What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-06 compared with 2026-05-12 · 208 added, 134 removed, 300 unchanged (53% of the section changed)

15 unchanged sentences

Series B, $ 0.001 par value:

1,454,545 shares issued and outstanding as of March 31, 2026 and December 31, 2025

0 and 1,454,545 shares issued and outstanding as of June 30, 2026 and December 31, 2025

Common stock, $ 0.001 par value;

10,000,000 shares authorized as of March 31, 2026 and December 31, 2025;

2,293,757 shares issued as of March 31, 2026 and December 31, 2025;

2,291,056 shares outstanding as of March 31, 2026 and December 31, 2025

10,000,000 shares authorized as of June 30, 2026 and December 31, 2025;

2,345,882 and 2,293,757 shares issued as of June 30, 2026 and December 31, 2025;

2,343,181 and 2,291,056 shares outstanding as of June 30, 2026 and December 31, 2025

Additional paid in capital

12 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended March 31,

THREE MONTHS ENDED

SIX MONTHS ENDED

Royalty revenue

2 unchanged sentences

Research and development

( 1,213,456 )

( 1,535,586 )

General and administrative

( 1,080,278 )

( 1,727,875 )

( 1,314,393 )

Total operating costs and expenses

1 unchanged sentence

( 1,314,309 )

( 2,941,331 )

( 2,849,979 )

Loss from operations

Other (expense) income:

( 1,473,807 )

( 1,666,821 )

Other income (expense):

Other (expense) income

Interest income, net

Total other income, net

Total other income

$ ( 929,695 )

$ ( 688,703 )

$ ( 1,386,077 )

$ ( 1,591,844 )

Basic and diluted net loss per share

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED MARCH 31, 2026

THREE MONTHS ENDED JUNE 30, 2026

Preferred Stock

Number of Shares

Value ($0.001)

Number of Shares

Value ($0.001)

Accumulated Deficit

Comprehensive Income

Stockholders' Equity

Additional Paid in

Accumulated Other Comprehensive

Total Stockholders'

Balance as of April 1, 2026

$ 212,306,163

$ ( 200,331,713 )

$ ( 5,281,180 )

Issuance of common stock in connection with restricted stock

Conversion of Series B Preferred Stock to common stock

( 1,454,545 )

Share-based expense

Balance as of June 30, 2026

$ 212,359,529

$ ( 201,261,408 )

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2026

Preferred Stock

Additional Paid in

Accumulated Other Comprehensive

Total Stockholders'

Balance as of January 1, 2026

2 unchanged sentences

$ ( 5,281,180 )

Issuance of common stock in connection with restricted stock

Conversion of Series B Preferred Stock to common stock

( 1,454,545 )

Share-based expense

Balance as of March 31, 2026

( 1,386,077 )

Balance as of June 30, 2026

$ 212,359,529

THREE MONTHS ENDED MARCH 31, 2025

$ ( 201,261,408 )

$ ( 5,281,180 )

The accompanying notes are an integral part of

these unaudited condensed consolidated financial statements.

XENETIC BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

THREE MONTHS ENDED JUNE 30, 2025

Preferred Stock

Comprehensive

Stockholders'

Additional Paid in

Accumulated Other Comprehensive

Total Stockholders'

Balance as of April 1, 2025

$ 208,244,999

$ ( 198,097,612 )

$ ( 5,281,180 )

Share-based expense

Balance as of June 30, 2025

$ 208,260,682

$ ( 198,786,315 )

$ ( 5,281,180 )

SIX MONTHS ENDED JUNE 30, 2025

Preferred Stock

Additional Paid in

Accumulated Other Comprehensive

Total Stockholders'

Balance as of January 1, 2025

3 unchanged sentences

Share-based expense

Balance as of March 31, 2025

( 1,591,844 )

Balance as of June 30, 2025

$ 208,260,682

$ ( 198,786,315 )

$ ( 5,281,180 )

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

( 1,411,866 )

( 1,385,722 )

Net change in cash

( 1,411,866 )

( 1,385,722 )

Cash at beginning of period

2 unchanged sentences

Cash paid for interest

SUPPLEMENTAL SCHEDULE OF NON-CASH FLOW INVESTING AND FINANCING

Issuance of common stock in connection with

restricted stock

Conversion of Series B preferred stock to common stock

The accompanying notes are an integral part of

43 unchanged sentences

Recent Developments

The Company and its board of directors (the

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

The Company is 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 discussions with third parties regarding

potential transactions.

Any such completed transaction could have a significant impact on the Company’s stockholders,

including if the transaction would result in the current investors of the counterparty holding a substantial majority of the

Company’s outstanding common stock following consummation of the potential transaction.

Given the current stage of such

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

There 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.

addition, if the Company does enter into definitive agreements with respect to a potential transaction, the Company expects that

consummation of the potential transaction would be subject to a number of conditions, including approval by the Company’s

stockholders and Nasdaq, and other customary conditions, which would be out of the Company’s control and may never be

The Company remains committed to advancing its DNase technology and does 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.

The Company and its board of directors (the “Board”)

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

The Company is 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 discussions with third parties regarding potential transactions.

Any such completed transaction

could have a significant impact on the Company’s stockholders, including if the transaction would result in the current investors

of the counterparty holding a substantial majority of the Company’s outstanding common stock following consummation of the potential

Given the current stage of such discussions, at this time there is no way to quantify the potential impact of a transaction,

There 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 the Company does enter into definitive agreements with respect to a potential transaction, the Company

expects that consummation of the potential transaction would be subject to a number of conditions, including approval by the Company’s

stockholders and Nasdaq, and other customary conditions, which would be out of the Company’s control and may never be satisfied.

The Company remains committed to advancing its DNase technology and does 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.

Risks and Uncertainties

Impact of Global

Events and Conflicts on Operations

Conflicts on Operations

The short and long-term

26 unchanged sentences

Segment Information

The Company is required to disclose significant

segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment

items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate

The Company is principally engaged in pre-clinical research and development activities to advance its DNase technology.

segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation

by the CODM, who is the Company’s Chief Executive Officer, in making decisions on how to allocate resources and assess performance.

The Company views its operations and manages its business as a single operating segment.

The Company’s measure of segment profit

or loss is net loss.

The Company is principally engaged in pre-clinical

research and development activities to advance its DNase technology.

Operating segments are identified as components of an enterprise

about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”),

who is the Company’s Chief Executive Officer, in making decisions on how to allocate resources and assess performance.

views its operations and manages its business as a single operating segment.

The Company’s measure of segment profit or loss is

The CODM manages and allocates to the operations of the Company on a total company basis.

Managing and allocating

resources on a consolidated basis enables the CODM to assess the overall level of resources available and how best to deploy these resources

across functions, therapeutic areas and research and development projects that are in line with the Company’s long-term company-wide

strategic goals.

Consistent with this decision-making process, the CODM uses consolidated financial information for purposes of evaluating

performance, forecasting future period financial results, allocating resources and setting incentive targets.

Managing and allocating resources

on a consolidated basis enables the CODM to assess the overall level of resources available and how best to deploy these resources across

functions, therapeutic areas and research and development projects that are in line with the Company’s long-term company-wide strategic

Consistent with this decision-making process, the CODM uses consolidated financial information for purposes of evaluating performance,

forecasting future period financial results, allocating resources and setting incentive targets.

The following table is representative

1 unchanged sentence

A reconciliation

to the condensed consolidated net loss for the three months ended March 31, 2026 and 2025 is as follows:

Net loss by segment

Three Months Ended March 31,

to the condensed consolidated net loss for the three and six months ended June 30, 2026 and 2025 is as follows:

Schedule of net loss by segment

Three Months Ended June 30,

Program expenses (1)

4 unchanged sentences

$ ( 688,703 )

Six Months Ended June 30,

Program expenses (1)

Non-program expenses (2)

Salaries and wages

Other segment items (3)

$ ( 1,386,077 )

$ ( 1,591,844 )

Includes external research and development.

7 unchanged sentences

that are outstanding during the period, except where such non-participating securities would be anti-dilutive.

For the three months ended March 31, 2026 and

2025, basic and diluted net loss per share are the same for each respective period due to the Company’s net loss position.

For the three and six months ended June 30, 2026

and 2025, basic and diluted net loss per share are the same for each respective period due to the Company’s net loss position.

dilutive, non-participating securities have not been included in the calculations of diluted net loss per share, as their inclusion would

7 unchanged sentences

Royalty payments

of approximately $ 0.8 million and $ 0.6 million were recorded as revenue during the three months ended March 31, 2026 and 2025, respectively,

and are based on single digit royalties on net sales of certain covered products.

The Company’s policy is to recognize royalty payments

as revenue when they are reliably measurable, which is upon receipt of reports from Takeda.

The Company receives these reports in the

quarter subsequent to the actual sublicensee sales.

At the time the revenue was received, there were no remaining performance obligations

and all other revenue recognition criteria were met.

of approximately $ 0.7 million and $ 1.5 million were recorded as revenue by the Company during the three and six months ended June 30,

2026, respectively, and approximately $ 0.6 million and $ 1.2 million were recorded as revenue by the Company during the three and six months

ended June 30, 2025, respectively.

These payments are based on single digit royalties on net sales of certain covered products.

The Company’s

policy is to recognize royalty payments as revenue when they are reliably measurable, which is upon receipt of reports from Takeda.

Company receives these reports in the quarter subsequent to the actual sublicensee sales.

At the time the revenue was received, there

were no remaining performance obligations and all other revenue recognition criteria were met.

Catalent Pharma Solutions LLC (“Catalent”)

1 unchanged sentence

of Work (the “SOW”) with Catalent to outline the general scope of work, timeline, and pricing pursuant to which Catalent will

provide certain services to the Company to perform current Good Manufacturing Practices manufacturing of the Company’s recombinant

protein, human DNase I.

The parties agreed to enter into a Master Services Agreement that will contain terms and conditions to govern

the project contemplated by the SOW and that will supersede the addendum to the SOW containing Catalent’s standard terms and conditions.

The Company has paid Catalent approximately $ 3.0 million through March 31, 2026, of which $ 28,000 and $ 53,000 has been recognized as an

advance payment and is included in prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025, respectively,

and approximately $ 0.1 million has been recognized as a liability and is included in accrued expenses and other current liabilities as

of both March 31, 2026 and December 31, 2025.

In addition, approximately $ 0.3 million has been recognized as long-term within other assets

as of both March 31, 2026 and December 31, 2025.

provide certain services to the Company to perform cGMP manufacturing of the Company’s recombinant protein, Human DNase I.

agreed to enter into a Master Services Agreement that will contain terms and conditions to govern the project contemplated by the SOW

and that will supersede the addendum to the SOW containing Catalent's standard terms and conditions.

The Company has paid Catalent approximately

$ 3.0 million through June 30, 2026, of which approximately $ 28,000 has been recognized as an advance payment and is included in prepaid

expenses and other current assets as of June 30, 2026 and December 31, 2025, respectively, and approximately $ 0.1 million has been recognized

as a liability and is included in accrued expenses and other current liabilities as of both June 30, 2026 and December 31, 2025.

approximately $ 0.3 million was recognized within other assets as of both June 30, 2026 and December 31, 2025.

Scripps Research Institute (“Scripps

42 unchanged sentences

The Company paid Scripps Research approximately

$ 2.0 million under the Agreement through March 31, 2026, of which approximately $ 0.1 million was included in accounts payable as of March

$ 2.4 million under the Agreement through June 30, 2026, of which approximately $ 0.1 million was included in accounts payable as of June

30, 2026 and $ 0.2 million was included in accrued expenses and other current liabilities as of December 31, 2025.

14 unchanged sentences

of the scope of work under the UVA Agreement.

The Company paid UVA approximately $ 0.6 million under the UVA Agreement through

March 31, 2026, of which approximately $ 77,000 was recorded within accounts payable as of March 31, 2026 and approximately $ 31,000 was

recorded within accrued expenses and other current liabilities as of December 31, 2025.

The Company paid UVA approximately $ 0.6 million under the UVA Agreement through June

30, 2026, of which approximately $ 31,000 was recorded within accrued expenses and other current liabilities as of December 31, 2025.

were no amounts outstanding as of June 30, 2026.

Other Agreements

3 unchanged sentences

The Company and its collaborative partners continue

to engage in research and development activities with no resultant commercial products through March 31, 2026.

to engage in research and development activities with no resultant commercial products through June 30, 2026.

No amounts were recognized

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three months ended March 31, 2026 and 2025, respectively.

as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements during the three and six months ended June 30, 2026 and 2025,

respectively.

Fair Value Measurements

12 unchanged sentences

for the asset or liability at the measurement date.

As of March 31, 2026 and December 31, 2025, the carrying amounts of the Company’s

financial instruments approximate fair value due to their short maturities.

As of June 30, 2026 and December 31, 2025, the carrying amounts of the Company’s

financial instruments approximates fair value due to their short maturities.

There were no financial instruments classified as Level 3

in the fair value hierarchy during the three months ended March 31, 2026 and 2025.

in the fair value hierarchy during the three and six months ended June 30, 2026 and 2025.

Stockholders’ Equity

Series B Preferred Stock

The Company has designated 2,500,000 shares as

Series B preferred stock with each share having a stated value of $4.00 per share (the “Series B Preferred Stock”).

December 31, 2025 there were approximately 1.5 million shares of Series B Preferred Stock issued and outstanding, which were convertible

into approximately 45,000 shares of common stock representing the issuable maximum that could be issued upon the conversion of the outstanding

Series B Preferred Stock.

During the three and six-months ended June 30, 2026, all of the issued and outstanding Series B Preferred Stock

was converted into approximately 45,000 shares of common stock.

As a result, there were no issued and outstanding shares of Series B Preferred

Stock as of June 30, 2026.

There were no conversions during the three and six months ended June 30, 2025.

has warrants to purchase approximately 800 shares of the Company’s common stock outstanding

as of both March 31, 2026 and December 31, 2025.

These warrants have an exercise price of $ 29.09 per share of common stock and expire

on July 3, 2026 .

None of these warrants were exercised or forfeited during the three months ended March 31, 2026 and 2025.

as of both June 30, 2026 and December 31, 2025.

These warrants have an exercise price of $ 29.09 per share of common stock and expire on

July 3, 2026.

None of these warrants were exercised or forfeited during the six months ended June 30, 2026 and 2025.

Share-Based Expense

Total share-based expense related to stock options

was approximately $11,000 and $19,000 during each of the three months ended March 31, 2026 and 2025, respectively.

Share-based expense is classified in the condensed

consolidated statements of operations as follows:

Allocation of share-based compensation expense

Three Months Ended March 31,

and restricted stock grants was approximately $52,000 and $16,000 for the three months ended June 30, 2026 and 2025, respectively, and

approximately $63,000 and $35,000 for the six months ended June 30, 2026 and 2025, respectively.

Share-based expense is classified in the condensed consolidated statements

of operations as follows:

Schedule of allocation of share-based compensation expense

Three Months Ended June 30,

Six Months Ended June 30,

Research and development expenses

General and administrative expenses

Employee Stock Options

Employee Stock Options and Restricted Stock

No employee stock option awards to purchase shares

of common stock were granted or exercised during the three months ended March 31, 2026 and 2025.

During the three months ended March 31,

2026 and 2025, options to purchase 102 shares of common stock and 25,836 shares of common stock expired, respectively.

of common stock were granted or exercised during the three and six months ended June 30, 2026 and 2025.

During the six months ended June

30, 2026, options to purchase 102 shares of common stock expired.

During the three and six months ended June 30, 2025, options to purchase

64,062 shares and 89,878 shares of common stock expired.

The Company granted restricted stock of 100,000 common shares during the three

and six months ended June 30, 2026.

No Restricted Stock was granted during the three and six months ended June 30, 2025.

The Company recognized

a total of approximately $ 11,000 and $ 19,000 of share-based expense related to employee stock options during each of the three months

ended March 31, 2026 and 2025.

a total of approximately $ 52,000 and $ 16,000 of share-based expense related to employee stock options and restricted stock during the

three months ended June 30, 2026 and 2025, respectively, and approximately $ 63,000 and $ 35,000 during the six months ended June 30, 2026

and 2025, respectively.

Restricted stock of approximately 7,000 shares vested and were issued during the three and six months ended June

No restricted stock vested during the three and six months ended June 30, 2025.

Non-Employee Stock Options

There were no

non-employee options outstanding as of both March 31, 2026 and December 31, 2025.

There were no non-employee stock options granted

or exercised during the three months ended March 31, 2026 and 2025.

No non-employee stock option grants expired during the three

months ended March 31, 2026 and 2025.

The Company did no t recognize any share-based expense related to non-employee stock options

during the three months ended March 31, 2026 and 2025.

During the three months ended March 31, 2026 and

2025, there was no provision for income taxes as the Company incurred losses during both periods.

Deferred tax assets and liabilities

reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes

and the amounts used for income tax purposes.

The Company records a valuation allowance against its deferred tax assets as the Company

believes it is more likely than not the deferred tax assets will not be realized.

The valuation allowance against deferred tax assets

was approximately $ 39.9 million and $ 39.8 million as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025,

There were no non-employee options outstanding

as of both June 30, 2026 and December 31, 2025.

No non-employee stock option grants expired during each of the three and six months ended

June 30, 2026 and 2025.

The Company did no t recognize any share-based expense related to non-employee stock options during each of the

three and six months ended June 30, 2026 and 2025.

During each of the three and six months ended

June 30, 2026 and 2025, there was no provision for income taxes as the Company incurred losses during both periods.

Deferred tax assets

and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial

reporting purposes and the amounts used for income tax purposes.

The Company records a valuation allowance against its deferred tax assets

as the Company believes it is more likely than not the deferred tax assets will not be realized.

The valuation allowance against deferred

tax assets was approximately $ 40.2 million and $ 39.9 million as of June 30, 2026 and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025,

the Company did no t record any unrecognized tax positions.

6 unchanged sentences

The Company has paid PeriNess approximately

$ 0.3 million to date under this contract through March 31, 2026.

As of March 31, 2026 and December 31, 2025, approximately $ 50,000 was

recorded as an advanced payment and included in prepaid expenses and other current assets.

In addition, approximately $ 9,000 and $ 8,000

was reflected in accounts payable on the March 31, 2026 and 2025 consolidated balance sheet, respectively.

$ 0.4 million to date under this contract through June 30, 2026.

As of June 30, 2026 and December 31, 2025, approximately $ 50,000 was recorded

as an advanced payment and included in prepaid expenses and other current assets.

In addition, approximately $ 9,000 and $ 28,000 was reflected

in accounts payable on the June 30, 2026 and December 31, 2025 consolidated balance sheets, respectively.

No amounts were incurred in

connection with agreements with Serum Institute and Pharmsynthez during the three months ended March 31, 2026 and 2025.

connection with agreements with Serum Institute and Pharmsynthez during the six months ended June 30, 2026 and 2025.

During the first quarter of 2025, the Company

4 unchanged sentences

Genkin approximately $ 0.5 million

through March 31, 2026, of which approximately $ 30,000 was reflected within accounts payable as of both March 31, 2026 and December 31,

through June 30, 2026, of which approximately $ 30,000 was reflected within accounts payable as of both June 30, 2026 and December 31,

Genkin does not receive any fees for his service as a member of the Board.

Subsequent Events

The Company performed a review of events subsequent

to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring

recognition or disclosure in the financial statements.

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

What changed 10-Q

Item 1. Financial Statements