What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-03-06 · 44 added, 45 removed, 144 unchanged (38% of the section changed)

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GEM-AKI, which is being developed as a potential therapy for the prevention and treatment of acute kidney injury;

GEM-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease;

and GEM-PSI, which is being developed for the prevention and treatment of post surgical infection.

Since our inception, we have devoted substantially all of our resources to organizing and staffing our Company, business planning, raising capital, and research and development of GEM-AKI, GEM-CKD and GEM-PSI, our product candidates.

and GEM-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease.

We have funded our operations since our inception to December 31, 2025 through the issuance and sale of our capital stock, from which we have raised net proceeds of $69.2 million.

Our current cash and cash equivalents balance will not be sufficient to complete all necessary product development or future commercialization efforts.

We anticipate that our current cash and cash equivalents balance will not be sufficient to sustain operations within one-year after the date that our audited financial statements for December 31, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

We anticipate that our current cash and cash equivalents balance, which includes approximately $10.7 million as of December 31, 2025, combined with approximately $6.7 million in net proceeds received in January 2026 in connection with a warrant inducement transaction, will not be sufficient to sustain operations within one-year after the date that our audited financial statements for December 31, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.

We plan to seek additional funding through public or private equity or debt financings.

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If we are unable to obtain funding we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business operations.

We have incurred recurring losses since our inception, including a net loss of $15.0 million for the year ended December 31, 2024 and $0.1 million for the year ended December 31, 2023, respectively.

We have incurred recurring losses since our inception, including a net loss of $8.9 million for the year ended December 31, 2025 and $15.0 million for the year ended December 31, 2024.

As of December 31, 2025 we had an accumulated deficit of $49.4 million.

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Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical studies and our expenditures on other research and development activities.

We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for GEM-AKI, GEM-CKD, GEM-PSI or other product candidates, which we expect will not be for at least several years, if ever.

Accordingly, until such time as we can generate significant revenue from sales of GEM-AKI, GEM-CKD, GEM-PSI or other product candidates, if ever, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for our Product Candidates or other product candidates, which we expect will not be for at least several years, if ever.

Accordingly, until such time as we can generate significant revenue from sales of Product Candidates or other product candidates, if ever, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

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2026 Reverse Stock Split

On January 28, 2025, the Company effected a 1-for-16 reverse stock split of our outstanding shares of common stock, which had been approved at a special meeting of stockholders.

NASDAQ Compliance

As previously reported on October 16, 2024, the Company received a letter from Nasdaq notifying the Company of its noncompliance with Nasdaq Listing Rule 5550(a)(2) by failing to maintain a minimum bid price for its common stock of at least $1.00 per share for 30 consecutive business days.

The Company had until February 14, 2025, to regain compliance by having a minimum closing bid price of at least $1.00 per share for at least 10 consecutive business days.

On February 19, 2025 the Company received a formal notice from Nasdaq stating that the Company’s common stock will continue to be listed and traded on Nasdaq, due to the Company having regained compliance with the minimum bid price requirement, and all applicable listing standards.

On January 28, 2026, the Company effected a 1-for-4 reverse stock split of our outstanding shares of common stock, which had been approved at the 2025 annual meeting of stockholders on June 23, 2025.

All share numbers included herein have been adjusted to reflect this reverse split.

Class I Warrant Inducement

On January 23, 2026, the Company entered into warrant inducement offer letters with two holders of 2,136,251 Class I Common Stock Warrants, exercisable for 2,136,251 shares of common stock with an exercise price of $8.80 per share of common stock.

Pursuant to the warrant inducement offer letters, the holders agreed to the immediate cash exercise of their 2,136,251 Class I Common Stock Warrants to purchase an aggregate of 2,136,251 shares of the Company’s common stock at an exercise price of $3.44 per share, and the Company’s agreement to issue 4,272,500 Class J Common Stock Warrants exercisable for a total of up to 4,272,500 shares of common stock, at an exercise price of $3.44.

The Company received net proceeds of approximately $6.7 million from the warrant exercises.

Research and Development

Research and development expenses consist primarily of costs incurred for the development of our product candidates GEM-AKI, GEM-CKD and GEM-PSI.

Research and development expenses consist primarily of costs incurred for the development of our product candidates.

Our research and development expenses consist primarily of external costs related to clinical development, costs related to contract research organizations, costs related to consultants, costs related to acquiring and manufacturing clinical study materials, costs related to contract manufacturing organizations and other vendors, costs related to the preparation of regulatory submissions, costs related to laboratory supplies and services, and personnel costs.

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We adjust our accrual as actual costs become known.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of GEM-AKI, GEM-CKD and GEM-PSI and continue to invest in research and development activities.

The process of conducting the necessary clinical research and product development to obtain regulatory approval is costly and time consuming, and the successful development of GEM-AKI, GEM-CKD and GEM-PSI and any future product candidates is highly uncertain.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of Product Candidates and continue to invest in research and development activities.

The process of conducting the necessary clinical research and product development to obtain regulatory approval is costly and time consuming, and the successful development of Product Candidates and any future product candidates is highly uncertain.

To the extent that our product candidates continue to advance into larger and later stage clinical studies, our expenses will increase substantially and may become more variable.

The actual probability of success for GEM-AKI, GEM-CKD and GEM-PSI or any future product candidate may be affected by a variety of factors, including the safety and efficacy of our product candidates, investment in our clinical programs, manufacturing capability and competition with other products.

As a result, we are unable to determine the timing of initiation, duration and completion costs of our research and development efforts or when and to what extent we will generate revenue from the commercialization and sale of GEM-AKI, GEM-CKD and GEM-PSI or any future product candidate.

The actual probability of success for Product Candidates or any future product candidate may be affected by a variety of factors, including the safety and efficacy of our product candidates, investment in our clinical programs, manufacturing capability, regulatory and staffing developments at the FDA and competition with other products.

As a result, we are unable to determine the timing of initiation, duration and completion costs of our research and development efforts or when and to what extent we will generate revenue from the commercialization and sale of Product Candidates or any future product candidate.

General and Administrative

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We also anticipate increased expenses as we continue to operate as a public company, including increased expenses related to financial advisory services, audit, legal, regulatory, investor relations costs, director and officer insurance premiums associated with maintaining compliance with exchange listing and SEC requirements.

Other (Expense) Income, Net

Other (expense) income, net primarily consists of the change in fair value of warrant liability, LifeSci Capital LLC judgment expense and reimbursement of legal costs, clinical trial related settlement expenses with A-IR Clinical Research Ltd., foreign currency transaction gains and losses, interest expense and interest income from our cash balances in savings accounts.

Other Income (Expense), Net

Other income (expense), net for 2025 primarily consists of the interest income from our cash balances in savings accounts, foreign currency transaction gains and losses, and the change in fair value of the warrant liability.

During 2024, other income (expense), net also included the LifeSci Capital LLC judgment expense and reimbursement of legal costs, clinical trial related settlement expenses with A-IR Clinical Research Ltd, and expenses in connection with the deferred underwriting commissions.

Results of Operations

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Loss from operations

Total other (expense) income, net

Total other income (expense), net

Research and Development Expenses

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

GEM-AKI, GEM-CKD and GEM-PSI clinical study expenses

GEM-AKI and GEM-CKD clinical study expenses

Manufacturing expenses

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Total research and development expenses

Research and development expenses decreased by $0.6 million, from $4.1 million for the year ended December 31, 2023 to $3.5 million for the year ended December 31, 2024.

The decrease was primarily due to decreases of $2.1 million in other program expenses and $0.3 million in manufacturing expenses, offset by increases of $1.5 million in clinical study expenses related to GEM-AKI, GEM-CKD and GEM-PSI and $0.5 million in personnel expenses.

Other program expenses include pre-clinical costs and clinical preparation costs primarily for programs GEM-AKI, GEM-CKD and GEM-PSI.

Research and development expenses increased by $0.5 million, from $3.5 million for the year ended December 31, 2024 to $4.1 million for the year ended December 31, 2025.

The increase was primarily due to increases of $0.5 million in clinical study expenses related to GEM-AKI and GEM-CKD and $0.4 million of personnel expenses, offset by a decrease of $0.4 million in manufacturing expenses.

General and Administrative Expenses

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Total general and administrative expenses

General and administrative expenses decreased by $0.1 million, from $4.5 million for the year ended December 31, 2023 to $4.4 million for the year ended December 31, 2024.

The decrease was primarily due to a decrease of $0.6 million in legal and professional fees, offset by an increase of $0.5 million in personnel expenses.

Other (Expense) Income, Net

Other (expense) income, net was $8,536,410 for the year ended December 31, 2023, related to the change in fair value of the warrant liability, foreign currency transaction gains and losses, and interest income from our cash balances in savings accounts.

Other (expense) income, net was ($7,063,427) for the year ended December 31, 2024, primarily related to the LifeSci Capital LLC judgment expense and reimbursement of legal costs, clinical trial related settlement expenses with A-IR Clinical Research Ltd.

and expenses in connection with the deferred underwriting commissions, offset by interest income from our cash balances in savings accounts.

General and administrative expenses increased by $0.6 million, from $4.4 million for the year ended December 31, 2024 to $5.0 million for the year ended December 31, 2025.

The increase was primarily due to an increase of $0.5 million in legal and professional fees and an increase of $0.3 million in personnel expenses, offset by a $0.1 million decrease in other general and administrative expenses.

Other Income (expense), Net

Other income (expense), net was income of $0.2 million for the year ended December 31, 2025, related primarily to interest income on our cash balances in savings accounts and foreign currency transactions gains and losses.

Other income (expense), net was expense of approximately $7.1 million for the year ended December 31, 2024, primarily related to the LifeSci Capital LLC judgment expense and reimbursement of legal costs, clinical trial related settlement expenses with A-IR Clinical Research Ltd., and expenses in connection with the deferred underwriting commissions, offset by interest income from our cash balances in savings accounts.

Liquidity and Capital Resources

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As of December 31, 2025, we had available cash and cash equivalents of $10.7 million and an accumulated deficit of $49.4 million.

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our therapeutic product candidates, GEM-AKI, GEM-CKD and GEM-PSI.

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to the Product Candidates or other products candidates.

We plan to increase our research and development expenses substantially for the foreseeable future as we continue the clinical development of our current and future product candidates.

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We expect to continue to incur significant operating and net losses, as well as negative cash flows from operations, for the foreseeable future as we continue to complete all necessary product development or future commercialization efforts.

We do not anticipate that our current cash and cash equivalents balance will be sufficient to sustain operations within one-year after the date that our audited financial statements for December 31, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for the Product Candidates or other product candidates, which we expect will not be for at least several years, if ever.

We do not anticipate that our current cash and cash equivalents balance, which includes $10.7 million as of December 31, 2025, combined with approximately $6.7 million in net proceeds received subsequent to December 31, 2025 in connection with a warrant inducement transaction, will be sufficient to sustain operations within one-year after the date that our audited financial statements for December 31, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.

To continue as a going concern, we will need, among other things, to raise additional capital resources.

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Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net Cash Used in Operating Activities

During the year ended December 31, 2024, net cash used in operating activities was $18.3 million, which consisted of a net loss of $15.0 million and a net change of $3.4 million in our net operating assets and liabilities.

During the year ended December 31, 2023, net cash used in operating activities was $7.3 million, which consisted of a net income of $0.1 million and a net change of $8.1 million comprised of the change in fair value of the warrant liability, stock-based compensation expense and depreciation expense, offset by a net change of $1.0 million in our net operating assets and liabilities.

During the year ended December 31, 2025, net cash used in operating activities was $8.3 million, which consisted of a net loss of $8.9 million offset primarily by $0.6 million in stock-based compensation expense.

During the year ended December 31, 2024, net cash used in operating activities was $18.3 million, which consisted of a net loss of $15.0 million and a change in our net operating assets and liabilities of $3.4 million.

Net Cash Used in Investing Activities

During the year ended December 31, 2024, net cash used in investing activities consisted of a purchase of lab equipment.

During the year ended December 31, 2023, there was no cash used in investing activities.

During the year ended December 31, 2025, there was there was no cash used in investing activities.

During the year ended December 31, 2024, net cash used in investing activities consisted of purchases of lab equipment.

Net Cash Provided by Financing Activities

During the year ended December 31, 2024, net cash provided by financing activities was $12.8 million, from net proceeds of $5.4 million received in connection with the February 2024 Public Offering (defined below), $0.2 million received from exercises of the Class D Common Stock Warrants (defined below), net proceeds of $3.5 million received in connection with the Class D Warrant Inducement (defined below) and net proceeds of $3.7 million received in connection with the Class E Warrant Inducement (defined below).

During the year ended December 31, 2023, net cash provided by financing activities was $14.0 million from the February 2023 Public Offering (defined below).

During the year ended December 31, 2025, net cash provided by financing activities was $12.5 million, and was primarily due to net proceeds of $3.4 million received in connection with the May 2025 Public Offering and $8.7 million in net proceeds received in connection with the Class H Warrant Inducement in September 2025.

During the year ended December 31, 2024, net cash provided by financing activities was $12.8 million, primarily from net proceeds of $5.4 million received in connection with the February 2024 Public Offering, $0.2 million received from exercises of the Class D Common Stock Warrants, net proceeds of $3.5 million received in connection with the Class D Warrant Inducement, and net proceeds of $3.7 million received in connection with the Class E Warrant Inducement.

Contractual Obligations and Other Commitments

The following table summarizes our contractual obligations as of December 31, 2024 and the effects of such obligations are expected to have on our liquidity and cash flow in future periods:

The following table summarizes our contractual obligations as of December 31, 2025 and the effects such obligations are expected to have on our liquidity and cash flow in future periods:

Operating lease obligations

Total contractual obligations

We have entered into an operating lease for laboratory space in San Diego, California.

We have entered into an operating lease for laboratory and office space in San Diego, California.

The table above includes future minimum lease payments under the non-cancelable lease arrangement.

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Stock-based Compensation

We recognize the compensation expense related to stock options, third-party warrants, and restricted stock unit (“RSU”) awards granted, based on the estimated fair value of the awards on the date of grant.

We recognize the compensation expense related to stock options, third-party warrants, restricted stock awards (“RSAs”), and restricted stock units (“RSUs”) granted, based on the estimated fair value of the awards on the date of grant.

The fair value of employee stock options and third-party warrants are generally determined using the Black-Scholes option-pricing model using various inputs, including estimates of historic volatility, term, risk-free rate, and future dividends.

The grant date fair value of the stock-based awards, which have graded vesting, is recognized using the straight-line method over the requisite service period of each stock-based award, which is generally the vesting period of the respective stock-based awards.

The fair value of RSAs and RSUs is determined based on the Company’s stock price on the date of grant.

The grant date fair value of the stock-based awards, which may have graded vesting, is recognized using the straight-line method over the requisite service period of each stock-based award, which is generally the vesting period of the respective stock-based awards.

The Company recognizes forfeitures as they occur.

As of December 31, 2024, there were 3 Rollover RSU awards vested and unissued and 64 stock options outstanding.

Recent Accounting Pronouncements

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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-K

Item 7. Management’s Discussion and Analysis