What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-18 · 170 added, 153 removed, 98 unchanged (77% of the section changed)

1 unchanged sentence

BUSINESS OVERVIEW

We are a biopharmaceutical company focused on

advancing innovative immune-oncology technologies addressing difficult to treat cancers.

Our Deoxyribonuclease (“DNase”) technology

is designed to improve outcomes of existing treatments, including immunotherapies, by targeting neutrophil extracellular traps (“NETs”),

which are involved in cancer progression.

We are currently focused on advancing our systemic DNase program into the clinic as an adjunctive

therapy for pancreatic carcinoma and locally advanced or metastatic solid tumors.

We are a biopharmaceutical company focused on advancing

innovative immuno-oncology technologies addressing difficult to treat cancers.

Our proprietary DNase technology is designed to improve

outcomes of existing treatments, including immunotherapies, by targeting NETs, which are involved in cancer progression.

We are currently

focused on advancing our systemic DNase program into the clinic as an adjunctive therapy for pancreatic carcinoma and locally advanced

or metastatic solid tumors.

We incorporate our patented and proprietary technologies

5 unchanged sentences

a significant amount of our resources to our research and development activities and anticipate continuing to do so for the near future.

To date, none of our drug candidates have received regulatory marketing authorization or approval in the United States (“U.S.”)

by the Food and Drug Administration (“FDA”) nor in any other countries or territories by any applicable agencies.

We are receiving

ongoing royalties pursuant to a license of our legacy PolyXen technology to an industry partner.

Although we hold a broad patent portfolio,

the focus of our internal efforts during the year ended December 31, 2024, was on the advancement of our DNase technology.

To date, none of our drug candidates have received regulatory marketing authorization or approval in the U.S.

by the Food and Drug Administration

nor in any other countries or territories by any applicable agencies.

We are receiving ongoing royalties pursuant to a license of our

legacy PolyXen technology to an industry partner.

Although we hold a broad patent portfolio, the focus of our internal efforts during

the years ended December 31, 2025 and 2024, was on the advancement of our DNase technology.

Critical Accounting Estimates

The preparation of our financial statements in

conformity with U.S.

The preparation of our financial statements in conformity

generally accepted accounting principles (“U.S.

21 unchanged sentences

We expense upfront, non-refundable payments made for research and development services as obligations are incurred, except when

deposits are made for specifically identified services.

The value ascribed to intangible assets acquired but which have not met capitalization

criteria is expensed as research and development at the time of acquisition.

Upfront payments under license agreements are expensed upon

receipt of the license.

Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the

period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

We are required to estimate accrued research and

development expenses at each reporting period.

This process involves reviewing open contracts and purchase orders, communicating with

our personnel and consultants to identify services that have been performed on our behalf and estimating the level of service performed

and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.

of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are

However, some require advanced payments.

We make estimates of accrued expenses as of each balance sheet date in the financial statements

based on facts and circumstances known at that time.

We periodically confirm the accuracy of the estimates with the service providers

and make adjustments, if necessary.

deposits are made for specifically identified future services.

The value ascribed to intangible assets acquired but which have not met

capitalization criteria is expensed as research and development at the time of acquisition.

Upfront payments under license agreements

are expensed upon receipt of the license.

Milestone payments under license agreements are accrued, with a corresponding expense being

recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable.

We are required to estimate accrued research and development

expenses at each reporting period.

This process involves reviewing open contracts and purchase orders, communicating with our personnel

and consultants to identify services that have been performed on our behalf and estimating the level of service performed and the associated

cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.

The majority of our service providers

invoice in arrears for services performed, on a pre-determined schedule or when contractual milestones are met.

However, some require

advanced payments.

We make estimates of accrued expenses as of each balance sheet date in the financial statements based on facts and

circumstances known at that time.

We periodically confirm the accuracy of the estimates with the service providers and make adjustments,

if necessary.

Examples of estimated accrued research and development expenses include fees paid to:

Collaborative partners performing research and development and pre-clinical activities;

Program managers in connection with overall program management of clinical trials;

Program managers in connection with overall program management of exploratory studies and clinical trials;

CMOs in connection with cGMP manufacturing;

CROs in connection with clinical trials;

Investigative sites in connection with clinical trials.

CROs in connection with exploratory studies and clinical trials;

Investigative sites in connection with exploratory studies and clinical trials.

We base our expenses related to research and development,

pre-clinical activities, manufacturing and clinical trials on our estimates of the services received and efforts expended pursuant to

quotes and contracts with multiple research institutions, CMOs and CROs that conduct and manage clinical trials on our behalf.

The financial

terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of the expense.

accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or

prepaid accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding

of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result

in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our

prior estimates of accrued research and development expenses.

In connection with certain financing, consulting

and collaboration arrangements, we issued warrants to purchase shares of our common stock.

The outstanding warrants are standalone instruments

that are not puttable or mandatorily redeemable by the holder and are classified as equity awards.

We measure the fair value of the awards

using the Black-Scholes option pricing model as of the measurement date.

Warrants issued to collaboration partners in conjunction with

the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued.

All other warrants are recorded at fair value

as expense on a straight-line basis over the requisite service period or at the date of issuance if there is not a service period or if

service has already been rendered.

For warrants that contain vesting triggers based on the achievement of certain objectives, we apply

judgment to estimate the probability and timing of the achievement of those objectives.

These estimates involve inherent uncertainties,

and as a result, if the probability or timing of the achievement of those objectives change, expense related warrants could be materially

different in the future.

For warrants issued in connection with financing arrangements we allocate the proceeds based on the relative

fair value of the award and other instrument(s).

quotes and contracts with multiple research institutions, CMOs and CROs that conduct and manage exploratory studies and clinical trials

on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven

payment flows.

There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment

of the expense.

In accruing service fees, we estimate the time period over which services will be performed and the level of effort to

be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust

the accrual or prepaid accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred,

our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary

and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments

to our prior estimates of accrued research and development expenses.

Recent Developments

We and our board of directors (“Board”)

have initiated a formal strategic review process with the assistance of outside financial and legal advisors.

We are considering a wide

range of alternatives to maximize shareholder value, including, but not limited to, the sale of all or part of the Company or its assets

or a business combination, including a “reverse merger”, share exchange or similarly structured transaction.

An independent

committee of the Board has engaged in preliminary discussions with third parties regarding potential transactions.

Any such completed

transaction could have a significant impact on our stockholders, including if the transaction would result in the current investors of

the counterparty holding a substantial majority of our outstanding common stock following consummation of the potential transaction.

the preliminary stage of such discussions, at this time there is no way to quantify the potential impact of a transaction, if any.

is no deadline or definitive timetable set for the completion of the strategic alternatives process, and there can be no assurance any

proposal will be made or accepted, any agreement will be executed, or any transaction will be consummated in connection with this review.

In addition, if we do enter into definitive agreements with respect to a potential transaction, we expect that consummation of the potential

transaction would be subject to a number of conditions, including approval by our stockholders and Nasdaq, and other customary conditions,

which would be out of our control and may never be satisfied.

We remain committed to advancing our DNase technology and do not intend

to make further announcements regarding the review process unless and until the Board approves a specific transaction or otherwise determines

that further disclosure is appropriate.

Impact of Global Conflicts on Operations

The short and long-term implications of Russia’s

invasion of Ukraine and conflict in the Middle East are difficult to predict at this time.

The imposition of current and future sanctions

and counter sanctions may have an adverse effect on the economic markets generally and could impact our business, financial condition,

and results of operations.

The short and long-term implications of geopolitical

events and global conflicts, including those in Ukraine and the Middle East are difficult to predict at this time.

The imposition of current

and future sanctions and counter sanctions may have an adverse effect on the economic markets generally and could impact our business,

financial condition, and results of operations.

Results of Operations

The table below sets forth the comparison of our

historical results of operations for the year ended December 31, 2024 to the year ended December 31, 2023.

The table below sets forth the comparison of our historical

results of operations for the year ended December 31, 2025 to the year ended December 31, 2024.

Royalty revenue

5 unchanged sentences

Other income (expense):

Other (expense) income

Other income (expense)

Interest income, net

1 unchanged sentence

$ (3,960,275 )

Revenue for the year ended December 31, 2024 was

relatively flat with that of the year ended December 31, 2023.

$ (1,279,415 )

Revenue for the year ended December 31, 2025 increased

by approximately $0.5 million, or 19.0%, to approximately $3.0 million from approximately $2.5 million for the year ended December 31,

This increase represented an increase in royalty revenue related to our sublicense agreement with Takeda as compared to the same

period in 2024, primarily due to royalties recognized from certain countries during the year ended December 31, 2025 compared to the same

period in 2024.

Research and Development Expense

1 unchanged sentence

31, 2025 decreased by approximately $0.2 million, or 6.8%, to $3.1 million from $3.3 million in the comparable period in 2024 primarily

due to decreased spending in connection with our DNase process development efforts.

During the year ended December 31, 2024, the Company

expensed approximately $0.7 million related to the impairment of long-lived assets associated with our legacy PSA technology.

no similar expense in 2023.

Excluding the $0.7 million impairment charge from total R&D expense of $3.3 million for the year ended

December 31, 2024, adjusted R&D expenses for the year ended December 31, 2024 decreased approximately $0.9 million, or 26.1%, to $2.6

million, from $3.5 million for the year ended December 31, 2023.

The table below sets forth the R&D costs incurred by us, by category

of expense, for the years ended December 31, 2024 and 2023:

due to approximately $0.7 million of expense related to the impairment of long-lived assets associated with our legacy PSA technology

incurred in 2024.

There was no similar expense in 2025.

Excluding the $0.7 million impairment charge from total R&D expense of $3.3

million for the year ended December 31, 2024, adjusted R&D expenses for the year ended December 31, 2025 increased approximately $0.5

million, or 18.6%, to $3.1 million, from $2.6 million for the year ended December 31, 2024.

The table below sets forth the R&D costs

incurred by us, by category of expense, for the years ended December 31, 2025 and 2024:

Year ended December 31,

5 unchanged sentences

Total research and development expense

The decrease in outside

services and contract research organizations expense was primarily due to the aforementioned decreased spending in connection with our

process development efforts, partially offset by increased third-party pre-clinical development efforts related to our DNase technology.

The increase in personnel costs is due to certain severance and benefits expensed in connection with a separation agreement entered into

during the second quarter of 2024 with our former Chief Scientific Officer.

The increase in outside services

and contract research organizations expense was primarily due to increased consulting, pre-clinical and manufacturing development efforts

as well as costs incurred in connection with the commencement of DNase exploratory studies during the year ended December 31, 2025.

decrease in salaries and wages and share-based expense during the year ended December 31, 2025 was related to certain severance and benefits

expensed during the year ended December 31, 2024 in connection with a separation agreement entered into during the second quarter of 2024

with our former Chief Scientific Officer, for which there were none in 2025.

General and Administrative Expense

General and administrative expenses for the year

ended December 31, 2024 was $3.4 million, decreasing by approximately $0.1 million, or 4.1%, compared to the same period in the prior

The decrease was primarily due to a reduction in legal and accounting costs during the year ended December 31, 2024 compared to

the prior year.

These decreases were substantially offset by certain severance and benefits expensed in connection with a separation agreement

entered into during the second quarter of 2024 with our former Chief Executive Officer.

Other (Expense) Income

Other expense was approximately $6,000 for the

year ended December 31, 2024 compared to other income of approximately $25,400 for the same period in 2023.

This decrease in other income

was primarily related to fees associated with the Pharmsynthez Loan recognized during the year ended December 31, 2023 for which there

were no similar fees received in the same period in 2024.

General and administrative expenses for the year ended

December 31, 2025 decreased by approximately $0.7 million, or 19.6%, to approximately $2.7 million from approximately $3.4 million in

the comparable period in 2024.

The decrease was primarily due to certain severance and benefits expensed during the year ended December

31, 2024 in connection with a separation agreement entered into during the second quarter of 2024 with our former Chief Executive Officer

and, to a lesser extent, a decrease in board of director fees.

This decrease was partially offset by an increase in legal and accounting

Other Income (Expense)

Other income was approximately $6,000 for the year

ended December 31, 2025 compared to approximately $6,000 of other expense for the comparable period in 2024.

This increase in other income

was primarily related to favorable changes in foreign currency exchange rates during the year ended December 31, 2025 as compared to the

same period in 2024.

Interest Income, net

Interest income, net decreased to approximately $148,000

$250,000 during the year ended December 31, 2024 as compared to approximately $356,000 in the prior year.

This decrease is primarily due

to lower average invested funds during the year ended December 31, 2024 compared to the prior year, as well as a decrease in interest

income received on the Pharmsynthez Loan.

during the year ended December 31, 2025 as compared to approximately $250,000 for the same period in the prior year.

This decrease is

primarily due to lower average invested funds during the year ended December 31, 2025 as compared to the same period in 2024.

Non-GAAP Measures

In our narrative discussion of operations above,

we exclude the impact of certain non-cash expenses from R&D expenses, which narrative discussion includes reconciliation of such adjusted

In our narrative discussion of operations above, we

exclude the impact of certain non-cash expenses from R&D expenses, which narrative discussion includes reconciliation of such adjusted

financial measures to the directly comparable GAAP financial measure.

4 unchanged sentences

Liquidity and Capital Resources

We incurred a net loss

of approximately $4.0 million for the year ended December 31, 2024.

We incurred a net loss of

approximately $2.7 million for the year ended December 31, 2025.

We had an accumulated deficit of approximately $199.9 million at December

3 unchanged sentences

During the year ended December 31,

2024, our working capital decreased by approximately $3.1 million primarily due to our net loss for the year ended December 31, 2024.

Our principal source

of liquidity consists of cash.

At December 31, 2024, we had approximately $6.2 million in cash and approximately $0.9 million in current

2025, our working capital increased by approximately $1.4 million primarily due to net proceeds of approximately $4.0 million from our

October 2025 underwritten public offering substantially offset by our net loss for the year ended December 31, 2025.

Our principal source of liquidity

consists of cash.

At December 31, 2025, we had approximately $7.9 million in cash and approximately $1.0 million in current liabilities.

have historically relied upon sales of our equity securities to fund our operations.

At December 31, 2024, we had approximately $6.2 million in cash and approximately $0.9 million in current liabilities.

We have historically

relied upon sales of our equity securities to fund our operations.

We evaluate whether there

5 unchanged sentences

for a period of at least twelve months from the date of the issuance of these financial statements.

However, we anticipate we will need

additional capital in the long-term to pursue our business initiatives.

While we believe that we have access to capital resources through

possible public or private equity offerings, debt financings, corporate collaborations, related party funding, or other means to continue

as a going concern, the terms, timing and extent of any future financing will depend upon several factors, including the achievement of

progress in our clinical development programs, our ability to identify and enter into licensing or other strategic arrangements, our continued

listing on the Nasdaq Stock Market (“Nasdaq”), and factors related to financial, economic, geo-political, industry and market

conditions, many of which are beyond our control.

The capital markets for the biotech industry can be highly volatile, which make the

terms, timing and extent of any future financing uncertain.

In addition, the Company raised net

proceeds of approximately $4.0 million in an underwritten public offering of common stock in October 2025.

However, we anticipate we will

need additional capital in the long-term to pursue our business initiatives.

While we believe that we will continue to have access to

capital resources through possible public or private equity offerings, debt financings, corporate collaborations, related party funding,

or other means to continue as a going concern, the terms, timing and extent of any future financing will depend upon several factors,

including the achievement of progress in our product development programs, our ability to identify and enter into licensing or other strategic

arrangements, our continued listing on Nasdaq, and factors related to financial, economic, geo-political, industry and market conditions,

many of which are beyond our control.

The capital markets for the biotech industry can be highly volatile, which make the terms, timing

and extent of any future financing uncertain.

Cash Flows from Operating Activities

Cash flows used in operating activities for the

year ended December 31, 2024 totaled approximately $2.8 million, which was primarily due to our net loss for the period, partially offset

by non-cash charges associated with share-based expense.

In addition, prepaid expenses and other decreased approximately $0.2 million,

other assets decreased by approximately $0.7 million due to the impairment of long-lived assets and accounts payable, accrued expenses

and other current liabilities increased approximately $0.1 million during the year ended December 31, 2024 compared to the prior year.

Cash flows used in operating activities for the year ended December 31, 2023 totaled approximately $4.1 million, which was primarily due

to our net loss for the period, partially offset by non-cash charges associated with share-based expense and, to a lesser extent, a decrease

in accounts payable, accrued expenses and other current liabilities.

Cash flows used in operating activities for the year

ended December 31, 2025 totaled approximately $2.3 million, which was primarily due to our net loss for the period, partially offset by

non-cash charges associated with share-based expense.

In addition, prepaid expenses and other decreased approximately $0.3 million and

accounts payable, accrued expenses and other current liabilities increased approximately $0.1 million during the year ended December 31,

2025 compared to the prior year.

Cash flows used in operating activities for the year ended December 31, 2024 totaled approximately $2.8

million, which was primarily due to our net loss for the period, partially offset by non-cash charges associated with share-based expense.

In addition, prepaid expenses and other decreased approximately $0.2 million, other assets decreased by approximately $0.7 million due

to the impairment of long-lived assets and accounts payable, accrued expenses and other current liabilities increased approximately $0.1

million during the year ended December 31, 2024 compared to the prior year.

Cash Flows from Investing Activities

2 unchanged sentences

Cash Flows from Financing Activities

There were no cash flows from financing activities

for each of the years ended December 31, 2024 and 2023.

Cash flows from financing activities for the year

ended December 31, 2025 totaled approximately $4.0 million representing net proceeds from our underwritten public common stock offering

in October 2025.

There were no cash flows from financing activities for the year ended December 31, 2024.

Contractual Obligations

Contractual obligations represent future cash

commitments and liabilities under agreements with third-parties and exclude contingent liabilities for which we cannot reasonably predict

future payment.

Contractual obligations represent future cash commitments

and liabilities under agreements with third-parties and exclude contingent liabilities for which we cannot reasonably predict future payment.

Our contractual obligations result from a property lease for office space.

Although we do have obligations for CMO and

CRO services, the table below excludes potential payments we may be required to make under our agreements with CMOs and CROs because timing

of payments and actual amounts paid under those agreements may be different depending on the timing of receipt of goods or services or

changes to agreed-upon terms or amounts for some obligations, and those agreements are cancelable upon written notice by the Company and

therefore, not long-term liabilities.

The contracts may also contain variable costs that are hard to predict as they are based on such

things as patients enrolled and clinical trial sites, which can vary and, therefore, are also not included in the table below.

Although we do have obligations for CMO and CRO services, the

table below excludes potential payments we may be required to make under our agreements with CMOs and CROs because timing of payments

and actual amounts paid under those agreements may be different depending on the timing of receipt of goods or services or changes to

agreed-upon terms or amounts for some obligations, and those agreements are cancelable upon written notice by the Company and therefore,

not long-term liabilities.

The contracts may also contain variable costs that are hard to predict as they are based on such things as

patients enrolled and exploratory study sites, which can vary and, therefore, are also not included in the table below.

Additionally,

the expected timing of payment of the obligations presented below is estimated based on current information.

The following tables represent our contractual

obligations as of December 31, 2024, aggregated by type:

The following tables represent our contractual obligations

as of December 31, 2025, aggregated by type:

Payments Due by Period

2 unchanged sentences

Recent Accounting Standards

Refer to Note 3, Summary of Significant Accounting Policies ,

of the accompanying financial statements set forth in Item 8.

Refer to Note 3, Summary of Significant

Accounting Policies , of the accompanying financial statements set forth in Item 8.

ITEM 7A – QUANTITATIVE

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not required to provide the information required by this Item

because we are a “smaller reporting company” (as

defined in Rule 12b-2 of the Exchange Act).

We are not required to provide the information required by this Item because

we are a “smaller reporting company” (as defined in Rule 12b-2 of the Exchange Act).

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

What changed 10-K

Item 7. Management’s Discussion and Analysis