What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-08-14 · 124 added, 146 removed, 269 unchanged (50% of the section changed)

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pharmaceutical company developing targeted radiotherapeutics with advanced platform technologies for central nervous system (“CNS”) cancers.

Our novel radioactive drug formulations and medical devices and therapeutic candidates are designed to deliver safe and effective doses of radiation to tumors.

Our novel radioactive drug formulations and medical device and therapeutic candidates are designed to deliver safe and effective doses of radiation to tumors.

To achieve this, we have developed innovative approaches to drug formulation, including encapsulating radionuclides such as rhenium isotopes with nanoliposomes and microspheres.

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Our acquired radiotherapeutic candidate, Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere (“ 188 RNL-BAM”), is designed to treat many solid organ cancers including primary and secondary liver cancers by intra-arterial injection.

On April 26, 2024, we acquired all of the right, title and interest in a cerebrospinal fluid cancer diagnostic portfolio known as the CNSide Platform from Biocept, Inc.

(“Biocept”), which is currently being utilized in the ReSPECT-LM clinical trial funded by the Cancer Prevention and Research Institute of Texas (“CPRIT”).

Our cerebrospinal fluid cancer diagnostic portfolio known as the CNSide Platform is currently being utilized in the ReSPECT-LM clinical trial funded by the Cancer Prevention and Research Institute of Texas (“CPRIT”).

In connection with our business plan for developing the CNSide Platform, we formed CNSide Diagnostics, LLC (“CNSide Diagnostics”), a wholly owned subsidiary of the Company, and our board of directors appointed a board of managers for CNSide Diagnostics.

We are planning for the CNSide Cerebrospinal Fluid Tumor Cell Enumeration test (the “CNSide Test”), which is a laboratory developed test (“LDT”), to be re-introduced to the U.S.

market starting in the second half of 2025 after we complete a number of steps related to certifications, state licensure, payor coverages, reimbursement codes and financing.

In March 2025, we moved our headquarters to Houston, Texas, in proximity to world-class cancer institutions and researchers.

market starting in the fourth quarter of 2025.

The laboratory for the CNSide Test in Houston, Texas has received a certificate of accreditation from the Centers for Medicare & Medicaid Services (CMS) which deems the lab compliant with Clinical Laboratory Improvement Amendments (“CLIA”) regulations.

Furthermore, CNSide Diagnostics has signed a national agreement with UnitedHealthcare Insurance Company, effective September 15, 2025, covering over 51 million people throughout the United States, to provide the CNSide Test.

Our headquarters is located in Houston, Texas, in proximity to world-class cancer institutions and researchers.

Our most advanced investigational drug, REYOBIQ, is a patented radiotherapy potentially useful for patients with CNS and other cancers.

We announced in March 2025 that the U.S.

Food and Drug Administration (“FDA”) conditionally accepted the proprietary

name REYOBIQ to be used by us for our proprietary rhenium ( 186 Re) obisbemeda.

Preclinical study data describing the use of REYOBIQ for several cancer targets have been published in peer-reviewed journals and reported at a variety of medical society peer-reviewed meetings.

Food and Drug Administration (“FDA”) conditionally accepted the proprietary name REYOBIQ to be used by us for our proprietary rhenium ( 186 Re) obisbemeda.

Preclinical study data describing the use of REYOBIQ

for several cancer targets have been published in peer-reviewed journals and reported at a variety of medical society peer-reviewed meetings.

Besides GBM, LM and PBC, REYOBIQ has been reported to have potential applications for head and neck cancer, ovarian cancer, breast cancer and peritoneal metastases.

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National Institutes of Health/National Cancer Institute which is expected to provide financial support for the continued clinical development of REYOBIQ for recurrent GBM through the completion of a Phase 2 clinical trial, including enrollment of up to 55 patients.

On August 29, 2022, we announced feedback from a Type C meeting with the FDA regarding Chemistry, Manufacturing and Controls practices.

The FDA indicated agreement with our proposed application of cGMP guidance for radiotherapeutics, small molecule drug products and liposome drug products for REYOBIQ in support of ongoing and future GBM clinical trials, manufacturing scale up, and commercialization.

Alignment with the FDA includes support of our proposed controls and release strategy for new drug substance and new drug product.

Because this product is identical for recurrent GBM, LM, and PBC, we believe alignment will be consistent for REYOBIQ used in other clinical development programs, including LM and PBC.

REYOBIQ versus External Beam Radiation Therapy for Recurrent GBM

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Because of this limitation, EBRT cannot provide a cure or long-term control of GBM and GBM always recurs within months after EBRT.

In contrast, locally delivered and targeted radiopharmaceuticals that precisely

deliver radiation in the form of beta particles such as Iodine-131 for thyroid cancer, are known to be safe and effective and minimize exposure to normal cells and tissues especially with optimal administered dose and minimizing exposure to normal tissue.

In contrast, locally delivered and targeted radiopharmaceuticals that precisely deliver radiation in the form of beta particles such as Iodine-131 for thyroid cancer, are known to be safe and effective and minimize exposure to normal cells and tissues especially with optimal administered dose and minimizing exposure to normal tissue.

The locally delivered REYOBIQ is designed for and provides patient tolerability and safety.

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The trial is funded through Phase 2 in large part by a National Institute of Health/National Cancer Institute grant.

On January 18, 2023, we announced that the first patient was dosed in Phase 2 of the ReSPECT-GBM Phase 1/2 trial evaluating REYOBIQ for the treatment of recurrent GBM.

Phase 2 of the trial is expected to enroll up to 34 total patients with small- to medium-sized tumors and is targeted for full enrollment by the end of 2025.

We currently have four clinical sites, and expect a data read-out by the end of 2025.

On September 30, 2024, we showcased new interim ReSPECT-GBM Phase 2 Trial Data at the 2024 Congress of Neurological Surgeons Annual Meeting that included the following findings as of that date:

• 42 total patients enrolled in ReSPECT-GBM trial at 3 sites, with 19 out of 42 patients having been treated at the recommended Phase 2 dose (22.3 mCi in 8.8 mL) in tumors of approximately 20 cm 3 or less.

• All Phase 2 patients have recurrent, histologically confirmed glioblastoma;

1 recurrence, bevacizumab naïve, single tumor of approximately 20 cm 3 or less (small-to-medium sized tumors).

• Average tumor size in Phase 2 was 7.5 mL (range 0.9-22.8 mL).

• Increases in absorbed dose correlated with specific drug delivery parameters such as infused dose and volume, maximal convection flow rate, and number of catheters.

• REYOBIQ continues to show a favorable safety profile in the 42 enrolled patients;

one dose-limiting toxicity (hemiplegia) has been reported, which was observed in Cohort 8 (41.5 mCi and 16.3 mL).

• In Phase 2, most adverse events were mild (73.5%) or moderate (18.8%), and largely unrelated (37.7%), or unlikely related (27.1%) to the drug.

Of the 9 severe adverse events, only 2 were related to the study drug.

• Average absorbed radiation dose to the tumor in Phase 2 was 300 Gy (n=18, 1 patient still under analysis).

• 88.9% of Phase 2 patients met key CED drug delivery parameters shown to correlate with overall survival, achieving a tumor absorbed dose >100 Gy and radiation coverage of >70%.

• 29 out of 42 patients treated thus far participated in the Phase 1 dose escalation phase of the trial (as per protocol, 6 out of 42 patients were included in both the Phase 1 and Phase 2 trial arms and related analyses).

• Phase 1 dose-escalation increased administered doses from 1.0 mCi to 41.5 mCi and volumes from 0.66 mL to 16.3 mL.

• In terms of objective tumor response based on quantitative image analysis, a statistically significant reduction in tumor volume rate change was seen in tumors receiving > 100 Gy absorbed dose (n=11 patients analyzed to date, p<0.005).

Sufficient tumor coverage correlated with tumor control, while regrowth occurred outside treated areas.

We completed Phase 1 of our ReSPECT-GBM Trial and are targeting full enrollment into Phase 2 by the end of 2026.

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The CPRIT Grant is subject to customary CPRIT funding conditions, including, but not limited to, a matching fund requirement (one dollar from us for every two dollars awarded by CPRIT), revenue sharing obligations upon commercialization of REYOBIQ based on specific dollar thresholds until CPRIT receives the aggregate amount of 400% of the proceeds awarded under the CPRIT Grant, and certain reporting requirements.

As of June 30, 2025, we had received approximately $12.4 million in milestone payments under the CPRIT Contract.

Interim results showed that a single treatment with REYOBIQ resulted in a consistent decreased cerebrospinal fluid (“CSF”) tumor cell count/ml and was tolerated by all LM patients.

As of September 30, 2025, we had received approximately $14.3 million in milestone payments under the CPRIT Contract.

Interim results show that a single treatment with REYOBIQ resulted in a consistent decreased cerebrospinal fluid (“CSF”) tumor cell count/ml and is tolerated by all LM patients.

REYOBIQ is an outpatient administration and treatment and is easily and safely administered through a standard intraventricular catheter (Ommaya Reservoir), distributed promptly throughout the CSF, and with durable retention in the leptomeninges at least through day seven.

All patients have shown well tolerated prompt and durable REYOBIQ distribution throughout the subarachnoid space.

In November 2023, the FDA granted orphan drug designation to REYOBIQ for the treatment of patients with breast cancer with LM.

On December 12, 2023, we announced our partnership with K2bio to implement novel analysis for CSF tumor and molecular biomarkers for CNS cancers.

On February 26, 2025, we announced the completion of the ReSPECT-LM Phase 1 single-dose escalation trial, having determined a recommended Phase 2 dose.

Enrollment in Cohort 6 was completed (75.0 mCi).

The Cohort 4 dose (44.1 mCi) was determined to be the recommended Phase 2 dose with no dose-limiting toxicities observed at that dose level.

One patient at the Cohort 4 dose was observed to have achieved a complete response, as evidenced by the eradication of tumor cells in the cerebrospinal fluid—a key therapeutic endpoint.

On June 30, 2025, we announced the initiation of the ReSPECT-LM dose optimization trial for REYOBIQ for the treatment of LM and on July 8, 2025 announced successfully treating the initial patients.

In March 2025, the FDA granted orphan drug designation to REYOBIQ for the treatment of LM in patients with lung cancer.

Our ReSPECT LM Multi-dose Phase 1/2 Study is currently enrolling patients.

ReSPECT-PBC Clinical Trial for Pediatric Brain Cancer

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In July 2021, we reported that we received FDA feedback pertaining to a pre-Investigational New Drug Application (“IND”) meeting briefing package in which the FDA stated that we are not required to perform any additional preclinical or toxicology studies.

Given the initial FDA feedback, receipt of adult GBM data and experience with REYOBIQ and follow-up communications with the FDA, we submitted a pediatric brain tumor IND for our ReSPECT-PBC clinical trial to investigate the use of REYOBIQ in two pediatric brain cancers, high-grade glioma and ependymoma, in the fourth quarter of 2024.

Pediatric high-grade gliomas can be found almost anywhere within the CNS;

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Diagnosis is based on MRI and biopsy and survival rate depends on tumor grade and how much of the tumor can be removed.

Grade II pathology was associated with significantly improved OS compared

to Grade III (anaplastic) pathology (five-year OS = 71 ± 5% vs.

Grade II pathology was associated with significantly improved OS compared to Grade III (anaplastic) pathology (five-year OS = 71 ± 5% vs.

Gross total resection compared to subtotal resection was associated with significantly improved OS (five-year OS = 75 ± 5% vs.

Overall, pediatric HGG and ependymoma are extremely difficult-to-treat pediatric brain tumors, frequently aggressive, and in recurrent settings, carry an extremely poor prognosis.

Effective September 1, 2024, we entered into an agreement with the Department of Defense office of the Congressionally Directed Medical Research Programs to receive a $3.0 million fund for research and development purposes (“DoD Award”) over a three-year period.

The DoD Award will be used to support the planned expansion of our clinical trial for pediatric brain cancer.

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This phase will enroll approximately 32 patients (12 with ependymoma and 20 with HGG) at the RP2D to assess efficacy.

• We anticipate to begin enrollment in our ReSPECT-PBC clinical trial before the end of 2025.

Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere Technology

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We have been executing on our commercial market access strategy, which includes prioritized state licensure, proprietary reimbursement codes, commercial and government payor coverage, and value-based pricing to optimize revenue.

We anticipate introducing the CNSide Platform first in Texas in the second half of 2025, followed rapidly by expansion into additional states in late 2025 and 2026.

We anticipate introducing the CNSide Platform first in Texas in the second half of 2025, followed rapidly by expansion into additional states in 2026.

In parallel, additional expanded CNS testing capabilities are also expected to roll out over the next year.

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Finally, we have hired experienced leadership with expertise in the development and commercialization of clinical diagnostic technologies on a large scale.

In August 2024, data from the CNSide FORESEE clinical trial in patients with LM was presented at the Society for Neuro-Oncology (“SNO”) / American Society for Clinical Oncology (“ASCO”) CNS Metastases Conference.

The trial met its key primary and secondary endpoints and the data showed that the CNSide Test more than doubled the diagnostic sensitivity versus gold standard cerebrospinal fluid cytology and influenced clinical management decisions in over 90% of LM cases.

On November 24, 2024, CNSide Diagnostics presented data at the 2024 SNO Annual Meeting from the FORESEE trial showcasing the CNSide Platform’s utility in diagnosing and guiding clinical decision making for breast cancer and non-small cell lung cancer patients with LM.

Key highlights included:

• The FORESEE trial achieved its primary endpoint, demonstrating that the CNSide Test influenced treatment decisions in over 90% of cases evaluated, surpassing the predetermined 20% primary endpoint target.

• The CNSide Test demonstrated enhanced sensitivity in detecting tumor cells (80%) vs.

CSF cytology (29%) in patients with LM.

• The CNSide Test identified actionable mutations in the CSF, such as HER2 amplification, influencing 24% of therapeutic selection decisions.

• The CNSide Test exhibited high specificity, with no tumor cells detected in patients without LM.

• The CNSide Test demonstrated improved Negative Predictive Value in ruling out LM (25%) vs.

CSF cytology (10%).

• The CNSide Test revealed HER2 positivity in LM tumors in 60% of breast cancer patients with HER2-negative primary tumors, informing physician treatment strategies.

R ecent Developments

Recent Developments

Recent Financings

Refer to the “Liquidity and Capital Resources” section below for information on our recent financings.

Manufacturing agreement with SpectronRX

On November 5, 2024, we entered into a manufacturing services agreement for drug product development and manufacturing (the “SpectronRx Services Agreement”) with NukeMed, Inc.

d/b/a SpectronRx (“SpectronRx”), pursuant to which SpectronRx will process development and manufacturing clinical investigational pharmaceutical products to support our clinical programs.

Pursuant to the SpectronRx Services Agreement, an initial proposal for drug product development and manufacturing under the SpectronRx Services Agreement is expected to become effective in the first half of 2026.

Under the SpectronRx Services Agreement, we will own all rights and interest in all intellectual property, including rights (i) related to copyright, patent, trademark, or other right to ideas, inventions, products, programs, procedures, process, formats, and other materials, (ii) developed solely by us in connection with developing, formulating, manufacturing, filing, processing, packaging, analyzing or testing of a (a) pharmaceutical ingredient or any intermediate thereof (“API/Drug Substance”), (b) drug product comprised of API/Drug Substance (“Drug Candidate”), or (c) intermediate(s) of (a) or (b) (together with API/Drug Substance and Drug Candidate, the “Product”), or (iii) directly related to the services rendered by SpectronRx or its subcontractors.

SpectronRx will own all rights and interest in the intellectual property owned by or licensed to SpectronRx other than in connection with Products or services covered under the SpectronRx Services Agreement (the “SpectronRx Technology”).

To the extent that any portion of SpectronRx Technology is required for the purpose of using or applying the Products, SpectronRx is required to provide to us a non-exclusive, royalty-free, perpetual license for that portion of SpectronRx Technology that is required by us to use and apply the Products.

Under the SpectronRx Services Agreement, upon written notice by us to SpectronRx, at least six months in advance of our first commercial manufacturing needs for a Product, SpectronRx will be required to enter into good faith negotiations with us for a commercial supply agreement governing the manufacture of such Product for commercial sale or use.

Unless earlier terminated, the SpectronRx Services Agreement will remain in place for a period of five years.

Thereafter, the SpectronRx Services Agreement will automatically renew for successive one-year terms unless either party notifies the other, not later than six months in advance of the original term or any additional renewed term, of the intention to terminate it.

We may terminate the SpectronRx Services Agreement (i) for any reason on prior written notice to SpectronRx, provided that we will be required to compensate SpectronRx for certain fees and costs if such cancellation is made prior to the completion of a work order, or (ii) immediately if SpectronRx files for bankruptcy, becomes insolvent, or is suspended or debarred by the FDA or the United States government.

In addition, either party may terminate the SpectronRx Services Agreement within thirty days upon any material breach that is left uncured by the other party.

Financing Related Transactions

As of September 30, 2025, we recorded a $6.4 million liability in accounts payable and accrued expenses due to the March 2025 Private Placement Purchasers.

Such liability declined by $1.3 million from September 30, 2025 to October 27, 2025 due to 1) a $0.9 million reduction as a result of the reselling of securities acquired in the March 2025 Private Placement by certain March 2025 Private Placement Purchasers, which was recorded as a reduction of liability that would have been settled in cash, with a corresponding increase to

stockholders’ equity, and 2) a payment of $0.4 million to the March 2025 Private Placement Purchasers subsequent to September 30, 2025, with 0.6 million shares of the Company’s common stock returned and cancelled under the terms of the Letter Agreement.

On October 28, 2025, we entered into an amendment to the Letter Agreement and the Support Letters with certain March 2025 Private Placement Purchasers (the “Amendment Agreement”), pursuant to which (a) the Support Letters were terminated other than with respect to the participation rights granted therein, and (b) the repayment mechanism under the Letter Agreement was modified.

As modified, we are no longer required to use 90% of the proceeds from any subsequent financing to repay the March 2025 Private Placement Purchasers.

Instead, we are only required to retain sufficient funds in an interest bearing account to cover such repayment obligations and make such repayments upon request by any March 2025 Private Placement Purchaser who executed the Amendment Agreement until each such purchaser has received cash either from us or from reselling securities acquired in the March 2025 Private Placement in an amount equal to 115% of the purchase price such purchaser paid in the March 2025 Private Placement.

If such requests are made, the requesting purchaser must return shares acquired in the March 2025 Private Placement at a value of $0.66 per share.

In addition, we issued approximately 3.3 million shares on the Lincoln Park Purchase Credit Agreement, raising an additional $1.9 million of capital through October 29, 2025.

Houston Lease

On October 16, 2025, we entered into a lease (the “Houston Lease”) with LG 1 Property Owner LP, pursuant to which we agreed to lease approximately 11,370 rentable square feet of space located at 6420 Levit Green Boulevard, Houston, Texas 77021.

The Houston Lease is expected to commence on or about November 1, 2026.

The Houston Lease provides for a monthly base rent of $58,745, which increases annually by approximately 3%, plus our share of the building’s direct expenses.

The Houston Lease has an initial term of 120 calendar months.

Results of Operations

Grant Revenue

We recognized $1.4 million and $1.3 million, and $2.5 million and $3.0 million of grant revenue during the three and six months ended June 30, 2025 and 2024, respectively, which represents CPRIT’s share of the costs incurred for our rhenium ( 186 Re) obisbemeda development for the treatment of patients with LM.

We recognized $1.4 million and $3.8 million, and $1.5 million and $4.4 million of grant revenue during the three and nine months ended September 30, 2025 and 2024, respectively, which represents CPRIT’s share of the costs incurred for our rhenium ( 186 Re) obisbemeda development for the treatment of patients with LM.

Research and development expenses

Research and development expenses include costs associated with the design, development, testing, and enhancement of our product candidates, payment of regulatory fees, laboratory supplies, pre-clinical studies, and clinical studies.

The following table summarizes the components of our research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the components of our research and development expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

Share-based compensation

Stock-based compensation

Total research and development expenses

Research and development expenses decreased by approximately $1.5 million during the three months ended June 30, 2025 as compared to the same period in 2024.

The decrease was due primarily to a reduction of $0.5 million in licensing expense, a decrease of $0.4 million in employee compensation expense, a decrease of $0.4 million in clinical expenses, a decrease of $0.2 million in professional research and development services, a decrease of $0.1 million in depreciation expense, and a decrease of $0.1 million in travel and other expenses, partially offset by an increase of approximately $0.2 million in legal and development expense.

Research and development expense decreased by approximately $2.5 million during the six months ended June 30, 2025 as compared to the same period in 2024.

The decrease was due primarily to a decrease of $1.2 million in clinical expenses, a decrease of $0.8 million of compensation expense, a decrease of $0.2 million in professional services, a decrease of $0.2 million in licensing expense, and a decrease of $0.2 million in depreciation, rent, and other expenses, partially offset by $0.1 million increase to development and other expenses.

We expect aggregate research and development expenses to increase during the remainder of 2025 as compared to the corresponding comparable period in 2024 as we commence the ReSPECT-LM dose optimization trial for REYOBIQ and prepare for the launch of CNSide Diagnostic.

Research and development expenses decreased by approximately $0.4 million during the three months ended September 30, 2025 as compared to the same period in 2024.

The decrease was due primarily to a decrease of $0.4 million in development expenses, a decrease of $0.4 million in compensation expense, a decrease of $0.4 million in professional research and development services, and a decrease of $0.1 million in depreciation expense.

These decreases were partially offset by an increase of $0.5 million in licensing expenses and an increase of $0.4 million in diagnostics.

Research and development expenses decreased by approximately $3.0 million during the nine months ended September 30, 2025 as compared to the same period in 2024.

The decrease was due primarily to a decrease of $1.3 million in clinical expenses, a decrease of $1.1 million in compensation expense, a decrease of $0.7 million in professional services, a decrease of $0.3 million in development expenses, a decrease of $0.2 million in depreciation expense and a decrease of $0.1 million in travel costs.

These decreases were partially offset by an increase of $0.4 million in diagnostics, and $0.3 million in licensing expenses.

General and administrative expenses

General and administrative expenses include costs for administrative personnel, legal and other professional expenses, and general corporate expenses.

The following table summarizes the general and administrative expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the general and administrative expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

General and administrative

Share-based compensation

Stock-based compensation

Total general and administrative expenses

General and administrative expenses decreased by $0.5 million during the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to a decrease of $0.7 million in legal and professional services, and a decrease of $0.1 million in other expenses, partially offset by an increase of $0.3 million in compensation expense.

General and administrative expenses increased $0.1 million during the six months ended June 30, 2025, as compared to the same period in 2024, primarily due to an increase of $0.6 million in compensation expense, partially offset by a decrease of $0.3 million in legal and professional services, and a decrease of $0.2 million in travel, depreciation expense, and other expenses.

We expect general and administrative expenditures to increase during the remainder of 2025 as compared to the corresponding comparable period in 2024 as we work towards the commercial launch of CNSide, which will require an increase in administrative and sales headcount.

General and administrative expenses increased by $1.0 million during the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase of $0.6 million in compensation expense, an increase of $0.3 million in legal and professional fees, and an increase of $0.1 million in accounting expenses.

General and administrative expenses increased $1.2 million during the nine months ended September 30, 2025, as compared to the same period in 2024, primarily due to an increase of $1.3 million in compensation expense, partially offset by a decrease of $0.1 million in legal and professional services.

We expect general and administrative expenditures to increase during the remainder of 2025 as compared to the corresponding comparable period in 2024 as we work towards the commercial launch of the CNSide Test, which will require an increase in administrative and sales headcount.

Stock-based compensation expense

Stock-based compensation expense includes charges related to stock options issued to employees, directors and non-employees.

Stock-based compensation expense includes charges related to equity awards issued to employees, directors and non-employees.

We measure stock-based compensation expense based on the grant-date fair value of any awards granted to our employees.

Such expense is recognized over the requisite service period.

The following table summarizes the components of our stock-based compensation expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes the components of our stock-based compensation expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development

General and administrative

Total share-based compensation

Our share-based compensation expenses, which are impacted by grants of share-based options, vesting schedule of such grants, as well as grant-date fair value of share-based awards, remained consistent for the three and six months ended June 30, 2025 and 2024.

Total stock-based compensation

Our stock-based compensation expense is impacted by grants of equity awards, the vesting schedule of such grants, as well as the grant date fair value of equity awards.

Stock-based compensation expense increased during the three and nine months ended September 30, 2025 as compared to the same periods in 2024 primarily due to an increase in the number of awards granted, which was partially offset by a decrease in the grant date fair value of equity awards granted.

Financing items

The following table summarizes non-operating income and expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

The following table summarizes non-operating income and expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Interest income

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Warrant issuance costs

The decrease in interest expense for the three months ended June 30, 2025 as compared to the same period in 2024 was due to the January 2025 payoff of the Pershing Credit Facility.

The increase in the fair value of the derivative instruments for the three months ended June 30, 2025 as compared to the same period in 2024 was due to the March 2025 Private Placement and May 2024 Private Placement and accompanying warrants issued in both financings.

The decrease in warrant issuance costs for the three months ended June 30, 2025 as compared to the same period in 2024, was due to warrant issuance costs related to the May 2024 Private Placement.

The decrease in financing expense for the three months ended June 30, 2025 as compared to the same period in 2024 was due to the reversal of offering costs related to the March 2025 Private Placement.

The increase in interest expense for the six months ended June 30, 2025 as compared to the same period in 2024 was due to interest expenses incurred in connection with the Funding Notes and Exchange Notes issued in February 2025, offset by the January 2025 payoff of the Pershing Credit Facility.

The decrease in the fair value of the derivative instruments for the six months ended June 30, 2025 as compared to the same period in 2024 was primarily due to the March 2025 Private Placement (specifically the liability classified March 2025 Series B Warrants, which were remeasured immediately prior to exercise, before being reclassified as equity), offset by the May 2024 Private Placement (specifically the May 2024 Series A Warrants and May 2024 Series B Warrants, which were initially classified as liabilities before being reclassified as equity).

The increase in the warrant issuance costs for the six months ended June 30, 2025 as compared to the same period in 2024 was due to the warrant issuance costs from the March 2025 Private Placement and May 2024 Private Placement.

The decrease in financing expense for the six months ended June 30, 2025 as compared to the same period in 2024 was due to the March 2025 PIPE and May 2024 PIPE transactions.

Interest income decreased for the three and six months ended June 30, 2025 compared with the same period in 2024 primarily due to lower average cash and investment balances during the three and six months ended June 30, 2025, accreted income on our available-for-sale securities in 2024, and a higher interest rate environment in 2024.

Interest income decreased for the three and nine months ended September 30, 2025 compared with the same period in 2024 primarily due to reduced accreted income on our available-for-sale securities in 2024 and a lower interest rate environment in 2025.

The decrease in interest expense for the three months ended September 30, 2025 as compared to the same period in 2024 was due to the January 2025 payoff of the Pershing Credit Facility.

The increase in interest expense for the nine months ended September 30, 2025 as compared to the same period in 2024 was due to interest expense incurred in connection with the Funding Notes and Exchange Notes issued in February 2025, partially offset by the January 2025 payoff of the Pershing Credit Facility.

The decrease in financing expenses for the nine months ended September 30, 2025 as compared to the same period in 2024 was primarily due to the March 2025 PIPE and May 2024 PIPE transactions.

The change in the fair value of the derivative instruments for the three months ended September 30, 2025 as compared to the same period in 2024 was due to the March 2025 Private Placement and May 2024 Private Placement and accompanying warrants issued in both financings.

The change in the fair value of the derivative instruments for the nine months ended September 30, 2025 as compared

to the same period in 2024 was primarily due to the March 2025 Private Placement (specifically the liability classified March 2025 Series B Warrants, which were remeasured immediately prior to exercise, before being reclassified as equity), offset by the May 2024 Private Placement (specifically the May 2024 Series A Warrants and May 2024 Series B Warrants, which were initially classified as liabilities before being reclassified as equity).

The decrease in warrant issuance costs for the three months ended September 30, 2025 as compared to the same period in 2024, was due to warrant issuance costs related to the May 2024 Private Placement.

The increase in the warrant issuance costs for the nine months ended September 30, 2025 as compared to the same period in 2024 was due to the warrant issuance costs from the March 2025 Private Placement and May 2024 Private Placement.

Liquidity and Capital Resources

Short-term and long-term liquidity

The following is a summary of our key liquidity measures at June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025

The following is a summary of our key liquidity measures at September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025

December 31, 2024

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Working capital

We incurred net losses of $12.3 million for the six months ended June 30, 2025.

We have an accumulated deficit of $505.7 million as of June 30, 2025.

Additionally, we used net cash of $12.0 million to fund our operating activities for the six months ended June 30, 2025.

We incurred net losses of $16.7 million for the nine months ended September 30, 2025.

We have an accumulated deficit of $510.2 million as of September 30, 2025.

Additionally, we used net cash of $14.5 million to fund our operating activities for the nine months ended September 30, 2025.

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

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In addition, the March 2025 Series B Warrant alternative cashless exercise provision provides that the March 2025 Series B Warrant can be exercised without further payment to us and for three times the number of shares of common stock then subject to the March 2025 Series B Warrant.

2025 Pre-Funded Warrants in lieu thereof, and the accompanying 5,314,870 March 2025 Series A Warrants and 5,314,870 March 2025 Series B Warrants, were issued in exchange for the cancelation of the Exchange Notes.

Of the securities issued in the March 2025 Private Placement, 3,077,270 shares of Common Stock, 19,650,000 shares of March 2025 Pre-Funded Warrants in lieu thereof, and the accompanying 22,727,270 March 2025 Series A Warrants and 22,727,270 March 2025 Series B Warrants, were issued in consideration of new capital subscriptions, and 992,468 shares of Common Stock, 4,322,400 March 2025 Pre-Funded Warrants in lieu thereof, and the accompanying 5,314,870 March 2025 Series A Warrants and 5,314,870 March 2025 Series B Warrants, were issued in exchange for the cancelation of the Exchange Notes.

The March 2025 Private Placement closed on March 7, 2025.

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Prior to modification of the March 2025 Series B Warrants as part of the Letter Agreement (as further described below), certain March 2025 Series B Warrants were cashless exercised for the issuance of 21,482,492 shares of common stock.

The liability classified March 2025 Series B Warrants were remeasured immediately prior to exercise, which resulted in a $3.8 million gain on the change in fair value for the three and six months ended June 30, 2025, and a $0.8 million credit to additional paid-in-capital.

The liability classified March 2025 Series B Warrants were remeasured immediately prior to exercise, which resulted in a $3.8 million gain on the change in fair value for the nine months ended September 30, 2025, and a $0.8 million credit to additional paid-in-capital.

Letter Agreement

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The Company and each of the March 2025 Private Placement Purchasers also agreed to waive any restrictions on subsequent equity sales and variable rate transactions contained in March 2025 Private Placement Purchase Agreement to allow for such repayment.

As of June 30, 2025, the Company had not elected to repurchase any shares from the March 2025 Private Placement Purchasers under the terms of the Letter Agreement and therefore, there is no liability recorded as of June 30, 2025 related to this Letter Agreement Repurchase Option.

During the three and nine months ended September 30, 2025, we paid the March 2025 Private Placement Purchasers $2.3 million and 3,472,740 shares were returned and cancelled under the terms of the Letter Agreement .

Support Letters

On July 11, 2025, we and certain March 2025 Private Placement Purchasers party to the Letter Agreement entered into that certain letter of support (the “Support Letters”) to modify certain portions of the Letter Agreement as between us and each of such March 2025 Private Placement Purchasers.

In the event that we reasonably believe that, within the 30 days (the “Modification Period”) prior to the end of any fiscal quarter, we will have stockholders’ equity in an amount below $3.0 million as of the end of such fiscal quarter (the “Potential Equity Deficiency”), the Subsequent Financing Percentage (as defined in the Letter Agreement) shall be modified from 90% to 50% for any Subsequent Financing (as defined in the Letter Agreement) that occurs during the Modification Period pursuant to the Lincoln Park Purchase Agreement.

Upon the end of the Modification Period, the Subsequent Financing Percentage shall be reverted to 90%, and such percentage shall apply to all Subsequent Financings, including all Subsequent Financings pursuant to the Lincoln Park Purchase Agreement.

In the event we desire to trigger the modification of the Subsequent Financing Percentage, we agree to supply the purchaser who executed a Support Letter with a pro forma balance sheet to evidence its reasonable belief of the Potential Equity Deficiency approximately 30 days prior to each end of fiscal quarter once the books for prior months are closed.

In accordance with the Support Letters, we made a cash payment of $0.5 million to each purchaser for a total cash payment of $2.3 million, which was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet as of September 30, 2025.

Such payment counted as cash received by the purchaser towards its Maximum Amount.

Each Support Letter also grants the purchaser party to the letter a participation right in certain future financings of ours for a period of 12 months.

First Amendment to the February 2025 SPEA

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As consideration for Lincoln Park’s irrevocable commitment to purchase shares of our common stock upon the terms of and subject to satisfaction of the conditions set forth in the Lincoln Park Purchase Agreement,

On June 23, 2025, a registration statement (the “Registration Rights Agreement”) was declared effective covering the resale of up to 17,000,000 shares of our common stock.

In accordance with the Lincoln Park Purchase Agreement, we are required to pay Lincoln Park an initial commitment fee of $0.5 million, which we may elect to pay in cash or shares of its common stock, or a combination of cash and shares of common stock, due between July 1, 2025 and August 8, 2025.

On June 23, 2025, a registration statement (the “Initial Registration Statement”) was declared effective covering the resale of up to 17,000,000 shares of our common stock.

On August 14, 2025, a registration statement (the “Second Registration Statement”) was declared effective covering the resale of up to 33,000,000 shares of our common stock.

In accordance with the Lincoln Park Purchase Agreement, we were required to pay Lincoln Park an initial commitment fee of $0.5 million, which was paid through the issuance of 1,612,903 shares of common stock on August 14, 2025.

The initial commitment fee was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet as of September 30, 2025.

An additional commitment fee of $0.5 million will be paid in cash or shares of common stock, or a combination of cash and shares of common stock, if and when we sell over $25.0 million of our common stock under the Lincoln Park Purchase Agreement.

As of June 30, 2025, we issued 10,187,000 shares under the Lincoln Park Purchase Agreement for gross proceeds of approximately $2.8 million.

As of the nine months ended September 30, 2025, we issued 44,575,496 shares under the Lincoln Park Purchase Agreement for gross proceeds of approximately $19.6 million.

The Company incurred approximately $50,000 for legal fees in connection with the Lincoln Park Purchase Agreement.

Subsequent to September 30, 2025, we issued 3.3 million shares under the Lincoln Park Purchase Agreement, raising an additional $1.9 million of capital through October 29, 2025.

On September 19, 2022, we entered into the CPRIT Contract, pursuant to which CPRIT will provide us with the CPRIT Grant of $17.6 million subject to the terms of the CPRIT Contract, to fund approximately two-thirds of the continued development of REYOBIQ for the treatment of patients with LM.

We recognized $1.4 million, $5.8 million, $4.9 million and $0.2 million of grant revenue during the six months ended June 30, 2025, years ended December 31, 2024, 2023 and 2022, respectively, all of which has been received.

We recognized $3.8 million, $5.8 million, $4.9 million and $0.2 million of grant revenue during the nine months ended September 30, 2025, years ended December 31, 2024, 2023 and 2022, respectively, all of which has been received.

The amounts recognized represents CPRIT’s share of the costs incurred for our REYOBIQ development for the treatment of patients with LM.

As of June 30, 2025, we had no deferred grant liability related to the CPRIT Grant.

As of September 30, 2025, we had $1.1 million of deferred grant liability related to the CPRIT Grant.

Nasdaq Listing Compliance

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If the Staff finds us again out of compliance with the Minimum Stockholders’ Equity Requirement before that date, we would not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and the Staff would not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor would we be afforded an applicable cure or compliance period.

Staff would issue a “Delist Determination Letter” and we would have an opportunity to request a hearing before the panel regarding our continued listing.

Instead, the Staff would issue a “Delist Determination Letter” and we would have an opportunity to request a hearing before the panel regarding our continued listing.

Furthermore, on May 16, 2025, we received notice from Nasdaq that, because the closing bid price for our common stock has fallen below $1.00 per share for 30 consecutive business days, we no longer comply with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”).

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and (ii) effect the reverse stock split, if at all, within twelve (12) months of the date the proposal is approved by stockholders.

On May 21, 2025, we received a notice from the Staff that, as a result of our delay in filing our Quarterly Report on Form 10-Q for the period ended March 31, 2025, we were not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires Nasdaq-listed companies to timely file all required periodic financial reports with the U.S.

Securities and Exchange Commission (the “SEC”).

The notice states that we have until July 21, 2025, to submit to Nasdaq an update to our plan to regain compliance with the Rule.

The notice also indicates that any additional exception to allow us to regain compliance with all delinquent filings will be limited to up to 180 calendar days from the due date of the filing, or until November 17, 2025.

The notice has no immediate effect on the listing of our securities on Nasdaq.

On June 3, 2025, the Company received a letter from the Staff stating that the Company had regained compliance with the Rule 5250(c)(1) due to filing its Quarterly Report on Form 10-Q for the period ended March 31, 2025 with the SEC on May 30, 2025.

In addition, on August 7, 2025, the stockholders granted discretionary authority to the Company’s board of directors to (i) amend the Company’s Certificate of Incorporation to combine outstanding shares of the Company’s common stock into a lesser number of outstanding shares, or a “reverse stock split,” at a specific ratio within a range of one-for two (1-for-2) to a maximum of one-for-two

hundred fifty (1-for-250), with the exact ratio to be determined by the board of directors in its sole discretion;

and (ii) effect the reverse stock split, if at all, within twelve (12) months of the date the proposal is approved by stockholders.

On June 3, 2025, the Staff notified the Company that it was not in compliance with the Minimum Stockholders’ Equity Requirement (the “June 3 Letter”).

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and (2) the Minimum Bid Requirement by September 8, 2025.

There can be no assurance that the Company will be able to regain compliance with the Minimum Stockholders’ Equity Requirement or the Minimum Bid Requirement.

On August 22, 2025, the Company received a letter (the “August 2025 Letter”) from Nasdaq confirming its compliance with Nasdaq Listing Rule 5550(b).

Specifically, the August 2025 Letter confirmed that the Company was in compliance with both (1) the Market Value of Listing Securities standard under 5550(b)(2), which requires certain companies to maintain a market value of listed securities of at least $35 million as well as compliance with (2) the alternative stockholders’ equity threshold under 5550(b)(1) or the Minimum Stockholders’ Equity Requirement.

Accordingly, the Company satisfied two alternative criteria under Nasdaq Listing Rule 5550.

As a result of such compliance, Nasdaq permitted the Company the remainder of the previously announced grace period to regain compliance with the $1.00 bid price rule under Nasdaq Listing Rule 5550(a)(2), through November 12, 2025.

Nasdaq previously required that the Company remedy the bid price deficiency by September 8, 2025, a deadline that no longer applies.

The August 2025 Letter also provided that, solely with respect to the Equity Standard, the Company remains subject to a one-year panel monitoring period, through August 22, 2026.

If, within that one-year monitoring period, the Staff determines that the Company no longer satisfies the Equity Standard (and the Company is not then in compliance with one of the alternative standards under Rule 5550(b)), the Company will not be permitted to provide the Staff with a plan of compliance and the Staff is not permitted to grant additional time to regain compliance with the Equity Standard nor will the Company be afforded an applicable cure or compliance period.

Instead, the Staff will issue a delist determination letter, and the Company will have an opportunity to request a new hearing before the Nasdaq Hearings Panel, which request would stay any further action by the Staff pending the ultimate outcome of the hearing.

There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Requirement or maintain compliance with the Equity Standard.

Funding and Material Cash Requirements

To date, our operating losses have been funded primarily from outside sources of invested capital from issuance of shares of our common and preferred equity, warrants, proceeds from the now-repaid in full term loan with Oxford, the margin loan facility under a line of credit with Pershing and grant funding.

agreements to fund our future clinical development programs, commercialization of CNSide, and other operations in the next twelve months from the filing of this Quarterly Report.

However, we have had, and will continue to have, an ongoing need to raise additional cash from outside sources through a combination of equity offerings, debt financings and potential collaboration, license or development agreements to fund our future clinical development programs, commercialization of CNSide, and other operations in the next twelve months from the filing of this Quarterly Report.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

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The accompanying condensed consolidated financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to our ability to continue as a going concern.

Cash (used in) provided by operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 is summarized as follows (in thousands):

Six Months Ended June 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Cash (used in) provided by operating, investing, and financing activities for the nine months ended September 30, 2025 and 2024 is summarized as follows (in thousands):

Nine Months Ended September 30,

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Net change in cash and cash equivalents

Material Cash Obligations

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CPRIT may require us to repay some or all of the disbursed CPRIT Grant proceeds (with interest not to exceed 5% annually) in the event of the early termination of the CPRIT Contract.

Other than as described above, we have no purchase commitments or long-term contractual obligations, except for lease obligations as of June 30, 2025.

Other than as described above, we have no purchase commitments or long-term contractual obligations, except for lease obligations as of September 30, 2025.

In addition, we have no off-balance sheet arrangements (as defined in the rules and regulations of the SEC) that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Operating activities

Net cash used in operating activities for the six months ended June 30, 2025 was $12.0 million, compared with $5.7 million in the same period of 2024, primarily due to an increase to net loss of $6.0 million, an increase to the fair value of derivative instruments of $7.3 million, offset by decreases to operating assets and liabilities of $7.0 million.

Net cash used in operating activities for the nine months ended September 30, 2025 of $14.5 million was primarily related to the net loss of $16.7 million and $4.7 million of changes to operating assets and liabilities, partially offset by $3.1 million of noncash financing expenses, $0.8 million of stock-based compensation expense, and $2.6 million of changes to the fair value of derivative instruments.

Net cash used in operating activities for the nine months ended September 30, 2024 of $9.3 million was primarily related to the net loss of $9.1 million and a $5.7 million change to the fair value of derivative instruments, partially offset by $3.5 million of noncash financing expenses and $0.8 million of changes to operating assets and liabilities.

Investing activities

Net cash used in investing activities for the six months ended June 30, 2025 was primarily related to the purchase of short-term investments of $7.8 million offset by the redemption of short-term investments of $6.7 million.

Net cash used in investing activities for the six months ended June 30, 2024 was related to the purchase of Biocept assets of $0.5 million, short-term investments of $3.5 million and purchases of fixed assets of $0.1 million.

Net cash provided by investing activities for the nine months ended September 30, 2025 of $0.2 million was primarily related to the redemption of short-term investments of $11.3 million which was partially offset by the purchase of short-term investments of $11.1 million.

Net cash used in investing activities for the nine months ended September 30, 2024 of $4.2 million was related to the purchase of Biocept assets of $0.5 million, short-term investments of $7.1 million and purchase of fixed assets of $0.1 million, partially offset by the redemption of short-term investments of $3.7 million.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 was related to $3.3 million repayment on the Pershing Credit Facility, $3.7 million repayment of Notes payable, and $0.2 million costs from sale of common stock offset by $15.0 million of net proceeds from sale of common stock, Pre-Funded Warrants and warrants in connection with the March 2025 Private Placement, $3.7 million of net proceeds from issuance of notes payable and warrants, $2.8 million in net proceeds from the sale of common stock under the Lincoln Park Purchase Agreement, and $0.9 million related to cash received from exercise of Series B Warrants from the May 2024 Private Placement.

Net cash provided by financing activities for the six months ended June 30, 2024 was related to net proceeds of $7.3 million raised by the May 2024 Private Placement, and drawdown of $3.3 million from the Pershing Credit Facility, offset by repurchase of treasury stock for approximately $0.4 million and repayment of principle balance under the Oxford loan of $4.0 million.

Net cash provided by financing activities for the nine months ended September 30, 2025 of $27.5 million was related to $19.6 million in proceeds from the sale of common stock under the Lincoln Park Purchase Agreement, $15.9 million of proceeds from sale of common stock, Pre-Funded Warrants and warrants in connection with the March 2025 Private Placement, and $3.7 million of net proceeds from the issuance of notes payable and warrants, partially offset by $3.3 million repayment on the Pershing Credit Facility, $3.7 million repayment of Notes payable, $2.3 million of costs paid to investors pursuant to the Letter Agreement, $0.2 million of costs related to the sale of common stock, and $2.3 million of financing costs related to the return and cancellation of Private Placement Shares and Pre-Funded Warrants.

Net cash provided by financing activities for the nine months ended September 30, 2024 of $6.2 million was related to net proceeds of $7.3 million from the exercise of Series B Warrants from the May 2024 Private Placement and the drawdown of $3.3 million from the Pershing Credit Facility, partially offset by the repurchase of treasury stock for approximately $0.4 million and repayment of the principle balance under the Oxford loan of $4.0 million.

Critical Accounting Policies and Significant Estimates

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We believe it is important for you to understand our most critical accounting policies.

Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and there have been no material changes during the six months ended June 30, 2025, other than what was disclosed in Note 1 of the accompanying condensed consolidated financial statements.

Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and there have been no material changes during the nine months ended September 30, 2025, other than what was disclosed in Note 2 of the accompanying condensed consolidated financial statements.

Quantitative and Qualitat ive Disclosures about Market Risk

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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