What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-12 compared with 2025-11-12 · 227 added, 234 removed, 231 unchanged (67% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q for the three-month

period ended September 30, 2025 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as

amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

forward-looking statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization

period ended March 31, 2026 contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended

(the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These forward-looking

statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization

efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters.

These forward-looking

statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties,

risks and changes in circumstances that are difficult to predict.

These statements may be identified by words such as “expects,”

“plans,” “projects,” “will,” “may,” “anticipates,” “believes,”

“should,” “intends,” “estimates,” and other words of similar meaning.

statements are based on management’s current expectations and assumptions about future events, which are inherently subject to

uncertainties, risks and changes in circumstances that are difficult to predict.

These statements may be identified by words such as

“expects,” “plans,” “projects,” “will,” “may,” “anticipates,”

“believes,” “should,” “intends,” “estimates,” and other words of similar meaning.

Actual results could differ materially from those

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also adversely affect our business, financial condition and results of operations may arise from time to time.

Given these risks and uncertainties,

the forward-looking statements discussed in this report may not prove to be accurate.

Accordingly, you should not place undue reliance

on these forward-looking statements, which only reflect the views of the Company’s management as of the date of this report.

undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated

events or changes to future operating results or expectations, except as required by law.

Given these risks and

uncertainties, the forward-looking statements discussed in this report may not prove to be accurate.

Accordingly, you should not place

undue reliance on these forward-looking statements, which only reflect the views of the Company’s management as of the date of

We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence

of unanticipated events or changes to future operating results or expectations, except as required by law.

The following discussion and analysis of our

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focus on kidney disease.

Founded in 2016, Unicycive was established to create a streamlined and efficient drug development platform capable

Founded in 2016, we were established to create a streamlined and efficient drug development platform capable

of accelerating the advancement of promising therapies from discovery to commercialization.

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and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease.

Our business model is to

license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global

Our business model is

to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global

Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs.

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us an advantage in identifying and bringing these assets into our company.

Our current development programs are focused on

two novel therapies:

Oxylanthanum Carbonate, a next-generation phosphate binder for the treatment of hyperphosphatemia in chronic kidney

disease patients on dialysis, and UNI-494, a novel drug candidate in development for the treatment of acute kidney injury.

Our current development programs are focused

on two novel therapies:

oxylanthanum carbonate, a next-generation phosphate binder for the treatment of hyperphosphatemia in chronic

kidney disease patients on dialysis, and UNI-494, a novel drug candidate in development for the treatment of acute kidney injury.

carbonate and UNI-494 were initially developed by and licensed to us from Spectrum Pharmaceuticals (“Spectrum”) and Sphaera

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Sphaera conceived and performed initial characterization of various potential pro-drug linkers, including the initial patent

As discussed herein, after completing IND enabling preclinical studies, we have completed a Phase I clinical study in healthy

As discussed herein;

after completing IND enabling preclinical studies, we have completed a Phase I clinical study in healthy

volunteers with UNI-494 in 2024.

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With OLC, if approved, people on dialysis and their physicians may have a better option to control hyperphosphatemia.

AKI is a sudden episode of kidney failure or kidney

damage (within the first 90 days of injury).

AKI is a sudden episode of kidney failure or

kidney damage (within the first 90 days of injury).

After 90 days, the patient is considered to have progressed into CKD.

AKI affects more than

2 million U.S.

more than 2 million U.S.

patients and costs the healthcare system in excess of $9 billion per year.

More than 300,000 patients per year in the U.S.

More than 300,000 patients per year

die due to AKI.

Currently there are no FDA approved medicines to treat DGF and/or AKI.

Treatment options for AKI include continuous renal

replacement therapy, renal transplant, and dialysis.

In most cases the damage to the kidney is irreversible, and the patient needs to

have a renal transplant or be on dialysis for life.

Treatment options for AKI include

continuous renal replacement therapy, renal transplant, and dialysis.

In most cases the damage to the kidney is irreversible, and the

patient needs to have a renal transplant or be on dialysis for life.

Therefore, there is a high unmet medical need.

If approved, UNI-494 has the potential

to be a first-in-class drug for the treatment of AKI.

If approved, UNI-494

has the potential to be a first-in-class drug for the treatment of AKI.

Our business model is to license technologies

and drugs and pursue development, regulatory approval, and commercialization of those products in global markets.

Many biotechnology companies

utilize similar strategies of in-licensing and then developing and commercializing drugs.

We believe, however, that our management team’s

broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing

these assets into the Company at an attractive price with limited upfront cost.

and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets.

Many biotechnology

companies utilize similar strategies of in-licensing and then developing and commercializing drugs.

We believe, however, that our management

team’s broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying

and bringing these assets into our company.

Since our formation we have devoted substantially

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We have incurred significant operating losses to date.

Our net losses were

$15.2 million and $11.9 million for the nine months ended September 30, 2024 and September 30, 2025, respectively.

As of September

Our net income was $0.6

million and our net loss was $12.8 million for the three months ended March 31, 2025 and 2026, respectively.

As of March 31, 2026,

we had an accumulated deficit of $140.6 million.

We expect that our operating expenses will increase significantly as

we advance our product candidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved,

proceed to commercialization;

We expect that our operating expenses will increase significantly as we advance our product

candidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization;

acquire, discover, validate, and develop additional product candidates;

obtain, maintain, protect and enforce

our intellectual property portfolio;

obtain, maintain, protect and enforce our intellectual property

and hire additional personnel.

We have funded our operations primarily from the

sale and issuance of common and preferred stock, convertible promissory notes and from a loan, including cash and deferred salary from

our Chief Executive Officer and principal stockholder.

Our ability to generate product revenue will depend

on the successful development, regulatory approval and eventual commercialization of our current product candidates and future product

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through

private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing.

We have funded our operations primarily from

the sale and issuance of common stock, convertible promissory notes and from a loan, including cash and deferred salary from our Chief

Executive Officer and principal stockholder.

Our ability to generate product revenue will

depend on the successful development, regulatory approval and eventual commercialization of our current product candidates and future

product candidates.

Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations

through private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources

of financing.

Adequate funding may not be available to us on acceptable terms, or at all.

If we fail to raise capital or enter into agreements to raise

capital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our

current product candidates and future product candidates.

If we fail to raise capital or enter into agreements

to raise capital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization

of our current product candidates and future product candidates.

We plan to continue to use third-party service

providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture and

supply the materials to be used during the development and commercialization of our product candidates.

providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture

and supply the materials to be used during the development and commercialization of our product candidates.

We operate with a sense of urgency to bring new

treatments to patients faster, leveraging our team’s expertise, operational efficiency, and strategic focus on high-value opportunities

within the renal space.

Through this approach, we aim to deliver innovative therapies that provide meaningful clinical and economic benefits

for patients, providers, and healthcare systems.

Recent Developments

During the nine months ended September 30, 2025,

the Company sold 8,046,736 shares of common stock pursuant to a sales agreement, with Guggenheim Securities, LLC, at an average price

of $4.94 per share and paid $1.2 million in commissions, resulting in net proceeds to the Company of approximately $38.6 million.

On October 28, 2025,we announced an update from

its meeting with the U.S.

Food and Drug Administration (FDA) and timing of the resubmission of its New Drug Application (NDA) for Oxylanthanum

Carbonate (OLC) following receipt of a Complete Response Letter (CRL) on June 30, 2025.

The Type A FDA meeting was held to discuss the

resolution of the single deficiency identified in the CRL related to the compliance status of a third-party manufacturing vendor.

No other concerns have been identified to us, including pre-clinical, clinical, or safety data submitted as part of the NDA.

receipt of the official meeting minutes from the Type A meeting and engaging in discussions with its third-party manufacturing vendor,

we plan to resubmit the NDA for OLC by year-end

our meeting with the U.S.

Food and Drug Administration (FDA) and timing of the resubmission of our New Drug Application (NDA) for Oxylanthanum

carbonate (OLC) following receipt of a CRL on June 30, 2025.

The Type A FDA meeting was held to discuss the resolution of the single

deficiency identified in the CRL related to the compliance status of a third-party manufacturing vendor.

No other concerns have been

identified to us, including pre-clinical, clinical, or safety data submitted as part of the NDA.

Following receipt of the official meeting

minutes from the Type A meeting and engaging in discussions with our third-party manufacturing vendor, we resubmitted our NDA to the

FDA in December 2025.

In January 2026, the FDA accepted the resubmission of the NDA for OLC, deeming the resubmission to be a Class II

complete response which has a six-month review period from the date of resubmission, and set a PDUFA target action date of June 29, 2026.

On April 6, 2026, Gaurav Aggarwal, M.D., one

of our directors, resigned from our Board of Directors.

Aggarwal’s resignation was not a result of any disagreement with us

or our management or Board of Directors on any matter related to our operations, policies, or practices.

Components of Results of Operations

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expenses consist of expenses incurred in connection with the development of our product candidates.

These expenses include fees paid to

third parties to conduct certain research and development activities on our 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 our research and product development employees and allocated overheads, including information

These expenses include fees paid

to third parties to conduct certain research and development activities on our 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 our research and product development employees and allocated overheads, including information

technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in process

research and development technology.

We expense both internal and external research and development expenses as they are incurred.

We expense both internal and external research and development costs as incurred.

We do not allocate our costs by product candidate,

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General and administrative expenses consist principally

of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for

legal, consulting, accounting and tax services, including information technology costs and utilities, and other general operating expenses

not otherwise classified as research and development expenses.

of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees

for legal (including patent costs), consulting, accounting and tax services, including information technology costs and utilities, and

other general corporate overhead expenses.

We anticipate that our general and administrative

expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting services

costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director and

officer insurance premiums associated with being a public company.

Other Expenses

Other expenses consist of the change in fair value

of our warrant liability, interest income and interest expense.

expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting

services costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director

and officer insurance premiums associated with being a public company.

Other Income (Expenses)

Other income (expenses) consist of the change

in fair value of our warrant liability, interest income and interest expense.

Results of Operations

Comparison of the Three Months Ended September

30, 2024 and 2025

The following table summarizes our results of

operations for the periods indicated (in thousands):

Comparison of the Three Months Ended March 31,

2025 and 2026 (in thousands)

Three Months Ended

September 30,

Operating expenses:

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Research and Development Expenses

Research and development expenses decreased by

approximately $81,000, or 3%, from approximately $3.1 million for the three months ended September 30, 2024, to approximately $3.0 million

for the three months ended September 30, 2025.

The decrease in research and development expenses was primarily due to a $235,000 decrease

in professional services and drug development costs, partially offset by increases in labor, travel, and other costs of $154,000.

General and Administrative Expenses

General and administrative expenses increased

by $1.2 million, or 37%, from approximately $3.2 million for the three months ended September 30, 2024, to approximately $4.4 million

for the three months ended September 30, 2025.

The increase in general and administrative expenses was primarily due to an increase of

$0.5 million in consulting and other professional services expenses as well as an increase of $0.6 million in labor and other costs.

Other Income (Expenses)

Other income (expenses) decreased $0.8 million,

or 38%, from $2.2 million in the three months ended September 30, 2024 to $1.3 million for the three months ended September 30, 2025.

was primarily due to the change in fair value of our warrant liability of $0.7 million.

Comparison of the Nine months ended September

30, 2024 and 2025

Nine months ended

September 30,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expenses):

Interest income

Interest expense

Change in fair value of warrant liability

Total other income (expenses)

Research and Development Expenses

Research and development expenses decreased by

approximately $7.9 million, or 53%, from approximately $14.7 million for the nine months ended September 30, 2024 to approximately

$6.9 million for the nine months ended September 30, 2025.

The decrease in research and development expenses was primarily due to an $8.2

million decrease in drug development costs, partially offset by an increase in labor costs of $0.4 million.

General and Administrative Expenses

Research and development expenses decreased by approximately $0.6 million,

or 26%, from approximately $2.2 million for the three months ended March 31, 2025 to approximately $1.6 million for the three months ended

March 31, 2026.

This decrease was primarily driven by a reduction in drug development costs of $0.5 million and consulting and professional

fees and other expenses of $0.2 million, partially offset by an increase in labor of $0.1 million and stock-based compensation of $0.1

General and Administrative Expenses

increased by $7.3 million, or 90%, from approximately $8.1 million for the nine months ended September 30, 2024 to approximately

$15.4 million for the nine months ended September 30, 2025 primarily due to an increase of $5.4 million in consulting and

professional services expenses as well as an increase of $1.9 million in labor and other costs.

General and administrative expenses increased by $1.0 million, or 17%,

from approximately $5.8 million for the three months ended March 31, 2025 to approximately $6.8 million for the three months ended March

This increase was primarily driven by a $0.9 million increase in consulting and professional service costs, and $0.3 million

in labor and related expenses.

Additionally, rent, travel, supplies, and other costs decreased by $0.2 million, while stock-based compensation

grew by $0.1 million.

Other Income (Expenses)

Other income (expenses) increased by $2.8 million,

or 36%, from $7.7 million expense in the nine months ended September 30, 2024 to $10.4 million income for the nine months ended

September 30.

The increase was primarily due to the change in fair value of our warrant liability.

Other income (expenses) decreased by $13.0 million, or 151%, from an

income of $8.6 million for the three months ended March 31, 2025, to expense of $4.4 million for the three months ended March 31, 2026.

This was primarily driven by a change in the fair value of our warrant liability, partially offset by a decrease of earned interest income

during the year as a result of lower average cash balances available for interest-bearing accounts.

Liquidity and Capital Resources

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As a result of our initial public offering (“IPO”),

on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received approximately

$22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.

We have used the net proceeds

from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes,

including hiring additional management and conducting market research and other commercial planning.

on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol “UNCY”, and on July 15, 2021 we received

approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses.

the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and

corporate purposes, including hiring additional management and conducting market research and other commercial planning.

Future revenue streams may consist of collaboration

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

During the nine months ended September 30, 2025, the Company

sold 8,046,736 shares of common stock pursuant to a sales agreement, with Guggenheim Securities, LLC, at an average price of $4.94 per

share and paid $1.2 million in commissions, resulting in net proceeds to the Company of approximately $38.6 million.

On November 14, 2025, the Company entered into an Amendment

1 to sales agreement with Guggenheim Securities LLC to increase the number of shares that may be sold under the sales agreement to

$100,000,000 (collectively with the November 13, 2024 sales agreement, the “Sales Agreement”).

During the three months ended March 31, 2026,

the Company sold 3,123,537 shares of common stock pursuant to the Sales Agreement, at an average price of $6.46 per share and paid $0.6

million in commissions, resulting in net proceeds to the Company of approximately $19.6 million.

Future Funding Requirements

We have incurred net losses since our inception.

For the nine months ended September 30, 2025, we had a net loss of $11.9 million, and we expect to incur substantial additional losses

in future periods.

As of September 30, 2025, we had an accumulated deficit of $113.2 million.

For the three months ended March 31, 2026, we had a net loss of $12.8 million, and we expect to incur substantial additional losses in

future periods.

As of March 31, 2026, we had an accumulated deficit of $140.6 million.

We anticipate that our current cash will be sufficient

to fund our operations for more than 12 months from the date of this report.

We expect to continue incurring losses in the

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equity offerings, debt financings, corporate collaborations or other means.

There can be no assurance that we will be able to obtain additional

financing on terms acceptable to us, on a timely basis or at all.

If we are unable to secure additional capital, we 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

our cash in amounts sufficient to sustain operations and meet our obligations.

Based on our current level of expenditures, we believe

that we have sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year

after the date that these financial statements are available to be issued.

There can be no assurance that we will be able to obtain

additional financing on terms acceptable to us, on a timely basis or at all.

If we are unable to secure additional capital, we 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 our cash in amounts sufficient to sustain operations and meet our obligations.

Based on our current level of expenditures,

we believe that we have sufficient resources such that there is not substantial doubt about our ability to continue operations for at

least one year after the date that these financial statements are available to be issued.

We anticipate that we will need to raise substantial

additional capital, the requirements for which will depend on many factors, including:

the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates;

the number and scope of clinical programs we decide to pursue;

the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

the scope and costs of development and commercial manufacturing activities;

the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval;

the extent to which we acquire or in-license other product candidates and technologies;

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

our ability to establish and maintain collaborations on favorable terms, if at all;

our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

the impact, if any, of the coronavirus pandemic on our business operations;

the scope, timing, rate

of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials

for our current product candidates and future product candidates;

the number and scope of

clinical programs we decide to pursue;

the cost, timing and outcome

of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

the scope and costs of

development and commercial manufacturing activities;

the cost and timing associated

with commercializing our current product candidates and future product candidates, if they receive marketing approval;

the extent to which we

acquire or in-license other product candidates and technologies;

the costs of preparing,

filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual

property-related claims;

our ability to establish

and maintain collaborations on favorable terms, if at all;

our efforts to enhance

operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development

of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

the impact, if any, of

the coronavirus pandemic on our business operations;

our ability to access capital;

our implementation of operational, financial and management systems;

the costs associated with being a public company.

our implementation of operational,

financial and management systems;

the costs associated with

being a public company.

A change in the outcome of any of these or other

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Furthermore, our operating plans may change in the future,

and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans.

and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating

If we raise additional funds by issuing equity securities, our stockholders may experience dilution.

Any future debt financing into which

we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or

additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset

sale transactions.

Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Any future debt financing

into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur

liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation

or asset sale transactions.

Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our

stockholders.

Adequate funding may not be available to us on

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and uses of cash for each of the periods presented below (in thousands):

Nine months ended

September 30,

Three Months ended

Net cash (used in) provided by:

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Net cash used in operating activities was $6.2

million for the nine months ended September 30, 2025.

million for the three months ended March 31, 2026.

Cash used in operating activities was primarily due to the use of funds for development

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compliance, and legal services.

We incurred a net loss of $12.8 million after including the effect of non-cash adjustments for stock

compensation and change in fair value of our warrant liability.

Net cash used in operating activities was $8.9

million for the nine months ended September 30, 2024.

million for the three months ended March 31, 2025.

Cash used in operating activities was primarily due to the use of funds for development

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compliance, and legal services.

We reported net income of $0.6 million after including the effect of non-cash adjustments for stock

compensation and change in fair value of our warrant liability.

Cash Flows from Investing Activities

Net cash used in investing activities was $5.2

for the nine months ended September 30, 2025 and was due to the purchase of lab equipment.

million for the three months ended March 31, 2026 and was due primarily to the purchase of marketable securities.

Net cash used in investing activities was $16,000

for the nine months ended September 30, 2024 and was due to the purchase of furniture and fixtures for our corporate office.

for the three months ended March 31, 2025 and was due to the purchase of furniture and fixtures for our corporate office.

Cash Flows from Financing Activities

Net cash provided by financing activities was $39.9 million during

the nine months ended September 30, 2025, due primarily to the at the market public offering agreement we signed on November 13, 2024.

Net cash provided by financing activities was

$44.7 million during the nine months ended September 30, 2024 due primarily to the private placement financing agreement we signed on

March 13, 2024.

Critical Accounting Policies, Significant Judgments and Use of Estimates

$19.6 million during the three months ended March 31, 2026, due primarily to sales made under the sales agreement with Guggenheim Securities

LLC dated November 13, 2024 as amended by Amendment No.

1 thereto dated November 14, 2025.

Net cash provided by financing activities was

$2.5 million during the three months ended March 31, 2025 due primarily to the private placement financing agreement we signed on March

13, 2025 and sales made under the sales agreement with Guggenheim Securities LLC dated November 13, 2024.

Off-Balance Sheet Arrangements

As of March 31, 2026 and through the filing

date of this Quarterly Report on Form 10-Q, we did not have during the periods presented, and we do not currently have any off-balance sheet

arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies, Significant

Judgments and Use of Estimates

Our financial statements have been prepared in

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The preparation of these financial statements requires

us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and

liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods.

Our estimates are

based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of

which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets

and liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods.

Our estimates

are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results

of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

Actual results may differ from these estimates under different assumptions or conditions.

We consider our critical accounting

policies and estimates to be related to revenue, research and development, stock-based compensation, debt and equity classification and

warrant liabilities.

There have been no other material changes to our critical accounting policies and estimates during the nine months

ended September 30, 2025 from those used for the year ended December 31, 2024.

policies and estimates to be related to debt and equity classification, warrant liabilities, research and development, and stock-based

compensation.

There have been no other material changes to our critical accounting policies and estimates during the three months ended

March 31, 2026 from those used for the year ended December 31, 2025.

The below policies represent our critical accounting policies.

Revenue Recognition

We implemented ASC 606, Revenue from Contracts

with Customers .

This includes the development of new policies based on the five-step model provided in the new revenue standard, ongoing

contract review requirements, and gathering of information provided for disclosures.

We recognize revenue from product sales or services

rendered when control of the promised goods is transferred to a counterparty in an amount that reflects the consideration to which we

expect to be entitled in exchange for those goods and services.

To achieve this core principle, we apply the following five steps:

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

price to performance obligations in the contract and recognize revenues when or as we satisfy a performance obligation.

Debt and Equity Classification

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The Series A-1 and Series B-1 Preferred Stock do not fall within the scope

of ASC 480, Distinguishing Liabilities from Equity , do not contain any embedded derivatives that require bifurcation, and are not

classified as liabilities.

However, as the Series A-1 and Series B-1 Preferred Stock, at issuance, are contingently redeemable upon the

occurrence of an event that is not solely within our control, they are required to be initially classified as mezzanine equity and measured

at the amount of net proceeds received.

As the Series A-1 and Series B-1 Preferred Stock are not currently redeemable or probable of becoming

redeemable, no subsequent remeasurement is required.

of ASC 480, Distinguishing Liabilities from Equity , do not contain any embedded derivatives that require bifurcation, and are

not classified as liabilities.

However, as the Series A-1 and Series B-1 Preferred Stock, at issuance, are contingently redeemable upon

the occurrence of an event that is not solely within our control, they are required to be initially classified as mezzanine equity and

measured at the amount of net proceeds received.

As the Series A-1 and Series B-1 Preferred Stock are not currently redeemable or probable

of becoming redeemable, no subsequent remeasurement is required.

Warrant Liabilities

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The warrant liabilities are measured using Level 3 fair value inputs.

See Note 10 for a description of

warrant liabilities and the related valuations.

Research and Development

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personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research

and product development employees and allocated overheads, including information technology costs and utilities and expenses for issuance

of shares pursuant to anti-dilution clause in the purchase of IPR&D technology.

We expense both internal and external research and

development expenses as they are incurred.

and product development employees.

We expense both internal and external research and development costs as incurred.

Stock-Based Compensation

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The Black-Scholes model requires the

input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, and the risk-free

interest rate.

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 .

JOBS Act Accounting Election

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be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.

Subject to certain conditions set forth in the

JOBS Act, as an “emerging growth company,” we intend to rely on certain of these exemptions, including, without limitation,

(i) providing an auditor’s attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the

Sarbanes-Oxley Act and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board (“PCAOB”)

regarding the communication of critical audit matters in the auditor’s report on financial statements.

We will remain an “emerging

growth company” until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235

billion or more;

(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public

(iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years;

the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Subject to certain conditions set forth in the JOBS Act, as an “emerging

growth company,” we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor’s

attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying

with the requirement adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding the communication of critical

audit matters in the auditor’s report on financial statements.

We will remain an “emerging growth company” until the

earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more;

(ii) the last

day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering;

(iii) the date on

which we have issued more than $1.0 billion in nonconvertible debt during the previous three years;

or (iv) the date on which we are deemed

to be a large accelerated filer under the rules of the SEC.

Recent Accounting Pronouncements

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Accounting Policies—Recent Accounting Pronouncements” in Note 2 to our financial statements included elsewhere in this Quarterly

report for additional information.

Off-Balance Sheet Arrangements

We did not have during the periods presented,

and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Report on Form 10-Q for additional information.

QUANTITATIVE AND

QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis