What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-15 · 189 added, 51 removed, 200 unchanged (55% of the section changed)

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NEO100 is administered to patients via intranasal delivery.

We have completed human safety testing in a Phase 1 clinical trial and are currently conducting preliminary efficacy testing in a Phase 2a trial with recurrent malignant glioma (Grade IV IDH1 mutant and Grade III Astrocytoma IDH1 mutant) patients.

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 harbouring primary and secondary malignant brain cancer types.

We have completed human safety testing in a Phase 1 clinical trial and have completed patient enrollment in, and the collection of clinical data from, our Phase 2a trial in patients with recurrent malignant glioma (Grade IV IDH1 mutant and Grade III Astrocytoma IDH1 mutant).

Based on the data generated to date, we intend to meet with the FDA to discuss the design of a potential Phase 3 clinical trial of NEO100.

NeOnc is also developing a second product candidate, NEO212, which has completed preclinical testing and, following the filing and acceptance of an investigational new drug (IND) application with the United States Food and Drug Administration (FDA), has completed its Phase 1 clinical trial in patients harboring primary and secondary malignant brain cancer types.

We have met with the FDA regarding the NEO212 program, and the FDA provided chemistry, manufacturing and controls (CMC) clearance to advance NEO212 into a Phase 2 clinical trial and indicated that the NEO212 program may proceed under the FDA’s accelerated approval pathway.

We have since modified the design of the planned Phase 2 trial to focus on recurrent IDH1 wildtype glioblastoma multiforme (GBM).

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

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The Patent covers proprietary technologies combining 3D bioprinting, artificial intelligence, and quantum modeling that are designed to enable the creation of patient-derived three-dimensional brain tumor models for high-throughput preclinical drug screening.

Liquidity and Going Concern

Since our inception, we have incurred significant operating losses.

Our net loss was $8,819,932 and $32,326,016 for the three months ended March 31, 2026 and 2025, respectively.

We had an accumulated deficit of $121,574,587 as of March 31, 2026, compared to $112,754,655 as of December 31, 2025.

For the three and six months ended June 30, 2026, the Company incurred a net loss of $14,240,044 and $23,059,976, respectively.

We had an accumulated deficit of $135,814,631 as of June 30, 2026, compared to $112,754,655 as of December 31, 2025.

We expect to continue to incur 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.

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In addition, if we obtain regulatory approval for our product candidates and do not enter a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

We have concluded that there is substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

These factors raise substantial

doubt regarding the Company’s ability to continue as a going concern one year from the issuance date of this Form 10-Q.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company is actively taking

steps to mitigate the substantial doubt about the Company’s ability to continue as a going concern, including pursuing additional

If the Company is unable to obtain additional capital and continue as a going concern, it may have to further scale back operations

or liquidate its assets and cease operations entirely, and the values received for assets in liquidation or dissolution could be significantly

lower than the values reflected in these financial statements.

Accordingly, these financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

Components of Results of Operations

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costs related to compliance with clinical regulatory requirements;

license fees and milestone payments made pursuant to license and collaboration agreements;

facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

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Gain (loss) on change in fair value of derivative liability relates to the fair value of the discount offered to stockholders who purchased shares under the equity line of credit.

Comparison of the three months ended March 31, 2026 and 2025:

Comparison of the three months ended June 30, 2026 and 2025:

Results of Operations

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Other income (expense)

Gain on change in fair value of derivative liability

No revenue was generated for fees for a “right to try” humanitarian program during the three months ended March 31, 2026.

Revenue of $39,990 was generated during the three months ended March 31, 2025 from fees related to a “right to try” humanitarian program.

Loss on change in fair value of derivative liability related to Series A preferred stock

No revenue was generated for fees for a “right to try” humanitarian program during the three months ended June 30, 2026 and June 30, 2025.

Research and Development Expenses

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Total research and development expense

Research and development expenses were $1,286,336 and $998,222 for the three months ended March 31, 2026 and 2025, respectively.

A portion of these expenses amounting to approximately $38,409 and $103,224 for the three months ended March 31, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr.

Research and development expenses were $2,649,673 and $677,332 for the three months ended June 30, 2026 and 2025, respectively.

A portion of these expenses amounting to approximately $0 and $82,225 for the three months ended June 30, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr.

Chen is a member of the faculty.

The total increase of $1,972,341 was primarily due to:

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

The addition of clinical trial sites for NEO100 and NEO212 clinical trials.

The increased drug product manufacturing activity to support ongoing and planned clinical trials.

The recruitment for NEO212.

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Increased patient recruitment efforts.

Data lockdown and analysis activities associated with the NEO100 clinical trial.

Costs associated with designing the Phase 2a trial for NEO212, including meetings and correspondence with the U.S.

Food and Drug Administration (“FDA”) regarding the program’s clinical development pathway.

Legal and Professional Expenses

Legal and professional expenses were $1,188,220 and $957,545 for the three months ended March 31, 2026 and 2025, respectively.

The increase of $230,675 was primarily attributable to investment banking fees and incremental legal and audit fees incurred in connection with the preparation and filing of our Annual Report on Form 10-K for the year ended December 31, 2025, our Registration Statement on Form S-3, and related prospectus supplement.

Legal and professional expenses were $1,286,167 and $520,364 for the three months ended June 30, 2026 and 2025, respectively.

The increase of $765,803 was primarily attributable to investment banking associated with the Company’s capital raising activities, incremental legal fees associated with the Second Addendum to the Company’s advisory agreement with AFH Holding & Advisory, LLC, the Series A Convertible Preferred Stock issuance, and other corporate and securities matters, and increased audit fees associated with the Company’s expanded reporting requirements as a public company.

General and Administrative Expenses

General and administrative expenses were $488,709 and $849,485 for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $360,776 was primarily driven by a reduction in marketing and advertising expense in connection with the direct public listing, as well as a reduction of rent, travel, and other costs incurred in Q1 2025 in pursuit of the Middle East deal.

General and administrative expenses were $895,559 and $984,262 for the three months ended June 30, 2026 and 2025, respectively.

The decrease of $88,703 was primarily due to a reduction in D&O insurance premiums, as well as a reduction in advertising, marketing, and travel expenses incurred during the three months ended June 30, 2025 in connection with a marketing campaign and in pursuit of a strategic partnership in the Middle East, for which a letter of intent was executed subsequent to June 30, 2025.

This decrease was partially offset by an increase in business development costs during the three months ended June 30, 2026.

Stock Based Compensation

Stock-based compensation expense, which is a non-cash expense, for the three months ended March 31, 2026 resulted from the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods.

Stock-based compensation expense for the three months ended March 31, 2025 included the recognition of expense from the original grant dates of certain restricted stock through the Listing Date that occurred on March 26, 2025, reflecting a cumulative catch-up upon removal of the listing contingency, in addition to amortization of the grant date fair value of those shares of restricted stock over their respective service periods following the Listing Date.

Stock-based compensation expense, which is a non-cash expense, for the three months ended June 30, 2026 primarily resulted from the acceleration of vesting of certain outstanding restricted stock awards approved by the Board of Directors in April 2026, which resulted in the recognition of previously unrecognized compensation expense associated with those awards, in addition to the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods for awards not subject to the acceleration.

Stock-based compensation expense for the three months ended June 30, 2025 included the recognition of expense from the original grant dates of certain restricted stock through the Listing Date that occurred on March 26, 2025, reflecting a cumulative catch-up upon removal of the listing contingency, in addition to amortization of the grant date fair value of those shares of restricted stock over their respective service periods following the Listing Date.

Since stock-based compensation is a non-cash item, it does not affect our cash position or our cash used in operating activities.

Advisory fee expense, primarily to a related party, was $1,360,000 and $11,737,806 for the three months ended March 31, 2026 and 2025, respectively.

Advisory fee expense for the three months ended March 31, 2026 consisted of fees incurred for advisory services related to our capital financing arrangements pursuant to a letter of intent with AFH (see Note 4).

Advisory fee expense for the three months ended March 31, 2025 was substantially comprised of the $11,328,565 fee earned upon the Listing Date on March 26, 2025 in accordance with the AFH advisory agreement.

2026, the Company’s Board of Directors approved the acceleration of vesting for certain outstanding unvested shares of restricted

stock previously granted to employees, directors, and scientific advisory board members, such that 734,356 shares that would otherwise

have vested on their original vesting schedules vested immediately on April 30, 2026.

The accelerated shares related to awards originally

granted on July 12, 2024, June 5, 2025, September 25, 2025, and November 6, 2025.

The acceleration was accounted for as a modification

under ASC 718-20.

Based on the $4.30 closing stock price on April 30, 2026, the Company recognized stock-based compensation expense of

$4,781,116 related to the accelerated shares during the three and six months ended June 30, 2026, representing the previously unrecognized

compensation cost associated with the original awards that was accelerated into the period.

Advisory fee expense, a related party, was $3,586,575 and $0 for the three months ended June 30, 2026 and 2025, respectively.

Advisory fee expense for the three months ended June 30, 2026 consisted of fees incurred for advisory services related to our capital financing arrangements pursuant to a letter of intent with AFH (see Note 4).

In addition, on June 11, 2026, the Company and AFH entered into a Second Addendum to the Letter of Intent and Advisory Services Agreement, which amends and clarifies the methodology for determining AFH’s annual advisory fee.

Under the Second Addendum, AFH is entitled to an annual advisory fee equal to 2.5% of the Company’s fully diluted market capitalization as of December 31 of each fiscal year.

As of June 30, 2026, the Company had an outstanding accrued advisory fee – related party balance of approximately $1,600,000 payable to AFH pursuant to the Second Addendum.

Interest and Other Income

Interest and income was $334 and $28,725 for the three months ended June 30, 2026 and 2025, respectively.

Interest and other income for the three months ended June 30, 2026 and 2025 related primarily to interest earned on our money market account.

Grant income was $482,778 and $0 for the three months ended June 30, 2026 and 2025, respectively.

Grant income for the three months ended June 30, 2026 related to the Company’s two Small Business Technology Transfer (“STTR”) grants from the National Institutes of Health (“NIH”), awarded in August 2025 and September 2025, respectively, pursuant to which the Company’s academic research collaborator at USC serves as subcontractor.

The Company recognizes grant income related to the whole portion of allowable costs as incurred and reimbursed by the NIH.

There was no comparable grant income during the three months ended June 30, 2025, as the grants were not awarded until the second half of 2025.

Amortization of Debt Issuance Costs

Amortization of debt issuance costs was $167,951 and $192,249 for the three months ended June 30, 2026 and 2025, respectively.

Amortization of debt issuance costs in both periods primarily reflected the ongoing amortization of debt issuance costs associated with the warrants issued in connection with the line of credit with HCWG.

Interest Expense

Interest expense was $982,624 and $308,922 for the three months ended March 31, 2026 and 2025, respectively.

Interest expense for the three months ended March 31, 2026 related to the short-term loan and accrued interest for a litigation matter.

Interest and other Grant Income

Interest and grant income was $52,319 and $51,699 for the three months ended March 31, 2026 and 2025, respectively.

Interest and other grant income for the three months ended March 31, 2026 related primarily to interest earned on our money market account and grant income pursuant to the two NIH grants which commenced in late 2025.

Interest and other income for the three months ended March 31, 2025 related primarily to interest earned on our money market account.

Interest expense was $234,370 and $48,750 for the three months ended June 30, 2026 and 2025, respectively.

The increase of $185,620 was primarily related to interest accrued on the Company’s unremitted restricted stock tax withholding obligations and accrued interest for a litigation matter.

Other Income (Expense)

Other expense was $189,627 and other income was $240,138 for the three months ended June 30, 2026 and 2025, respectively.

Other expense for the three months ended June 30, 2026 consisted of penalties and interest accrued in connection with the unremitted income tax withholdings on shares of common stock that were withheld from recipients upon the vesting of shares of restricted stock to satisfy the recipients’ tax obligations.

As of June 30, 2026, the Company had not remitted such withholding taxes to the applicable taxing authorities, and accordingly the Company has accrued penalties and interest, which is included within accrued expenses in the condensed consolidated balance sheets.

Loss on change in fair value of derivative liability related to Series A preferred stock

Loss on change in fair value of derivative liability related to Series A Preferred Stock was $61,321 and $0 for the three months ended June 30, 2026 and 2025, respectively.

In connection with the issuance of the Company’s Series A Convertible Preferred Stock during the three months ended June 30, 2026, the Company bifurcated an embedded variable-rate conversion feature as a derivative liability, which is remeasured to fair value at each reporting period using a Monte Carlo simulation model, with changes in fair value recognized in the condensed consolidated statements of operations.

The loss recognized during the three months ended June 30, 2026 reflects the change in fair value of the derivative liability between the issuance date and June 30, 2026 (see Note 8).

There was no comparable activity during the three months ended June 30, 2025, as the Series A Preferred Stock was not issued until the current period.

Comparison of the six months ended June 30, 2026 and 2025:

Results of Operations

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

Six Months Ended

Operating Expenses:

Research and development

Legal and professional

General and administrative

Stock based compensation

Total Operating Expenses

Loss From Operations

Other Income (Expense):

Interest and other income

Amortization expense

Interest expense - related parties

Other income (expense)

Loss on change in fair value of derivative liability related to Series A preferred stock

Loss on change in fair value of derivative liability related to sales of common stock through equity line of credit

revenue was generated for fees for a “right to try” humanitarian program during the six months ended June 30, 2026

and June 30, 2025.

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 $3,936,009 and $1,635,564 for the six months ended June 30, 2026 and 2025, respectively.

A portion of these expenses amounting to approximately $38,409 and $184,449 for the six months ended June 30, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr.

Chen is a member of the faculty.

The total increase of $2,300,445 was primarily due to:

The addition of clinical trial sites for NEO100 and NEO212 clinical trials.

The increased drug product manufacturing activity to support ongoing and planned clinical trials.

The recruitment for NEO212.

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

Increased patient recruitment efforts.

Data lockdown and analysis activities associated with the NEO100-01 clinical trial.

Costs associated with designing the Phase 2a trial for NEO212, including meetings and correspondence with the U.S.

Food and Drug Administration (“FDA”) regarding the program’s clinical development pathway.

Legal and Professional Expenses

Legal and professional expenses were $2,474,387 and $1,477,909 for the six months ended June 30, 2026 and 2025, respectively.

The increase of $996,478 was primarily attributable to investment banking and advisory fees associated with the Company’s capital raising activities.

Additionally, the increase reflected incremental legal fees associated with the preparation and filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, its Registration Statement on Form S-3 and related prospectus supplement, the Second Addendum to the Company’s advisory agreement with AFH Holding & Advisory, LLC, the Series A Convertible Preferred Stock issuance, and other corporate and securities matters, as well as increased audit fees associated with the Company’s expanded reporting requirements as a public company.

General and Administrative Expenses

General and administrative expenses were $1,384,267 and $1,833,747 for the six months ended June 30, 2026 and 2025, respectively.

The decrease of $449,480 was primarily due to a reduction in advertising and marketing expense in connection with the Company’s direct public listing, a reduction in D&O insurance premiums, and a reduction in rent, travel, and other costs incurred during the six months ended June 30, 2025 in connection with a marketing campaign and in pursuit of a strategic partnership in the Middle East.

This decrease was partially offset by an increase in business development and travel costs during the six months ended June 30, 2026.

Stock Based Compensation

Stock-based compensation expense, which is a non-cash expense, for the six months ended June 30, 2026 primarily resulted from the acceleration of vesting of certain outstanding restricted stock awards approved by the Board of Directors in April 2026, which resulted in the recognition of previously unrecognized compensation expense associated with those awards, in addition to the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods for awards not subject to the acceleration.

Stock-based compensation expense for the six months ended June 30, 2025 included the recognition of expense from the original grant dates of certain restricted stock through the Listing Date that occurred on March 26, 2025, reflecting a cumulative catch-up upon removal of the listing contingency, in addition to amortization of the grant date fair value of those shares of restricted stock over their respective service periods following the Listing Date.

Since stock-based compensation is a non-cash item, it does not affect our cash position or our cash used in operating activities.

Advisory fee expense, primarily to a related party, was $4,946,575 and $11,737,806 for the six months ended June 30, 2026 and 2025, respectively.

Advisory fee expense for the six months ended June 30, 2026 consisted of fees incurred for advisory services related to our capital financing arrangements pursuant to a letter of intent with AFH (see Note 4).

Under the Second Addendum, effective retroactively to January 1, 2025, AFH is entitled to an annual advisory fee equal to 2.5% of the Company’s fully diluted market capitalization as of December 31 of each fiscal year.

As of June 30, 2026, the Company had an outstanding accrued advisory fee – related party balance of approximately $1,600,000 payable to AFH pursuant to the Second Addendum.

Advisory fee expense for the six months ended June 30, 2025 was substantially comprised of the $11,328,565 fee earned upon the Listing Date on March 26, 2025 in accordance with the AFH advisory agreement then in effect.

Interest and Other Income

Interest and income was $5,530 and $80,424 for the six months ended June 30, 2026 and 2025, respectively.

Interest and other income for the six months ended June 30, 2026 and 2025 related primarily to interest earned in our money market account.

Grant income was $529,901 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Grant income for the six months ended June 30, 2026 related to the Company’s two Small Business Technology Transfer (“STTR”) grants from the National Institutes of Health (“NIH”), awarded in August 2025 and September 2025, respectively, pursuant to which the Company’s academic research collaborator at USC serves as subcontractor.

The Company recognizes grant income related to the whole portion of allowable costs as incurred and reimbursed by the NIH.

There was no comparable grant income during the six months ended June 30, 2025, as the grants were not awarded until the second half of 2025.

Amortization of Debt Issuance Costs

Amortization of debt issuance costs was $192,165 and $167,951 for the three months ended March 31, 2026 and 2025, respectively.

Amortization of debt issuance costs in both periods primarily reflected the ongoing amortization of debt issuance costs associated with (i) the warrants issued in connection with the line of credit with HCWG and (ii) the offering costs related to the equity purchase agreement with Mast Hill Fund, LP.

Amortization of debt issuance costs was $360,116 and $360,200 for the six months ended June 30, 2026 and 2025, respectively.

Interest Expense

Interest expense was $1,216,994 and $357,672 for the six months ended June 30, 2026 and 2025, respectively.

The increase of $859,322 was primarily related to the short-term OID loan (see Note 6), interest accrued on the Company’s unremitted restricted stock tax withholding obligations, and accrued interest for a litigation matter.

Other Income (Expense)

Other expense was $834,228 and other income was $240,138 for the six months ended June 30, 2026 and 2025, respectively.

Other expense for the six months ended June 30, 2026 consisted of penalties and interest accrued in connection with the unremitted income tax withholdings on shares of common stock that were withheld from recipients upon the vesting of restricted stock to satisfy the recipients’ tax obligations.

Loss on change in fair value of derivative liability related to Series A preferred stock

Loss on change in fair value of derivative liability related to Series A Preferred Stock was $61,321 and $0 for the six months ended June 30, 2026 and 2025, respectively.

The loss recognized during the three months ended June 30, 2026 reflects the change in fair value of the derivative liability between the issuance date and June 30, 2026 (see Note 8).

There was no comparable activity during the six months ended June 30, 2025, as the Series A Preferred Stock was not issued until the current period.

Gain on Change in Fair Value of Derivative Liability

Gain on change in fair value of derivative liability was $2,801 and $0 for the three months ended March 31, 2026 and 2025, respectively.

Gain on change in fair value of derivative liability was $2,801 and $0 for the six months ended June 30, 2026 and 2025, respectively.

The derivative liability is created from the settlement feature embedded in the Company’s equity line of credit agreement with Mast Hill Fund, LP.

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The gain represents the change in fair value of this derivative liability from each draw under the agreement through the corresponding settlement date.

There were no draws under the equity purchase agreement during the three months ended March 31, 2025, and no related loss was recognized in that period.

Other Income (Expense)

Other expense was $644,601 and $0 for the three months ended March 31, 2026 and 2025, respectively.

Other expense for the three months ended March 31, 2026 consisted of penalties and interest accrued in connection with the unremitted income tax withholdings on shares of common stock that were withheld from recipients upon the vesting of shares of restricted stock to satisfy the recipients’ tax obligations.

As of March 31, 2026, the Company had not remitted such withholding taxes to the applicable taxing authorities, and accordingly the Company has accrued penalties and interest, which is included within accrued expenses in the condensed consolidated balance sheets.

There were no draws under the equity purchase agreement during the six months ended June 30, 2025, and no related loss was recognized in that period.

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, 2026, net cash used in operating activities was $6,991,773 consisting primarily of our net loss of $8,819,932, offset by stock based compensation of $2,732,397, accretion of original issue discount on the convertible promissory notes of $714,600, amortization of debt issuance of $192,165, amortization of right of use asset of $20,406, amortization of intangible asset of $11,574, and increase in accrued expense of $1,437,582.

These were offset by decreases in accrued advisory fee of $1,757,141, accounts payable of $390,550, accounts payable and accrued expenses - related parties of $463,513, and lease liability of $15,760, an increase in prepaid expenses of $650,800, and a gain on change in fair value of derivative liability of $2,801.

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 $32,326,016, offset by stock based compensation of $17,397,774, accretion of original issue discount on related-party advances of $300,000, amortization of debt issuance costs of $577,192, increase in accrued advisory fee of $8,828,565, and increase in accounts payable – related parties of $628,276.

These were offset by an increase in prepaid expenses of $765,738 and a decrease in accrued compensation of $290,108.

the six months ended June 30, 2026, net cash used in operating activities was $11,756,954, consisting primarily of our net loss

of $23,059,976, offset by stock-based compensation of $8,384,311, accretion of original issue discount on the convertible promissory

notes of $714,600, amortization of debt issuance costs of $360,116, amortization of right of use asset of $38,996, amortization of intangible

asset of $18,519, transaction costs expensed on the issuance of Series A Convertible Preferred Stock of $127,478, loss on change in fair

value of derivative liability related to Series A Convertible Preferred Stock of $61,321, an increase in accrued expense of $2,261,282,

and an increase in accounts payable of $582,222.

These were offset by decreases in accrued advisory fee of $100,566, accounts payable

– related parties of $197,762, and lease liability of $33,596, an increase in prepaid expenses and other of $824,168, an increase

in deferred offering costs of $86,930, and a gain on change in fair value of derivative liability of $2,801.

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 stock-based compensation of $20,923,850, accretion of original issue discount on the bridge loan – related party of $300,000, amortization of debt issuance costs of $769,441, amortization of right of use asset of $18,153, an increase in accrued advisory fee of $5,882,710, and an increase in accounts payable – related parties of $45,350.

These were offset by an increase in prepaid expenses and other of $350,134, a decrease in other assets of $47,177, a decrease in accrued compensation of $479,775, and a decrease in lease liability of $20,458.

Financing Activities

During the three months ended March 31, 2026, cash provided by financing activities was $7,071,645 consisting primarily of proceeds from the issuance of common stock and warrants in connection with our PIPE financing of $13,071,783 and proceeds from the sales of common stock under the equity line of credit of $666,528, offset by the repayment of the OID convertible promissory notes of $6,666,667.

During the three months ended March 31, 2025, cash provided by financing activities was $11,024,372 consisting primarily of proceeds from the sale of common stock of $11,324,372 and proceeds from related party loans of $300,000, offset by repayment of related party loans of $600,000.

During the six months ended June 30, 2026, cash provided by financing activities was $13,671,645, consisting primarily of proceeds from the issuance of common stock and warrants in connection with our PIPE financing of $15,071,783, proceeds from the issuance of Series A Convertible Preferred Stock of $5,000,000, and proceeds from sales of common stock under the equity purchase agreement of $666,528, offset by the repayment of the OID loan of $6,666,667 and payment of issuance costs related to the Series A Convertible Preferred Stock of $400,000.

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

Liquidity and Capital Resources

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Our historical sources of liquidity, including the issuances of common stock under our private placements, sales under the Equity Purchase Agreement with Mast Hill Fund, LP, the line of credit with HCWG, and our convertible debt financings, are described in the “Liquidity and Capital Resources” section of our Annual Report on Form 10-K for the year ended December 31, 2025.

There have been no material changes to these arrangements during the three months ended March 31, 2026 except as described below.

There have been no material changes to these arrangements during the six months ended June 30, 2026 except as described below.

The accompanying condensed 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.

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

For the three months ended March 31, 2026, we incurred a net loss of $8,819,932, and we had an accumulated deficit of $121,574,587 at March 31, 2026.

At March 31, 2026, we had cash totaling $138,601.

For the six months ended June 30, 2026, we incurred a net loss of $23,059,976, and we had an accumulated deficit of $135,814,631 at June 30, 2026.

At June 30, 2026, we had cash totaling $1,973,420.

These factors raise substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

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In January 2026, the Company entered into the first of a series of related Securities Purchase Agreements providing for the issuance, in one or more closings, of up to an aggregate of 2,222,222 shares of common stock and warrants to purchase up to 2,222,222 shares of common stock at an exercise price of $9.00 per share, for aggregate gross proceeds of up to approximately $16,000,000.

During the three months ended March 31, 2026, we completed closings under three Securities Purchase Agreements for an aggregate of 1,815,528 shares of common stock and warrants to purchase 1,815,528 shares of common stock, resulting in gross proceeds of $13,071,808.

Subsequent to March 31, 2026, on April 20, 2026, we entered into a fourth Securities Purchase Agreement and completed an additional closing thereunder for an aggregate of 277,777 shares of common stock and warrants to purchase 277,777 shares of common stock, resulting in gross proceeds of approximately $2,000,000.

During the six months ended June 30, 2026, we completed closings under three Securities Purchase Agreements for an aggregate of 2,093,305 shares of common stock and warrants to purchase 2,093,305 shares of common stock, resulting in gross proceeds of $15,071,783.

The offering of securities under the PIPE Financing terminated on April 30, 2026.

In June 2026, the Company entered into a Securities Purchase Agreement providing for the issuance of shares of Series A Convertible Preferred Stock for aggregate gross proceeds of $5,000,000.

During the six months ended June 30, 2026, the Company completed the closing under the Securities Purchase Agreement, resulting in gross proceeds of $5,000,000 and net proceeds of approximately $4,600,000, after deducting issuance costs of $400,000.

See Note 8 to the condensed consolidated financial statements for additional information regarding the terms of the Series A Convertible Preferred Stock.

While the proceeds from the PIPE Financing and the Series A Convertible Preferred Stock financing have provided additional liquidity during the six months ended June 30, 2026, management does not believe these proceeds, together with the Company’s other available resources, are sufficient to fund operations for at least twelve months from the date of issuance of these financial statements, and substantial doubt about the Company’s ability to continue as a going concern therefore remains, as discussed above.

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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On October 11, 2024, the Company entered into a Line of Credit Agreement (“the Agreement”) with HCWG for borrowings of up to $10.0 million.

No amounts have been borrowed under the facility through December 31, 2025.

No amounts have been borrowed under the facility through June 30, 2026.

On October 22, 2024, we entered into an equity purchase agreement (the “Equity Purchase Agreement”) 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.

During the three months ended March 31, 2026, the Company sold 76,648 shares of common stock at prices ranging from $8.40 to $8.97 per share under the Equity Purchase Agreement, resulting in net proceeds of $663,727.

During the six months ended June 30, 2026, the Company sold 76,648 shares of common stock at prices ranging from $8.40 to $8.97 per share under the Equity Purchase Agreement, resulting in net proceeds of $663,727.

On April 2, 2026, the Company filed a shelf registration statement on Form S-3, pursuant to which the Company may offer and sell up to $300,000,000 of common stock, preferred stock, debt securities, warrants, and units, from time to time.

In connection with the Shelf Registration Statement, the Company entered into an At-the-Market Equity Offering Sales Agreement (the “ATM Agreement”) with BTIG, LLC and Alliance Global Partners, as sales agents, pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $75,000,000, subject to any applicable limits when using Form S-3.

During the six months ended June 30, 2026, the Company did not sell any shares of common stock under the ATM Agreement.

No assurance can be given that we will be able to draw upon such facilities if needed.

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If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We intend to finance our operations over the next 12 months primarily through existing cash balances and the proceeds from the funds available through our Line of Credit Agreement with HCWG and sales under the Equity Purchase Agreement, each as described above.

We intend to finance our operations over the next 12 months primarily through existing cash balances and the proceeds from the funds available through our Line of Credit Agreement with HCWG, sales under the Equity Purchase Agreement, and sales under the ATM Agreement, each as described above.

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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Changes in these assumptions, particularly expected volatility, expected term, and stock price, can materially affect the estimated fair value of our warrants and, for liability-classified warrants, our reported results of operations in any given period.

Series A Convertible Preferred Stock

We consider the accounting for our Series A Convertible Preferred Stock a critical accounting estimate.

Management exercised significant judgment in determining that the Series A Convertible Preferred Stock should be classified as permanent equity under ASC 480, and that the embedded variable-rate conversion feature should be bifurcated and separately accounted for as a derivative liability under ASC 815.

The derivative liability is initially recorded at fair value, with subsequent changes in fair value recognized in the condensed consolidated statements of operations at each reporting period.

The fair value of the derivative liability is estimated using a Monte Carlo Simulation model, which requires significant judgment in the selection of key inputs, including expected volatility, risk-free interest rate, the probability and timing of conversion events, and the fair value of our common stock.

Expected volatility is estimated based on the historical volatility of a peer group of guideline public companies, given our limited trading history as a public company.

Changes in these assumptions, particularly expected volatility, stock price, and the probability and timing of conversion, can materially affect the estimated fair value of the derivative liability and our reported results of operations in any given period.

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