Financial Analysis

"Contingencies Second Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with David J. Mazzo, Ph.D., the Companys Chief Executive Officer (the Mazzo Second Amended and Restated Employment Agreement). The Mazzo Second Amended and Restated Employment Agreement supplements and amends the Amended and Restated Employment Agreement, dated and effective as of March 19, 2021, between Dr. Mazzo and the Company. The Mazzo Second Amended and Restated Employment Agreement: (i) amended Dr. Mazzos base salary to $717,229 from $633,032 and removed the non-accountable expense allowance of $12,000 per year, (ii) clarified that a material reduction in Dr. Mazzos base salary is included in the definition of Good Reason, (iii) amended that in the event of Dr. Mazzos termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Mazzos termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Mazzos entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amended Dr. Mazzos COBRA benefit coverage after the date of termination to monthly reimbursemen …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Share-Based Compensation Share-Based Compensation The Company utilizes share-based compensation in the form of stock options, restricted stock, restricted stock units and warrants. The following table summarizes the components of share-based compensation expense for the years ended December 31, 2025 and 2024 ($ in thousands): Year Ended December 31, 2025 2024 Research and development $ 228 $ 270 General and administrative 998 1,383 Total share-based compensation expense $ 1,226 $ 1,653 Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized at December 31, 2025 were as follows ($ in thousands): Stock Options Restricted Stock Units Warrants Restricted Stock Unrecognized compensation cost $ 216 $ 7 $ $ 527 Expected weighted-average period in years of compensation cost to be recognized 1.65 0.02 0.00 1.74 Total fair value of shares vested and the weighted average estimated fair values of shares granted for the years ended December 31, 2025 and 2024 were as follows ($ in thousands): Stock Options Warrants Year Ended December 31, Year Ended December 31, 2025 2024 2025 2024 Total fair value of shares vested $ 267 $ 204 $ 150 $ Weighted average estimated fair value of shares granted 2.60 2.15 1.99 Valuation Assumptions The fair value of stock options and warrants at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon histo …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value of financial assets and liabilities that are being measured and reported are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories: Level 1 inputs are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. Level 3 inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 were as follows (in thousands): December 31, 2025 December 31, 2024 Level 1 Level 2 Level 3 Total Level …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The provision (benefit) for income taxes is based on loss from operations before provision for income taxes and noncontrolling interests as follows ($ in thousands): Years Ended December 31, Pre-tax book income 2025 2024 United States $ (16,890) $ (19,474) Australia (658) (1,309) Total $ (17,548) $ (20,783) The provision (benefit) from income taxes was as follows ($ in thousands): Years Ended December 31, 2025 2024 Current U.S. Federal $ $ State and local $ $ Deferred U.S. Federal $ $ State and local (962) (798) $ (962) $ (798) Total U.S. Federal $ $ State and local (962) (798) $ (962) $ (798) The provision (benefit) for income taxes is determined by applying the U.S. Federal statutory rate of 21% to income before income taxes, and the components are set forth below ($ in thousands): Years Ended December 31, 2025 % 2024 % U.S. Federal tax (benefit) at statutory rate $ (3,685) 21.00 % $ (4,364) 21.00 % Domestic Other true ups (2) 0.01 % (21) 0.10 % Change in Valuation Allowance US 2,756 (15.71) % 3,695 (17.78) % Non-taxable or non-deductible items Section 162(m) Limit on Compensation 67 (0.38) % 86 (0.41) % Share-based compensation 525 (2.99) % 172 (0.83) % Sale of NJ NOLs 202 (1.15) % 168 (0.81) % Other (1) 0.01 % (11) 0.05 % Domestic state and local income taxes, net of federal effect * (962) 5.48 % (798) 3.84 % Foreign Tax Effects Australia AUS Foreign Rate Differential (26) 0.15 % (52) 0.25 % Change in Valuation Allowance AUS 177 (1.01) % (35) 0.17 % Non-deduc …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Operating Leases The Company had an operating lease for one office which expired in 2025, however, based on prior understanding with the buildings management, continue to occupy a portion of office space in the building on a non-committal basis. The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as the Company's lease did not provide an implicit rate of return. The Company recognized lease expense on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASU No. 2016-02, Leases (Topic 842), the Company elected to account for non-lease components associated with its leases and lease components as a single lease component. The Company's lease included an option for the Company to extend the lease term and/or sub-lease space in whole or in part for which the Company has not exercised. Operating lease liabilities and right-of-use assets were recorded in the following captions of the Company's balance sheet as follows (in thousands): December 31, 2025 December 31, 2024 Right-of-Use Assets: Other assets $ $ 138 Total Right-of-Use Asset $ $ 138 Operating Lease Liabilities: Accrued liabilities $ $ 137 Other long-term liabilities Total Operating Lease Liabilities $ $ 137 As of December 31, 2024, the weighted average remaining lease term for the Company's operating lease was 0.75 years, and the weighted average discount rate for the Company's operating leas …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. Recently adopted accounting pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about their reportable segments significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. The Company adopted ASU 2023-07 during the year ended December 31, 2024. These amendments were effective for the Company in 2024 and retrospectively to all prior periods using the significant segment expense categories identified. The impact of the adoption of the amendments i …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Segment Information The Company operates as one operating segment, the research and development of its investigational drug product. The Company used the management approach to determine its reportable operating segment. The Company's Chief Operating Decision Maker (""CODM"") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The Company is a clinical-stage pharmaceutical company and has limited revenue associated with license and collaboration agreements. The CODM uses net loss as a measure of profit and loss, and assesses Company performance through the achievement of its clinical development goals. The CODM is regularly provided with budgeted and forecasted expense information which is used to determine the Companys liquidity needs and cash allocation to its development programs. The CODM uses cash and marketable securities as a measure of segment assets in managing the enterprise. The Company had revenue of $0.2 million during the year ended December 31, 2025, and $1.0 million during the year ended December 31, 2024 in connection with certain upfront license fees in the current year and the Exclusive License and Collaboration Agreement with Kuva Labs, Inc in the prior year (Note 17) who is based in the United States. Depreciation and amortization expense was $0.1 million and $0.2 million for the years ended December 31, 2025, and 2024, respectively. Equity method investment expense was $0.1 million for the year ended Dece …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of expenses during the reporting period. The Company bases its estimates on historical experience and other assumptions believed to be 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 sources. The Company makes critical estimates and assumptions in determining stock-based awards values. Accordingly, actual results could differ from those estimates and assumptions. Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is cur …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Stockholders' Equity Equity Plans The Company has used long-term incentive plans for the purpose of granting equity awards to employees of the Company, including officers, and nonemployees, including consultants and nonemployee members of the Company's board of directors (collectively, the Participants). The Participants may receive awards as determined by a committee of independent members of the Company's board of directors or, to the extent authorized by such committee with respect to certain Participants, a duly authorized employee (collectively, the Committee). The incentive plan currently used by the Company is the 2018 Equity Incentive Compensation Plan (the 2018 Plan), as adopted by the stockholders of the Company in (i) June 2018, and subsequently increased by the stockholders of the Company in June 2024 with 600,000 shares authorized for issuance thereunder and 862,135 additional shares authorized for issuance thereunder pursuant to the automatic annual evergreen increase, in (ii) June 2023 with 400,000 shares authorized for issuance thereunder, in (iii) September 2022 with 333,333 shares authorized for issuance thereunder, in (iv) June 2021 with 400,000 shares authorized for issuance thereunder and in (v) June 2020 with 166,667 shares authorized for issuance thereunder, plus any shares awarded under the 2015 Equity Compensation Plan (the 2015 Plan) or the Amended and Restated 2009 Equity Compensation Plan (the 2009 Plan) that are not issued due to their subsequent …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

"Subsequent Events Proposed Acquisition by Kuva Labs Inc. On March 6, 2026, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Kuva Labs Inc. (Kuva), and Kuva Acquisition Corp., a wholly owned subsidiary of Kuva (Purchaser). Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Purchaser will commence a tender offer (the Offer) to purchase all of the issued and outstanding shares of common stock, par value $0.001 per share (the Common Shares), of the Company in exchange for (i) $5.00 per Common Share, net to the seller in cash, without interest, but subject to any applicable withholding of taxes (the Closing Amount) plus (ii) one non-tradeable contingent value right (each, a CVR), which represents the contractual right to receive a contingent cash payment of $1.00 per CVR if a New Drug Application or similar registration is filed or formally accepted for review by the FDA or any governmental authority in any jurisdiction with respect to any pharmaceutical product that contains or incorporates the product candidate referred to as of the date of the Merger Agreement as certepetide, alone or in combination with one or more other therapeutically active ingredients, including all formulations, dosages, or modes of delivery, for any indication or patient population prior to the earlier of (a) 11:59 p.m. New York City Time on the seventh (7th) anniversary of the Closing Date (as defined in the Merger Agreement), …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

"Commitments and Contingencies Second Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with David J. Mazzo, Ph.D., the Companys Chief Executive Officer (the Mazzo Second Amended and Restated Employment Agreement). The Mazzo Second Amended and Restated Employment Agreement supplements and amends the Amended and Restated Employment Agreement, dated and effective as of March 19, 2021, between Dr. Mazzo and the Company. The Mazzo Second Amended and Restated Employment Agreement: (i) amends Dr. Mazzos base salary to $717,229 from $633,032 and removed the non-accountable expense allowance of $12,000 per year, (ii) clarifies that a material reduction in Dr. Mazzos base salary is included in the definition of Good Reason, (iii) amends that in the event of Dr. Mazzos termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Mazzos termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Mazzos entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amends Dr. Mazzos COBRA benefit coverage after the date of termination to monthly …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Share-Based Compensation Share-Based Compensation The Company utilizes share-based compensation in the form of stock options, restricted stock, restricted stock units and warrants. The following table summarizes the components of share-based compensation expense for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Research and development $ 38 $ 35 $ 190 $ 158 General and administrative 194 292 811 860 Total share-based compensation expense $ 232 $ 327 $ 1,001 $ 1,018 Total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards were expected to be recognized at September 30, 2025 were as follows (in thousands): Stock Options Restricted Stock Units Restricted Stock Unrecognized compensation cost $ 263 $ 83 $ 631 Expected weighted-average period in years of compensation cost to be recognized 1.81 0.28 1.91 Total fair value of shares vested and the weighted average estimated fair values of shares granted for the nine months ended September 30, 2025 and 2024 were as follows (in thousands): Stock Options Warrants Nine Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Total fair value of shares vested $ 267 $ 204 $ 150 $ Weighted average estimated fair value of shares granted $ 2.60 $ 2.15 $ $ 1.99 Valuation Assumptions The fair value of stock options and warrants at the date of g …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Fair value of financial assets and liabilities that are being measured and reported are defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market at the measurement date (exit price). The Company is required to classify fair value measurements in one of the following categories: Level 1 inputs are defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are defined as inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. Level 3 inputs are defined as unobservable inputs for the assets or liabilities. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Companys assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 were as follows (in thousands): September 30, 2025 December 31, 2024 Level 1 Level 2 Level 3 Total Leve …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes In assessing the realizability of deferred tax assets, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time. As of December 31, 2024 and 2023, the Company had approximately $57.9 million and $43.7 million, respectively, of Federal NOLs available to offset future taxable income expiring from 2030 through 2036. The Company performed an analysis and determined that they had an ownership change of greater than 50% on September 15, 2022. As a result of the ownership change, $88.2 million of Federal NOLs will expire unutilized. The Company wrote off that portion of the deferred tax asset and reduced the corresponding valuation allowance resulting in $34.0 million of remaining Federal NOLs as of December 31, 2022. The write-off of the deferred tax asset and the corresponding reduction in valuation allowance has no impact to the consolidated balance sheet or income statement. Losses incurred before the ownership change on September 15, 2022 will be subject to an annual limitation of zero while losses incurred after September 15, 2022 will not be subject to limitations. As of December 31, 2022, Cend Therapeutics, Inc. (Cend) ha …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Operating Leases The Company had an operating lease for one office which expired on September 30, 2025. The Company estimates its incremental borrowing rate at lease commencement to determine the present value of lease payments as the Company's lease does not provide an implicit rate of return. The Company recognizes lease expense on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASU No. 2016-02, Leases (Topic 842), the Company elected to account for non-lease components associated with its leases and lease components as a single lease component. The Company's lease included an option for the Company to extend the lease term and/or sub-lease space in whole or in part for which the Company has not exercised. Operating lease liabilities and right-of-use assets were recorded in the following captions of the Company's balance sheet as follows (in thousands): September 30, 2025 December 31, 2024 Right-of-Use Assets: Other assets $ $ 138 Total Right-of-Use Assets $ $ 138 Operating Lease Liabilities: Accrued liabilities $ $ 137 Total Operating Lease Liabilities $ $ 137 As of September 30, 2025, the weighted average remaining lease term for the Company's operating lease was 0.00 years, and the weighted average discount rate for the Company's operating lease was 0.0%. As of December 31, 2024, the weighted average remaining lease term for the Company's operating lease was 0.75 years, and the weighted average discount rat …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Segment Information The Company operates as one operating segment, the research and development of its investigational drug product. The Company used the management approach to determine its reportable operating segment. The Company's Chief Operating Decision Maker (""CODM"") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The Company is a clinical-stage pharmaceutical company and has limited revenue associated with a license and collaboration agreement. The CODM uses net loss as a measure of profit and loss, and assesses Company performance through the achievement of its clinical development goals. The CODM is regularly provided with budgeted and forecasted expense information which is used to determine the Companys liquidity needs and cash allocation to its development programs. The CODM uses cash and marketable securities as a measure of segment assets in managing the enterprise. The Company had revenue of $0 and $70 thousand for the three and nine months ended September 30, 2025, respectively, and $0 and $0 for the three and nine months ended September 30, 2024, respectively. Depreciation and amortization expense was $44 thousand and $131 thousand for the three and nine months ended September 30, 2025, respectively and $42 thousand and $133 thousand for the three and nine months ended September 30, 2024, respectively. Equity method investment expense was $0 and $0 for the three and nine months ended September 30, 2025, …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include short-term, highly liquid, investments with maturities of ninety days or less when purchased. Concentration of Risks The Company is subject to credit risk from its portfolio of cash, cash equivalents, accounts receivable and marketable securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government, thereby reducing credit risk exposure. Cash is held at major banks in the United States and may exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The goals of the Company's investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk, liquidity of investments sufficient to meet cash flow requirements, and a competitive after-tax rate of return. The Companys accounts receivable balance as of September 30, 2025 and December 31, 2024 is primarily derived from its license agreement dated November 30, 2024, more fully described in Note 17. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Accounts Receivable Accounts r …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Stockholders' Equity Equity Issuances At The Market Offering Agreement On June 4, 2021, the Company entered into an At The Market Offering Agreement (the ATM Agreement) with H.C. Wainwright & Co., LLC, as sales agent, in connection with an at the market offering under which the Company from time to time may offer and sell shares of its common stock, having an aggregate offering price of up to $50.0 million. As of the date of this filing and so long as the Companys public float remains below $75.0 million, the Company is subject to limitations pursuant to General Instruction I.B.6 of Form S-3 (the Baby Shelf Limitation), which limits the amount the Company can offer to up to one-third of its public float during any trailing 12-month period. Subsequent to the filing of a prospectus supplement to the Company's Registration Statement on Form S-3 (File No. 333-279034) relating to the at the market offering on August 21, 2024, the aggregate market value of its outstanding common stock held by non-affiliates was approximately $29.6 million. Pursuant to the Baby Shelf Limitation, since the aggregate market value of the Company's outstanding common stock held by non-affiliates was below $75.0 million at the time of such prospectus supplement filing, the aggregate amount of securities that the Company is permitted to offer and sell is now $9,855,890, which is equal to one-third of the aggregate market value of our common stock held by non-affiliates as of August 20, 2024. If the Co …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events Non-Exclusive License Agreement On October 8, 2025, the Company entered into a worldwide Non-Exclusive License Agreement (the Non-Exclusive License Agreement or the Agreement) with Catalent, Inc. (Catalent), pursuant to which the Company granted to Catalent, on a non-exclusive basis, certain of its intellectual property to exploit use of the Companys novel iRGD cyclic peptide, certepetide, as an antibody drug conjugate (ADC) payload as part of Catalents SMARTag ADC platform. Under the Agreement, Catalent will assume full responsibility for research, development, and commercialization costs. In connection with entering into the Non-Exclusive License Agreement, the Company is eligible to receive pre-determined development milestone payments of up to $10.5 million in the aggregate. The Company is also eligible to receive tiered revenue sharing on future sales and/or partnerships, subject to specified royalty reductions as set forth in the Agreement, as well as a portion of any sublicense consideration received from the grant of any sublicense or similar rights under any of the rights or licenses granted to Catalent under the Agreement. The Agreement will remain in effect until it expires on a product-by-product and country-by-country basis at the end of the royalty term. Either party may terminate the Agreement upon the other partys material breach, subject to specified notice and cure provisions, as well as resulting from the bankruptcy or insolvency of the ot …

SubsequentEventsTextBlock · excerpt; the full note is in the filing