What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-14 · 459 added, 431 removed, 846 unchanged (51% of the section changed)

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Right of use asset, net

Property, plant and equipment, net

Property and equipment, net

Liabilities and stockholders’ equity

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Stockholders’ equity:

Series A-2 Prime preferred stock, $ 0.001 par value per share – 21,338.01 Series A-2 Prime shares authorized at December 31, 2024 and March 31, 2025;

6,150.21 and 5,464.21 Series A-2 Prime shares issued and outstanding at December 31, 2024 and March 31, 2025, respectively

Series B-2 preferred stock, $ 0.001 par value per share – 7,882 Series B-2 shares authorized at December 31, 2024 and March 31, 2025;

3,000 Series B-2 shares issued and outstanding at December 31, 2024 and March 31, 2025

Preferred stock:

$ 0.001 par value per share — 9,846,891 shares authorized at December 31, 2024 and March 31, 2025;

zero shares issued and outstanding at December 31, 2024 and March 31, 2025

Common stock, $ 0.001 par value per share – 400,000,000 shares authorized at December 31, 2024 and March 31, 2025;

113,842,364 and 119,749,743 shares issued and outstanding at December 31, 2024 and March 31, 2025, respectively

Series A-2 Prime preferred stock, $ 0.001 par value per share – 21,400 Series A-2 Prime shares authorized at December 31, 2024, and June 30, 2025;

6,150.21 and 5,464.21 Series A-2 Prime shares issued and outstanding at December 31, 2024, and June 30, 2025, respectively

Series B-2 preferred stock, $ 0.001 par value per share – 50,000 Series B-2 shares authorized at December 31, 2024, and June 30, 2025;

3,000 and zero Series B-2 shares issued and outstanding at December 31, 2024, and June 30, 2025, respectively

Preferred stock, $ 0.001 par value per share— 10,000,000 shares

authorized at December 31, 2024, and June 30, 2025;

zero shares issued and outstanding at December 31, 2024, and June 30, 2025

Common stock, $ 0.001 par value per share – 400,000,000 shares authorized at December 31, 2024, and June 30, 2025;

11,384,236 and 14,111,852 shares issued and outstanding at December 31, 2024, and June 30, 2025, respectively

Additional paid-in capital

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Three Months Ended

Six Months Ended

Operating expenses:

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Total other income (expenses)

Net (loss) income

Net (loss) income attributable to common stockholders, basic

Net loss attributable to common stockholders, diluted

Net (loss) income per share:

Weighted-average shares outstanding:

Net income (loss)

Dividend to Series B-1 preferred stockholders

Net income attributable to participating securities

Net income (loss) attributable to common stockholders

Net income (loss) per share attributable to common stockholders, basic

Net loss per share attributable to common stockholders, diluted

Weighted-average shares outstanding used in computing net income (loss) per share, basic

Weighted-average shares outstanding used in computing net loss per share, diluted

See accompanying notes to the financial statements

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Statements of Mezzanine Equity and Stockholders’

(Deficit) Equity

(In thousands, except share amounts)

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Preferred Stock

Stockholders’

Balance at December 31, 2023

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Balance at March 31, 2024

Dividends Paid on Series B-1 preferred stock

Conversion of Series A-2 Prime preferred stock into common stock

Issuance of common stock for exercise of options

Stock-based compensation expense

Balance at June 30, 2024

Series A-2 Prime

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Preferred Stock

Stockholder’s

Preferred Stock

Balance at December 31, 2024

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$ ( 100,700 )

Issuance of Series A-3 preferred stock upon exercise of warrants

Conversion of Series B-2 preferred stock into common stock

Conversion of Series A-3 preferred stock into common stock

Issuance of common stock for vested restricted stock units

Issuance of common stock for cash, net of issuance costs

Stock-based compensation expense

Balance at June 30, 2025

$ ( 107,147 )

See accompanying notes to the financial statements

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(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities

Net (loss) income

Adjustments to reconcile net loss to net cash used in operating activities:

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Cash flows from investing activities

Purchases of property, plant, and equipment

Purchases of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from secondary public offering

Commissions paid on settlement

Payments on financed insurance policies

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Proceeds from issuance of Series B-1 preferred stock

Commissions paid on secondary public offering

Proceeds from secondary public offering

Proceeds from exercise of warrants

Dividends on preferred stock

Net cash provided by financing activities

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was incorporated in the State of Delaware on August 18, 2016 .

The Company was dormant until July 2017 when it began evaluating several

drug candidates for in-licensing.

The Company was dormant until July 2017 when it began evaluating a number

of drug candidates for in-licensing.

The Company in-licensed the drug candidate UNI

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negative cash flows from operations since inception and expects to continue to incur negative cash flows from operations in the future.

As the Company continues its research and development activities, the operating losses are expected to increase.

As the Company increases its research and development activities, the operating losses are expected to increase.

The Company has historically

relied on equity offerings, debt financing and loans from a stockholder to fund its operations.

As of December 31, 2024, and March 31,

relied on private equity offerings, debt financing and loans from a stockholder to fund its operations.

As of December 31, 2024 and June

30, 2025, the Company had an accumulated deficit of $ 101.3 million and $ 107.1 million, respectively.

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a private placement.

Pursuant to the securities purchase agreement, the Company issued institutional purchasers $ 50.0 million in shares

of Series B Convertible Preferred Stock.

Pursuant to the securities purchase agreement, the Company issued institutional investors $ 50 million in shares of

Series B Convertible Preferred Stock.

The Company received $ 46.2 million in net proceeds.

On November 13, 2024, the Company entered into

a sales agreement, with Guggenheim Securities, LLC pursuant to which, the Company may offer and sell shares of common stock having an

aggregate offering price of up to $ 50.0 million, subject to certain limitations and in accordance with the terms of the sales agreement,

from time to time through or to Guggenheim Securities, acting as sales agent or principal.

During the three months ended March 31, 2025,

the Company sold 4,507,379 shares of common stock at an average price of $ 0.62 per share and paid $ 84 ,000 in commissions, resulting in

net proceeds to the Company of approximately $ 2.7 million.

On November 13, 2024, we entered into a sales

agreement, with Guggenheim Securities, LLC pursuant to which, we may offer and sell shares of common stock having an aggregate offering

price of up to $ 50.0 million, subject to certain limitations and in accordance with the terms of the sales agreement, from time to time

through or to Guggenheim Securities, LLC acting as sales agent or principal.

During the six months ended June 30, 2025, the Company sold

2,009,616 shares of common stock at an average price of $ 6.07 per share and paid $ 379,000 in commissions, resulting in net proceeds to

the Company of approximately $ 12.2 million.

The Company expects to continue incurring losses

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Management believes that the Company will continue to have access to capital

resources through possible equity offerings, debt financing, corporate collaborations, or other means.

resources through possible equity offerings, debt financings, corporate collaborations or other means.

There can be no assurance that

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and take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its

Based on the Company’s currently anticipated level of expenditures, the Company believes that current available cash

will not be sufficient to fund planned expenditures and meet obligations through the end of the first quarter of 2026, and there is substantial

doubt about the Company’s ability to continue as a going concern for one year after the date that these financial statements are

available to be issued.

Based on the Company’s currently anticipated level of expenditures, the Company believes that it has sufficient resources

such that there is not substantial doubt about the ability to continue operations for at least one year after the date that these financial

statements are available to be issued.

Summary of Significant Accounting Policies

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The accompanying unaudited financial statements

of the Company as of March 31, 2025 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X

of the Company as of June 30, 2025 have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X

and, accordingly, they do not include all information and footnote disclosures required by accounting principles generally accepted in

The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair presentation

of the results of the interim periods presented.

The financial statements include all adjustments (solely of a normal recurring nature)

which are, in the opinion of management, necessary to make the information presented not misleading.

You should read these financial statements

and the accompanying notes in conjunction with the financial statements and notes thereto included in the Company’s Annual Report

on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S.

The Company believes the footnotes and other disclosures made in the financial statements are adequate for a fair

presentation of the results of the interim periods presented.

The financial statements include all adjustments (solely of a normal recurring

nature) which are, in the opinion of management, necessary to make the information presented not misleading.

You should read these financial

statements and the accompanying notes in conjunction with the financial statements and notes thereto included in the Company’s Annual

Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the U.S.

Securities and Exchange Commission on March 31, 2025.

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Significant items subject to such estimates and assumptions

include, stock-based compensation, research contract progress estimates, incremental borrowing rate for leases, useful life for assets, debt

and equity transactions, and the valuation of warrant liabilities.

Actual results may

materially differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).

applies the five-step model in ASC 606 and recognizes revenue from product sales or services rendered when control of the promised goods

or services are transferred to a counterparty in an amount that reflects the consideration to which the Company expects to be entitled

in exchange for those goods and services.

To achieve this core principle, the Company applies the following five steps:

identify the contract

with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price

to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.

include, stock-based compensation, research contract progress estimates, incremental borrowing rate for leases, useful life for assets,

debt and equity transactions, and the valuation of warrant liabilities.

Actual results may materially differ from those estimates.

Warrant Liability

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Segment Information

Company reports its segment information to reflect the manner in which the Company’s

Chief Operating Decision Maker (“CODM”) reviews

and assesses performance.

The Company’s Chief Executive Officer has the responsibility as the CODM to review and assess the performance

of the Company as a whole.

The Company reports its segment information to

reflect the manner in which the Company’s Chief Operating Decision Maker (“CODM”) reviews and assesses performance.

The Company’s Chief Executive Officer has the responsibility as the CODM to review and assess the performance of the Company as

The primary financial measures used by the CODM

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Property and Equipment

Property and equipment are recorded at

cost less accumulated depreciation.

Additions, improvements, and major renewals or replacements that substantially extend the useful life

of an asset are capitalized.

Property and equipment are recorded at cost less

accumulated depreciation.

Additions, improvements, and major renewals or replacements that substantially extend the useful life of an

asset are capitalized.

Repairs and maintenance expenditures are expensed as incurred.

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of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition.

If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated

fair value at that time.

During the three months ended March 31, 2024 and 2025, management determined there were no impairments of the

Company’s property, plant and equipment.

If these cash flows are less than the carrying amount of the asset, an impairment charge is recognized

in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset .

During the six months ended

June 30, 2024 and 2025, management determined there were no impairments of the Company’s property and equipment.

The Company determines whether a contract is,

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the estimated present value of unpaid lease payments over the lease term.

The Company uses its incremental borrowing rate based on the

information available at lease commencement in determining the present value of unpaid lease payments.

The right-of-use assets are reviewed for impairment whenever

events or changes in circumstances exist that indicate the carrying amount may not be recoverable.

The Company uses its incremental borrowing

rate based on the information available at lease commencement in determining the present value of unpaid lease payments.

Fair Value of Financial Instruments

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be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement

establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The fair value

hierarchy contains the following levels:

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The fair value hierarchy

contains the following levels:

Level 1 — defined as observable inputs based on unadjusted quoted prices for identical instruments in active markets;

Level 2 — defined as inputs other than Level 1 that are either directly or indirectly observable in the marketplace for identical or similar instruments in markets that are not active;

Level 3 — defined as unobservable inputs

in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable.

The fair value of the warrant liability is

determined using a Black Scholes model with parameters including (i) the exercise price of the warrants, (ii) the price of the

underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v)

the risk-free rate, and (vi) estimated probability assumptions surrounding the achievement by the Company of technical milestones

associated with regulatory and commercial progress.

Level 3 — defined as unobservable inputs in which little or no market data exists where valuations are derived from techniques in which one or more significant inputs are unobservable.

The fair value of the warrant liability is determined

using a Black Scholes model with parameters including (i) the exercise price of the warrants, (ii) the price of the underlying security,

(iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate, and (vi)

estimated probability assumptions surrounding the achievement by the Company of technical milestones associated with regulatory and commercial

These valuation techniques involve management’s

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opposite impact on fair value measurement.

The following table summarizes the fair value

hierarchy of financial liabilities measured at fair value as of March 31, 2025 (in thousands):

The following table summarizes the fair value hierarchy of financial

liabilities measured at fair value as of June 30, 2025 (in thousands):

Warrant liability

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are attributable to unobservable inputs (in thousands):

Three Months Ended

Fair value at December 31, 2023

Six Months Ended

Fair value at January 1, 2024

Change in fair value of warrants

Fair value at March 31, 2024

Three Months Ended

Fair value at December 31, 2024

Change in fair value of warrants

Fair value at June 30, 2024

Six Months Ended

Fair value at January 1, 2025

Change in fair value of warrants

Fair value at March 31, 2025

The income (expense) relating to the change

in fair value of the warrant liability of ($ 11.8 ) million and $ 8.3 million for the three months ended March 31, 2024 and March 31,

2025 respectively is included in other income (expense) in the statements of operations.

Change in fair value of warrants

Fair value at June 30, 2025

The expense relating to the change in fair value

of the warrant liability of $ 5.0 million and $ 8.7 million for the six months ended June 30, 2024 and June 30, 2025 respectively is included

in other income (expenses) in the statements of operations.

ASC 820, Fair Value Measurement and Disclosures

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to estimate fair value.

As of December 31, 2024 and March 31, 2025, the recorded values of cash and cash equivalents, accounts payable,

As of December 31, 2024, and June 30, 2025, the recorded values of cash and cash equivalents, accounts payable,

and accrued liabilities approximated fair value due to the short-term nature of the instruments.

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to other adverse conditions in the financial or credit markets.

No such losses have been incurred through March 31, 2025.

No such losses have been incurred through June 30, 2025.

Prepaid Expenses and Other Current Assets

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The Company accounts for corporate income taxes

in accordance with GAAP as stipulated in ASC, Topic 740, Income Taxes, (“ASC 740”).

This standard entails the use of the asset

and liability method of computing the provision for income tax expense.

Current tax expense results from corporate tax payable at the

Federal and California jurisdictions for the Company, which relates to the current accounting period.

Deferred tax expense results primarily

from temporary differences between financial statement and tax return reporting, which result in additional tax payable in future periods.

in accordance with GAAP as stipulated in ASC740, Income Taxes, (“ASC 740”).

This standard entails the use of the asset and

liability method of computing the provision for income tax expense.

Current tax expense results from corporate tax payable at the Federal

and California jurisdictions for the Company, which relates to the current accounting period.

Deferred tax expense results primarily from

temporary differences between financial statement and tax return reporting, which result in additional tax payable in future periods.

Deferred tax assets and liabilities are determined based on the differences between the financial statement basis and tax basis of assets

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We are monitoring legislation for any further changes to Section 174 and the impact, if any, to the financial statements in 2025.

On July 4, 2025, the “One big Beautiful

Bill Act (OBBBA) was signed into law.

This legislation introduces a number of new changes to the Internal Revenue Code.

As the Company

does not currently generate taxable income, we do not expect the legislation to have a material impact on our tax posture.

will continue to maintain a full valuation allowance against its net deferred tax assets.

Comprehensive Loss

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as a result comprehensive loss is the same as net loss for each period presented.

Net (Loss) Income per Share

Basic and diluted net (loss) income per share

Net Income (Loss) per Share

Basic and diluted net income (loss) per share

is presented in conformity with the two-class method required for participating securities.

Basic and diluted net (loss) income

Basic and diluted net income (loss)

for common stock and for preferred stock is computed by dividing the sum of distributed earnings and undistributed earnings for each class

of stock by the weighted average number of shares outstanding for each class of stock for the period.

Diluted net loss per share includes

potentially dilutive securities outstanding for the period.

See Note 12 for reconciliations of basic and diluted net (loss) income per

Diluted net income (loss) per share

includes potentially dilutive securities outstanding for the period.

See Note 12 for reconciliations of basic and diluted net income (loss)

Recent Accounting Pronouncements

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not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

In November 2023, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-07, Segment Reporting (ASC 280):

to Reportable Segment Disclosures, which requires an enhanced disclosure of significant segment expenses on an annual and interim basis.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after

December 15, 2024.

Early adoption is permitted.

Upon adoption, the guidance should be applied retrospectively to all prior periods presented

in the financial statements.

The Company has adopted this guidance, and it did not have a material impact on the Company’s financial

Income Taxes Disclosures – In December 2023,

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ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted.

Company is currently evaluating the impact of this guidance on its financial statements.

Company is currently evaluating the impact of this guidance on its consolidated financial statements.

Accounting pronouncements pending adoption

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Expense Disaggregation Disclosures (“ASU 2024-03”).

ASU 2024-03 amends ASC 220, Comprehensive Income to expand

income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about

certain costs and expenses.

ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early

adoption permitted.

The Company is currently evaluating the impact of adopting the standard on its financial statements.

ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statement

expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses.

ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted.

is currently evaluating the impact of adopting the standard on its financial statements.

Significant Agreements

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to the development and commercialization of Oxylanthanum Carbonate (“OLC”).

In June 2024, the Company entered into the First

Amendment to Manufacturing and Supply Agreement with Shilpa (the “Amendment”) in anticipation of an increased manufacturing

demand for OLC.

Pursuant to the Amendment, the Company has agreed to make a binding purchase order for tablets of OLC and Shilpa has agreed

to deliver such order by September 30, 2025.

In addition, the Company has agreed to order additional tablets for delivery between December

31, 2025, and September 30, 2026.

Further, the Company has agreed to make certain milestone payments and to provide certain funding to

Shilpa for a new manufacturing line.

The initial term of the Agreement shall continue until the eighth (8th) anniversary of the date of

receipt by the Company of FDA approval of its NDA of OLC (the “Initial Term”).

Following the Initial Term, the Agreement shall

continue in effect for consecutive periods of four (4) years each unless earlier terminated pursuant to the terms of the Agreement.

In June 2024, the Company entered into the First Amendment to Manufacturing

and Supply Agreement with Shilpa (the “Amendment”) in anticipation of an increased manufacturing demand for OLC.

to the Amendment, the Company has agreed to make a binding purchase order for tablets of OLC and Shilpa has agreed to deliver such order

by September 30, 2025.

In addition, the Company has agreed to order additional tablets for delivery between December 31, 2025, and September

Further, the Company has agreed to make certain milestone payments and to provide certain funding to Shilpa for a new manufacturing

The initial term of the Agreement shall continue until the eighth (8th) anniversary of the date of receipt by the Company of FDA

approval of its NDA of OLC (the “Initial Term”).

Following the Initial Term, the Agreement shall continue in effect for consecutive

periods of four (4) years each unless earlier terminated pursuant to the terms of the Agreement.

In October 2017, the Company entered into an exclusive

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on a fully-diluted basis.

Fully-diluted shares of common stock for purposes of the Spectrum Agreement assumes conversion of any security

convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock reserved for issuance

under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors of the Company immediately

following the issuance of additional shares of the Company’s common stock (but prior to the issuance of any additional shares of

common stock to Spectrum).

Spectrum’s ownership shall not be subject to dilution until the earlier of thirty-six months from the

first date the Company’s stock trades on a public market, or the date upon which the Company attains a public market capitalization

of at least $ 50 million.

On July 13, 2021, the Company’s initial public offering resulted in a public market capitalization of at

least $ 50 million, and as a result the Company was required to issue 438,374 anti-dilution shares of common stock.

This issuance represented

the final anti-dilution calculation required under the Spectrum Agreement, and no further anti-dilution shares will be issued.

calculated the fair value of the shares and recognized $ 2.2 million to research and development expenses as cost to issue those shares

during the third quarter of 2021.

In the event an NDA filing for Oxylanthanum Carbonate is accepted by the FDA, the Company will be required

to pay $ 0.2 million to Altair Nanomaterials, Inc., (“Altair”) in accordance with the Spectrum Agreement.

In addition, in the

event FDA approval for Oxylanthanum Carbonate is received, the Company will be required to pay $ 4.5 million to Altair.

The Company is

also required to pay Spectrum 40 % of all the Company’s sublicense income for any sublicense granted to certain sublicensees during

the first 12 months after the Closing Date (as that term is defined in the Spectrum Agreement) and 20 % of all other sublicense income.

The Company’s payment obligations to Spectrum will expire on the twentieth (20th) anniversary of the Closing Date of the Spectrum

In August 2022, the Company received an upfront payment of approximately $ 1.0 million resulting from a sublicense development

agreement with Lee’s Pharmaceutical (HK) Limited.

The payment represents sublicense income as described in the Spectrum Agreement,

and 20 % of the amount received has been accrued as an R&D expense in the accompanying statements of operations for the year ended

December 31, 2022.

In February 2023, the Company received an upfront payment of approximately $ 0.7 million resulting from a sublicense

development agreement with Lotus International Pte Ltd.

The payment represents sublicense income as described in the Spectrum Agreement,

and 20 % of the amount received has been accrued as an R&D expense in the accompanying statements of operations for the three months

ended March 31, 2025.

Fully-diluted shares of common stock for purposes of the Oxylanthanum Carbonate Purchase Agreement assumes conversion

of any security convertible into or exchangeable or exercisable for common stock or any combination thereof, including any common stock

reserved for issuance under a stock option plan, restricted stock plan, or other equity incentive plan approved by the Board of Directors

of the Company immediately following the issuance of additional shares of the Company’s common stock (but prior to the issuance

of any additional shares of common stock to Spectrum).

Spectrum’s ownership shall not be subject to dilution until the earlier of

thirty-six months from the first date the Company’s stock trades on a public market, or the date upon which the Company attains

a public market capitalization of at least $ 50 million.

On July 13, 2021, the Company’s initial public offering resulted in a public

market capitalization of at least $ 50 million, and as a result the Company was required to issue 43,838 anti-dilution shares of common

This issuance represented the final anti-dilution calculation required under the Spectrum Agreement, and no further anti-dilution

shares will be issued.

The Company calculated the fair value of the shares and recognized $ 2.2 million to research and development expenses

as cost to issue those shares during the third quarter of 2021.

In the event an NDA filing for Oxylanthanum Carbonate is accepted by the

FDA, the Company will be required to pay $ 0.2 million to Altair Nanomaterials, Inc., (“Altair”) in accordance with the Spectrum

In addition, in the event FDA approval for Oxylanthanum Carbonate is received, the Company will be required to pay $ 4.5 million

The Company is also required to pay Spectrum 40 % of all the Company’s sublicense income for any sublicense granted to

certain sublicensees during the first 12 months after the Closing Date (as that term is defined in the Spectrum Agreement) and 20 % of

all other sublicense income.

The Company’s payment obligations to Spectrum will expire on the twentieth (20th) anniversary of the

Closing Date of the Spectrum Agreement.

In August 2022, the Company received an upfront payment of approximately $ 1.0 million resulting

from a sublicense development agreement with Lee’s Pharmaceutical (HK) Limited.

In February 2023, the Company received an upfront

payment of approximately $ 0.7 million resulting from a sublicense development agreement with Lotus International Pte Ltd.

represents sublicense income as described in the Spectrum Agreement, and 20 % of the amount received has been accrued as an R&D expense

in the accompanying statements of operations for the six months ended June 30, 2025.

On January 6, 2022, the Company entered into a

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Related payments totaling approximately $ 2.9 million

have been paid to Quotient as of March 31, 2025, approximately $ 2.8 million of related expense has been recorded, and there is no prepaid

balance in the accompanying balance sheets as of December 31, 2024 and March 31, 2025, respectively.

have been paid to Quotient as of June 30, 2025, approximately $ 2.9 million of related expense has been recorded, and there is no prepaid

balance in the accompanying balance sheets as of December 31, 2024 and June 30, 2025, respectively.

On April 10, 2023, the Company entered into an

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The budget for these services is approximately $ 2.9 million.

Approximately $ 2.9 million has been paid to Inotiv as of March 31, 2025

and there is no prepaid balance in the accompanying balance sheets as of December 31, 2024 and March 31, 2025, respectively.

Approximately $ 2.9 million has been paid to Inotiv as of June 30, 2025 and

there is no prepaid balance in the accompanying balance sheets as of December 31, 2024 and June 30, 2025, respectively.

On July 14, 2022, the Company entered into a license

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The agreements provide

for total payments of up to $ 6.5 million, and the Company has made $ 6.5 million in payments pursuant to the agreements as of December

for total payments of up to $ 6.5 million, and the Company has made $ 6.5 million in payments pursuant to the agreements as of June 30,

Balance Sheet Components

Prepaid expenses and other current assets as of

December 31, 2024 and March 31, 2025 consisted of the following (in thousands):

December 31, 2024 and June 30, 2025 consisted of the following (in thousands):

Prepaid directors’ and officers’ liability insurance premiums

Prepaid drug manufacturing supply costs

Property, plant and equipment as of December 31,

2024 and March 31, 2025 consisted of the following (in thousands):

Prepaid preclinical services

Property and equipment as of December 31, 2024 and June 30, 2025 consisted

of the following (in thousands):

Leasehold improvements

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Less accumulated depreciation

Accounts payable as of December 31, 2024 and March

Accounts payable as of December 31, 2024 and June

30, 2025 consisted of the following (in thousands):

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Accrued liabilities as of December 31, 2024 and

March 31, 2025 consisted of the following (in thousands):

June 30, 2025 consisted of the following (in thousands):

Accrued labor costs

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of the original lease, and the Company evaluated the new agreement under ASC 842, Leases.

The Company classified the lease as an

operating lease and, on July 15, 2024, determined that the present value of the lease was approximately $ 1.0 million using an estimated

incremental borrowing rate of 10 %.

During the three months ended March 31, 2024 and March 31, 2025, the Company reflected amortization

of right-of-use asset of approximately $ 80,000 and $ 127,000 , respectively, resulting in a right of use asset balance of approximately

$ 0.5 million at March 31, 2025.

During the three months ended March 31, 2024 and

March 31, 2025, the Company made cash payments on the lease of $ 0.1 million and $ 0.1 million, respectively, towards the lease liabilities.

As of March 31, 2025, the total lease liability was approximately $ 0.5 million.

Rent expense for the lease for the three months

ended March 31, 2024 and March 31, 2025 was approximately $ 0.1 million and $ 0.1 million, respectively.

As of March 31, 2025, maturities of the Company’s

The Company classified the lease as an operating

lease and, on July 15, 2024, determined that the present value of the lease was approximately $ 1.0 million using an estimated incremental

borrowing rate of 10 %.

During the six months ended June 30, 2024 and June 30, 2025, the Company reflected amortization of right-of-use

asset of approximately $ 148,000 and $ 259,000 , respectively, resulting in a right of use asset balance of approximately $ 0.4 million at

June 30, 2025.

During the six months ended June 30, 2024 and

June 30, 2025, the Company made cash payments on the lease of $ 0.2 million and $ 0.3 million, respectively towards the lease liabilities.

As of June 30, 2025, the total lease liability was approximately $ 0.4 million.

As of June 30, 2025, maturities of the Company’s

lease liabilities are as follows (in thousands, unaudited):

Operating Lease

Year ending December 31, 2025

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Company contributions to the 401(k) Plan totaled approximately $ 72,000 and $ 87,000 for the

for the three months ended March 2024 and March 31, 2025, respectively.

six months ended June 30, 2024 and June 30, 2025, respectively.

Stockholders’ Equity (Deficit)

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shares of common stock at par value of $ 0.001 per share.

Reverse Stock Split

On June 18, 2025, the Company filed the Charter

Amendment with the Secretary of State of the State of Delaware to effectuate a reverse stock split.

The Company’s common stock began

trading on a split-adjusted basis at the opening of trading on the Nasdaq Capital Market on June 20, 2025.

When the reverse stock split

became effective, every 10 shares of common stock were automatically reclassified and combined into one share of common stock.

No fractional

shares were issued as a result of the split.

Stockholders who would otherwise be entitled to receive a fractional share will instead automatically

have their fractional interests rounded up to the next whole share, after aggregating all the fractional interests of a holder resulting

from the split.

The split affects all stockholders uniformly and will not change any stockholder’s percentage ownership interest

or any stockholder’s proportionate voting power, except for immaterial changes that may result from the treatment of fractional

The split did not change the number of authorized shares of common stock or the par value per share of the common stock.

As a result of the reverse stock split, proportionate

adjustments were made to the per share exercise prices of, and the number of shares underlying, the Company’s outstanding stock

options, as well as to the number of shares available for future awards granted under the Company’s stock incentive plans.

proportionate adjustments were made to the per share exercise prices of, and the number of shares underlying, outstanding warrants to

purchase shares of the Company’s common stock.

Further, a proportionate adjustment was made to the per share conversion price of

the Company’s series A-2 prime preferred stock, pursuant to its terms.

All share and per share data in the accompanying financial

statements have been retroactively adjusted to reflect the effect of the reverse stock split.

Issuance of Common Stock and Warrants from

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During July 2021, as a result of its initial public

offering (“IPO”), the Company issued 5,000,000 shares of common stock and 4,000,000 warrants to investors in exchange for

cash at $ 5.00 per unit, consisting of $ 4.99 per share of common stock and $ .0125 per four fifths of a warrant.

The warrants have a 5 -year

term and an exercise price of $ 6.00 per warrant.

The underwriters exercised their option to purchase an additional 600,000 warrants, and

the Company received $ 7,500 in proceeds.

offering, the Company issued 500,000 shares of common stock and 400,000 warrants to investors in exchange for cash at $ 50.00 per unit,

consisting of $ 49.90 per share of common stock and $ .125 per four fifths of a warrant.

The warrants have a 5 -year term and an exercise

price of $ 60.00 per warrant.

The underwriters exercised their option to purchase an additional 60,000 warrants, and the Company received

$ 7,500 in proceeds.

As a result of the initial public offering, the

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are equity classified.

The following table summarizes activity for the Company’s IPO warrants for the three months ended March 31,

The following table summarizes activity for the Company’s IPO warrants for the six months ended June 30,

Number of Average

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Warrants exercised -

Outstanding, March 31, 2025 4,784,193 6.00 1.29 -

Outstanding, June 30, 2025 478,419 60.00 1.04 -

See Note 10 for information on preferred stock

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B Preferred Stock

On June 26, 2023, the Company held its

annual shareholder meeting and, as a result, shareholder approval for the issuance of common shares upon the conversion of the

Series A-1 Preferred Stock was obtained (see Notes 8 and 9).

On July 11, 2023, pursuant to the Certificate of Designation of

Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Series A Certificate of

Designation”), the Company issued a total of 19,516,205 shares of common stock and 43,649 Series A-2 preferred Stock in

settlement of the auto-conversion of the Series A-1 Preferred Stock.

On June 26, 2023, the Company held its annual

shareholder meeting and, as a result, shareholder approval for the issuance of common shares upon the conversion of the Series A-1 Preferred

Stock was obtained (see Notes 8 and 9).

On July 11, 2023, pursuant to the Certificate of Designation of Preferences, Rights and Limitations

of the Series A Convertible Voting Preferred Stock (the “Series A Certificate of Designation”), the Company issued a total

of 1,951,621 shares of common stock and 43,649 Series A-2 Preferred Stock in settlement of the auto-conversion of the Series A-1 Preferred

On March 26, 2024, the Company issued 285,000

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conversion of the Series B-1 Convertible Preferred Stock.

On June 25, 2024, the Company issued 5,956,000

shares of common stock upon conversion of 2,918.44 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 23, 2024, the Company issued 3,550,000

shares of common stock upon conversion of 1,739.50 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 25, 2024, the Company issued 3,756,000

shares of common stock upon conversion of 1,840.44 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 29, 2024, the Company issued 1,359,000

shares of common stock upon conversion of 665.91 shares of the Company’s Series A-2 Prime Preferred Stock.

On June 25, 2024, the Company issued 595,600 shares

of common stock upon conversion of 2,918.44 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 23, 2024, the Company issued 355,000 shares

of common stock upon conversion of 1,739.50 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 25, 2024, the Company issued 375,600 shares

of common stock upon conversion of 1,840.44 shares of the Company’s Series A-2 Prime Preferred Stock.

On July 29, 2024, the Company issued 135,900 shares

of common stock upon conversion of 665.91 shares of the Company’s Series A-2 Prime Preferred Stock.

On August 14, 2024, the Company issued 350,200

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Stock Offering”), net of placement agent fees and offering expenses of $ 2.2 million.

The Company has used the net proceeds

from the Preferred Stock Offering to support the Company’s New Drug Application (NDA) submission for approval of Oxylanthanum Carbonate

The Company has used the net proceeds from

the Preferred Stock Offering to support the Company’s New Drug Application (NDA) submission for approval of Oxylanthanum Carbonate

for the treatment of hyperphosphatemia and, if approved, for the commercial launch of Oxylanthanum Carbonate in the U.S.

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the Tranche C Warrant for an aggregate exercise price of approximately $ 50 million is exercisable until 21 days following four quarters

of commercial sales of Oxylanthanum Carbonate following receipt of TDAPA approval.

The Company has designated 30,190 shares of Series

A-1 Preferred Stock, 1,800,000 shares of Series A-2 Preferred Stock, 1,800,000 shares of Series A-3 Preferred Stock, 1,800,000 shares

of Series A-4 Preferred Stock, and 3,600,000 shares of Series A-5 Preferred Stock, together the “Series A Preferred Stock”.

The Series A Preferred Stock has a par value of $ 0.001 per share.

The Series A Certificate of Designation states that, to the extent that

the conversion of the Series A-1 preferred stock as well as the exercise of the Warrants into Series A-2, Series A-3, Series A-4, and

Series A-5 preferred stock results in a beneficial ownership interest in excess of the maximum percentage of common stock upon conversion,

the holders will receive the as converted equivalent for the remaining shares in preferred stock.

of commercial sales of Oxylanthanum Carbonate.

The Company had designated 30,190 shares of Series A-1 Preferred Stock,

1,800,000 shares of Series A-2 Preferred Stock, 1,800,000 shares of Series A-3 Preferred Stock, 1,800,000 shares of Series A-4 Preferred

Stock, and 3,600,000 shares of Series A-5 Preferred Stock, together the “Series A Preferred Stock”.

The Series A Preferred

Stock has a par value of $ 0.001 per share.

The Series A Certificate of Designation states that, to the extent that the conversion of the

Series A-1 preferred stock as well as the exercise of the Warrants into Series A-2, Series A-3, Series A-4, and Series A-5 preferred stock

results in a beneficial ownership interest in excess of the maximum percentage of common stock upon conversion, the holders will receive

the as converted equivalent for the remaining shares in preferred stock.

The Company determined that the Warrants are freestanding

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shareholder meeting and, as a result, shareholder approval for the conversion of the Series A-1 Preferred Stock was obtained.

11, 2023, pursuant to the Series A Certificate of Designation, the Company issued 19,516,205 shares of common stock and 43,649 shares

of Series A-2 Preferred Stock in partial settlement of the auto-conversion of the Series A-1 preferred shares.

11, 2023, pursuant to the Series A Certificate of Designation, the Company issued 1,951,621 shares of common stock (see Note 9) and 43,649

shares of Series A-2 Preferred Stock in partial settlement of the auto-conversion of the Series A-1 preferred shares.

As of December 31,

there were zero shares of Series A-1 preferred stock issued and outstanding and there were 43,649 shares of Series A-2 Preferred Stock

issued and outstanding.

2023, there were zero shares of Series A-1 preferred stock issued and outstanding and there were 43,649 shares of Series A-2 Preferred

Stock issued and outstanding.

The Series A-2, A-3, A-4, and A-5 Preferred Stock

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the common stock.

Holders of the Series A-2, A-3, A-4, and

A-5 Preferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis as determined by dividing

the liquidation preference with respect to such shares of Preferred Stock by the conversion price.

Holders of common stock are entitled

to one vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders of Series A Preferred

Stock will be entitled to one vote for each whole share of Common Stock into which their Series A Preferred Stock is then-convertible

on all matters submitted to a vote of stockholders.

At the option of the holder thereof, each share

of Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, or Series A-5 Preferred Stock shall be convertible

into one share of common stock.

Holders of the Series A-2, A-3,

A-4, and A-5 Preferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis as determined

by dividing the liquidation preference with respect to such shares of Preferred Stock by the conversion price.

Holders of common stock

are entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders

of Series A Preferred Stock will be entitled to one vote for each whole share of common stock into which their Series A Preferred Stock

is then-convertible on all matters submitted to a vote of stockholders.

At the option of the holder thereof, as of the date of the issuance

of the Series A-1 Preferred on March 3, 2023, each share of Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred

Stock, or Series A-5 Preferred Stock shall be convertible into one share of common stock.

Exchange Agreement

On March 13, 2024, the Company entered into an

exchange agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”), pursuant to

which the Investors surrendered all shares of Series A-2 Preferred Stock held by them in exchange for an aggregate of 21,388.01 shares

of new preferred stock to be known as “Series A-2 Prime Preferred” having rights set forth in the Amended and Restated Certificate

of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Amended Series A

Certificate of Designation”).

On March 13, 2024, the Company entered into

an exchange agreement (the “Exchange Agreement”) with certain accredited investors (the “Investors”), pursuant

to which the Investors surrendered all shares of Series A-2 Preferred Stock held by them in exchange for an aggregate of 21,388.01 shares

of new preferred stock to be known as “Series A-2 Prime Preferred” (the “Exchanged Preferred”) having rights set

forth the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred

Stock (the “Amended Series A Certificate of Designation”).

Concurrent with execution of the Exchange Agreement,

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Tranche B Warrants”) and (iii) tranche C warrants to acquire an aggregate of 6,960,353 shares of Series A-5 Convertible Preferred

Stock of the Company that were issued on July 11, 2023(the “Original Tranche C Warrants”, and together with the Original Tranche

A Warrants and Tranche B Warrants, the “Original Warrants”) have been amended and restated to acquire 51,506.61294 shares

of Series A-5 Convertible Preferred Stock (as amended, the “Amended Tranche C Warrants,” together with the Amended Tranche

A Warrants and the Amended Tranche B Warrants, the “Amended Warrants”).

The Amended Warrants have the same terms and conditions

as the original warrants except that such Amended Warrants:

(i) reduced the amount of shares of Series A-3 Convertible Preferred Stock,

Series A-4 Convertible Preferred Stock and Series A-5 Convertible Preferred Stock into which such Amended Warrants are convertible as

described above;

Stock of the Company that were issued on July 11, 2023 (the “Original Tranche C Warrants”, and together with the Original

Tranche A Warrants and Tranche B Warrants, the “Original Warrants”) have been amended and restated to acquire 5,150.66129

shares of Series A-5 Convertible Preferred Stock (as amended, the “Amended Tranche C Warrants,” together with the Amended

Tranche A Warrants and the Amended Tranche B Warrants, the “Amended Warrants”).

The Amended Warrants have the same terms and

conditions as the original warrants except that such Amended Warrants:

(i) reduced the amount of shares of Series A-3 Convertible Preferred

Stock, Series A-4 Convertible Preferred Stock and Series A-5 Convertible Preferred Stock into which such Amended Warrants are convertible

as described above;

(ii) allow for the issuance of fractional shares of Series A-3 Preferred Stock, Series A-4 Preferred Stock and Series

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and the Series A-5 Preferred Stock and exercise period in the Amended Warrants did not change from the Original Warrants.

Subject to the terms and limitations contained

in the Amended Series A Certificate of Designation, each share of Series A-2 Prime Convertible Preferred Stock, Series A-3 Convertible

Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock are convertible into a number shares

of Common Stock obtained by dividing the Original Per Share Price ($ 1,000 ) of each such share of Series A-2 Prime Convertible Preferred

Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock by the

applicable conversion price of $ 0.49 , $ 0.54 , $ 0.59 and $ 0.74 of each such share of Series A-2 Prime Convertible Preferred Stock, Series

A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock, respectively.

Pursuant to the terms of the Exchange Agreement, effective March 13, 2024, the Company filed the Amended Certificate of Designation

with the Delaware Secretary of State designating, 21,400 shares as Series A-2 Prime Preferred Stock, 25,900 shares as Series A-3 Convertible

Preferred Stock, 25,700 shares as Series A-4 Convertible Preferred Stock, and 51,600 shares as Series A-5 Convertible Preferred

Stock (all such series of preferred stock referred to herein collectively as “Series A Preferred Stock”), each with a stated

value of $ 1,000 per share (the “Original Per Share Price”).

The Amended Certificate of Designation sets forth the rights,

preferences and limitations of the shares of Series A Preferred Stock.

Terms not otherwise defined in this item shall have the meanings

given in the Amended Certificate of Designation.

The Amended Certificate of Designation was filed with an effective date of March 14,

2024 and the Series A-2 Prime, A-3, A-4, and A-5 Preferred Stock have the following rights, has the following terms:

At all times following the Issuance

Date, while shares of Series A Preferred Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitled to receive,

and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis and

without regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other than dividends

in the form of Common Stock, which shall be made in accordance with the terms of the Amended Certificate of Designation) actually paid

on shares of the Common Stock when, as and if such dividends (other than dividends in the form of Common Stock, which shall be made in

accordance with the terms of the Amended Certificate of Designation) are paid on shares of the Common Stock.

Pursuant to the terms of the Exchange Agreement,

effective March 13, 2024, the Company filed the Amended Certificate of Designation with the Delaware Secretary of State designating,

21,400 shares as Series A-2 Prime Preferred Stock, 25,900 shares as Series A-3 Convertible Preferred Stock, 25,700 shares as

Series A-4 Convertible Preferred Stock, and 51,600 shares as Series A-5 Convertible Preferred Stock (all such series of preferred

stock referred to herein collectively as “Series A Preferred Stock”), each with a stated value of $ 1,000 per share (the “Original

Per Share Price”).

The Amended Certificate of Designation sets forth the rights, preferences and limitations of the shares of Series

A Preferred Stock.

Terms not otherwise defined in this item shall have the meanings given in the Amended Certificate of Designation.

The Amended Certificate of Designation was filed with an effective date of March 14, 2024 and the Series A-2 Prime, A-3, A-4, and A-5

Preferred Stock have the following rights, has the following terms:

At all times following

the Issuance Date, while shares of Series A Preferred Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitled

to receive, and the Company shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stock

basis and without regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other than

dividends in the form of common stock, which shall be made in accordance with the terms of the Amended Certificate of Designation) actually

paid on shares of the common stock when, as and if such dividends (other than dividends in the form of common stock, which shall be made

in accordance with the terms of the Amended Certificate of Designation) are paid on shares of the common stock.

Voting Rights .

Subject to certain limitations

described in the Amended Certificate of Designation, the Series A Preferred Stock is voting stock.

Holders of the Series A Preferred Stock

are entitled to vote together with the Common Stock on an as-if-converted-to-Common-Stock basis.

Holders of Common Stock are entitled

to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders.

Accordingly, holders of Series A Preferred

Stock will be entitled to one vote for each whole share of Common Stock into which their Series A Preferred Stock is then-convertible

on all matters submitted to a vote of stockholders.

Upon any Liquidation, the assets

of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series A Preferred

Stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series

A Preferred Stock as if they had been converted to Common Stock pursuant to the terms of the Amended Certificate of Designation immediately

prior to such Liquidation, without regard to any limitations on conversion set forth in the Amended Certificate of Designation or otherwise.

Subject to certain

limitations described in the Amended Certificate of Designation, the Series A Preferred Stock is voting stock.

Holders of the Series A

Preferred Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis.

Holders of common stock

are entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders

of Series A Preferred Stock will be entitled to one vote for each whole share of common stock into which their Series A Preferred Stock

is then-convertible on all matters submitted to a vote of stockholders.

Liquidation .

Upon any Liquidation, the

assets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series A

Preferred Stock and common stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares

of Series A Preferred Stock as if they had been converted to common stock pursuant to the terms of the Amended Certificate of Designation

immediately prior to such Liquidation, without regard to any limitations on conversion set forth in the Amended Certificate of Designation

or otherwise.

Subject to the limitations set

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Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock, respectively.

Pursuant to the terms

of the Certificate of Correction to the Amended Series A Certificate of Designation filed on August 13, 2025 (which correction was effective

as of March 14, 2024 pursuant to Section 103(f) of the Delaware General Corporation Law), there was no adjustment to the conversion prices

for the Series A-3, A-4 and A-5 Preferred Stock as there were no shares outstanding in such series of preferred stock at the time of the

reverse stock split.

Issuance of Series B-1 Preferred Stock

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B-1 Convertible Preferred Stock.

50,000 Shares of Series B-1 Convertible Preferred Stock were issued at a price of $ 1,000.00 per share

and each share is convertible into shares of common stock at a rate equal to the initial $ 1,000 purchase price divided by the initial

conversion price of $ 1.00 per share.

50,000 Shares of Series B-1 Convertible Preferred Stock were issued at a price of $ 1,000 per share and

each share is convertible into shares of common stock at a rate equal to the initial $ 1,000 purchase price divided by the initial conversion

price of $ 1.00 per share.

Pursuant to the Certificate of Designation of

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The Company has designated 50,000 shares of Series

A-1 Preferred Stock and 50,000 shares of Series B-2 Preferred Stock.

B-1 Preferred Stock and 50,000 shares of Series B-2 Preferred Stock.

The Series B Certificate of Designation states that, to the extent

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stockholder meeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible Preferred Stock was obtained

On July 5, 2024, pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred

Stock, the Company issued 42,118,000 shares of common stock and 7,882 shares of Series B-2 preferred stock in settlement of the automatic

conversion of the Series B-1 Convertible Preferred Stock.

The Series B-1 Preferred Stock has the following

Prior to the receiving Stockholder

Approval, dividends will accrue, on all issued and outstanding shares of Series B-1 Preferred Stock, prior to and in preference to all

other shares of capital stock of the Company, at an annual rate of eight percent ( 8 %) compounded annually on the original per share price

(plus any such accreted compounded amounts);

(“Stockholder Approval”).

On July 5, 2024, pursuant to the Certificate of Designation of Preferences, Rights and Limitations

of the Series B Convertible Preferred Stock, the Company issued 4,211,800 shares of common stock and 7,882 shares of Series B-2 preferred

stock in settlement of the automatic conversion of the Series B-1 Convertible Preferred Stock.

The Series B-1 Preferred Stock had the following

Prior to receiving Stockholder

Approval, dividends accrued, on all issued and outstanding shares of Series B-1 Preferred Stock, prior to and in preference to all other

shares of capital stock of the Company, at an annual rate of eight percent ( 8 %) compounded annually on the original per share price (plus

any such accreted compounded amounts);

provided that such annual dividend rate shall increase to fourteen percent ( 14 %) if Stockholder

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Subject to certain limitations

described in the Series B Certificate of Designation holders of the Series B-1 Preferred Stock are entitled to vote together with

the common stock on an as-if-converted-to-common-stock basis as determined by dividing the liquidation preference with respect to

such shares of Series B-1 Preferred Stock by the conversion price.

Holders of common stock are entitled to one vote for each share

of common stock held on all matters submitted to a vote of stockholders.

Unless and until the Company has obtained the Stockholder

Approval, the number of shares of Common Stock that shall be deemed issued upon conversion of the Series B Preferred Stock (for

purposes of calculating the number of aggregate votes that the holders of Series B Preferred Stock are entitled to on an

as-converted basis) will be equal to that number of shares equal to 19.9 % of the Company’s outstanding Common Stock as of the

Signing Date (excluding for purposes of the calculation, any securities issued on the Signing Date) (the “Cap”), which

each such holder being able to vote the number of shares of Series B Preferred Stock held by it relative to the total number of

shares of Series B Preferred Stock then outstanding multiplied by the Cap.

Notwithstanding the foregoing, the holders of the Series

B Preferred Stock are not entitled to vote together with the Common Stock on an as-if-converted-to-Common-Stock-basis with regard to

the approval of the issuance of Common Stock upon conversion of the Series B Preferred Stock.

On the tenth trading day following the

announcement of the Stockholder Approval, each share of Series B-1 Preferred Stock shall automatically convert into a unit

consisting of:

(1) the number of shares of common stock equal to the quotient of (A) the liquidation preference with respect to such

share of Series B-1Preferred Stock, divided by (B) the conversion price, provided that, to the extent the share conversion would

cause such Holder’s beneficial ownership to exceed 9.99 %, such holder shall receive shares of Series B-2 Preferred Stock in

lieu of common stock, on a one-for-one basis, with respect to the number of shares of common stock that exceed 9.99 % ownership

divided by 1,000 .

described in the Series B Certificate of Designation holders of the Series B-1 Preferred Stock are entitled to vote together with the

common stock on an as-if-converted-to-common-stock basis as determined by dividing the liquidation preference with respect to such shares

of Series B-1 Preferred Stock by the conversion price.

Holders of common stock are entitled to one vote for each share of common stock

held on all matters submitted to a vote of stockholders.

Unless and until the Company has obtained the Stockholder Approval, the number

of shares of common stock that shall be deemed issued upon conversion of the Series B Preferred Stock (for purposes of calculating the

number of aggregate votes that the holders of Series B Preferred Stock are entitled to on an as-converted basis) will be equal to that

number of shares equal to 19.9 % of the Company’s outstanding common stock as of the Signing Date (excluding for purposes of the

calculation, any securities issued on the Signing Date) (the “Cap”), which each such holder being able to vote the number

of shares of Series B Preferred Stock held by it relative to the total number of shares of Series B Preferred Stock then outstanding multiplied

Notwithstanding the foregoing, the holders of the Series B Preferred Stock are not entitled to vote together with the common

stock on an as-if-converted-to-Common-Stock-basis with regard to the approval of the issuance of common stock upon conversion of the Series

B Preferred Stock.

On the tenth trading day following the announcement

of the Stockholder Approval, each share of Series B-1 Preferred Stock automatically converted into a unit consisting of:

(1) the number

of shares of common stock equal to the quotient of (A) the liquidation preference with respect to such share of Series B-1 Preferred Stock,

divided by (B) the conversion price, provided that, to the extent the share conversion would cause such Holder’s beneficial ownership

to exceed 9.99 %, such holder shall receive shares of Series B-2 Preferred Stock in lieu of common stock, on a one-for-one basis, with

respect to the number of shares of common stock that exceed 9.99 % ownership divided by 1,000 .

Liquidation Preference :

The Series B-1 Preferred

Stock had a liquidation preference of one-times the original per share price of $ 1,000 per share, plus any accrued but unpaid dividends

thereon, whether or not declared, subject to certain customary anti-dilution adjustments.

The Series B-1

Preferred Stock had a liquidation preference of one-times the original per share price of $ 1,000 per share, plus any accrued but unpaid

dividends thereon, whether or not declared, subject to certain customary anti-dilution adjustments.

The Series B-2 Preferred Stock has the following

Dividends will accrue, on all issued

and outstanding shares of Series B-2 Preferred Stock, prior to and in preference to all other shares of capital stock of the Company,

at an annual rate of eight percent ( 8 %) compounded annually on the original per share price (plus any such accreted compounded amounts).

If such dividends are not declared and paid in cash, the dividend amounts will be added to the aggregate liquidation preference then outstanding.

Subject to certain limitations described

in the Series B Certificate of Designation, the Series B-2 Preferred Stock is voting stock.

Holders of the SeriesB-2 Preferred Stock are

entitled to vote together with the common stock on an as-if-converted-to-common-stock basis.

Holders of common stock are entitled to one

vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders of Series B-2 Preferred

Stock will be entitled to one vote for each whole share of common stock into which their Series B-2 Preferred Stock is then-convertible

Following the Issuance Date,

while shares of Series B Preferred Stock are issued and outstanding, holders of Series B Preferred Stock shall be entitled to receive,

and the Corporation shall pay, dividends on shares of Series B Preferred Stock equal (on an as-if-converted-to-common-stock basis and

without regard to any limitations on conversion set forth herein or otherwise) to and in the same form as dividends (other than dividends

in the form of common stock, which shall be made in accordance with Section 7(a)) actually paid on shares of the common stock when, as

and if such dividends (other than dividends in the form of common stock, which shall be made in accordance with Section 7(a)) are paid

on shares of the common stock.

Subject to certain limitations

described in the Series B Certificate of Designation, the Series B-2 Preferred Stock is voting stock.

Holders of the SeriesB-2 Preferred

Stock are entitled to vote together with the common stock on an as-if-converted-to-common-stock basis.

Holders of common stock are entitled

to one vote for each share of common stock held on all matters submitted to a vote of stockholders.

Accordingly, holders of Series B-2

Preferred Stock will be entitled to one vote for each whole share of common stock into which their Series B-2 Preferred Stock is then-convertible

on all matters submitted to a vote of stockholders.

Upon any Liquidation, the assets

of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series B Preferred

Stock and common stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series

B preferred Stock as if they had been converted to common stock pursuant to the terms of the Certificate of Designation immediately prior

to such Liquidation, without regard to any limitations on conversion set forth in the Series B Certificate of Designation or otherwise.

Subject to the limitations set forth

in the Series B Certificate of Designation, at the option of the holder thereof, each share of Series B-2 Preferred Stock, is convertible

into the number of shares of common stock equal to the quotient of (A) the stated value ($ 1,000 ), divided by (B) the conversion price

Liquidation :

Upon any Liquidation, the

assets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series B

Preferred Stock and common stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares

of Series B preferred Stock as if they had been converted to common stock pursuant to the terms of the Certificate of Designation immediately

prior to such Liquidation, without regard to any limitations on conversion set forth in the Series B Certificate of Designation or otherwise.

Subject to the limitations

set forth in the Series B Certificate of Designation, at the option of the holder thereof, each share of Series B-2 Preferred Stock, is

convertible into the number of shares of common stock equal to the quotient of (A) the stated value ($ 1,000 ), divided by (B) the conversion

price of $ 1.00 .

As of June 30, 2025, all shares of Series B-2 Preferred Stock have been converted into common stock.

Warrant Liability

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at each balance sheet date after issuance.

Any change in fair value is recognized as a component of other income (expense) in the statements

Any change in fair value is recognized as a component of other income (expenses) in the statements

of operations in the period of change.

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by a directionally opposite change and a directionally similar change, respectively, in the assumption used for the estimated term.

The fair value of the contingently issuable

Warrants associated with the Company’s March 2023 private placement transaction was initially determined as of March 3,2023,

and March 31, 2023, by using a Monte Carlo simulation technique (“MCS”) to value the embedded derivatives associated

with the Warrants.

The MCS methodology calculates the theoretical value of a warrant based on certain parameters, including:

threshold of exercising the warrant, (ii) the price of the underlying security, (iii) the time to expiration, or expected term, (iv)

the expected volatility of the underlying security, (v) the risk-free rate, (vi) the number of paths, (vii) estimated probability

assumptions surrounding shareholder approval as well as the achievement by the Company of technical milestones associated with

regulatory and commercial progress, and (viii) an estimated discount for lack of marketability.

The fair value of the Warrants associated with

the Company’s March 2023 private placement transaction was determined as of March 3, 2023, and March 31, 2023, by using a Monte

Carlo simulation technique (“MCS”) to value the embedded derivatives associated with the Warrants.

The MCS methodology calculates

the theoretical value of a warrant based on certain parameters, including:

(i) the threshold of exercising the warrant, (ii) the price

of the underlying security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v)

the risk-free rate, (vi) the number of paths, (vii) estimated probability assumptions surrounding shareholder approval as well as the

achievement by the Company of technical milestones associated with regulatory and commercial progress, and (viii) an estimated discount

for lack of marketability.

The MCS valuation model was used for the valuation

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the exercise price for the Warrants became fixed.

Therefore, as of December 31, 2024 and March 31, 2025, the fair value of the Warrants

Therefore, as of December 31, 2024 and June 30, 2025, the fair value of the Warrants

was determined using a Black Scholes model using parameters including (i) the exercise price of the warrant, (ii) the price of the underlying

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The tables below summarize the valuation inputs into the Black Scholes

model for the liability associated with the three tranches of Warrants at December 31, 2024, and March 31, 2025.

model for the liability associated with the three tranches of Warrants at December 31, 2024 and June 30, 2025.

Tranche A Warrant

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Risk free rate

3.9 % – 4.3 %

Dividend yield

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0.01 % - 27.46 %

As of the issuance date (March 3, 2023), the Company

estimated the fair value of the Warrants to be $ 2.8 million.

As of December 31, 2024 and March 31, 2025, the Company estimated the fair

As of December 31, 2024 and June 30, 2025, the Company estimated the fair

value of the Warrants to be $ 18.9 million and $ 10.2 million, respectively.

The following table summarizes activity for the

Company’s preferred stock warrants for the three months ended March 31, 2024:

The following table summarizes activity, on an

as-converted to common shares basis, for the Company’s preferred stock warrants for the six months ended June 30, 2025:

Number of Average

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Warrants exercised ( 277,000 ) -

Outstanding, March 31, 2025 160,958,167 $ 0.64 1.88 $

Outstanding, June 30, 2025 15,818,817 $ 6.42 1.63 $

Stock-based Compensation

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award agreements.

A total of 1,302,326 shares of common stock were reserved for issuance pursuant to the 2021 Plan prior to our annual

meeting on June 26, 2023.

A total of 130,233 shares of common stock were reserved for issuance pursuant to the 2021 Plan prior to our annual meeting

on June 26, 2023.

Shareholders approved an increase to the number of shares reserved on June 26, 2023, and accordingly, at December 31,

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As of December 31, 2024, approximately 743,333 shares of common stock were available under the 2021 Plan.

As of March 31, 2025,

As of June 30, 2025,

there are approximately 1,921,549 shares of common stock available under the 2021 Plan.

The following table summarizes activity for stock

options under all plans for the three months ended March 31, 2024:

options under all plans for the six months ended June 30, 2025:

Number of Average

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Options exercised -

Outstanding, March 31, 2025 13,781,140 $ 1.00 8.35 $ 189

Options vested and exercisable as of March 31, 2025 5,786,925 $ 1.19 7.91 $ 55

The grant date fair value of options granted during the three months

ended March 31, 2025, was approximately $ 53,000 .

As of March 31, 2025, the unrecognized compensation

Outstanding, June 30, 2025 1,420,714 $ 9.86 8.16 $ 5,410

Options vested and exercisable as of June 30, 2025 725,525 $ 11.47 7.82 $ 2,662

The grant date fair value of options granted during the six months

ended June 30, 2025, was approximately $ 53,000 .

As of June 30, 2025, the unrecognized compensation

cost related to outstanding stock options was $ 4.6 million, which is expected to be recognized as expense over approximately 4.0 years.

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units vested in May 2024.

During August 2023, the Company granted a

consultant 10,000 restricted stock units with a grant date fair value of $ 7,500 , resulting in a fair value per share of $ 0.75 .

restricted stock units vested in March 2025.

During August 2023, the Company granted a consultant

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The restricted stock

units vested in March 2025.

During August 2024, the Company granted a consultant

1,177 restricted stock units with a grant date fair value of $ 4,000 , resulting in a fair value per share of $ 3.40 .

The restricted stock

units will vest in August 2026.

The Company has recorded stock-based compensation

expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the three months ended

March 31, 2024 and 2025 (in thousands):

expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the three and six months

ended June 30, 2024 and 2025 (in thousands):

Three Months Ended

Six Months Ended

Research and development

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fair value of the common stock underlying the Company’s stock options prior to the initial public offering was estimated at each

grant date and was determined on a periodic basis and based either on transactions with third parties in which common stock was sold for

cash or with the assistance of an independent third-party valuation expert.

grant date and was determined on a periodic basis and based either on transactions with third parties in which common stock was sold

for cash or with the assistance of an independent third-party valuation expert.

Subsequent to our initial public offering, the fair value

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The assumptions

underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application of

significant levels of management judgment.

underlying these valuations represented management’s best estimates, which involved inherent uncertainties and the application

of significant levels of management judgment.

Volatility - The expected volatility

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Expected Dividend – Through

March 31, 2025, the Company has never declared nor paid any cash dividends.

June 30, 2025, the Company has never declared nor paid any cash dividends.

The Company shall modify its dividend policy to state that

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of commercial sales.

The following averaged assumptions were used to calculate the fair

value of awards granted to employees, directors and non-employees for the three months ended March 31, 2024 and March 31, 2025:

Three Months Ended

The following averaged assumptions were used to

calculate the fair value of awards granted to employees, directors and non-employees for the three months ended June 30, 2024 and June

Six Months Ended

Expected volatility

107.44 % - 108.54 %

Risk-free interest rate

4.49 % - 4.65 %

3.75 % - 4.38

Dividend yield

Expected term 6.25 years 6.25 years

Net (Loss) Income Per Share

The Company computes net (loss) income per share

Expected term

Net Income (Loss) Per Share

The Company computes net income (loss) per share

using the two-class method.

The two-class method uses an earnings allocation formula that determines net loss per share for common stock

and any participating securities according to dividends declared and participation rights in undistributed earnings.

Diluted net loss per share includes the potential

dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive.

The two-class method uses an earnings allocation formula that determines net income (loss) per share for common

stock and any participating securities according to dividends declared and participation rights in undistributed earnings.

Diluted net income (loss) per share includes the

potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect

Common stock equivalents include:

(i) outstanding stock options and restricted stock units;

(ii) common stock to be issued upon the assumed

exercise of the Company’s common stock warrants;

(iii) common stock to be issued upon the assumed conversion of the

Company’s convertible preferred stock, and (iv) warrants related to the Company’s

March private placement financing.

Because the impact of these items is generally anti-dilutive during periods of net loss, there is no

difference between basic and diluted loss per common share for periods with net losses.

The following tables set forth the computation

of basic and diluted net (loss) income per share of common stock (in thousands, except share and per share data):

Three Months Ended

Basic net (loss) income per share

Net (loss) income

Dividend to Series B preferred stockholders

Net income attributable to participating securities

Net (loss) income attributable to common stockholders, basic

Weighted-average shares outstanding used in computing net (loss) income per share attributable to common stockholders, basic

Net (loss) income per share attributable to common stockholders, basic

(ii) common stock to be issued

upon the assumed exercise of the Company’s common stock warrants;

(iii) convertible preferred stock;

and (iv) prior to issuance,

the issuable warrants related to the Company’s March private placement financing.

The following table sets forth the computation

of basic and diluted net income (loss) per share of common and preferred stock (in thousands, except share and per share data):

Three Months Ended

Diluted net loss per share

Net (loss) income

Six Months Ended

Basic net income (loss) per share

Net income (loss)

Net loss attributable to participating securities

Dividend to Series B-1 preferred stockholders

Net income attributable to participating securities

Net income (loss) attributable to common shares, basic

Weighted-average shares outstanding used in computing net income (loss) per share attributable to common stockholders, basic

Net income (loss) per share attributable to common stockholders, basic

Diluted net income (loss) per share

Net income (loss) attributable to common shares, basic

Change in fair value of preferred stock warrant liability

Net loss attributable to common stockholders, diluted

Net (loss) attributable to common shares, diluted

Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic

Weighted-average effect of diluted securities:

Tranche warrants to purchase convertible preferred stock

Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, diluted

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The following outstanding shares of potentially

dilutive securities were excluded from the computation of diluted net (loss) income per share for the periods presented because including

them would have been antidilutive:

dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them

would have been antidilutive:

Three Months Ended

Six Months Ended

Options to purchase common stock

Series A-2 Prime preferred stock

Series B-2 preferred stock

Warrants to purchase common stock

Restricted stock units

Common stock issuable upon conversion of Series B-1 convertible preferred stock

Common stock issuable upon conversion of Series A-2 Prime convertible preferred stock

Warrants to purchase convertible preferred stock

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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 1. Financial Statements