Unicycive Therapeutics, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA UNICYCIVE THERAPEUTICS, INC. INDEX TO FINANCIAL STATEMENTS Page Audited Financial Statements for the years ended December 31, 2024 and 2025: Report of Independent Registered Public Accounting Firm (PCAOB ID # 606 ) F-2 Balance Sheets as of December 31, 2024 and 2025 F-3 Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2025 F-4 Statements of Mezzanine Equity and Stockholders’ (Deficit) Equity for the years ended December 31, 2024 and 2025 F-5 Statements of Cash Flows for the years ended December 31, 2024 and 2025 F-6 Notes to the Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Unicycive Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Unicycive Therapeutics, Inc. (the “Company”) as of December 31, 2024 and 2025, and the related statements of operations and comprehensive loss, mezzanine equity and stockholders’ (deficit) equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ GRASSI & CO., CPAs, P.C. We have served as the Company’s auditor since 2023. Jericho, New York March 30, 2026 F- 2 Unicycive Therapeutics, Inc. Balance Sheets (In thousands, except for share and per share amounts) As of As of December 31, December 31, 2024 2025 Assets Current assets: Cash and cash equivalents $ 26,142 $ 29,198 Prepaid expenses and other current assets 4,806 7,692 Marketable securities - 12,071 Total current assets 30,948 48,961 Right of use asset, net 645 108 Property and equipment, net 75 66 Total assets $ 31,668 $ 49,135 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,058 $ 383 Accrued liabilities 3,562 1,523 Warrant liability 18,936 16,915 Operating lease liability - current 564 117 Total current liabilities 24,120 18,938 Operating lease liability – long term 117 - Total liabilities 24,237 18,938 Commitments and contingencies (Note 7) Stockholders’ equity: Series A-2 Prime preferred stock, $ 0.001 par value per share – 21,388.01 Series A-2 Prime shares authorized at December 31, 2024, and December 31, 2025; 6,150.21 and 2,265 Series A-2 Prime shares issued and outstanding at December 31, 2024, and December 31, 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 December 31, 2025; 3,000 and zero Series B-2 shares issued and outstanding at December 31, 2024, and December 31, 2025, respectively - - Preferred stock, $ 0.001 par value per share— 10,000,000 shares authorized at December 31, 2024, and December 30, 2025; zero shares issued and outstanding at December 31, 2024, and December 31, 2025 - - Common stock, $ 0.001 par value per share – 400,000,000 shares authorized at December 31, 2024, and December 31, 2025; 11,384,236 and 22,114,245 shares issued and outstanding at December 31, 2024, and December 31, 2025, respectively 11 22 Accumulated other comprehensive loss - ( 1 ) Additional paid-in capital 108,690 158,001 Accumulated deficit ( 101,270 ) ( 127,825 ) Total stockholders’ equity 7,431 30,197 Total liabilities and stockholders’ equity $ 31,668 $ 49,135 See accompanying notes to the financial statements F- 3 Unicycive Therapeutics, Inc. Statements of Operations and Comprehensive Loss (In thousands, except for share and per share amounts) Year Ended December 31, Year Ended December 31, 2024 2025 Operating expenses: Research and development $ 20,014 $ 9,121 General and administrative 12,103 20,396 Total operating expenses 32,117 29,517 Loss from operations ( 32,117 ) ( 29,517 ) Other income (expenses): Interest income 1,261 1,012 Interest expense ( 71 ) ( 71 ) Change in fair value of warrant liability ( 5,802 ) 2,021 Total other income (expenses) ( 4,612 ) 2,962 Net loss ( 36,729 ) ( 26,555 ) Other comprehensive loss: Unrealized loss on marketable securities, net - ( 1 ) Net comprehensive loss $ ( 36,729 ) $ ( 26,556 ) Dividend to Series B-1 preferred stockholders ( 1,095 ) - Net loss attributable to common stockholders $ ( 37,824 ) $ ( 26,555 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 5.65 ) $ ( 1.67 ) Weighted-average shares outstanding used in computing net loss per share, basic and diluted 6,698,513 15,886,876 See accompanying notes to the financial statements F- 4 Unicycive Therapeutics, Inc. Statements of Mezzanine Equity and Stockholders’ (Deficit) Equity (In thousands, except share amounts) Series B-1 Series A-2 Series A-2 Prime Series B-2 Additional Stockholders’ Preferred Stock Common Stock Preferred Stock Preferred Stock Preferred Stock Paid-In Accumulated (Deficit) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Equity Balance at December 31, 2023 - $ - 3,475,605 $ 4 43,649 $ - - $ - - $ - $ 60,728 $ ( 64,541 ) $ ( 3,809 ) Net loss - - - - - - - - - - - ( 36,729 ) ( 36,729 ) Issuance of Series B-1 preferred stock, net of issuance costs 50,000 46,187 - - - - - - - - - - - Dividends on Series B-1 preferred stock - - - - - - - - - ( 1,095 ) - ( 1,095 ) Exchange of Series A-2 preferred stock for Series A-2 Prime preferred stock - - - - ( 43,649 ) - 21,388.01 - - - - - - Conversion of Series A-2 Prime preferred stock into common stock - - 3,109,755 3 - - ( 15,237.80 ) - - - - - 3 Issuance of Series B-2 preferred stock and common stock upon conversion of Series B-1 preferred stock ( 50,000 ) ( 46,187 ) 4,211,800 4 - - - - 7,882 - 46,179 - 46,183 Conversion of Series B-2 preferred stock into common stock - - 488,200 - - - - - ( 4,882 ) - - - Issuance of common stock for cash, net of issuance costs - -- 97,740 - - - - - - - 524 - 524 Issuance of common stock for exercise of options - - 1,136 - - - - - - - 4 - 4 Stock-based compensation expense - - - - - - - - - - 2,350 - 2,350 Balance at December 31, 2024 - $ - 11,384,236 $ 11 - $ - 6,150.21 $ - 3,000 $ - $ 108,690 $ ( 101,270 ) $ 7,431 Series A-2 Prime Series B-2 Series A-3 Additional Accumulated Other Common Stock Preferred Stock Preferred Stock Preferred Stock Paid-In Accumulated Comprehensive Stockholders’ Shares Amount Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity Balance at December 31, 2024 11,384,236 $ 11 6,150.21 $ - 3,000 $ - - $ - 108,690 $ ( 101,270 ) $ - $ 7,431 Net loss - - - - - - - - - ( 26,555 ) ( 26,555 ) Issuance of Series A-3 preferred stock upon exercise of warrants - - - - - - 1,495.80 - 1,496 - - 1,496 Conversion of Series A-2 Prime preferred stock into common stock 792,900 1 ( 3,885.21 ) - - - - - - - - 1 Conversion of Series B-2 preferred stock into common stock 300,000 - - - ( 3,000 ) - - - - - - - Conversion of Series A-3 preferred stock into common stock 277,000 - - - - - ( 1,495.80 ) - - - - - Issuance of common stock for vested restricted stock units 1,000 - - - - - - - - - - - Issuance of common stock for cash, net of issuance costs 9,310,618 10 - - - - - - 45,174 - - 45,184 Unrealized loss on available-for-sale securities, net - - - - - - - - - - ( 1 ) ( 1 ) Reverse split share adjustment 48,491 - - - - - - - - - - - Stock-based compensation expense - - - - - - - - 2,641 - - 2,641 Balance at December 31, 2025 22,114,245 $ 22 2,265 $ - - $ - - $ - $ 158,001 $ ( 127,825 ) $ ( 1 ) $ 30,197 See accompanying notes to the financial statements F- 5 Unicycive Therapeutics, Inc. Statements of Cash Flows (In thousands) Year Ended December 31, 2024 Year Ended December 31, 2025 Cash flows from operating activities Net loss $ ( 36,729 ) $ ( 26,555 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 22 34 Stock-based compensation expense 2,350 2,641 Change in fair value of warrant liability 5,802 ( 2,021 ) Amortization of operating lease right of use asset 406 538 Changes in assets and liabilities: Prepaid expense and other current assets ( 820 ) ( 2,884 ) Accounts payable and accrued liabilities 790 ( 2,505 ) Operating lease liability ( 397 ) ( 565 ) Net cash used in operating activities ( 28,575 ) ( 31,317 ) Cash flows from investing activities Purchases of marketable securities - ( 12,071 ) Purchases of property and equipment ( 72 ) ( 24 ) Net cash used in investing activities ( 72 ) ( 12,095 ) Cash flows from financing activities Gross proceeds from secondary public offering 683 46,582 Commissions paid on secondary public offering ( 1,398 ) Deferred cost of at the market offering ( 160 ) - Payments on financed insurance policies ( 527 ) ( 212 ) Issuance costs related to issuance of Series B-1 preferred stock ( 3,813 ) - Proceeds from issuance of Series B-1 preferred stock 50,000 - Proceeds from exercise of warrants - 1,496 Dividends on preferred stock ( 1,095 ) - Net cash provided by financing activities 45,088 46,468 Net increase in cash and cash equivalents 16,441 3,056 Cash and cash equivalents at the beginning of the period 9,701 26,142 Cash and cash equivalents at the end of the period $ 26,142 $ 29,198 Supplemental cash flow information Issuance of Series B-2 preferred stock and common stock upon conversion of Series B-1 preferred stock $ 46,187 $ - Deferred insurance charges included in prepaid expenses and other current assets $ 267 $ 332 Cash paid for interest $ 12 $ - See accompanying notes to the financial statements F- 6 Unicycive Therapeutics, Inc. Notes to the Financial Statements 1. Organization and Description of Business Overview Unicycive Therapeutics, Inc. (“we”, “the Company”) was incorporated in the State of Delaware on August 18, 2016 . The Company in-licensed the drug candidate UNI 494 from Sphaera Pharma Pte. Ltd, a Singapore-based corporation, (“Sphaera”) (Note 4). UNI 494 is a pro-drug of Nicorandill that is being developed as a treatment for acute kidney injury. In September 2018, the Company purchased a second drug candidate, Renazorb RZB 012 and its trademark, RENALAN, and various patents from Spectrum Pharmaceuticals, Inc. (“Spectrum”) (Note 4). Renazorb (“oxylanthanum carbonate”) is being developed for the treatment of hyperphosphatemia in patients with Chronic Kidney Disease (“CKD”). The Company continues to evaluate the licensing of additional technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Liquidity The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with governmental regulations and the need to obtain additional financing to fund operations. The Company’s product candidates currently under development will require significant additional research and development efforts prior to commercialization. Future revenue streams may consist of collaboration or licensing revenue as well as product sales. The Company has incurred operating losses and 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 drug development activities, the operating losses are expected to increase. The Company has historically relied on private equity offerings, debt financing and loans from a stockholder to fund its operations. As of December 31, 2024 and December 31, 2025, the Company had an accumulated deficit of $ 101.3 million and $ 127.8 million, respectively. In connection with its initial public offering (“IPO”), on July 13, 2021, the Company began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021, received approximately $ 22.3 million in net proceeds after deducting the underwriting discounts, commissions and other offering expenses. The Company has used the net proceeds from the IPO to complete pre-clinical and clinical studies, prepare regulatory filings for the FDA, and for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning. On March 3, 2023, the Company entered into a securities purchase agreement with certain healthcare-focused institutional investors that may provide up to $ 130.0 million in gross proceeds through a private placement and that included initial upfront funding of $ 30.0 million in gross proceeds. On March 13, 2024, the Company entered into a securities purchase agreement with certain healthcare-focused institutional investors to provide $ 50 million in gross proceeds through a private placement. 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 as amended by Amendment No. 1 thereto dated November 14, 2025 (as amended, the “Sales Agreement”) pursuant to which, we may offer and sell shares of common stock having an aggregate offering price of up to $ 100.0 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 year ended December 31, 2025, the Company sold 9,310,618 shares of common stock pursuant to a sales agreement, with Guggenheim Securities, LLC, at an average price of $ 5.00 per share and paid $ 1.4 million in commissions, resulting in net proceeds to the Company of approximately $ 45.2 million. F- 7 The Company expects to continue incurring losses in the future and will be required to raise additional capital in the future to complete its planned clinical trials, pursue product development initiatives and penetrate markets for the sale of its products. Management believes that the Company will continue to have access to capital resources through possible equity offerings, debt financings, corporate collaborations or other means. There can be no assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis or at all. If the Company is unable to secure additional capital, it may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. 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. 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the periods presented. Management believes that these estimates and assumptions are reasonable; however, actual results may differ and could have a material effect on future results of operations and financial position. 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, valuation of marketable securities, equity transactions, and the valuation of warrant liabilities. Actual results may materially differ from those estimates. Cash and Cash Equivalents Highly liquid investments that are readily convertible to cash and have original maturities of three months or less at the time of acquisition are considered cash equivalents. As of December 31, 2025, cash and cash equivalents consist of cash deposited with banks, money market funds, investment in corporate bonds with original maturities of three months or less, and U.S. Treasury bills. As of December 31, 2024, cash and cash equivalents consist of cash deposited with banks and money market funds. Marketable Securities Marketable securities consist of corporate debt securities with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the balance sheet date. The Company classifies its investment in marketable securities as available-for-sale, as the sale of such securities may be required prior to maturity. Management determines the appropriate classification of its investments in debt securities at the time of purchase. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bid and/or offers. Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported as accumulated other comprehensive income (loss).The carrying value of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, the net amount of which, along with interest and realized gains and losses, is included under other income (expense) in the statements of comprehensive income (loss). At each balance sheet date, the Company reviews its available-for-sale debt securities that are in an unrealized loss position to determine whether the unrealized loss or any potential credit losses should be recognized in the statements of operations. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through net income (loss). For available-for-sale securities that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the severity of the impairment, any changes in interest rates, changes to the underlying credit ratings and forecasted recovery among other factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in other income, net through an allowance account. There have been no impairment or credit losses recognized during any of the periods presented. . Warrant Liability In conjunction with the issuance of Series A-1 Preferred Stock (see Note 9), the Company established a warrant liability as of March 3, 2023, representing the fair value of warrants that may be issued (and have since been issued), subject to shareholder approval, upon conversion of the Series A-1 Preferred Stock which was received on June 26, 2023. The Company accounts for these warrants as liabilities (in accordance with ASC 480, Distinguishing Liabilities from Equity ) on the balance sheets as a result of certain redemption clauses that are not within the control of the Company. The warrant liability was initially measured at fair value and is remeasured at fair value each reporting period. Changes in the fair value of the warrant liability are recognized in earnings during each period. The warrant liability is measured using Level 3 fair value inputs. See Note 11 for a description of warrant liability and the related valuations. F- 8 Segment Information 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 a whole. The primary financial measures used by the CODM to evaluate performance and allocate resources are net (loss) income and operating (loss) income. The CODM uses net income (loss) and operating (loss) income to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on net (loss) income and operating (loss) income is disclosed in the statements of operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Statements of Operations. The CODM does not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the notes to the financial statements. Risks and Uncertainties The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company related to intellectual property, product, regulatory, or other matters; and the Company’s ability to attract and retain employees necessary to support its growth. The Company’s general business strategy may be adversely affected by any such economic, volatile business environments and continued unstable or unpredictable economic and market conditions. Any product candidates developed by the Company will require approvals from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s current product candidates or any future product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval, it could have a materially adverse impact on the Company. The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of its product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company will require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs, which would materially and adversely affect its business, financial condition and operations. The Company is dependent upon the services of its employees, consultants and other third parties. 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. Repairs and maintenance expenditures are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years for lab equipment and furniture and fixtures. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication 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 charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. During the years ended December 31, 2024 and 2025, management determined there were no impairments of the Company’s property and equipment. F- 9 Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company records the right-of-use asset at the amount of the lease liability plus any prepaid rent, and initial direct costs, less any lease incentives and accrued rent. Lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. 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 The Company’s financial instruments include the cash and cash equivalents, investment in marketable securities, accounts payable, accrued liabilities, and warrant liabilities. Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. 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; and ● 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. These valuation techniques involve management’s estimates and judgment based on unobservable inputs and are classified in Level 3. The fair value estimates may not be indicative of the amounts that would be realized in a market exchange. Additionally, there may be inherent uncertainties or changes in the underlying assumptions used, which could significantly affect the current or future fair value estimates. Generally, a significant increase (decrease) in the probabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher (lower) fair value measurement; however, changes in other inputs such as expected term and price of the underlying common stock will have a directionally opposite impact on fair value measurement. F- 10 The following tables present the approximate value of assets and liabilities measured at fair value on a recurring basis within the Company’s balance sheets as of December 31, 2025 by the fair value hierarchy (in thousands): Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Cash and cash equivalents $ 29,198 $ - $ $ 29,198 Total cash and cash equivalents at fair value $ 29,198 $ - $ $ 29,198 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Corporate bonds $ - $ 12,071 $ $ 12,071 Total marketable securities at fair value $ - $ 12,071 $ $ 12,071 Refer to Note 3 for disclosures related to cash equivalents and marketable securities. Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Warrant liability $ - $ - $ 16,915 $ 16,915 Total liabilities at fair value $ - $ - $ 16,915 $ 16,915 The following tables present the approximate value of assets and liabilities measured at fair value on a recurring basis within the Company’s balance sheets as of December 31, 2024 by the fair value hierarchy (in thousands): Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Cash and cash equivalents $ 26,142 $ - $ $ 26,142 Total cash and cash equivalents at fair value $ 26,142 $ - $ $ 26,142 F- 11 Refer to Note 3 for disclosures related to cash equivalents and marketable securities. Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Warrant liability $ - $ - $ 18,936 $ 18,936 Total liabilities at fair value $ - $ - $ 18,936 $ 18,936 The following table summarizes the changes in fair value of the warrant liability classified in Level 3. Gains and losses reported in this table include changes in fair value that are attributable to unobservable inputs (in thousands): Year Ended December 31, 2025 Fair value at January 1, 2025 $ 18,936 Change in fair value of warrants ( 2,021 ) Fair value at December 31, 2025 $ 16,915 Year Ended December 31, 2024 Fair value at January 1, 2024 $ 13,134 Change in fair value of warrants 5,802 Fair value at December 31, 2024 $ 18,936 The expense relating to the change in fair value of the warrant liability of $ 5.8 million and income of $ 2.0 million for the years ended December 31, 2024 and December 31, 2025, respectively, is included in other income (expenses) in the statements of operations. ASC 820, Fair Value Measurement and Disclosures requires all entities to disclose the fair value of financial instruments, both assets and liabilities, for which it is practicable to estimate fair value. As of December 31, 2024, and December 31, 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. Cash and cash equivalents, accounts payable, and accrued liabilities are Level 1 financial instruments. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The cash and cash equivalents the Company uses to satisfy working capital and operating expense needs are held in accounts at various financial institutions. Cash balances may at times exceed federally insured limits. Cash and cash equivalents could be adversely impacted, including the loss of uninsured deposits and other uninsured financial assets, if one or more of the financial institutions in which the Company holds its cash or cash equivalents fails or is subject to other adverse conditions in the financial or credit markets. No such losses have been incurred through December 31, 2025. F- 12 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets represent costs incurred that benefit future periods. These costs are amortized over specific time periods based on the agreements. Research and Development Expenses Substantially all the Company’s research and development expenses consist of expenses incurred in connection with the development of the Company’s product candidates. These expenses include fees paid to third parties to conduct certain research and development activities on the Company’s behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for the Company’s research and product development employees. The Company expenses both internal and external research and development expenses as incurred. General and Administrative Expenses General and administrative expenses represent personnel costs for employees involved in general corporate functions, including finance, accounting, legal and human resources, among others. Additional costs included in general and administrative expenses consist of professional fees for legal (including patent costs), audit and other consulting services, stock-based compensation and other general corporate overhead expenses. Patent Costs The Company expenses all costs as incurred in connection with patent licenses and applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are reflected in general and administrative expenses in the statements of operations. Stock-Based Compensation The Company accounts for stock-based compensation for all share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation expense over the requisite service period on a straight-line basis. The Company recognizes forfeitures related to stock-based compensation as they occur. The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, risk-free interest rate, and the public market closing price of the Company’s underlying common stock on the date of grant. Income Taxes The Company accounts for corporate income taxes 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 and liabilities using enacted tax rates and law. Net future tax benefits are subject to a valuation allowance when management expects that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Current and non-current tax assets and liabilities are based upon an estimate of taxes refundable or payable for each of the jurisdictions in which the Company is subject to tax. In the ordinary course of business there is inherent uncertainty in quantifying income tax positions. The Company assess income tax positions and record the largest amount of tax benefit with a greater than 50 % likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company’s policy is to recognize interest or penalties related to income tax matters in income tax expense. F- 13 Comprehensive Loss Accumulated other comprehensive loss includes unrealized gains and losses on securities available for sale, and is recognized as separate components of stockholders’ equity, As of December 31, 2025, comprehensive loss of $ 1 ,000 related to marketable securities was recorded. 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 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 income (loss) per share includes potentially dilutive securities outstanding for the period. See Note 12 for reconciliations of basic and diluted net income (loss) per share. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results of operations upon adoption. Income Taxes Disclosures – In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard prospectively for the year ended December 31, 2025. The adoption of the standard impacted the 2025 income tax disclosures. Accounting pronouncements pending adoption On November 4, 2024, the FASB issued ASU No. 2024-03, 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. 3. Cash, Cash Equivalents, and Marketable Securities The following table summarizes the Company’s investments as of December 31, 2025 (in thousands): Amortized Cost Basis Unrealized Gains Unrealized Losses Estimated Fair Value Cash $ 24,172 $ - $ - $ 24,172 U.S. Treasury Bills 3,449 - - 3,449 Money Market 1,577 1,577 Investments in corporate bonds 12,072 - ( 1 ) 12,071 Total cash, cash equivalents and investments in marketable securities $ 41,270 $ - $ ( 1 ) $ 41,269 F- 14 The Company classifies its investments in corporate bonds as available-for-sale. Unrealized gains and losses on these securities are included as a component of comprehensive income (loss). The Company did not hold any investments in corporate bonds as of December 31, 2024. On December 31, 2025, the remaining contractual maturities of all the Company’s available-for-sale investments were less than twelve months. As of December 31, 2025, the Company has not established an allowance for credit losses for any of its available-for-sale securities. 4. Significant Agreements With regards to manufacturing, testing and potential commercial supply of oxylanthanum carbonate, on October 31, 2020, the Company entered into an agreement with Shilpa Medicare Ltd (“Shilpa”) based in India. Pursuant to the Agreement, Shilpa provides certain development, manufacturing, supply and other CMC-related services related 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 October 2017, the Company entered into an exclusive license agreement with Sphaera, a stockholder, for the rights to further develop the drug candidate, UNI 494, for commercialization. No payments were made upon execution of the agreement but payments for $ 50 ,000 will be due commencing with the initiation by the Company of a second clinical trial and $50,000 on completion of such trial. If the FDA accepts a NDA application submitted by the Company for the product, the Company will pay Sphaera $ 1.65 million. Upon commercialization and sale of the drug product, royalty payments will also be payable quarterly to Sphaera equal to 2 % of net sales in the preceding quarter. F- 15 In September 2018, the Company entered into an Assignment and Asset Purchase Agreement with Spectrum Pharmaceuticals, Inc. (“Spectrum Agreement”) pursuant to which the Company purchased certain assets from Spectrum, including Spectrum’s right, title, interest in and intellectual property related to Renazorb RZB 012, also known as RENALAN™ (“Renalan”) and RZB 014, also known as SPI 014 (“SPI” and together with Renalan, the “Compounds”), to further develop and commercialize oxylanthanum carbonate and related compounds. In partial consideration for the Spectrum Agreement, the Company issued 31,366 shares of common stock to Spectrum valued at approximately $ 4 ,000 which represented four percent of the Company on a fully-diluted basis at the date of the execution of the Spectrum Agreement. The Spectrum Agreement has an anti-dilution provision, which provides that Spectrum maintain its ownership interest in the Company at 4 % of the Company’s shares on a fully-diluted basis. 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 stock. 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 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 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. 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, 2025. On January 6, 2022, the Company entered into a Master Services Agreement with Quotient Sciences Limited (“Quotient”), a UK based company that provides drug development and analysis services, for the purpose of performing clinical research in support of UNI-494. The initial budget for the study is approximately $ 3.7 million, and subsequent revisions reduced the overall budget to $ 2.9 million. Related payments totaling approximately $ 2.9 million have been paid to Quotient as of December 31, 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 December 31, 2025, respectively. On April 10, 2023, the Company entered into an agreement with Inotiv that provides preclinical trial and related services, for the purpose of performing research in support of UNI-494. The budget for these services is approximately $ 2.9 million. Approximately $ 2.9 million has been paid to Inotiv as of December 31, 2025 and there is no prepaid balance in the accompanying balance sheets as of December 31, 2024 and December 31, 2025, respectively. F- 16 On July 14, 2022, the Company entered into a license agreement with Lee’s Pharmaceutical (HK) Limited. Under the terms of the agreement, Lee’s Pharmaceutical will be responsible for development, registration filing and approval for oxylanthanum carbonate in China, Hong Kong, and certain other Asian markets. In addition, Lee’s Pharmaceutical will have sole responsibility for the importation of the drug product from the Company and for the costs of commercialization of oxylanthanum carbonate in the licensed territories. The Company has received an upfront payment of $ 1.0 million, expects to receive up to $ 1.0 million in milestone payments upon product launch in China and will be eligible for tiered royalties of between 7 % and 10 % upon achievement of prespecified regulatory and commercial achievements. On February 1, 2023, the Company entered into a license agreement with Lotus International Pte Ltd. (“Lotus”). Under the terms of the agreement, Lotus will be responsible for development, registration filing and approval for oxylanthanum carbonate in the licensed territory of South Korea. In addition, Lotus will have sole responsibility for the importation of the drug product from the Company and for the costs of commercialization of oxylanthanum carbonate in the licensed territory. The Company has received an upfront payment of $ 0.7 million, may receive up to $ 3.7 million in future milestone payments and will be eligible for tiered royalties upon achievement of specified commercial achievements. On June 29, 2023 and October 26, 2023, the Company entered into services agreements with Shilpa related to NDA filing support for oxylanthanum carbonate. The agreements provide for total payments of up to $ 4.5 million, and the Company has made $ 4.5 million in payments pursuant to the agreements as of December 31, 2025. 5. Balance Sheet Components Prepaid expenses and other current assets as of December 31, 2024 and December 31, 2025 consisted of the following (in thousands): As of As of December 31, December 31, 2024 2025 Prepaid directors’ and officers’ liability insurance premiums $ 263 $ 332 Prepaid drug manufacturing supply costs 3,604 6,189 Other 939 1,171 Total $ 4,806 $ 7,692 Property and equipment as of December 31, 2024 and December 31, 2025 consisted of the following (in thousands): As of As of December 31, December 31, 2024 2025 Leasehold improvements $ 49 $ 65 Lab equipment 26 26 Furniture and fixtures 39 47 Subtotal 114 138 Less accumulated depreciation ( 39 ) ( 72 ) Net $ 75 $ 66 F- 17 Accounts payable as of December 31, 2024 and December 31, 2025 consisted of the following (in thousands): As of As of December 31, December 31, 2024 2025 Trade accounts payable $ 966 $ 301 Credit card liability 92 82 Total $ 1,058 $ 383 Accrued liabilities as of December 31, 2024 and December 31, 2025 consisted of the following (in thousands): As of As of December 31, December 31, 2024 2025 Accrued labor costs $ 1,910 $ 329 Accrued drug development costs 1,258 753 Other 394 441 Total $ 3,562 $ 1,523 6. Operating Lease The Company leases office space under an operating lease. In December 2021, the Company entered into a lease agreement for 2,367 square feet of office space commencing December 1, 2021. The initial lease term was for two years , and there was an option to extend the lease for an additional year. On March 3, 2023, the Company expanded its leased space through a lease amendment by an additional 2,456 square feet commencing March 15, 2023. The term of the amended lease is for three years with an option to extend the lease for three additional years . On June 28, 2024, the Company further expanded its leased space through a lease amendment by an additional 2,581 square feet commencing July 15, 2024. The term of the amended lease unifies with the current expiration of the lease which is March 31, 2026. The lease amendment represents a modification 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 years ended December 31, 2024 and December 31, 2025, the Company reflected amortization of right-of-use asset of approximately $ 0.4 million and $ 0.5 million, respectively, resulting in a right-of-use asset balance of approximately $ 0.1 million at December 31, 2025. During the years ended December 31, 2024 and December 31, 2025, the Company made cash payments on the lease of $ 0.5 million and $ 0.6 million, respectively towards the lease liabilities. As of December 31, 2025, the total lease liability was approximately $ 0.1 million As of December 31, 2025, maturities of the Company’s lease liabilities are as follows (in thousands): Operating Lease Year ending December 31, 2026 $ 118 Total lease payments 118 Less imputed interest rate / present value discount ( 1 ) Present value of lease liability 117 Less current portion ( 117 ) Long term portion $ - In November 2025, the Company entered into a lease agreement for 10,734 square feet of office space commencing on February 1, 2026. The initial lease term is for one and a half years, and there is an option to extend the lease for an additional year. The Company is evaluating the new agreement under ASC 842, Leases. F- 18 7. Commitments and Contingencies Contingencies The Company is subject to claims and legal proceedings that arise in the ordinary course of business. Such matters are inherently uncertain, and there can be no guarantee that the outcome of any such matter will be decided favorably to the Company or that the resolution of any such matter will not have a material adverse effect upon the Company’s financial statements. On August 15, 2025, a putative shareholder class action complaint captioned Elkhodari v. Unicycive Therapeutics, Inc., et al. , Case No. 3:25-cv-06923-JD (the “Securities Class Action”), was filed in the U.S. District Court for the Northern District of California (“Northern District of California”), naming the Company and certain current officers and/or directors of the Company as defendants. The lawsuit generally alleges that the Company made material misrepresentations and/or omissions of material fact relating to the Company’s manufacturing of oxylanthanum carbonate (“OLC”) and the approval prospects of its New Drug Application for OLC for the treatment of hyperphosphatemia in CKD patients on dialysis in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The putative class action is brought on behalf of persons or entities who purchased or otherwise acquired the Company’s securities between March 29, 2024, and June 27, 2025, inclusive, and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorneys’ fees. On January 27, 2026, Plaintiff filed an amended complaint. On March 13, 2026, defendants filed their motion to dismiss the amended complaint. On October 30 and November 7, 2025, two purported stockholders of the Company filed derivative complaints in the Northern District of California against certain of the Company’s current officers and directors (collectively, the “Derivative Actions”). The Company is named as a nominal defendant. The complaints are based on the same alleged misconduct as in the Securities Class Action. The complaints assert state law claims on behalf of the Company against the individual defendants for breach of fiduciary duty, unjust enrichment, gross mismanagement, and waste of corporate assets, and federal law claims under Section 14(a) of the Exchange Act. On November 20, 2025, the Court issued an order relating the Derivative Actions to the Securities Class Action. The Derivative Actions seek unspecified damages on behalf of the Company, corporate governance reforms, disgorgement and restitution, and an award of costs and expenses, including attorneys’ fees. On March 12, 2026, a purported stockholder made a demand on the Company’s Board of Directors to commence a civil action against certain of the Company’s current and former officers and directors for breaching their fiduciary duties based on the same alleged misconduct as alleged in the above-mentioned Securities Class Action and Derivative Actions (the “Demand”). At this early stage of the proceedings, the Company is unable to make any prediction regarding the outcome of the Securities Class Action, the Derivative Actions, or the Demand. It is possible that additional lawsuits will be filed or allegations will be made by stockholders with respect to these same or other matters also naming the Company and/or our officers and directors as defendants. The Company intends to vigorously defend against the claims brought by the plaintiffs in each of these matters. Such lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources and may incur substantial legal fees and costs in defending against the pending lawsuits and any other related lawsuits, and we may not prevail. Monitoring, initiating and defending against legal actions is time-consuming for our management, is likely to be expensive, and may detract from the ability to fully focus internal resources on business activities. Additionally, the Company may not be successful in having any such lawsuits dismissed or settled within the limits of insurance coverage. Given the early stage of these lawsuits and the inherent uncertainty of litigation, the Company cannot predict how long it may take to resolve the pending lawsuits or the potential outcome or possible amount of any damages. As such, we currently are unable to reasonably estimate the possible losses or a range of possible losses that may result from these matters, if any. Expenses associated with the pending lawsuits and any potential related lawsuits could be material to the financial statements if we do not prevail in the defense of such lawsuits, or even if we do prevail. F- 19 Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications, including for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. However, the Company may record charges in the future as a result of these indemnification obligations. Additionally, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at the Company’s request in such capacity. The indemnification period covers all pertinent events and occurrences during the director’s or officer’s service. Employee Benefit Plan In December 2021, the Company implemented a 401(k) Plan which covers all eligible employees of the Company (the “401(k) Plan”). Employer matching contributions are immediately 100 % vested. The Company’s 401(k) Plan provides that the Company match each participant’s contribution at 100 % up to 4 % of the employee’s eligible compensation. Company contributions to the 401(k) Plan totaled approximately $ 136,000 and $ 180,000 for the years ended December 31, 2024 and December 31, 2025, respectively. 8. Stockholders’ Equity Authorized Common Stock The Company is authorized to issue up to 400,000,000 shares of common stock at par value of $ 0.001 per share. Reverse Stock Split On June 18, 2025, the Company filed a certificate of amendment to its certificate of incorporation with the Secretary of State of the State of Delaware to effectuate a 1-for-10 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 have received a fractional share automatically had their fractional interests rounded up to the next whole share, after aggregating all the fractional interests of a holder resulting from the split. The reverse stock split affected 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 shares. The split did not change the number of authorized shares of common stock or the par value per share of the common stock. F- 20 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. In addition, 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 Initial Public Offering During July 2021, as a result of its initial public 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 $. 0.10 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 Company’s outstanding convertible notes and unpaid accrued interest were converted into 73,691 shares of common stock. Additionally, in accordance with the original terms of the warrant agreements convertible noteholders were granted a total of 18,419 common stock warrants with a 5 -year term and with an exercise price of $ 60.00 per warrant. The warrants from the initial public offering are equity classified. The following table summarizes activity for the Company’s IPO warrants for the year ended December 31, 2025: Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Outstanding Exercise Term Value Warrants Price (in Years) (in thousands) Outstanding, December 31, 2024 478,419 60.00 1.54 - Warrants granted - - - - Warrants exercised - - - - Outstanding, December 31, 2025 478,419 60.00 0.54 - Issuance of Common Stock Upon Conversion of Series A and Series 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 Note 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 Stock. On March 26, 2024, the Company issued 285,000 shares of common stock upon conversion of 1,396.50 shares of Series A-2 Prime Preferred Stock. On June 20, 2024, we held our annual stockholder meeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible Preferred Stock was obtained (see Note 10). 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. F- 21 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 shares of common stock upon conversion of 1,715.98 shares of the Company’s Series A-2 Prime Preferred Stock. On October 9, 2024, the Company issued 550,000 shares of common stock upon conversion of 2,695 shares of the Company’s Series A-2 Prime Preferred Stock. On October 31, 2024, the Company issued 43,800 shares of common stock upon conversion of 438 shares of the Company’s Series B-2 Preferred Stock. On December 11, 2024, the Company issued 462,455 shares of common stock upon conversion of 2,266.03 shares of the Company’s Series A-2 Prime Preferred Stock. On December 18, 2024, the Company issued 144,100 shares of common stock upon conversion of 1,441 shares of the Company’s Series B-2 Preferred Stock. On December 19, 2024, the Company issued 300,300 shares of common stock upon conversion of 3,003 shares of the Company’s Series B-2 Preferred Stock. On February 18, 2025, the Company issued 140,000 shares of common stock upon conversion of 686 shares of the Company’s Series A-2 Prime Preferred Stock. In June 2025, the Company issued 277,000 shares of common stock upon the exercise and conversion of Series A-3 warrants and received $ 1.5 million in exercise proceeds. On June 11, 2025, the Company issued 300,000 shares of common stock upon conversion of 3,000 shares of the Company’s Series B-2 Preferred Stock. On August 26, 2025, the Company issued 652,900 shares of common stock upon conversion of 3,199.21 shares of the Company’s Series A-2 Prime Preferred Stock. Voting Rights of Common Stock Each holder of shares of common stock shall be entitled to one vote for each share thereof held. 9. Issuance of Series A-1 Preferred Stock On March 3, 2023, the Company issued and sold, in a private placement, 30,190 shares of Series A-1 Preferred Stock for an aggregate net proceeds of $ 28.0 million (the “Preferred 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 for the treatment of hyperphosphatemia and, if approved, for the commercial launch of oxylanthanum carbonate in the U.S. F- 22 Pursuant to the Series A Certificate of Designation, as of March 3, 2023, each share of Series A-1 Preferred Stock was, subject to approval of the Company’s stockholders, convertible into a unit (“Unit”) consisting of: (i) shares of common stock of the Company and, if applicable, shares of Series A-2 Preferred Stock, in lieu of common stock, (ii) a tranche A warrant to acquire approximately 4,667,594 shares (excluding deemed dividends) of Series A-3 Preferred Stock (the “Tranche A Warrant”), (iii) a tranche B warrant to acquire approximately 4,243,267 shares (excluding deemed dividends) of Series A-4 Preferred Stock (the “Tranche B Warrant”), and (iv) a tranche C warrant to acquire approximately 6,789,228 shares (excluding deemed dividends) of Series A-5 Preferred Stock (the “Tranche C Warrant”, together with the Tranche A Warrant and the Tranche B Warrant, the “Warrants”). The Tranche A Warrant, for an aggregate exercise price of approximately $ 25 million, is exercisable until 21 days following the Company’s announcement of receipt of FDA approval for oxylanthanum carbonate, the Tranche B Warrant, for an aggregate exercise price of approximately $ 25 million, is exercisable until 21 days following the Company’s announcement of receipt of Transitional Drug Add-On Payment Adjustment (“TDAPA”) approval for oxylanthanum carbonate, and 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. 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 from the Series A-1 Preferred Stock, because the stock will automatically convert into shares of common stock, and the holders will be able to sell those shares while retaining the Warrants. The Company noted that at contract inception, the Warrants were contingently issuable upon the occurrence of a specified event (shareholder approval). In connection with the Series A-1 Preferred Stock issuance, the Company recognized liabilities for the associated Warrants, which had an aggregate fair value of $ 2.8 million at the time of issuance. Offering costs of $ 0.2 million were allocated to the Warrants and expensed during March 2023. The fair value of the Warrants was accounted for as a reduction to the net proceeds of the Preferred Stock Offering, which resulted in an initial carrying value of $ 25.4 million for the Series A-1 Preferred Stock (net of $ 2.0 million of placement agent fees and offering costs allocated to 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 conversion of the Series A-1 Preferred Stock was obtained. On July 11, 2023, pursuant to the Series A Certificate of Designation, the Company issued 1,951,621 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. As of December 31, 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 have the following rights: Dividends : While shares of Series A Preferred Stock are issued and outstanding, holders of Series A Preferred Stock shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-common-stock basis) and in the same form as dividends(other than dividends in the form of common stock) actually paid on shares of the common stock when, as and if such dividends are paid on shares of the common stock. F- 23 Voting : 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” (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, but prior to filing of the Amended Series A Certificate of Designation with the Delaware Secretary of State, the Company filed Certificates of Elimination for each of its Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock and Series A-5 Preferred Stock (collectively, the “Certificates of Elimination”) with the Delaware Secretary of State. Concurrent with the execution of the Exchange Agreement, the Company and each Investor have amended and restated the following warrants: (i) tranche A warrants to acquire an aggregate of 4,785,243 shares of Series A-3 Convertible Preferred Stock of the Company that were issued on July 11 2023 (the “Original Tranche A Warrants”) have been amended and restated to acquire an aggregate of 2,584.03122 shares of Series A-3 Convertible Preferred Stock (as amended, the “Amended Tranche A Warrants”); (ii) tranche B warrants to acquire an aggregate of 4,350,221 shares of Series A-4 Convertible Preferred Stock of the Company that were issued on July 11, 2023 (the “Original Tranche B Warrants”) have been amended and restated to acquire an aggregate of 2,566.63015 shares of Series A-4 Convertible Preferred Stock (as amended, the “Amended 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 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 A-5 Preferred Stock, as applicable upon exercise of such Amended Warrants and (ii) revised the exercise price to be $ 1,000 per share of Series A-3 Preferred Stock, Series A-4 Preferred Stock and Series A-5 Preferred Stock, as applicable in such Amended Warrants. The aggregate exercise price, the amount of shares of common stock upon conversion of the Series A-3 Preferred Stock, the Series A-4 Preferred Stock and the Series A-5 Preferred Stock and exercise period in the Amended Warrants did not change from the Original Warrants. F- 24 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: Dividends . 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. 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. Conversion . Subject to the limitations set forth in the Amended Certificate of Designation, at the option of the holder, each share of Series A-2 Prime Preferred Stock, Series A-3 Convertible Preferred Stock, Series A-4 Convertible Preferred Stock or Series A-5 Convertible Preferred Stock shall be 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 $ 4.90 , $ 0.54 , $ 0.59 and $ 0.74 for the 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 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. As of December 31, 2025, there were 2,265 shares of Series A-2 Prime Preferred Stock outstanding. F- 25 10. Issuance of Series B-1 Preferred Stock and Series B-2 Preferred Stock On March 13, 2024, the Company signed a securities purchase agreement with certain healthcare-focused institutional investors that provided $50.0 million in gross proceeds through a private placement. Pursuant to the securities purchase agreement, the Company issued to institutional investors $ 50.0 million in shares of Series B-1 Convertible Preferred Stock. 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 Preferences, Rights and Limitations of the Series B Convertible Preferred Stock filed with the Delaware Secretary of State on March 14, 2024, as corrected by the Certificate of Correction to Series B Certificate of Designation filed with the Delaware Secretary of State on November 8, 2024 (the “Series B Certificate of Designation”), each share of Series B-1 Preferred Stock is, subject to approval of the Company’s stockholders, convertible into shares of common stock of the Company and, if applicable, shares of Series B-2 Convertible Preferred Stock (the “Series B-2 Preferred Stock”), in lieu of common stock. The Company has designated 50,000 shares of Series 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 that the conversion of the Series B-1 preferred stock results in a beneficial ownership interest in excess of the maximum percentage of common stock upon conversion, the holders will receive them as converted equivalent for the remaining shares in preferred stock. On June 20, 2024, The Company held its annual stockholder meeting, and as a result, stockholder approval for the conversion of the Series B-1 Convertible Preferred Stock was obtained (“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 rights: Dividends : 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 Approval is not obtained at the first meeting of stockholders following the date of the Preferred Stock offering. If such dividends are not declared and paid in cash, the dividend amounts will be added to the aggregate liquidation preference then outstanding of the Series B-1 Preferred Stock. At all times following the Issuance Date, while shares of Series B-1 Preferred Stock are issued and outstanding, holders of Series B Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series B-1 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 Series B 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 Series B Certificate of Designation) are paid on shares of the common stock. Stockholder approval was received on June 20, 2024. F- 26 Voting : 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 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-2 Preferred Stock has the following rights: Dividends : 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. Voting : 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. 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. Conversion : 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 $ 10.00 . As of December 31, 2025, all shares of Series B-2 Preferred Stock have been converted into common stock. F- 27 11. Warrant Liability In connection with the Series A Preferred Stock Offering (see Note 9), the Company issued the Warrants. After the Warrants were legally issued as a result of the automatic conversion of the Series A-1 Preferred Stock upon shareholder approval, they became immediately exercisable at the option of the holder. The Company determined that the Warrants, while initially contingently issuable, qualified as derivative instruments pursuant to ASC 815-40, Contracts in an Entity’s Own Equity and that the Warrants were considered issued for accounting purposes concurrently with 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 conversion of the Series A-1 Preferred Stock was obtained. On July 11, 2023, pursuant to the Series A Certificate of Designation, the Company issued, in addition to common stock and Series A-2 Preferred Stock, (i) a Tranche A Warrant to acquire 4,785,243 shares of Series A-3 Preferred Stock, (ii) a Tranche B Warrant to acquire 4,350,221 shares of Series A-4 Preferred Stock, and (iii) a Tranche C Warrant to acquire 6,960,353 shares of Series A-5 Preferred Stock. In March 2024, the Company entered into an exchange agreement with certain accredited investors, pursuant to which the accredited investors surrendered all shares of Series A-2 Preferred Stock held by them in exchange for shares of new preferred stock to be known as Series A-2 Prime Preferred Stock 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 Warrants are recognized as liabilities in the balance sheets and were initially recognized at fair value at the time of issuance. The Warrants are also subject to remeasurement at each balance sheet date after issuance. Any change in fair value is recognized as a component of other income (expenses) in the statements of operations in the period of change. The valuation of the Warrants contains unobservable inputs that reflect the Company’s own assumptions for which there is little market data. Accordingly, the Warrants are measured at fair value on a recurring basis using unobservable inputs and are classified as Level 3 inputs. The significant unobservable inputs used in the fair value measurement of the Company’s Warrants include, but are not limited to, probability of obtaining certain shareholder approvals, probability of reaching certain technical milestones related to the development of oxylanthanum carbonate, and the estimated term of the Warrants. Significant increases (decreases) in any of those inputs in isolation would result in a significantly higher (lower) fair value measurement. Generally, a change in the assumption used for the probability of obtaining certain shareholder approvals is not correlated to a change in the probability of reaching certain technical milestones. However, a change to the assumption used for the probability of obtaining certain shareholder approvals or a change in the probability of reaching certain technical milestones would have been accompanied by a directionally opposite change and a directionally similar change, respectively, in the assumption used for the estimated term. F- 28 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 performed as of the transaction inception on March 3, 2023, and on March 31, 2023, due to uncertainty in the timing of shareholder approval and the potential variability in the Warrant exercise price. 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 and the exercise price for the Warrants became fixed. Therefore, as of December 31, 2024 and December 31, 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 security, (iii) the time to expiration, or expected term, (iv) the expected volatility of the underlying security, (v) the risk-free rate, (vi) discount for lack of marketability, and (vii) estimated probability assumptions surrounding the achievement by the Company of technical milestones associated with regulatory and commercial progress. These valuation techniques involve management’s estimates and judgment based on unobservable inputs and are classified in Level 3. The fair value estimates may not be indicative of the amounts that would be realized in a market exchange. Additionally, there may be inherent uncertainties or changes in the underlying assumptions used, which could significantly affect the current or future fair value estimates. Generally, a significant increase (decrease) in the probabilities of shareholder approval and the achievement of technical milestones would have resulted in a significantly higher (lower) fair value measurement; however, changes in other inputs such as expected term and price of the underlying common stock will have a directionally opposite impact on fair value measurement. The Company uses a third-party valuation expert to assist in the determination of the fair value of the Warrants. 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 December 31, 2025. Tranche A Warrant At December 31, 2024 At December 31, 2025 Fair value of underlying stock $ 7.90 $ 5.77 Exercise price $ 5.39 $ 5.39 Volatility 105.4 % – 111.3 % 61.6 % – 100.3 % Risk free rate 4.2 % 3.5 % – 3.7 % Dividend yield 0 % 0 % Term (in years) 0.5 – 1.5 0.2 – 1.0 Discount for lack of marketability 7.5 % 5.0 % Probability for receipt of FDA approval for oxylanthanum carbonate 38.48 % - 39.29 % 64.80 % - 66.83 % Tranche B Warrant At December 31, 2024 At December 31, 2025 Fair value of underlying stock $ 7.90 $ 5.77 Exercise price $ 5.93 $ 5.93 Volatility 105.4 % – 125.2 % 100.3 % - 108.2 % Risk free rate 4.2 % 3.5 % Dividend yield 0 % 0 % Term (in years) 1.0 – 2.0 0.7 - 1.5 Discount for lack of marketability 7.5 % 5 % Probability for receipt of Transitional Drug Add-On Payment Adjustment approval for oxylanthanum carbonate 30 % 70.0 % F- 29 Tranche C Warrant At December 31, 2024 At December 31, 2025 Fair value of underlying stock $ 7.90 $ 5.77 Exercise price $ 7.41 $ 7.41 Volatility 105.4 % – 125.2 % 99.0 % - 105.0 % Risk free rate 4.2 % 3.5 % Dividend yield 0 % 0 % Term (in years) 1.5 – 2.5 1.2 – 2.0 Discount for lack of marketability 7.5 % 5 % Probability for public disclosure of financial results for four (4) quarters of commercial sales for oxylanthanum carbonate following receipt of Transitional Drug Add-On Payment Adjustment approval 0.01 % - 27.46 % 1.56 % - 51.2 % 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 December 31, 2025, the Company estimated the fair value of the Warrants to be $ 18.9 million and $ 16.9 million, respectively. The following table summarizes activity, on an as-converted to common shares basis, for the Company’s preferred stock warrants for the year ended December 31, 2025: Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Outstanding Exercise Term Value Warrants Price (in Years) (in thousands) Outstanding, December 31, 2024 16,095,817 $ 6.40 2.12 $ - Warrants contingently issuable - - - - Warrants exercised ( 277,000 ) - - - Outstanding, December 31, 2025 15,818,817 $ 6.41 1.12 $ - 12. Stock-based Compensation On July 15, 2021, in connection with the completion of the Company’s IPO, the Company adopted a new comprehensive equity incentive plan, the 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). Following the effective date of the 2021 Plan, no further awards may be issued under the 2018 Plan or the 2019 Plan (collectively, the “Prior Plans”). However, all awards under the Prior Plans that are outstanding as of the effective date of the 2021 Plan will continue to be governed by the terms, conditions and procedures set forth in the Prior Plans and any applicable award agreements. 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, 2023, approximately 1,277,600 shares were reserved for issuance. On June 20, 2024, shareholders approved a further increase of 800,000 shares, to the number of shares reserved, for a total of 2,077,600 shares. On January 1, 2025, pursuant to a 4 % evergreen increase provision in the 2021 Plan, the amount of shares reserved under the Plan increased by 1,235,316 shares, to the number of shares reserved, for a total of 3,312,916 shares. The 2021 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. As of December 31, 2024, approximately 743,333 shares of common stock were available under the 2021 Plan. As of December 31, 2025, there are approximately 1,310,150 shares of common stock available under the 2021 Plan. On January 1, 2026, pursuant to a 4 % evergreen increase provision in the 2021 Plan, the amount of shares reserved under the Plan increased by 884,570 shares, to the number of shares reserved, for a total of 4,197,486 shares. F- 30 The following table summarizes activity for stock options under all plans for the year ended December 31, 2025: Weighted- Number of Average Shares Weighted- Remaining Aggregate Underlying Average Contractual Intrinsic Outstanding Exercise Term Value Options Price (in Years) (in thousands) Outstanding, December 31, 2024 1,367,114 $ 10.01 8.59 $ 705 Options granted 669,500 $ 4.81 9.56 $ - Options forfeited ( 3,500 ) $ 5.70 - $ - Options exercised - $ - - $ - Outstanding, December 31, 2025 2,033,114 $ 8.31 8.23 $ 10,347 Options vested and exercisable as of December 31, 2025 896,043 $ 10.79 7.13 $ 4,219 The grant date fair value of options granted during the year ended December 31, 2025, was approximately $ 2.8 million. As of December 31, 2025, the unrecognized compensation cost related to outstanding stock options was $ 5.6 million, which is expected to be recognized as expense over approximately 3.6 years. During the year ended December 31, 2021, employees and consultants exercised a total of 38,372 stock options and the Company received $ 119,000 in proceeds. A portion of these options were exercised early (prior to vesting), and as of December 31, 2024, none of the options remained unvested. Proceeds received related to the vested portion of options of $ 2,500 were reclassified to equity during the year ended December 31, 2024. During May 2022, the Company granted a consultant 1,000 restricted stock units with a grant date fair value of $ 7,200 , resulting in a fair value per share of $ 7.20 . The restricted stock units vested in May 2024. During August 2023, the Company granted a consultant 1,000 restricted stock units with a grant date fair value of $ 7,500 , resulting in a fair value per share of $ 7.50 . 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. During July 2025, the Company granted a consultant 2,500 restricted stock units with a grant date fair value of $ 11,775 , resulting in a fair value per share of $ 4.71 . The restricted stock units will vest in July 2027. The Company has recorded stock-based compensation expense, which includes expense related to restricted stock units, allocated by functional cost as follows for the years ended December 31, 2024 and 2025 (in thousands): Year Ended Year Ended December 31, December 31, 2024 2025 Research and development $ 1,058 $ 1,201 General and administrative 1,292 1,440 Total stock-based compensation $ 2,350 $ 2,641 Fair Value of Stock Options The assumptions are based on the following for each of the periods presented: Expected Term - The expected term is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vesting employment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting. The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method. F- 31 Common Stock Fair Value - The 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. Subsequent to our initial public offering, the fair value underlying the Company’s common stock is determined based on the public market closing price on each date of grant. The assumptions 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 being used is derived from the historical stock volatilities of a representative industry peer group of comparable publicly listed companies over a period approximately equal to the expected term of the options. Risk-free Interest Rate - The risk-free interest rate is based on median U.S. Treasury zero coupon issues with remaining terms similar to the expected term on the options. Expected Dividend – Through December 31, 2025, the Company has never declared nor paid any cash dividends on common stock. The Company shall modify its dividend policy to state that the Company intends to pay dividends to all stockholders, including holders of Series A Preferred Stock on an as-if-converted-to-common-stock basis, on a quarterly basis in an amount of which the aggregate of all quarterly dividends shall equal at least seventy-five percent ( 75 %) of its annual net cash flow from operations following the approval of oxylanthanum carbonate by the FDA if obtained, and the commencement 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 years ended December 31, 2024 and December 31, 2025: Year Ended December 31, 2024 Year Ended December 31, 2025 Expected volatility 105 %- 107 % 107.44 % - 116.54 % Risk-free interest rate 3.78 % - 4.65 % 3.75 % - 4.38 % Dividend yield - % - % Expected term 6.25 years 5.50 years - 6.25 years 13. Income Taxes The Company’s pre-tax loss for the years ended December 31, 2024 and 2025 is from U.S. operations. For the years ended December 31, 2024 and 2025, the Company did not record a current or deferred income tax expense or benefit. A reconciliation of the provision for income taxes to the amount computed by applying the statutory income tax rate of 21 % to the net loss is summarized for the year ended December 31, 2024 as follows: Year Ended December 31, 2024 Income taxes (benefit) at statutory rates 21.00 % State income tax (benefit), net of federal benefit 5.84 % Change in valuation allowance ( 23.12 )% Fair value adjustment on warrants ( 3.32 )% Officers’ compensation ( 1.05 )% Other 0.65 % Effective income tax rate 0.00 % F- 32 The table below provides the updated requirements of ASU 2023-09 (in thousands) for the year ended December 31, 2025: Year Ended December 31, 2025 Amount Percentage Provision for income taxes at U.S. federal statutory rate $ ( 5,576 ) 21.00 % State and local income taxes, net of federal benefit (1) ( 178 ) 0.67 % Tax Credits Research and development (“R&D”) credits ( 458 ) 1.72 % Changes in valuation allowance 5,599 ( 21.09 )% Non-taxable or non-deductible items: Officers’ compensation 279 ( 1.05 )% Fair value adjustment on warrants ( 424 ) 1.60 % Other 122 ( 0.45 )% Changes in unrecognized tax benefits 636 ( 2.40 )% Other adjustments: Other - 0.00 % $ - 0.00 % (1) The state(s) that contribute to the majority (greater than 50%) of the tax effect in this category is California for year ending December 31, 2025. The Company did not pay federal or state cash income taxes or have cash income taxes refunded in the year ended December 31, 2025. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax basis of existing assets and liabilities and operating loss carryforward, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than not that such loss carryforward and deferred tax asset will not be realized. Significant components of the Company’s deferred tax assets at December 31, 2024 and 2025 are shown below (in thousands): December 31, December 31, 2024 2025 Deferred tax assets: Stock-based compensation $ 730 $ 1,041 Net operating losses carryforwards 11,022 16,651 Depreciation and amortization 960 915 Capitalized research 6,572 7,023 Accrued expenses 553 30 Other - 37 Total gross deferred tax assets 19,837 25,697 Less: valuation allowance ( 19,668 ) ( 25,669 ) Net deferred tax assets, net of valuation allowance $ 169 $ 28 Deferred tax liabilities: Other $ ( 169 ) $ ( 28 ) Total deferred tax liabilities ( 169 ) ( 28 ) Net deferred tax assets / liabilities $ - $ - F- 33 The valuation allowance increased by $ 6 million during the year ended December 31, 2025. The Company has concluded, based upon ASC 740, that it is more likely than not the Company will not realize any benefit from the deferred tax assets related to certain Federal and state net operating loss and credit carryforwards. Accordingly, the Company has established a full valuation allowance against its Federal and state deferred tax assets. As of December 31, 2025, the Company had available Federal and state net operating loss carryforwards of approximately $ 64 million and $ 46.8 million, respectively, to reduce future taxable income, if any. Federal net operating losses generated prior to 2018 and all state net operating losses generated expire in varying amounts beginning in 2037. The net operating losses generated after 2017 do not expire and will be able to offset 80 % of taxable income generated in the future. As of December 31, 2025, the Company had research and development credit carryforwards of approximately $ 1.8 million and $ 0.9 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. These credits are fully reserved against under ASC 740-10. The federal credit carryforwards begin to expire in 2037, and the state credit carryforwards can be carried forward indefinitely. Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. The effect of an ownership change would be the imposition of annual limitation on the use of net operating loss (“NOL”) carryforwards attributable to periods before the change in ownership. An assessment of such ownership changes under Section 382 of the Code was not completed through December 31, 2025, and as such the Company is not able to determine the impact on the NOLs and tax credit carryforwards, if any, as of the date of the financial statements. To the extent that an assessment is completed in the future, the Company’s ability to utilize tax attributes could be restricted on a year-by-year basis and certain attributes could expire before they are utilized. The Company applies the guidance under ASC 740, subtopic 10-50-15, Unrecognized Tax Benefit Related Disclosures (formerly FASB Interpretation 48, Accounting for Uncertainty in Income Taxes). For benefits to be realized, a tax position must be more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon settlement. This interpretation also provides guidance on measurement, de-recognition, classification, interest and penalties. The following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2024 and 2025 (in thousands): Year Ended December 31, Year Ended December 31, 2024 2025 Beginning balance $ 1,027 $ 1,985 Additions related to current year positions 958 649 Additions related to prior year positions - 34 Ending balance $ 1,985 $ 2,668 As of December 31, 2024 and 2025, the total unrecognized tax benefit was approximately $ 2 million and $ 2.7 million, respectively. The Company’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025, the Company had no accrued interest and penalties related to uncertain tax positions. The Company files U.S. federal and state income tax returns with varying statutes of limitations. Tax years 2018 and forward remain open to examination due to the carryover of NOL carryforwards. There are no ongoing examinations by taxing authorities at this time. F- 34 On July 4, 2025, the U.S. President signed into law H.R.1, the legislation commonly known as the One Big Beautiful Bill Act (OBBBA). This legislation extended, modified, or made permanent many of the tax provisions which were initially enacted as part of the Tax Cuts and Jobs Act (TCJA) of 2017. The OBBBA contains a number of tax provisions including, but not limited to, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest, bonus depreciation modifications, as well as international tax provision modifications. These tax provisions apply to either tax years beginning after December 31, 2024 or December 31, 2025. The impact of this legislation was not material to the Company’s financial position and results of operation for the year ended December 31, 2025. Income Taxes Disclosures – In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard prospectively for the period ending December 31, 2025. The adoption of the standard impacted the 2025 income tax disclosures. 14. Net 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 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 is dilutive. 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) convertible preferred stock; and (iv) prior to issuance, the issuable warrants related to the Company’s March 2023 private placement financing. The following table sets forth the computation of basic and diluted net loss per share of common and preferred stock (in thousands, except share and per share data): Year Ended December 31, Year Ended December 31, 2024 2025 Basic net loss per share Numerator: Net loss $ ( 36,729 ) $ ( 26,555 ) Cash Dividends to Series B holders ( 1,095 ) - Net loss attributable to common shares, basic and diluted ( 37,824 ) ( 26,555 ) Denominator: Weighted-average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted 6,698,513 15,886,876 Net loss per share attributable to common stockholders, basic and diluted $ ( 5.65 ) $ ( 1.67 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: Year Ended December 31, Year Ended December 31 2024 2025 Options to purchase common stock 1,367,114 2,033,114 Warrants to purchase common stock 478,419 478,419 Restricted stock units 2,177 3,677 Common stock issuable upon conversion of Series B-2 convertible preferred stock 300,000 - Common stock issuable upon conversion of Series A-2 Prime convertible preferred stock 1,255,145 462,245 Warrants to purchase convertible preferred stock 16,095,817 15,818,817 Total 19,498,672 18,796,272 15. Subsequent Events Subsequent to December 31, 2025, pursuant to a sales agreement dated November 13, 2024 between the Company and Guggenheim Securities, LLC, as amended by Amendment No. 1 thereto dated November 14, 2025, the Company sold 3,123,537 shares of common stock at an average price of $ 6.51 per share, resulting in net proceeds to the Company of approximately $ 19.6 million. On March 12, 2026, a purported stockholder made a demand on the Company’s Board of Directors to commence a civil action against certain of the Company’s current and former officers and directors for breaching their fiduciary duties based on the same alleged misconduct as alleged in the Securities Class Action and Derivative Actions described in Note 7 (the “Demand”). At this early stage of the proceedings, the Company is unable to make any prediction regarding the outcome of the Securities Class Action, the Derivative Actions, or the Demand. F- 35 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.