Matinas BioPharma Holdings, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS Matinas BioPharma Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands, except for share data) September 30, 2025 December 31, 2024 (Unaudited) (Audited) ASSETS: Current assets: Cash and cash equivalents $ 5,435 $ 7,284 Restricted cash – security deposit 50 50 Prepaid expenses and other current assets 168 691 Total current assets 5,653 8,025 Non-current assets: Leasehold improvements and equipment – net 156 468 Assets held for sale - net 70 — Operating lease right-of-use assets – net 1,351 1,680 Finance lease right-of-use assets – net 5 8 In-process research and development 2,260 2,260 Restricted cash – security deposit 200 200 Total non-current assets 4,042 4,616 Total assets $ 9,695 $ 12,641 LIABILITIES AND STOCKHOLDERS’ EQUITY: Current liabilities: Accounts payable $ 80 $ 95 Accrued expenses 564 1,805 Operating lease liabilities – current 846 761 Financing lease liabilities – current 5 5 Total current liabilities 1,495 2,666 Non-current liabilities: Deferred tax liability 257 257 Operating lease liabilities – net of current portion 1,472 2,116 Financing lease liabilities – net of current portion 11 12 Total non-current liabilities 1,740 2,385 Total liabilities 3,235 5,051 Stockholders’ equity: Series C Convertible preferred stock, stated value $ 1,000 per share, par value $ 0.001 per share, 10,000,000 shares authorized at September 30, 2025 and December 31, 2024; 3,155 and 0 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively. Liquidation preference of $ 3,155,000 as of September 30, 2025. — — Common stock par value $ 0.0001 per share, 500,000,000 and 250,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively; 5,901,091 and 5,086,985 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 1 1 Additional paid-in capital 215,334 207,413 Accumulated deficit ( 208,875 ) ( 199,824 ) Total stockholders’ equity 6,460 7,590 Total liabilities and stockholders’ equity $ 9,695 $ 12,641 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Matinas BioPharma Holdings, Inc. Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share data) Unaudited 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Costs and expenses: Research and development $ — $ 2,239 $ 85 $ 9,057 General and administrative 1,577 2,142 5,275 7,067 Total costs and expenses 1,577 4,381 5,360 16,124 Loss from operations ( 1,577 ) ( 4,381 ) ( 5,360 ) ( 16,124 ) Change in fair value of warrant liability — — ( 3,161 ) — Gain on sale of assets, net — — 110 — Other income/(expenses), net 45 106 ( 22 ) 306 Net loss $ ( 1,532 ) $ ( 4,275 ) $ ( 8,433 ) $ ( 15,818 ) Deemed dividend relating to warrant exchange ( 618 ) — ( 618 ) — Net loss attributable to common shareholders $ ( 2,150 ) $ ( 4,275 ) $ ( 9,051 ) $ ( 15,818 ) Net loss per share – basic and diluted $ ( 0.40 ) $ ( 0.85 ) $ ( 1.74 ) $ ( 3.30 ) Weighted average common shares outstanding: Basic and diluted 5,435,829 5,037,829 5,204,544 4,791,572 Other comprehensive gain, net of tax Unrealized gain on securities available-for-sale — 51 — 221 Other comprehensive gain, net of tax — 51 — 221 Comprehensive loss $ ( 1,532 ) $ ( 4,224 ) $ ( 8,433 ) $ ( 15,597 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Matinas BioPharma Holdings, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except for share data) Unaudited Shares Amount Shares Amount Capital Deficit (loss)/Income Equity Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Shares Amount Capital Deficit (loss)/Income Equity Balance, December 31, 2024 — $ — 5,086,985 $ 1 $ 207,413 $ ( 199,824 ) $ — $ 7,590 Stock-based compensation — — — — 806 — — 806 Issuance of preferred stock and warrants in public offering, net of stock issuance costs ($ 29 ) 3,300 — — — 330 — — 330 Reclassification of warrants from liability to equity — — — — 6,103 — — 6,103 Issuance of Common Stock in exchange for warrants — — 466,666 — 618 — — 618 Deemed dividend — — — — — ( 618 ) — ( 618 ) Issuance of Common Stock upon conversion of preferred stock ( 145 ) — 247,440 — — — — — Issuance of Common Stock upon exercise of warrants — — 100,000 — 64 — — 64 Net loss — — — — — ( 8,433 ) ( 8,433 ) Balance, September 30, 2025 3,155 $ — 5,901,091 $ 1 $ 215,334 $ ( 208,875 ) $ — $ 6,460 Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Shares Amount Capital Deficit (loss)/Income Equity Balance, June 30, 2025 3,300 $ — 5,086,985 $ 1 $ 214,399 $ ( 206,725 ) $ — $ 7,675 Stock-based compensation — — — — 253 — — 253 Issuance of Common Stock in exchange for warrants — — 466,666 — 618 — — 618 Deemed dividend — — — — — ( 618 ) — ( 618 ) Issuance of Common Stock upon conversion of preferred stock ( 145 ) — 247,440 — — — — — Issuance of Common Stock upon exercise of warrants — — 100,000 — 64 — — 64 Net loss — — — — — ( 1,532 ) ( 1,532 ) Balance, September 30, 2025 3,155 $ — 5,901,091 $ 1 $ 215,334 $ ( 208,875 ) $ — $ 6,460 Shares Amount Capital Deficit (Loss)/Income Equity Common Stock Additional Paid - in Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit (Loss)/Income Equity Balance, December 31, 2023 4,345,291 $ — $ 195,040 $ ( 175,573 ) $ ( 221 ) $ 19,246 Stock-based compensation — — 2,951 — — 2,951 Issuance of common stock and warrants in public offering, net of stock issuance cost ($ 877 ) 671,033 1 9,178 — — 9,179 Issuance of common stock in reverse stock split 70,661 — — — — — Other comprehensive income — — — — 221 221 Net loss — — — ( 15,818 ) — ( 15,818 ) Balance, September 30, 2024 5,086,985 $ 1 $ 207,169 $ ( 191,391 ) $ — $ 15,779 Common Stock Additional Paid - in Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit (Loss)/Income Equity Balance, June 30, 2024 5,016,324 $ 1 $ 206,269 $ ( 187,116 ) $ ( 51 ) $ 19,103 Balance 5,016,324 $ 1 $ 206,269 $ ( 187,116 ) $ ( 51 ) $ 19,103 Stock-based compensation — — 965 — — 965 Issuance of common stock and warrants in public offering, net of stock issuance cost ($ 65 ) — — ( 65 ) — — ( 65 ) Issuance of common stock and warrants in public offering, net of stock issuance cost — — ( 65 ) — — ( 65 ) Issuance of common stock in reverse stock split 70,661 — — — — — Other comprehensive income — — — — 51 51 Net loss — — — ( 4,275 ) — ( 4,275 ) Balance, September 30, 2024 5,086,985 $ 1 $ 207,169 $ ( 191,391 ) $ — $ 15,779 Balance 5,086,985 $ 1 $ 207,169 $ ( 191,391 ) $ — $ 15,779 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Matinas BioPharma Holdings, Inc. Condensed Consolidated Statements of Cash Flow (in thousands) Unaudited 2025 2024 Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 8,433 ) $ ( 15,818 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 29 275 Gain on sale of assets ( 110 ) — Stock based compensation expense 806 2,951 Change in operating lease right-of-use assets 329 446 Change in finance lease right-of-use assets 3 4 Amortization of bond premium — ( 16 ) Change in fair value of warrant liability 3,161 — Changes in operating assets and liabilities: Operating lease liabilities ( 558 ) ( 481 ) Prepaid expenses and other current assets 524 839 Accounts payable ( 15 ) ( 165 ) Accrued expenses and other liabilities ( 1,238 ) ( 410 ) Net cash used in operating activities ( 5,502 ) ( 12,375 ) Cash flows from investing activities: Proceeds from sale of assets 320 — Purchase of marketable debt securities — ( 8,437 ) Proceeds from maturities of marketable debt securities — 17,145 Net cash provided by investing activities 320 8,708 Cash flows from financing activities: Gross proceeds from private placement of preferred stock and common stock warrants 3,300 — Transaction costs paid pursuant to private placement ( 29 ) — Net proceeds from exercise of warrants 64 — Net proceeds from public offering of common stock and warrants — 9,179 Payments of finance lease liability – principal ( 2 ) ( 4 ) Net cash provided by financing activities 3,333 9,175 Net (decrease)/increase in cash, cash equivalents and restricted cash ( 1,849 ) 5,508 Cash, cash equivalents and restricted cash at beginning of period 7,534 5,037 Cash, cash equivalents and restricted cash at end of period $ 5,685 $ 10,545 Supplemental non-cash financing and investing activities: Reclassification of warrants from liability to equity $ 6,103 $ — Unrealized gain on marketable debt securities $ — $ 221 Exchange of warrants for shares of common stock $ 618 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 6 MATINAS BIOPHARMA HOLDINGS, INC. Notes to Unaudited Condensed Consolidated Financial Statements (Tabular dollars and shares in thousands, except per share data) Note 1 – Description of Business Matinas BioPharma Holdings Inc. (“Holdings”) is a Delaware corporation formed in 2013. Holdings is the parent company of Matinas BioPharma, Inc. (“BioPharma”), and Matinas BioPharma Nanotechnologies, Inc. (“Nanotechnologies,” formerly known as Aquarius Biotechnologies, Inc.), its operating subsidiaries (“Nanotechnologies”, and together with “Holdings” and “BioPharma”, “the Company”). The Company is a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using its lipid nanocrystal (LNC) platform delivery technology (LNC Platform). Note 2 – Liquidity, Plan of Operations and Going Concern The Company has experienced net losses and negative cash flows from operations each period since its inception. Through September 30, 2025, the Company had an accumulated deficit of $ 208,875 . The Company’s net loss for the nine months ended September 30, 2025 and 2024 was $ 8,433 and $ 15,818 , respectively. The Company expects operating expenses to be lower in the near term compared to recent years until such time as it is able to consummate a licensing, sale or other similar transaction with a prospective partner that will provide funding to support initiation of the Phase 3 registration trial for MAT2203 and advancement of the LNC platform delivery technology. The Company expects that its research and development expenses will increase if it moves forward with additional clinical studies for its current product candidates and development of additional product candidates. If the Company obtains U.S. Food and Drug Administration (“FDA”) approval for one or more of its product candidates, the Company expects that its expenses will continue to increase once the Company reaches commercial launch. As a result, the Company expects to continue to incur substantial losses for the foreseeable future, and that these losses will be increasing. As of September 30, 2025, the Company had cash and cash equivalents of $ 5,435 and restricted cash of $ 250 . The Company does not believe the cash and cash equivalents on hand are sufficient to fund planned operations beyond the next twelve months from the filing date of these financial statements. As a result, substantial doubt exists about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon securing one or more partners to monetize the value of MAT2203, the ability to control its operating expenses, future sales of common stock through the At-The-Market Sales Agreement (“Sales Agreement”) with BTIG, LLC and securing additional financing. While the Company believes in the viability of this strategy and believes the actions presently being taken by the Company provide the opportunity for it to continue as a going concern, there can be no assurance the Company will be successful in its implementation. In particular, utilization of the Sales Agreement may not be viable due to market conditions and new financing may not be available on acceptable terms, or at all. These consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern. Note 3 – Summary of Significant Accounting Policies Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of Holdings and its wholly owned subsidiaries, BioPharma, and Nanotechnologies. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and reflect the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Other than the policies listed below, there have been no material changes to the Company’s significant accounting policies are described in Note 3 within the Company’s Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 7 In August 2020, the FASB issued Accounting Standard Update No. 2020-06 – Debt: Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted the ASU on January 1, 2025. This update permits the use of either the modified retrospective or fully retrospective method of transition. In November 2023, the FASB released ASU No. 2023-07 – Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which aims to improve the disclosures public entities provide regarding significant segment expenses so that investors can “better understand an entity’s overall performance” and assess “potential future cash flows”. This update requires public companies to provide more transparency in both quarterly and annual reports about the expenses they incur from revenue-generating business units. The amendments improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker and extend certain annual disclosures to interim periods. The amendments in this update became effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company does not judge an operating segment identified as reportable segment but has a consolidated single reportable segment, therefore this update did not have a material impact on its condensed consolidated financial statements and related disclosures. The Company’s management has considered all recent accounting pronouncements issued and believes that these recent pronouncements will not have a material effect on the Company’s financial statements. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s condensed consolidated balance sheets and no further adjustments to their initial valuation are subsequently made. Warrants that require separate accounting as liabilities are recorded on the Company’s condensed consolidated balance sheets at their fair value on the date of issuance and are revalued on each subsequent balance sheet date until such instruments are exercised or expired, with any changes in the fair value between reporting periods recorded on the condensed consolidated statement of operations. The assessment of whether the warrants are accounted for as equity-classified or liability-classified instruments is re-evaluated on a periodic basis. See Note 9 - Stockholders’ Equity for a discussion on the Company’s warrants. Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Debt Securities The Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash and cash equivalents and all investments with maturities of greater than three months from date of purchase are classified as marketable debt securities. Cash and cash equivalents consist of cash in bank checking and savings accounts, money market funds and short-term U.S. treasury bonds that mature within three months of settlement date. Cash, Cash Equivalents and Restricted Cash The Company presents restricted cash with cash and cash equivalents in the Condensed Consolidated Statements of Cash Flows. Restricted cash at both September 30, 2025 and December 31, 2024 of $ 250 represents funds the Company is required to set aside as collateral, primarily for one of the Company’s operating leases. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of the amounts in the Condensed Consolidated Statements of Cash Flows as of September 30, 2025, December 31, 2024, September 30, 2024 and December 31, 2023: Schedule of Cash, Cash Equivalents and Restricted Cash September 30, 2025 December 31, 2024 September 30, 2024 December 31, 2023 Cash and cash equivalents $ 5,435 $ 7,284 $ 10,295 $ 4,787 Restricted cash included in current/non-current assets 250 250 250 250 Cash, cash equivalents and restricted cash in the statement of cash flows $ 5,685 $ 7,534 $ 10,545 $ 5,037 8 Marketable Debt Securities The Company has historically classified its investments in marketable debt securities as available-for-sale and as a current asset. The Company’s investments in marketable debt securities were carried at fair value, with unrealized gains and losses included as a separate component of stockholders’ equity. Unrealized losses and gains were classified as other comprehensive (loss)/income and costs were determined on a specific identification basis. Realized gains and losses from our marketable debt securities were recorded in other income, net. The Company did not incur any realized gains and losses during the nine months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 and 2024, the Company recorded unrealized gains of $ 0 and $ 221 , respectively. Note 5 - Fair Value Measurements The Company uses the fair value hierarchy to measure the value of its financial instruments. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below: ● Level 1 – Quoted prices for identical assets or liabilities in active markets. ● Level 2 – Quoted prices for identical or similar assets and liabilities in markets that are not active; or other model-derived valuations whose inputs are directly or indirectly observable or whose significant value drivers are observable. ● Level 3 – Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable and for which assumptions are used based on management estimates. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as counterparty credit risk in its assessment of fair value. The carrying amounts of cash equivalents, current portion of restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments. The Company did not have any financial assets or liabilities that were carried at fair value using the hierarchy as of either September 30, 2025 or December 31, 2024. The table below presents a summary of changes in fair value of the warrant liability that was measured at fair value on a recurring basis: Schedule of Fair Value of Warrant Liability Warrant Liability Balance at January 31, 2025 — Issuance of warrants reported at fair value 2,942 Change in fair value 3,161 Reclassification to equity ( 6,103 ) Balance at September 30, 2025 — On February 13, 2025, the Company entered into a securities purchase agreement with certain investors and, pursuant to an initial and second closing under the agreement, issued and sold to the investors an aggregate of (i) 3,300 shares of convertible preferred stock and (ii) warrants (the “Warrants”) to purchase up to 11,262,808 shares of the Company’s common stock (see Note 9). The Company classified the Warrants as a liability upon issuance. Accordingly, proceeds from the transaction were first allocated to the Warrants which were recorded at fair value at issuance, and any residual value allocated to preferred stock. Subsequent changes in fair value of the Warrants were recognized in the Company’s condensed consolidated statements of operations and comprehensive loss. 9 On June 26, 2025, the terms of the Warrants were amended to remove the provision that provided for a potential adjustment to the Warrants that did not meet the indexation requirements. The Company determined that the Warrants now satisfy the conditions to be accounted for as equity instruments. The change in fair value of the Warrants until June 26, 2025 was recorded in the income statement and fair value of the Warrants on June 26, 2025, was reclassified to equity. There will be no subsequent measurement for the equity classified Warrants as long as the indexation and equity classification criteria continue to be met. For each reporting period during which the Warrants were classified as a liability, the Company’s warrant liability was measured at fair value utilizing a Monte Carlo simulation model, which required assumptions including the value of the stock on the measurement date, exercise price, expected term, expected volatility, and the risk-free interest rate. Certain assumptions, including the expected term and expected volatility, were subjective and require judgment to develop. The warrant liabilities were valued on the various measurement dates during the nine months ended September 30, 2025 using the following range of assumptions: Schedule of Warrant Liability Expected volatility 54.0 % - 61.0 % Risk-free interest rate 3.77 % – 4.39 % Stock price on valuation date $ 0.52 - 0.94 Exercise price $ 0.64 Dividend yield 0.00 % Expected term 4.8 - 5.0 years Note 6 – Leasehold Improvements and Equipment Leasehold improvements and equipment, summarized by major category, consist of the following as of September 30, 2025 and December 31, 2024: Schedule of Leasehold Improvements and Equipment September 30, 2025 December 31, 2024 Equipment $ — $ 283 Leasehold improvements 218 218 Total 218 501 Less: accumulated depreciation and amortization 62 33 Leasehold improvements and equipment, net $ 156 $ 468 Depreciation and amortization expense for the three and nine months ended September 30, 2025 was $ 2 and $ 29 , respectively. Depreciation and amortization expense for the three and nine months ended September 30, 2024 was $ 90 and $ 275 , respectively. Assets held for sale, net On April 19, 2025, the Company initiated a process to sell certain unused laboratory equipment that was previously impaired and carried a net book value of $ 280 . During the nine months ended September 30, 2025, the Company sold $ 210 of the equipment, generating proceeds of $ 320 and a gain of $ 110 . As of September 30, 2025, the remaining $ 70 of equipment is classified as held for sale on the Company’s balance sheet. We expect the remaining equipment to be sold prior to December 31, 2025. 10 Note 7 – Accrued Expenses and Other Liabilities Accrued expenses, summarized by major category, as of September 30, 2025 and December 31, 2024 consist of the following: Schedule of Accrued Expenses September 30, 2025 December 31, 2024 Severance $ 120 $ 1,509 General and administrative expenses 444 296 Total $ 564 $ 1,805 Note 8 – Leases The Company has various lease agreements, including leases of office space, a laboratory and manufacturing facility, and various equipment. Some leases include purchase, termination or extension options for one or more years . These options are included in the lease term when it is reasonably certain that the option will be exercised. The assets and liabilities from operating and finance leases are recognized at the lease commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating leases do not provide implicit rates, therefore the Company utilized a discount rate based on its incremental borrowing rate to record the lease obligations. The Company’s finance leases provide readily determinable implicit rates. Operating lease obligations The Company incurred lease expense for its operating leases of $ 168 and $ 225 for the three months ended September 30, 2025 and 2025, respectively, and $ 513 and $ 667 for the nine months ended September 30, 2025 and 2024, respectively. The Company incurred amortization expense on its operating lease right-of-use assets of $ 111 and $ 152 for the three months ended September 30, 2025 and 2024, respectively, and $ 329 and $ 446 for the nine months ended September 30, 2025 and 2024, respectively. Finance Leases The Company incurred interest expense on its finance leases of $ 0 and $ 1 for the three months ended September 30, 2025 and 2024 and $ 0 and $ 2 for the nine months ended September 30, 2025 and 2024, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of $ 1 for the three months ended September 30, 2025 and 2024, and $ 3 and $ 4 for the nine months ended September 30, 2025 and 2024, respectively. The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of September 30, 2025: Schedule of Maturity of Operating and Finance Leases Liabilities Maturity of Lease Liabilities Operating Lease Liabilities Finance Lease Liabilities Remainder of 2025 $ 255 $ 4 2026 1,040 7 2027 944 7 2028 273 — 2029 138 — - - Total undiscounted operating lease payments $ 2,650 $ 18 Less: Imputed interest 332 2 Present value of operating lease liabilities $ 2,318 $ 16 Weighted average remaining lease term in years 2.7 2.2 Weighted average discount rate 9.4 % 11.6 % 11 The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases and finance leases as of December 31, 2024: Maturity of Lease Liabilities Operating Lease Liabilities Finance Lease Liabilities 2025 $ 998 $ 7 2026 1,040 7 2027 944 7 2028 273 — 2029 138 — Total undiscounted operating lease payments $ 3,393 $ 21 Less: Imputed interest 516 4 Present value of operating lease liabilities $ 2,877 $ 17 Weighted average remaining lease term in years 3.3 2.9 Weighted average discount rate 9.3 % 11.6 % Note 9 – Stockholders’ Equity As of September 30, 2025, in accordance with the Certificate of Incorporation, the Company was authorized to issue 500,000,000 shares of common stock and 10,000,000 shares of preferred stock, each share having a par value of $ 0.0001 . Common Stock On June 23, 2025, the Company received shareholder approval to increase the number of shares of common stock authorized for issuance to 500,000,000 . On August 6, 2025, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s common stock from 250,000,000 shares to 500,000,000 shares. The Certificate of Amendment became effective upon filing. April 2024 Purchase Agreement On April 5, 2024, the Company closed a registered direct offering of 666,667 shares of its common stock and warrants to purchase up to an aggregate of 666,667 additional shares of common stock, at a combined purchase price of $ 15.00 per share and accompanying warrant. The Company generated gross proceeds of $ 10,000 and net proceeds of $ 9,125 , after deducting underwriting discounts and commissions and other offering expenses. At-The-Market Equity Offering On July 2, 2020, the Company entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC (“BTIG”), pursuant to which the Company may offer and sell, from time to time, through BTIG, as sales agent and/or principal, shares of its common stock having an aggregate offering price of up to $ 50,000 , subject to certain limitations on the amount of common stock that may be offered and sold by the Company set forth in the Sales Agreement. BTIG will be paid a 3 % commission on the gross proceeds from each sale. The Company may terminate the Sales Agreement at any time; BTIG may terminate the Sales Agreement in certain limited circumstances. The Company did no t sell any shares under the Sales Agreement during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, the Company sold 4,366 shares of its common stock generating net proceeds of $ 54 . As of September 30, 2025, the Sales Agreement’s available capacity is $ 44,191 . As of the filing of this Form 10-Q, the Company is subject to the General Instruction I.B.6 to Form S-3, known as the “baby shelf rules,” which limit the number of securities it can sell under the Sales Agreement and its registration statement on Form S-3. Preferred Stock On February 13, 2025, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which the Company sold, in a private placement (the “Offering”), an aggregate of 3,300 shares of the Company’s Series C Convertible Preferred Stock, par value $ 0.0001 per share (the “Preferred Stock”), initially convertible into up to 5,631,404 shares of the Company’s common stock with a stated value of $ 1,000 per share (the “Stated Value”), and warrants (the “Warrants”) to purchase up to an aggregate of 200 % of the shares of Common Stock into which the shares of Preferred Stock are initially convertible, or 11,262,808 shares of Common Stock, for an offering price of $ 1,000 per share of Preferred Stock and accompanying Warrants in two equal tranches, the second of which closed on April 8, 2025. 12 Pursuant to the Purchase Agreement, on February 13, 2025, the Company issued and sold in an initial closing of the Offering (the “Initial Closing”), 1,650 shares of Preferred Stock, initially convertible into up to 2,815,702 shares of Common Stock, and accompanying Warrants, initially exercisable for up to 5,631,404 shares of Common Stock, for gross proceeds to the Company of $ 1.65 million. On April 4, 2025, the Company obtained shareholder approval (“Shareholder Approval”) for the issuance of the Preferred Stock and Warrants, as required by the rules and regulations of NYSE American LLC (the “ NYSE”), including Section 713 of the NYSE American Company Guide, and issued and sold, in a second closing of the Offering (the “Second Closing”), an additional 1,650 shares of Preferred Stock, initially convertible into up to 2,815,702 shares of Common Stock, and accompanying Warrants, initially exercisable for up to 5,631,404 shares of Common Stock, for gross proceeds to the Company of $ 1.65 million. The following table summarizes the changes in Preferred Stock outstanding for the nine months ended September 30, 2025: Schedule of Changes in Preferred Stock Outstanding Shares Outstanding at December 31, 2024 — Issued 3,300 Converted to Common Stock ( 145 ) Outstanding at September 30, 2025 3,155 Warrants On April 5, 2024, the Company issued warrants to purchase 666,667 shares of the Company’s common stock at an exercise price of $ 17.50 per share. On February 13, 2025, the Company issued the Warrants to purchase 5,631,404 shares of the Company’s common stock in the Initial Closing. Warrants to purchase an additional 5,631,404 shares of the Company’s common stock were issued on April 8, 2025, in the Second Closing. The exercise price is $ 0.64 per share, subject to adjustment in accordance with the terms of the Warrant Agreement. The Warrants expire on April 4, 2030 . The Warrants include anti-dilution protection provisions. The Company determined that the Warrants did not satisfy the conditions to be accounted for as equity instruments as the Warrants were not considered indexed to the Company’s own stock and were classified as a liability upon issuance. The Warrants were recorded at fair value with changes in fair value recognized in the Company’s condensed consolidated statements of operations and comprehensive loss. The valuation of the Warrants was considered under Level 3 of the fair value hierarchy due to the need to use assumptions in the valuation that were both significant to the fair value measurement and unobservable (see Note 5). On June 26, 2025, the terms of the Warrants were amended to remove the provision that provided for a potential adjustment to the Warrants that did not meet the indexation requirements. As a result of the amendment, the Company determined that the Warrants satisfy the conditions to be accounted for as equity instruments and the fair value of the Warrants was reclassified to equity. There will be no subsequent measurement for the equity classified Warrants as long as the indexation and equity classification criteria continue to be met. On August 15, 2025, the Company entered into Warrant Exchange Agreements (the “Exchange Agreements”) with the holders (the “Holders”) of common stock purchase warrants exercisable for an aggregate of up to 466,666 shares of the Company’s common stock originally issued on April 5, 2024 and having a current exercise price of $ 17.50 (the “2024 Warrants”). Pursuant to the Exchange Agreements, on August 15, 2025, the Company issued to the Holders one share of common stock for each 2024 Warrant, for an aggregate of 466,666 shares of common stock (the “Exchange Shares”), in exchange for the 2024 Warrants (the “Exchange”), in reliance on an exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”). Following the consummation of the Exchange, the 2024 Warrants were cancelled and no further shares are issuable pursuant to the 2024 Warrants. 13 The fair value of the 2024 Warrants immediately prior to Exchange was $ 483 and the total fair value of common stock issued was $ 1,101 . The Company determined that the excess of fair value of the common stock issued over the fair value of the 2024 Warrants is not associated with anything other than the Exchange. Thus, the excess amount of $ 618 was recognized as a deemed dividend. As the Company does not have retained earnings, the dividend will be recognized through accumulated deficit. For purposes of calculating earnings per share, the Company reduced the income available to common stockholders by $ 618 . The following table summarizes the changes in warrants outstanding for the nine months ended September 30, 2025: Schedule of Shareholder Equity Warrants Outstanding Shares Outstanding at December 31, 2024 666,667 Issued 11,262,808 Exercised ( 100,000 ) Exchanged ( 466,666 ) Expired — - Outstanding at September 30, 2025 11,362,809 The following table summarizes the changes in warrants outstanding for the nine months ended September 30, 2024: Shares Outstanding at December 31, 2023 - Issued 666,667 Exercised - Tendered - Expired - Outstanding at September 30, 2024 666,667 Net Loss Per Share The following table sets forth the computation of basic and dilutive net loss per share: Schedule of Computation of Basic and Dilutive Net Loss Per Share 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator: Net loss attributable to common stockholders $ ( 1,532 ) $ ( 4,275 ) $ ( 8,433 ) $ ( 15,818 ) Adjustment for deemed dividend (*) ( 618 ) — ( 618 ) — Adjusted net loss used for basic and diluted calculation $ ( 2,150 ) $ ( 4,275 ) $ ( 9,051 ) $ ( 15,818 ) Denominator: Weighted-average common shares, basic and diluted 5,435,829 5,037,829 5,204,544 4,791,572 Net loss per common share: Basic and diluted $ ( 0.40 ) $ ( 0.85 ) $ ( 1.74 ) $ ( 3.30 ) (*) Deemed dividend represents the excess of fair value of common stock issued over the fair value of warrants immediately prior to exchange, which reduces income available to common stockholders used for the basic and diluted net loss per common share calculation. 14 Basic and diluted net loss per common share The Company had two classes of stock outstanding during the nine months ended September 30, 2025, common stock and preferred stock, and had only common stock outstanding during the nine months ended September 30, 2024. The Company computes net loss per share using the two-class method, as the Preferred Stock participates in distributions with the Company’s common stock. The two-class method of computing net loss per share is an earnings allocation formula that determines net loss for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share attributable to common stockholders is computed using the more dilutive of (1) the two-class method or (2) the if-converted method. During the three and nine months ended September 30, 2025 and 2024, diluted loss per common share is the same as basic loss per common share because, as the Company incurred a net loss during each period presented, the potentially dilutive securities from the assumed exercise of all outstanding stock options, warrants and preferred stock, would have an anti-dilutive effect. The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive as of September 30, 2025 and 2024: Schedule of Anti-dilutive Securities Excluded from Computation of Earning Per Share As of September 30, 2025 2024 Stock options 457,219 872,063 Convertible preferred stock upon conversion 5,383,964 — Warrants 11,362,809 666,667 Total 17,203,992 1,538,730 Note 10 – Stock-based Compensation 2013 Plan The Company’s Amended and Restated 2013 Equity Compensation Plan (the “2013 Plan”), which expired on May 7, 2024, provided for the granting of incentive stock options, nonqualified stock options, restricted stock units, performance units, and stock purchase rights. The term of the 2013 Plan was for 10 years . As of September 30, 2025, there were 434,334 awards, including both restricted stock grants and option grants, issued and exercised under the 2013 Plan and no remaining shares available for grant under the 2013 Plan. 2025 Plan On April 30, 2025, the Company’s board of directors (the “Board”), subject to the approval of its stockholders which was received on June 23, 2025, adopted a new 2025 Equity Incentive Plan (the “2025 Plan”) to succeed the 2013 Plan. As of September 30, 2025, there were 116,500 option grant awards issued and outstanding under the 2025 Plan and 646,548 awards available for grant under the 2025 Plan. The Company recognized stock-based compensation expense (options and restricted share grants) in its condensed consolidated statements of operations as follows: Schedule of Recognized Stock-Based Compensation 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and Development $ — $ 387 $ 85 $ 1,212 General and Administrative 253 578 721 1,739 Total $ 253 $ 965 $ 806 $ 2,951 As of September 30, 2025, total compensation costs related to unvested awards not yet recognized was $ 990 and the weighted-average periods over which the awards are expected to be recognized was 1.7 years. Stock Options The following table summarizes the activity for Company’ stock options for the nine months ended September 30, 2025: Schedule of Stock Option Activity Stock Options Outstanding at December 31, 2024 687,356 Granted 116,500 Exercised — Forfeited ( 3,101 ) Expired ( 343,536 ) Outstanding at September 30, 2025 457,219 15