rate changes on cash and cash equivalents (73 ) 3 Net increase (decrease) in cash and cash equivalents $ (1,616 ) $ 3,279 Cash used in operating activities Cash used in operations was $12.8 million for the six months ended June 30, 2026 . This $2.7 million increase over the prior year period of $10.1 million was primarily due to the timing of costs incurred and associated payments for clinical trial expenses and drug production and other testing related expenses. Cash provided by fin ancing activities During June of 2026, warrants were exercised for the issuance of 1,396,500 shares at $2.01 per share for proceeds of approximately $2.8 million. In May 2026, we sold 354,757 shares under the 2025 ATM Agreement for net proceeds of approximately $0.8 million where the lowest price sold was $2.01 per share. On February 19, 2026, we 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 our 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, we 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 initial 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 our 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 our outstanding Series F warrants was adjusted to $2.75 per share, and the exercise price of our outstanding Series G warrants was adjusted to $2.3976 per share. In connection with the August 2026 offering, the exercise price of the outstanding Series G warrants was further adjusted to $1.326 per share, and the exercise price of the outstanding Series H warrants was adjusted to $0.962 per share. On December 23, 2025, we increased the maximum aggregate gross sales price of our common stock that may be offered, issued and sold under our at the market equity offering agreement (the “2025 ATM Agreement”) with Roth Capital Partners, LLC (“Roth”), which we initially entered into in July 2025, from $6.5 million to $8.2 million. Pursuant to the terms of the 2025 ATM Agreement, we may offer and sell shares of our 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 our common stock in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices. We pay Roth a commission equal to 3.0% of the gross proceeds from any shares of common stock sold under the 2025 ATM Agreement. During the first quarter of 2026, we sold 3,785 shares of common stock pursuant to the 2025 ATM Agreement for gross proceeds of approximately $18,000. We believe that our cash on hand and cash equivalents as of June 30, 2026, plus the $9.3 million gross proceeds raised subsequent to the quarter as described above, are sufficient to fund our planned operations into the first quarter of 2027. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary financing to continue operations and the attainment of profitable operations. We must seek additional funds of approximately $8 million, to support MIRACLE and our operations into the second quarter of 2027 through the combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof to continue our operations in near term. We cannot provide assurance that such events or a combination thereof can be achieved. Critical Accounting Policies and Significant Judgments and Estimates There have been no material changes to our critical accounting policies and use of estimates from those disclosed in our Form 10-K for the year ended December 31, 2025, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Estimates in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Not applicable as we are a smaller reporting company. 18 Table of Contents