Matinas BioPharma Holdings, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS Matinas BioPharma Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands, except for share data) June 30, 2026 December 31, 2025 (Unaudited) (Audited) ASSETS: Current assets: Cash and cash equivalents $ 761 $ 3,999 Restricted cash – security deposit 50 50 Prepaid expenses and other current assets 332 26 Total current assets 1,143 4,075 Non-current assets: Leasehold improvements and equipment – net — 138 Operating lease right-of-use assets – net 6 531 Finance lease right-of-use assets – net 3 4 In-process research and development 2,260 2,260 Restricted cash – security deposit — 200 Total non-current assets 2,269 3,133 Total assets $ 3,412 $ 7,208 LIABILITIES AND STOCKHOLDERS’ EQUITY: Current liabilities: Accounts payable $ 845 $ 315 Accrued expenses 504 452 Operating lease liabilities – current — 694 Financing lease liabilities – current 1 2 Total current liabilities 1,350 1,463 Non-current liabilities: Deferred tax liability 257 257 Operating lease liabilities – net of current portion — 653 Financing lease liabilities – net of current portion 5 5 Total non-current liabilities 262 915 Total liabilities 1,612 2,378 Stockholders’ equity: Series C Convertible preferred stock, stated value $ 1,000 per share, par value $ 0.0001 per share, 10,000,000 shares authorized at June 30, 2026 and December 31, 2025; 3,155 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. Liquidation preference of $ 3,155,000 as of June 30, 2026. — — Common stock par value $ 0.0001 per share, 500,000,000 shares authorized at June 30, 2026 and December 31, 2025; 6,406,191 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. 1 1 Additional paid-in capital 215,833 215,616 Accumulated deficit ( 214,034 ) ( 210,787 ) Total stockholders’ equity 1,800 4,830 Total liabilities and stockholders’ equity $ 3,412 $ 7,208 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Matinas BioPharma Holdings, Inc. Condensed Consolidated Statements of Operations (in thousands, except for share and per share data) Unaudited 2026 2025 2026 2025 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Costs and expenses: Research and development $ — $ — $ — $ 85 General and administrative 1,555 1,837 3,490 3,698 Total costs and expenses 1,555 1,837 3,490 3,783 Loss from operations ( 1,555 ) ( 1,837 ) ( 3,490 ) ( 3,783 ) (Loss)/gain on disposal of assets, net ( 138 ) 110 ( 138 ) 110 Gain on lease termination 368 — 368 — Change in fair value of warrant liability — ( 3,455 ) — ( 3,161 ) Other income/(loss), net ( 1 ) ( 63 ) 13 ( 67 ) Net loss $ ( 1,326 ) $ ( 5,245 ) $ ( 3,247 ) $ ( 6,901 ) Net loss per share – basic and diluted $ ( 0.21 ) $ ( 1.03 ) $ ( 0.51 ) $ ( 1.36 ) Weighted average common shares outstanding: Basic and diluted 6,406,191 5,086,985 6,406,191 5,086,985 Net loss attributed to common shareholders $ ( 1,326 ) $ ( 5,245 ) $ ( 3,247 ) $ ( 6,901 ) 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 Equity Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance, December 31, 2025 3,155 $ — 6,406,191 $ 1 $ 215,616 $ ( 210,787 ) $ 4,830 Stock-based compensation — — — — 217 — 217 Net loss — — — — — ( 3,247 ) ( 3,247 ) Balance, June 30, 2026 3,155 $ — 6,406,191 $ 1 $ 215,833 $ ( 214,034 ) $ 1,800 Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance, March 31, 2026 3,155 $ — 6,406,191 $ 1 $ 215,729 $ ( 212,708 ) $ 3,022 Stock-based compensation — — — — 104 — 104 Net loss — — — — — ( 1,326 ) ( 1,326 ) Balance, June 30, 2026 3,155 $ — 6,406,191 $ 1 $ 215,833 $ ( 214,034 ) $ 1,800 Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance, December 31, 2024 — $ — 5,086,985 $ 1 $ 207,413 $ ( 199,824 ) $ 7,590 Stock-based compensation — — — — 553 — 553 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 Net loss — — — — — ( 6,901 ) ( 6,901 ) Balance, June 30, 2025 3,300 $ — 5,086,985 $ 1 $ 214,399 $ ( 206,725 ) $ 7,675 Convertible Preferred Stock Series C Common Stock Additional Paid - in Accumulated Total Stockholders’ Shares Amount Shares Amount Capital Deficit Equity Balance, March 31, 2025 1,650 $ — 5,086,985 $ 1 $ 207,749 $ ( 201,480 ) $ 6,270 Balance 1,650 $ — 5,086,985 $ 1 $ 207,749 $ ( 201,480 ) $ 6,270 Stock-based compensation — — — — 238 — 238 Issuance of preferred stock and warrants in public offering, net of stock issuance costs ($ 27 ) 1,650 — — — 309 — 309 Issuance of preferred stock and warrants in public offering, net of stock issuance costs 1,650 — — — 309 — 309 Reclassification of warrants from liability to equity — — — — 6,103 — 6,103 Net loss — — — — — ( 5,245 ) ( 5,245 ) Balance, June 30, 2025 3,300 $ — 5,086,985 $ 1 $ 214,399 $ ( 206,725 ) $ 7,675 Balance 3,300 $ — 5,086,985 $ 1 $ 214,399 $ ( 206,725 ) $ 7,675 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Matinas BioPharma Holdings, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Unaudited 2026 2025 Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 3,247 ) $ ( 6,901 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization — 30 Net loss/(gain) on disposal of assets 138 ( 110 ) Stock-based compensation expense 217 553 Change in operating lease right-of-use assets 77 218 Change in finance lease right-of-use assets 1 2 Gain on the termination of an operating lease ( 368 ) — Change in fair value of warrant liability — 3,161 Changes in operating assets and liabilities: Operating lease liabilities ( 530 ) ( 363 ) Prepaid expenses and other current assets ( 306 ) 319 Accounts payable 529 71 Accrued expenses and other liabilities 52 ( 1,008 ) Net cash used in operating activities ( 3,437 ) ( 4,028 ) Cash flows from investing activities: Net cash provided by (used in) investing activities — — 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 ) Payments of finance lease liability – principal ( 1 ) ( 2 ) Net cash (used in) provided by financing activities ( 1 ) 3,269 Net decrease in cash, cash equivalents and restricted cash ( 3,438 ) ( 759 ) Cash, cash equivalents and restricted cash at beginning of period 4,249 7,534 Cash, cash equivalents and restricted cash at end of period $ 811 $ 6,775 Supplemental non-cash financing and investing activities: Sale of assets $ — $ 320 Reclassification of warrants from liability to equity $ — $ 6,103 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 in thousands, except per share data) Note 1 – Description of Business Matinas BioPharma Holdings, Inc. (the “Company”) is a Delaware corporation formed in 2013. The Company is the parent company of Matinas BioPharma, Inc. (“BioPharma”), and Matinas BioPharma Nanotechnologies, Inc. (“Nanotechnologies,” formerly known as Aquarius Biotechnologies, Inc.), its operating subsidiaries. The Company is a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using its lipid nanocrystal (“LNC”) platform delivery technology (“LNC Platform”). As discussed more fully in Note 11, the Company entered into the Business Combination Agreement (as defined below) and the Stock Purchase Agreement (as defined below) in July 2026. Subject to the terms and conditions in the agreements, (i) upon closing of the transactions contemplated by the Business Combination Agreement, the Company will become a wholly owned subsidiary of Pubco (as defined below) and (ii) upon closing of the transactions contemplated by the Stock Purchase Agreement, Azurity Pharmaceuticals, Inc. will acquire all of the issued and outstanding equity interests of Nanotechnologies. Following the closing of the Business Combination, the current business of GH Power (as defined below) is expected to become the primary business of the combined company, and the Company does not expect to continue its historical clinical-stage LNC Platform development activities as an independent, publicly traded company. 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 June 30, 2026, the Company had an accumulated deficit of $ 214,034 . The Company’s net loss for the six months ended June 30, 2026 and 2025 was $ 3,247 and $ 6,901 , respectively. As of June 30, 2026, the Company had cash and cash equivalents of $ 761 and restricted cash of $ 50 . The Company does not believe that the cash and cash equivalents on hand are sufficient to fund planned operations for a period of at least 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. As more fully described in Note 11, subsequent to June 30, 2026 the Company announced a series of strategic transactions whereby the Company entered into a Business Combination Agreement with GH Power Inc., and a Stock Purchase Agreement with Azurity Pharmaceuticals, Inc. for the sale of Nanotechnologies, owner of MAT2203. Additionally, subsequent to June 30, 2026, the Company received net proceeds of approximately $ 575 from the Series D Financing (as defined below) and approximately $ 2,323 from the Warrant Inducement (as defined below). There can be no assurance that the Business Combination (as defined below) with GH Power Inc. or the sale of Nanotechnologies will be consummated. If such transactions are not consummated the Company will need to secure substantial additional funding from other sources to continue its operations, and there can be no assurance that such funding will be available on acceptable terms, or at all. In such a case, the Board of Directors may decide to pursue a winddown, dissolution or other liquidation process. 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. 7 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 the Company 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. There have been no material changes to the Company’s significant accounting policies 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, 2025. 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. Segment and geographic information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company considers its chief executive officer to be the Company’s CODM. The CODM manages its operations and allocates resources based on the Company’s consolidated results and therefore operates as one segment. Segment revenue, profit or loss, significant segment expenses and other segment items - The accounting policies of the Company’s single operating and reportable segment are the same as those described in this Summary of Significant Accounting Policies. The Company’s method for measuring segment profitability includes net income (loss), which the CODM uses to assess performance and make decisions for resource allocation, consistent with the measurement principles for net income (loss) as reported on the Company’s condensed consolidated statement of operations. The significant assets and expenses regularly reviewed by the CODM are consistent with those reported on the Company’s condensed consolidated balance sheet, and statement of operations. The measure of segment assets is reported in the condensed consolidated balance sheet as total assets. Segment revenues and expenses are identical to that disclosed in the accompanying condensed consolidated statements of operations. Note 4 – Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash and cash equivalents. Cash and cash equivalents consist of cash in bank checking and savings accounts and money market funds 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 June 30, 2026 and December 31, 2025 of $ 50 and $ 250 , respectively, represents funds the Company is required to set aside as collateral, primarily for the Company’s credit cards and one of the Company’s operating leases at December 31, 2025. 8 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 Flow as of June 30, 2026, December 31, 2025, June 30, 2025 and December 31, 2024: Schedule of Cash, Cash Equivalents and Restricted Cash June 30, 2026 December 31, 2025 June 30, 2025 December 31, 2024 Cash and cash equivalents $ 761 $ 3,999 $ 6,525 $ 7,284 Restricted cash included in current/non-current assets 50 250 250 250 Cash, cash equivalents and restricted cash in the statement of cash flows $ 811 $ 4,249 $ 6,775 $ 7,534 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, current portion of lease liabilities 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 June 30, 2026 and December 31, 2025. 9 Note 6 – Leasehold Improvements and Equipment Leasehold improvements and equipment, summarized by major category, consist of the following as of June 30, 2026 and December 31, 2025: Schedule of Leasehold Improvements and Equipment June 30, 2026 December 31, 2025 Leasehold improvements $ — $ 166 Total — 166 Less: accumulated depreciation and amortization — 28 Leasehold improvements and equipment, net $ — $ 138 The Company’s leasehold improvements were written down to salvage value at December 31, 2025. As a result, no depreciation expense was incurred during the six months ended June 30, 2026. Depreciation and amortization expense for the six months ended June 30, 2025 was $ 30 . On April 7, 2026, the Company’s operating lease for its Bridgewater facility was terminated. As a result of the lease termination, all remaining leasehold improvements associated with the leased premises were abandoned as of the termination date. Accordingly, the Company wrote off the related leasehold improvements and recognized a loss of $ 138 . See Note 8 for additional information. Note 7 – Accrued Expenses and Other Liabilities Accrued expenses, summarized by major category, as of June 30, 2026 and December 31, 2025 consist of the following: Schedule of Accrued Expenses June 30, 2026 December 31, 2025 Legal fees $ 342 $ 75 Accounting fees 113 193 Payroll and incentives 10 150 Other 39 34 Total $ 504 $ 452 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. 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. 10 Operating lease obligations On December 15, 2016, the Company entered into a 10 -year, 3-month lease of laboratory and manufacturing space in Bridgewater, New Jersey. The lease began in August 2017. The monthly rent started at approximately $ 43 , increasing to approximately $ 64 in the final year. To obtain the lease, the Company provided an initial security deposit of $ 586 which was subsequently reduced and was $ 200 at December 31, 2025. The Company filed a complaint against COE Bridgewater, LLC (its “Landlord”) in the Superior Court of New Jersey, Somerset County, Chancery Division on July 11, 2025 alleging principally that Landlord illegally locked the Company out of its leased premises in Bridgewater, New Jersey. As a result of the illegal lockout, the Company sought (among other things) a declaration that the lease and all obligations thereunder, including rent, terminated as of the date of the lockout. On September 5, 2025, Landlord filed an answer with counterclaims, which it amended on December 12, 2025. In the counterclaims, Landlord sought a declaration that there was no lockout, or that the lockout was justified, and therefore the lease remains in effect. Landlord also sought damages for the Company’s alleged failure to pay approximately $ 205 in rent (as of December 31, 2025) following the lockout, and alleged conversion of certain furniture, fixtures, and equipment (FF&E) items within the premises belonging to Landlord. The matter was resolved by way of Termination of Lease and Release Agreement (“Settlement Agreement”) effective April 7, 2026, pursuant to which the Company made a termination payment of $ 765 (which was satisfied with the $ 200 security deposit and a cash payment of $ 565 ) in return for discontinuation of the action, termination of the lease, and an exchange of mutual general releases. As a result of the lease termination, the Company recorded a gain of $ 368 , and the Company exited the Bridgewater premises on April 29, 2026 pursuant to the terms of the Settlement Agreement. The Company incurred lease expense for its operating leases of $ 3 and $ 171 for the three months ended June 30, 2026 and 2025, respectively, and $ 104 and $ 345 for the six months ended June 30, 2026 and 2025, respectively. The Company incurred amortization expense on its operating lease right-of-use assets of $ 3 and $ 111 for the three months ended June 30, 2026 and 2025, respectively, and $ 77 and $ 218 for the six months ended June 30, 2026 and 2025, respectively. Finance Leases The Company incurred interest expense on its finance leases of $ 0 for the three months ended June 30, 2026 and 2025 and $ 0 for the six months ended June 30, 2026 and 2025, respectively. The Company incurred amortization expense on its finance lease right-of-use assets of $ 1 for the three months ended June 30, 2026 and 2025, respectively, and $ 1 and $ 2 for the six months ended June 30, 2026 and 2025, 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 June 30, 2026: Schedule of Maturity of Operating and Finance Leases Liabilities Maturity of Lease Liabilities Operating Lease Liabilities Finance Lease Liabilities Remainder of 2026 $ — $ 2 2027 — 4 Total undiscounted operating lease payments $ — $ 6 Less: Imputed interest — — Present value of operating lease liabilities $ — $ 6 Weighted average remaining lease term in years — 1.4 Weighted average discount rate — % 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, 2025: Maturity of Lease Liabilities Operating Lease Liabilities Finance Lease Liabilities 2026 $ 781 $ 4 2027 678 4 Total undiscounted operating lease payments $ 1,459 $ 8 Less: Imputed interest 112 1 Present value of operating lease liabilities $ 1,347 $ 7 Weighted average remaining lease term in years 1.8 1.9 Weighted average discount rate 8.4 % 11.6 % Note 9 – Stockholders’ Equity As of June 30, 2026, in accordance with the Certificate of Incorporation, the Company is 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 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 not sell any shares under the Sales Agreement during the six months ended June 30, 2026 and 2025. As of June 30, 2026, the Sales Agreement’s available capacity is $ 44,191 . On July 23, 2026, pursuant to and in accordance with Section 12(a) of the Sales Agreement, BTIG notified the Company that BTIG is terminating the Sales Agreement, effective immediately. The Company is not subject to any termination penalties or other expenses related to the termination of the Sales Agreement. Preferred Stock On February 13, 2025, the Company entered into a Securities Purchase Agreement (the “February 2025 Agreement”) with certain investors 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 “Series C 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 “2025 Warrants”) to purchase up to an aggregate of 200 % of the shares of common stock into which the shares of Series C Preferred Stock are initially convertible, or 11,262,808 shares of common stock, for an offering price of $ 1,000 per share of Series C Preferred Stock and accompanying 2025 Warrants in two equal tranches, the second of which closed on April 8, 2025. Pursuant to the February 2025 Agreement, on February 13, 2025, the Company issued and sold in an initial closing of the Offering (the “Initial Closing”), 1,650 shares of Series C Preferred Stock, initially convertible into up to 2,815,702 shares of common stock, and accompanying 2025 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 Series C Preferred Stock and 2025 Warrants, as required by the rules and regulations of NYSE American LLC (the “NYSE American”), 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 Series C Preferred Stock, initially convertible into up to 2,815,702 shares of common stock, and accompanying 2025 Warrants, initially exercisable for up to 5,631,404 shares of common stock, for gross proceeds to the Company of $ 1.65 million. 12 The following table summarizes the changes in Series C Preferred Stock outstanding for the quarter ended June 30, 2026: Schedule of Changes in Preferred Stock Outstanding Shares Outstanding at December 31, 2025 3,155 Issued — Converted to Common Stock — Outstanding at June 30, 2026 3,155 Warrants As of June 30, 2026, the Company had outstanding warrants to purchase 10,516,543 shares of common stock, 200,001 shares at an exercise price of $ 17.50 per share (the “2024 Warrants”) and the 2025 Warrants consisting of 10,316,542 shares at an exercise price of $ 0.64 . The 2024 Warrants have an exercise price of $ 17.50 , were exercisable beginning October 2, 2024, and expire on the five-and-one-half year anniversary of the date of issuance, or October 5, 2029. The 2025 Warrants have an exercise price of $ 0.64 per share. The 2025 Warrants purchased in the Initial Closing of the Private Placement became exercisable on April 4, 2025, the effective date of the Shareholder Approval and will expire five years from the effective date of the Shareholder Approval, or April 4, 2030. The 2025 Warrants purchased in the Second Closing of the Private Placement were immediately exercisable and will expire on April 8, 2030. On August 15, 2025, the Company entered into Warrant Exchange Agreements (the “Exchange Agreements”) with certain holders (the “Exchanging Holders”) of 2024 Warrants to purchase an aggregate of 466,666 shares of common stock. Pursuant to the Exchange Agreements, on August 15, 2025, the Company issued to the Exchanging Holders one share of common stock for each 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 held by the Exchanging Holders were cancelled. A summary of warrants outstanding as of June 30, 2026 and December 31, 2025 were as follows: Schedule of Shareholder Equity Warrants Outstanding Shares Outstanding at December 31, 2024 666,667 Issued 11,262,808 Exercised ( 946,266 ) Exchanged ( 466,666 ) Outstanding at December 31, 2025 10,516,543 Issued — Exercised — Exchanged — Expired — Outstanding at June 30, 2026 10,516,543 13 Basic and diluted net loss per common share Net loss per share information is determined using the two-class method. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in the earnings as if all income (loss) for the period had been distributed. The Company’s convertible preferred stock and outstanding warrants participate in any dividends declared by the Company on common stock on a one-for-one basis and are therefore considered to be participating securities. The participating securities are not required to participate in the losses of the Company, and therefore during periods of loss there is no allocation required under the two-class method. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss 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 by dividing the diluted net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period including potential dilutive common shares. For purposes of this calculation, outstanding options and warrants to purchase common stock, and shares of convertible preferred stock are considered potential dilutive common shares. The Company has generated net loss in all periods presented, and therefore the basic and diluted net loss per share attributable to common stockholders are the same as the inclusion of the potentially dilutive securities would be anti-dilutive. 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 June 30, 2026 and 2025: Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share 2026 2025 As of June 30, 2026 2025 Stock options 378,602 464,297 Convertible preferred stock upon conversion 5,383,964 5,631,404 Warrants 10,516,543 11,929,475 Total 16,279,109 18,025,176 Note 10 – Stock-based Compensation 2013 Plan On August 2, 2013, the Company’s Board adopted the 2013 Equity Compensation Plan (as amended to date, the “2013 Plan”) pursuant to the terms described herein. The 2013 Plan was approved by the stockholders on August 7, 2013. Effective May 8, 2014, upon the approval of the Company’s Board and its stockholders, the Company amended and restated the 2013 Plan, primarily to include “evergreen” provisions, which provided that the number of shares of common stock available for issuance under the 2013 Plan is subject to an automatic annual increase on January 1 of each year beginning in 2015; to amend the definition of “fair market value”; and to increase the limits on awards under the 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. 14 As of June 30, 2026, there were 355,717 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, 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. The general purpose of the 2025 Plan is to provide an incentive to its employees, directors, consultants and advisors by enabling them to share in the future growth of our business. The term of the 2025 Plan is 10 years . The 2025 Plan includes the “evergreen” provisions, which provides that the number of shares of common stock available for issuance under the 2025 Plan is subject to an automatic annual increase on January 1 of each year beginning in 2026. Therefore, an additional 256,248 shares were automatically made available for issuance on the first trading day of 2026, which represented 4.0 % of the number of shares outstanding on December 31, 2025. As of the date of this filing, these shares have not been registered. As of June 30, 2026, there were 116,500 options outstanding and 902,796 remaining shares available for grant under the 2025 Plan. The Company recognized stock-based compensation expense for stock options in its condensed consolidated statements of operations as follows: Schedule of Recognized Stock-Based Compensation 2026 2025 2026 2025 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Research and Development $ — $ — $ — $ 85 General and Administrative 104 238 217 468 Total $ 104 $ 238 $ 217 $ 553 As of June 30, 2026, total compensation costs related to unvested awards not yet recognized was $ 391 and the weighted-average periods over which the awards are expected to be recognized was 1.8 years. Stock Options The following table summarizes the activity for Company’ stock options for the six months ended June 30, 2026: Schedule of Stock Option Activity Stock Options Outstanding at December 31, 2025 457,219 Granted — Exercised — Forfeited ( 12,758 ) Expired ( 65,859 ) Outstanding at June 30, 2026 378,602 15 Note 11 – Subsequent Events Series D Financing On July 10, 2026, the Company entered into a Securities Purchase Agreement (the “Series D Purchase Agreement”) with certain investors, pursuant to which the Company agreed to issue and sell, in a private placement (the “Series D Financing”), an aggregate of 575 shares of the Company’s Series D Convertible Preferred Stock, par value $ 0.0001 per share (the “Series D Preferred Stock”), initially convertible into up to 1,642,856 shares of the common stock, with a stated value of $ 1,000 per share, together with warrants (the “Series D Warrants”) to purchase up to an aggregate of 100 % of the shares of common stock into which the shares of Series D Preferred Stock are initially convertible, or 1,642,856 shares of common stock, for aggregate gross proceeds of up to $ 575 , at an offering price of $ 1,000 per share of Series D Preferred Stock and accompanying Series D Warrant. The Series D Financing closed on July 10, 2026 and the Company received net proceeds of $ 575 therefrom . As a result of the Series D Financing, the exercise price of the 2025 Warrants was adjusted from $ 0.6446 to $ 0.35 pursuant to the terms of the anti-dilution provisions contained therein and previously approved by the Company’s stockholders. In addition, the conversion price of the Series C Preferred Stock issued on February 13, 2025 and April 8, 2025, was adjusted from $ 0.586 to $ 0.35 pursuant to the terms of the anti-dilution provisions contained therein and previously approved by the Company’s stockholders. Warrant Inducement On July 10, 2026, the Company entered into inducement offer letter agreements (the “Inducement Letters”) with certain holders (the “Warrant Holders”) of 2025 Warrants to purchase up to an aggregate of 7,486,605 shares of common stock. Pursuant to the Inducement Letters, the Warrant Holders agreed to exercise for cash all or a portion of their 2025 Warrants at the current exercise price of $ 0.35 per share in consideration for the Company’s agreement to issue, in a private placement, new unregistered common stock purchase warrants (the “New Warrants”) to purchase up to 7,486,605 shares of common stock ( 100 % of the number of shares of common stock issued pursuant to each such exercise of 2025 Warrants) (such transaction, the “Warrant Inducement”). The Warrant Inducement closed on July 10, 2026. The Company received net proceeds of $ 2,323 from the Warrant Inducement. The Company engaged ThinkEquity LLC (the “Solicitation Agent”) to act as its exclusive warrant solicitation agent in connection with the transactions described above pursuant to that certain Warrant Solicitation Agent Agreement, by and between the Company and the Solicitation Agent, dated as of July 10, 2026 (the “Warrant Solicitation Agent Agreement”). Pursuant to the Warrant Solicitation Agent Agreement, the Company agreed to pay the Solicitation Agent a fee consisting of (i) a cash payment equal to 10 % of the aggregate gross cash proceeds received by the Company from the Warrant Holders’ exercise of the 2025 Warrants and (ii) warrants (the “Solicitation Agent Warrants”) to purchase 374,330 shares of common stock ( 5 % of the aggregate number of shares underlying the New Warrants issued to the Warrant Holders in connection with the transactions contemplated by the Inducement Letters). The Solicitation Agent Warrants have terms substantially similar to the New Warrants. Pursuant to the Warrant Solicitation Agent Agreement, the Company also agreed to reimburse the Solicitation Agent for its reasonable legal and other expenses up to $ 50 . 16 Business Combination On July 10, 2026, the Company, GH Power Inc., a corporation organized under the laws of Ontario (“GH Power”), 1001550000 Ontario Inc., a corporation organized under the laws of Ontario (“Pubco”), 1001550002 Ontario Inc., a corporation organized under the laws of Ontario and a wholly owned subsidiary of Pubco (“GH Power Merger Sub”) and MBH Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Pubco (“Matinas Merger Sub”), entered into a Business Combination Agreement (the “Business Combination Agreement”) pursuant to which, subject to the terms and conditions contained in the Business Combination Agreement, (i) GH Power Merger Sub and GH Power will amalgamate to form one corporate entity and wholly owned subsidiary of Pubco by way of a plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Ontario) (the “Amalgamation”) and (ii) immediately following the effectiveness of the Amalgamation, Matinas Merger Sub will merge with and into the Company (the “Company Merger” and together with the Amalgamation, the “Business Combination”), with the Company surviving the Company Merger as a direct wholly owned subsidiary of Pubco. Subject to the terms and conditions of the Business Combination Agreement and the Plan of Arrangement, at the effective time of the Plan of Arrangement (the “Arrangement Effective Time”), (i) each common share, without par value, of GH Power (“GH Power Common Share”) issued and outstanding immediately prior to the Arrangement Effective Time will be automatically exchanged for the common shares, without par value, of Pubco (“Pubco Common Shares”) based on the GH Power Exchange Ratio (as defined in the Plan of Arrangement), (ii) each preferred share, without par value, of GH Power issued and outstanding immediately prior to the Arrangement Effective Time will be automatically exchanged for Pubco Common Shares based on the GH Power Exchange Ratio on an as-converted to GH Power Common Share basis and (iii) each GH Power Option (as defined in the Business Combination Agreement) and GH Power Warrant (as defined in the Business Combination Agreement) issued and outstanding immediately prior to the Arrangement Effective Time will be assumed by Pubco and converted into a Converted Option and Converted Warrant, respectively (each as defined in the Plan of Arrangement). Subject to the terms and conditions of the Business Combination Agreement, at the effective time of the Company Merger (the “Effective Time”), (i) each share of common stock, par value $ 0.0001 per share, of the Company (“Common Stock”) issued and outstanding immediately prior to the Effective Time shall automatically be converted into the right to receive one-tenth (0.1) of a Pubco Common Share (the “Per Share Matinas Merger Consideration”), (ii) each share of preferred stock, par value $ 0.0001 per share, of the Company issued and outstanding immediately prior to the Effective Time shall automatically, in accordance with the applicable certificate of designation, be converted into the right to receive the Per Share Matinas Merger Consideration on an as-converted to Common Stock basis, (iii) each outstanding option to purchase a share of Common Stock (each, a “Company Stock Option”) issued and outstanding immediately prior to the Effective Time will be assumed by Pubco and shall be automatically converted into a Substituted Option (as defined in the Business Combination Agreement), with each Substituted Option representing the right to purchase that number of shares of Pubco Common Shares equal to the Per Share Matinas Merger Consideration underlying such Company Stock Option immediately prior to the Effective Time with a per-share exercise price equal to the exercise price per share of Common Stock subject to such Company Stock Option immediately prior to the Effective Time divided by 0.1, subject to adjustment as set forth in the Business Combination Agreement, and (iv) each outstanding warrant to purchase shares of Common Stock (“Company Warrant”) issued and outstanding immediately prior to the Effective Time will (a) be assumed by Pubco and shall be automatically converted into an Assumed Warrant (as defined in the Business Combination Agreement), with each share of Common Stock the holder of such Company Warrant would have received had such Company Warrant been exercised in full (on a cashless or non-cashless basis, as permitted by the terms of such Company Warrant) in accordance with its terms immediately prior to the Effective Time, entitling such holder to the Per Share Matinas Merger Consideration with a per-share exercise price equal to the exercise price per share of Common Stock subject to such warrant immediately prior to the Effective Time divided by 0.1, or (b) entitle the holder of such Company Warrant to such other consideration that such holder is entitled to receive pursuant to the terms of such holder’s Company Warrant. 17 A former financial advisor to the Company is entitled to receive, in connection with the closing of the Business Combination (the “Closing” and the date of the Closing, the “Closing Date”), (i) a cash fee equal to $ 2,000 and (ii) $ 2,000 of Pubco Common Shares (the “Advisor Issuance”), calculated based on the average of the closing prices of the Common Stock on the NYSE American for the ten trading days ending one trading day prior to the Closing Date. Under the GH Power Exchange Ratio formula, upon the Closing, on a pro forma basis and based upon the number of Pubco Common Shares expected to be issued in connection with the Business Combination, but prior to giving effect to the Advisor Issuance, current equityholders of the Company (including the investors in the Series D Financing and the Warrant Inducement) are expected to own approximately 9 % of the outstanding Pubco Common Shares and GH Power equityholders are expected to own approximately 91 % of the outstanding Pubco Common Shares, in each case calculated on a fully diluted basis using the treasury stock method and subject to certain assumptions, including (i) a valuation for the Company of $ 24,725 , (ii) a valuation for GH Power of $ 250,000 and (iii) the relative capitalization of the Company and GH Power. The percentage of the combined company that each party’s equityholders will own following the Closing is subject to certain adjustments as described in the Business Combination Agreement and Plan of Arrangement, including dollar-for-dollar upward adjustments to the Company’s valuation and GH Power’s valuation for any capital raised by the Company or GH Power, respectively, from the date of the Business Combination Agreement through the Effective Time or Arrangement Effective Time, as applicable. Each of the parties has agreed to customary representations, warranties and covenants in the Business Combination Agreement, including, among others, covenants relating to (i) obtaining the requisite approval of its respective stockholders and (ii) the conduct of its respective business during the period between the signing of the Business Combination Agreement and the consummation of the transactions contemplated thereby (such period, the “Interim Period”). In addition, the Company and Pubco agreed to prepare and file a proxy statement/prospectus included in the registration statement on Form F-4 (the “F-4 Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”), which will contain a proxy statement of the Company (the “Proxy Statement”) for the purpose of soliciting proxies from the Company’s stockholders at a special meeting of its stockholders (the “Special Stockholder Meeting”) to (1) obtain the Required Matinas Stockholder Approval (as defined in the Business Combination Agreement), including the Company’s Board of Directors’ (the “Board”) recommendation that the stockholders vote “FOR” the Business Combination Agreement and transactions contemplated thereby (the “Company Board Recommendation”), (2) approve the Stock Sale (as defined below), if deemed necessary, (3) approve any adjournment of the Special Stockholder Meeting, if necessary or desirable, and (4) approve any other proposals the parties deem necessary to effectuate the transactions contemplated by the Business Combination Agreement (collectively, the “Stockholder Approval Matters”). The Company also expects to seek, through the proxy statement/prospectus included in the F-4 Registration Statement, any stockholder approval required under the rules of the NYSE American for the issuance of securities in the Series D Financing and the Warrant Inducement. The Company also agreed that, prior to the Closing, it will be subject to restrictions on soliciting or facilitating any Acquisition Proposal or Acquisition Inquiry (as each is defined in the Business Combination Agreement). 18 The Closing is subject to certain closing conditions, including, among other things, (i) completion of a financing by GH Power (the “PIPE Financing”), including evidence that all cash from the PIPE Financing has been deposited with GH Power in accordance with the Subscription Agreements (as defined in the Business Combination Agreement) and that such financing results in gross proceeds of at least $ 15,000 , (ii) obtaining the Required Matinas Stockholder Approval, (iii) obtaining the Required GH Power Shareholder Approval (as defined in the Business Combination Agreement), (iv) the effectiveness of the F-4 Registration Statement, (v) obtaining the Interim Order (as defined in the Business Combination Agreement) and the Final Order (as defined in the Business Combination Agreement) on terms consistent with the Business Combination Agreement, (vi) the listing of the Pubco Common Shares issuable in connection with the Business Combination on the NYSE, (vii) the absence of any Law or Order (each as defined in the Business Combination Agreement) that makes the transactions illegal or otherwise prevents or prohibits consummation, (viii) election or appointment of the Post-Closing Pubco Board (as defined in the Business Combination Agreement) and (ix) evidence reasonably satisfactory to each of GH Power and the Company that Pubco qualifies as a foreign private issuer pursuant to Rule 3b-4 of the Exchange Act of 1934, as amended (the “Exchange Act”) as of the Closing. Each party’s obligation to consummate the Business Combination is also subject to other specified customary conditions, including conditions regarding the accuracy of the representations and warranties of the other party, subject to the applicable materiality standard, and the performance in all material respects by the other party of its obligations under the Business Combination Agreement required to be performed on or prior to the Closing. Stock Purchase Agreement On July 10, 2026, the Company and Azurity Pharmaceuticals, Inc., a Delaware corporation (“Azurity”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which Azurity will purchase and acquire from the Company all of the issued and outstanding equity interests (the “Stock Sale”) of Nanotechnologies. As consideration for the Stock Sale, Azurity agreed to pay to the Company cash consideration of up to $ 21,500 , with $ 4,000 due to the Company at the closing of the Stock Sale, subject to downward adjustment by the amount of Indebtedness (as defined in the Stock Purchase Agreement), and up to an additional $ 17,500 due upon the achievement of certain milestone events set forth in the Stock Purchase Agreement. The Company will also be eligible to receive a mid-single-digit royalty on Net Sales (as defined in the Stock Purchase Agreement) and Licensing Proceeds (as defined in the Stock Purchase Agreement) generated on MAT2203 (as defined in the Stock Purchase Agreement). Pursuant to the terms of royalty rights certificates held by the former holders of the Company’s Series A Preferred Stock, the holders thereof are entitled to receive, in the aggregate, 7.5 % of the amounts the Company receives from Azurity in connection with the Stock Sale, including the initial purchase price, milestone payments and royalty amounts described above. The Stock Purchase Agreement, the Stock Sale and the other transactions contemplated by the Stock Purchase Agreement must also be approved by the Company’s stockholders as a condition to the closing of the Stock Sale, and the Company expects to seek such approval at the Special Stockholder Meeting by means of the proxy statement/prospectus included in the F-4 Registration Statement. Each party’s obligation to consummate the Stock Sale is subject to certain closing conditions, including, among other things, the accuracy of the other party’s representations and warranties as of the closing, subject, in certain instances, to certain materiality and other thresholds, the performance by the other party of its obligations and covenants under the Stock Purchase Agreement in all material respects, obtaining the requisite vote from the Company’s stockholders, the delivery of certain related ancillary documents by the other party and the absence of any injunction or other legal prohibitions preventing consummation of the Stock Sale. In addition, the Company’s obligation to consummate the Stock Sale is conditioned upon the satisfaction of all conditions to the closing of the transactions contemplated by the Business Combination Agreement (other than those conditions which, by their terms, are to be satisfied or waived at the closing, but subject to the satisfaction or waiver of such conditions). The Company and Azurity have also agreed to indemnify each other from and against losses due to breaches of their respective representations, warranties and covenants contained in the Stock Purchase Agreement and certain other liabilities, with recovery for such losses subject to certain specified limitations set forth in the Stock Purchase Agreement. ATM Termination On July 23, 2026, pursuant to and in accordance with Section 12(a) of the Sales Agreement, BTIG notified the Company that BTIG is terminating the Sales Agreement effective immediately. The Company is not subject to any termination penalties or other expenses related to the termination of the Sales Agreement. 19