What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-18 compared with 2025-05-09 · 144 added, 70 removed, 159 unchanged (57% of the section changed)

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NeOnc is also developing a second product candidate, NEO212, which has completed preclinical testing, and an investigational new drug (IND) application has been filed and accepted with the United States Food and Drug Administration (FDA).

The company has started Phase 1 clinical trials with patients harboring primary and secondary malignant brain cancer types.

The company has started Phase 1 clinical trials with patients harbouring primary and secondary malignant brain cancer types.

Several additional drug candidates are in the pipeline and are undergoing preclinical development.

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We do not have any products approved for sale and have not generated any revenue from product sales other than for humanitarian usage.

From inception through March 31, 2025, we had raised an aggregate of approximately $29.3 million of gross proceeds through the sale and issuance of preferred stock and common stock, and approximately $11.7 million through the issuance of notes payable from HCWG, a related party (which was converted to common stock on June 30, 2024).

Since its inception, we have incurred significant operating losses.

Our net loss was $38,001,987 and $2,938,976, for the three months ended March 31, 2025 and 2024, respectively.

We had an accumulated deficit of $88,610,432 at March 31, 2025.

We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

On October 11, 2024, the Company entered into an agreement with a broker dealer to serve as placement agent and provide broker services in connection with the proposed sale of common stock up to $10,000,000.

Under this agreement, through December 31, 2024, the Company closed on commitments from investors to purchase 625,000 shares of common stock of the Company at $16 per share for total commitments of $10,000,000, which were to be held in escrow until the Company’s registration statement was declared effective.

During the three months ended March 31, 2025, prior to the Company having an effective registration statement, the Company closed on an additional commitment to purchase 102,750 shares of common stock of the Company at $16 per share, for total commitments of $1,644,000, On March 10, 2025, the Company’s registration statement was declared effective at which time the $11,644,000 in escrow was released to the Company.

On March 26, the Company was listed (“Listing”) on the NASDAQ global markets.

The Company has restated the

previously issued unaudited consolidated financial statements as of and for the quarter ended March 31, 2025 (the “Restatement”).

The Restatement corrects an overstatement of share based compensation due to an incorrect vesting period.

The correction reduced

the share based compensation expense from $23,073,745 to $17,397,774 and the corresponding net loss from $38,002,012 to $32,326,016 for

the quarter ended March 31, 2025.

Investment and Joint Venture

In June 2025, the Company (through a soon to be formed entity – Nuromena Holdings Ltd.

“NuroMena”) entered into a letter of intent to form an investment and joint venture agreement with a Middle-East investor (“Investor”), Quazar Investments.

At the formation date, the Company would own 10 million shares of NuroMena and contribute a license to its technology to NuroMena, and the Investor will purchase 2.5 million shares of NuroMena for a subscription price of $400,000 (“Initial Investment”).

Following the formation of the entity and closing of the Initial Investment, the Investor shall source one or more future investors to purchase up to $50.0 million at $25/share in common stock of the Company, of which 70% of the proceeds will be maintained by the Company and 30% will be transferred to an operating entity to be formed under NuroMena, to conduct clinical trials in the middle-east markets.

As of August 13, 2025, the entity has not yet been formed, and therefore the Initial Investment has not yet occurred.

Since its inception, we have

incurred significant operating losses.

Our net loss was $5,680,170 and $4,522,006, for the three months ended June 30, 2025 and

2024, respectively, and $38,006,186 and $7,460,982 for the six months ended June 30, 2025 and 2024, respectively.

We had an accumulated

deficit of $88,614,631 at June 30, 2025.

We expect to continue to incur significant and increasing expenses and operating losses

for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture

drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual

property portfolio, hire additional research and development and business personnel and operate as a public company.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates.

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The report of our independent registered public accounting firm on our financial statements as of and for the year ended December 31, 2024 included an explanatory paragraph indicating that there was substantial doubt about our ability to continue as a going concern.

See Note 1 to our l financial statements for additional information on our assessment.

See Note 1 to our financial statements for additional information on our assessment.

Components of Results of Operations

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Amortization on deferred offering costs resulted from the issuance of common stock in connection with a private equity agreement

Comparison of the three months ended March 31, 2025 and 2024:

Comparison of the three and six months ended June 30, 2025 and 2024:

Results of Operations

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Three Months Ended

Cost of Revenues

Operating Expenses:

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Share based compensation

License expense

Total Operating Expenses

Loss From Operations

Other expense:

Other Income (Expense):

Interest income

Amortization on debt issuance

Interest expense

Amortization on debt issuance and deferred offering costs

Other income, net

Interest expense - related parties

Loss on extinguishment of Bridge loan - related party

$ (5,680,170 )

$ (4,522,006 )

Revenue was generated for fees for a “right to try” humanitarian program during 2025 and 2024.

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The following table summarizes the components of our research and development expenses for the periods presented:

Three Months Ended

Research and development costs by project:

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Total research and development expense

Research and development expenses were $998,222 and $614,517 for the three months ended March 31, 2025 and 2024, respectively.

A portion of these expenses amounting to approximately $84,912 and $72,710 for the three months ended March 31, 2025 and 2024, respectively are from the University of Southern California (USC), where Dr.

Research and development expenses were $677,332 and $394,484 for the three months ended June 30, 2025 and 2024, respectively.

A portion of these expenses amounting to approximately $145,588 and $165 for the three months ended June 30, 2025 and 2024, respectively, are from the University of Southern California (USC), where Dr.

Chen is a member of the faculty.

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Legal and Professional Expenses

Legal and professional expenses were $957,545 and $564,354 for the three months ended March 31, 2025 and 2024, respectively.

and professional expenses were $520,364 and $590,984 for the three months ended June 30, 2025 and 2024, respectively.

decrease of $70,820 was primarily due to the completion of the direct listing process which occurred in the first quarter of

General and Administrative Expenses

General and administrative expenses were $984,262 and $289,652 for the three months ended June 30, 2025 and 2024, respectively.

The increase of $694,610 was primary due to a marketing campaign, rent and travel expenses and expense incurred in pursuit of the Middle East deal for which a letter of intent was executed subsequent to June 30, 2025.

Share Based Compensation

Share based compensation resulted from the granting of RSUs and is the recognition of the expense from the grant date (which included a catch up period from the original date of issuance of the RSU’s through the Listing Date, due to the removal of the contingency which occurred on the Listing Date) during the three months June 30, 2025.

Interest Expense

Interest expense was $48,750 and $1,171,963 for the three months ended June 30, 2025 and 2024, respectively.

The interest for the three months ended June 30, 2025 relates primarily to the accrued interest for a litigation matter.

The OID interest for the three months ended June 30, 2024 relates to the OID for the related party bridge loan that was converted into common stock in June of 2024.

Interest Income

Interest income was $28,725 and $0 for the three months ended June 30, 2025 and 2024, respectively.

The interest income for the three months ended June 30, 2025, relates primarily interest earned on the money market account.

Loss on Extinguishment of Bridge Loan – related part

Loss on Extinguishment of Bridge Loan – related party was $0 and $2,069,923 for the three months ended June 30, 2025 and 2024, respectively.

The loss is related to the loan being converted into common stock in June 2024.

Amortization of Debt Issuance and Deferred Offering Costs

The amortization of debt issuance costs was approximately $192,000 and $0 for the three months ended June 30, 2025 and 2024, respectively.

This represents the amortization of the debt issuance costs associated with the warrants issued for the HCWG line of credit, and offering costs relating to the Mast Hill agreement.

The following table summarizes our results of operations for the periods presented:

Six Months Ended

Cost of Revenues

Operating Expenses:

Research and development

Legal and professional

General and administrative

Share based compensation

License expense

Advisory fees

Total Operating Expenses

Loss From Operations

(37,608,876 )

(34,777,273 )

Other Income (Expense):

Interest income

Amortization on debt issuance and deferred offering costs

Other income, net

Interest expense

Loss on extinguishment of Bridge loan - related party

$ (38,006,186 )

$ (7,460,982 )

$ (30,545,204 )

Revenue was generated for fees for a “right to try” humanitarian program during 2025 and 2024.

Research and Development Expenses

The following table summarizes the components of our research and development expenses for the periods presented:

Six Months Ended

Research and development costs by project:

Six Months Ended

Clinical trial expense

Research and laboratory

Total research and development expense

Research and development expenses were $1,675,554 and $1,009,000 for the six months ended June 30, 2025 and 2024, respectively.

A portion of these expenses amounting to approximately $230,500 and $165 for the six months ended June 30, 2025 and 2024, respectively, are from the University of Southern California (USC), where Dr.

Chen is a member of the faculty.

The total increase of $666,553 was primarily due to:

The addition of clinical trial sites for NEO100’s clinical trial.

The recruitment for NEO212.

The start of the clinical trial for NEO100-03for a Pediatric Indication.

Increased patient recruitment efforts.

Legal and Professional Expenses

Legal and professional expenses were $1,477,909 and $1,155,338 for the six months ended June 30, 2025 and 2024, respectively.

The increase of 322,571 was primarily due to completion of the direct listing process.

General and Administrative Expenses

General and administrative expenses were $849,485 and $415,612 for the three months ended March 31, 2025 and 2024, respectively.

General and administrative expenses were $1,833,747 and $705,264 for the six months ended June 30, 2025 and 2024, respectively.

The increase of $1,128,483 was primary due to a marketing campaign, rent and travel expenses.

Share Based Compensation

Share based compensation resulted from the granting of RSUs and is the recognition of the expense from the grant date to March 31, 2025.

The advisory fee was earned on the Listing Date March 26, 2025.

Interest Expense

Interest expense was $308,922 and $1,387,493 for the three months ended March 31, 2025 and 2024, respectively.

The interest for the three months ended March 31, 2025 relates to the short-term loan in March from a related party in the amount of $301,422 and $7,500 accrued interest for a litigation matter.

The OID interest for the three months ended March 31, 2024 relates to the OID for the related party bridge loan that was converted into common stock in June of 2024.

Amortization of Debt Issuance Costs

The debt issuance costs were $167,951 and $0 for the three months ended March 31, 2025 and 2024, respectively.

This represents the amortization of the warrants issued for the HCWG line of credit.

Interest expense was $357,672 and $2,559,456 for the six months ended June 30, 2025 and 2024, respectively.

The interest for the six months ended June 30, 2025 relates to the short-term loan in March from a related party in the amount of $300,000 and $56,250 interest for a litigation matter.

The OID interest for the six months ended June 30, 2024 relates to the OID for the related party bridge loan that was converted into common stock in June of 2024.

Amortization of Debt Issuance and Deferred Offering Costs

The amortization of debt issuance costs were $360,200 and $0 for the six months ended June 30, 2025 and 2024, respectively.

This represents the amortization of the warrants issued for the HCWG line of credit and deferred offering costs relating to the Mast Hill agreement.

The following table summarizes our cash flow for the periods indicated:

three months ended

Six Months Ended

Net cash provided by (used in):

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Operating Activities

During the three months ended March 31, 2025, net cash used in operating activities was $5,650,055 consisting primarily of our net loss of $38,001,987, offset by share based compensation of $23,073,745, accretion of original issue discount of $300,000, amortization of costs of $577,192, the accrued advisory fee of $8,828,565 and increases in accounts payable in the amount of $628,276.

These were offset by decreases in accrued compensation in the amount of $290,108, and prepaid expenses in the amount of $765,738.

During the three months ended March 31, 2024, net cash used in operating activities was $145,748 consisting primarily of our net loss of $2,938,976 less the non-cash charge of the accretion of the original issue discount on the bridge loan in the amount $1,387,493, increase in the bridge loan – expenses paid by the bridge loan provider on behalf of the Company of $476,393 and an offset by an increase in accounts payable of $1,001,066.

During the six months ended

June 30, 2025, net cash used in operating activities was $10,964,226 consisting primarily of our net loss of $38,006,186, offset

by share based compensation of $20,923,850, accretion of original issue discount of $300,000, amortization of costs of $769,441 and the

accrued advisory fee of $5,882,710.

These were offset by decreases in accrued compensation in the amount of $479,775, and prepaid expenses

in the amount of $350,134.

During the six months ended June 30, 2024, net cash used in operating activities was $172,456 consisting primarily of our net loss of $7,460,982 less the non-cash charge of the accretion of the original issue discount on the bridge loan in the amount $2,558,241, less the non-cash charge for the loss on extinguishment of convertible debt of $2,069,923 and an increase in accounts payable of $1,551,272.

Financing Activities

During the three months ended

March 31, 2025, cash provided by financing activities was $11,024,372 consisting primarily of the sale of common stock of $11,644,005

offset by offering costs in the amount of $319,533, resulting in net offering costs of $11,324,372 and the repayment of related party

loan of $600,000.

During the three months March 31, 2024, cash used in financing activities was $172,595 consisting primarily of

proceeds from related party loans, offset by repayment of the same related parties loans and the decrease in deferred offering costs.

During the six months ended June 30, 2025, cash provided by financing activities was $11,024,372 consisting primarily of the sale of common stock of $11,324,372, receipt of $300,000 from a related party loan and the repayment of related party loan of $600,000.

During the six months ended June 30, 2024, cash used in financing activities was $1,673,148, consisting primarily of proceeds from the sale of common stock of $1,702,658.

Liquidity and Capital Resources

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Since our inception, we have funded our operations through the sale and issuance of preferred and common stock and debt financing rounds from related and third parties.

In March 2025 prior to

our direct listing we issued 625,000 shares of common stock in a private placement at a price of $16.00 per share for gross proceeds of

approximately $10,000,000.

In March 2025 after our direct listing we issued 102,750 shares of common stock in a private placement

at a price of $16.00 per share for gross proceeds of approximately $1,644,000.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Since our inception, we have not generated any revenue from product sales or any other sources, except humanitarian use, and we have incurred significant operating losses.

We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever.

As reflected in the accompanying consolidated financial statements, we have incurred recurring net losses since our inception.

For the three months ended March 31, 2025, the Company incurred a net loss of $38,001,987 and has an accumulated deficit of $88,610,432 at March 31, 2025.

At March 31, 2025, the Company had cash totalling $5,439,210.

These factors raise substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our strategies, such as executing additional licensing contracts.

The consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

In March 2025 prior to our direct listing we issued 625,000 shares of common stock in a private placement at a price of $16.00 per share for gross proceeds of approximately $10,000,000.

In March 2025 after our direct listing we issued 102,750 shares of common stock in a private placement at a price of $16.00 per share for gross proceeds of approximately $1,644,000.

No shares of common stock were issued in the quarter ending June 30, 2025.

The accompanying consolidated

financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of

liabilities and commitments in the normal course of business.

Since our inception, we have not generated any revenue from product sales

or any other sources, except humanitarian use, and we have incurred significant operating losses.

We have not yet commercialized any

products, and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever.

in the accompanying consolidated financial statements, we have incurred recurring net losses since our inception.

For the three and six

months ended June 30, 2025, the Company incurred a net loss of $5,680,170 and $38,006,186, respectively, and had an accumulated

deficit of $88,614,631 at June 30, 2025.

At June 30, 2025, the Company had cash totaling $125,039.

These factors raise substantial

doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our ability to raise

additional funds and implement our strategies, such as executing additional licensing contracts.

The consolidated financial statements

do not include any adjustments that might be necessary if we are unable to continue as a going concern.

The ability to continue as a going concern is dependent on us raising additional capital and attaining and maintaining profitable operations in the future to meet our obligations and repay our liabilities arising from normal business operations when they come due.

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We expect to finance our operations over the next 12 months primarily through existing cash balances and the proceeds from the aforementioned private placements and supplemented as necessary by funds available through our Line of Credit Agreement with HCWG and sales under the Equity Purchase Agreement, each as described below.

Line of Credit Agreement

On October 11, 2024, we entered into a Line of Credit Agreement with HCWG for borrowings of up to $10.0 million.

Borrowings under the Line of Credit Agreement bear interest at 10.0% per annum with interest payments due on the first business day of each calendar month, with unpaid principal due by October 12, 2027.

This agreement may be extended by mutual agreement for a three year period and in the event of an extension of the maturity date the interest rate will increase to 14%.

In connection therewith, we issued HCWG a five-year warrant to purchase up to 312,500 shares of our common stock at a per share exercise price of $12.00.

Equity Purchase Agreement

On October 22, 2024, we entered into an equity purchase agreement (the “Equity Purchase Agreement”) and related registration rights agreement (the “ELOC RRA”) with Mast Hill Fund, LP (“Mast Hill”) pursuant to which the Company may sell and issue to the investor, and the investor may purchase from the Company, up to $50,000,000 of Company’s common shares.

Under the Equity Purchase Agreement, the Company has the right, but not the obligation, to direct Mast Hill, by its delivery to the Mast Hill of a Put Notice from time to time, to purchase Put Shares (i) in a minimum amount not less than $50,000.00 and (ii) in a maximum amount up to the lesser of (a) $750,000.00 or (b) 150% of the average trading volume of the Company’s common stock during the five trading days immediately preceding the Put Date.

The actual amount of proceeds we receive pursuant to each Put Notice (each, the “Put Amount”) is determined by multiplying the Put Amount requested by the applicable purchase price.

The purchase price for each of the Put Shares equals 95% of the “Market Price,” less the Clearing Costs.

Market Price is the lowest volume weighted average prices of the Company’s common shares on its principal market on any trading day during the Valuation Period.

The Valuation Period is the five trading days immediately following the date on which Mast Hill receives the Put Shares in its brokerage account.

Clearing Costs are all the fees incurred by Mast Hill with respect to its brokerage firm, clearing firm, Company transfer agent fees, and attorney fees, with respect to the Put Shares.

Because the purchase price per share to be paid by Mast Hill for the common shares that the Company may elect to sell to Mast Hill under the Equity Purchase Agreement, if any, will fluctuate based on the market prices of common shares prior to each sale made pursuant to the Equity Purchase Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and prior to any such sales, the number of common shares that we will sell to Mast Hill under the Equity Purchase Agreement, the purchase price per share that Mast Hill will pay for shares purchased from us under the Equity Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by Mast Hill under the Equity Purchase Agreement, if any.

Pursuant to the Equity Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to Mast Hill.

If and when we do elect to sell shares of our common shares to Mast Hill pursuant to the Equity Purchase Agreement, after it has acquired such shares, Mast Hill may resell all, some or none of such shares at any time or from time to time in its discretion and at different prices.

As a result, the other investors who purchase shares from Mast Hill in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results.

The term of the Equity Purchase Agreement commenced on March 25, 2025 and will terminate on the earlier of (i) the date on which the Mast Hill shall have purchased Put Shares equal to the $50,000,000, (ii) twenty-four (24) months after the date of the Equity Purchase Agreement, (iii) written notice of termination by the Company to Mast Hill, (iv) the registration statement registering the Put Shares is no longer effective after the initial effective date of such registration statement, or (v) the date that, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a receiver, trustee, assignee, liquidator or similar official is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors.

We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.

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our ability to establish and maintain collaborations on favorable terms, if at all;

the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

achievement of milestones or the occurrence of other developments that trigger payments under any license or collaboration

agreements we might have at such time;

the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

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If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Advances – Executive Chairman of the Board

In February 2025, our Executive Chairman advanced the Company approximately $300,000.

The advances carry a 50% (or 1 times amounts borrowed) original issue discount (“OID”) on the principal.

In the event of default, interest is payable at on any unpaid balance at a rate of 10% per annum.

In March 2025, further to the terms of such advance, the Executive Chairman was paid a total of $600,000 upon repayment of such advances, including OID.

Critical Accounting Estimates

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis