Financial Analysis

Note 10 Commitments and Contingencies Operating and Finance Leases As of June 30, 2025, the Company has lease agreements for the Corporate headquarters and laboratory space. The balances of the operating and finance lease related accounts as of June 30, 2025 and December 31, 2024 are as follows (in thousands): June 30, December 31, Operating and Finance leases 2025 2024 Right-of-use assets $ 509 $ 600 Operating lease liabilities - Short-term $ 208 $ 169 Operating lease liabilities - Long-term $ 387 $ 502 Finance lease liabilities - Short-term $ 18 $ 17 Finance lease liabilities - Long-term $ 9 $ 18 The short-term lease liabilities and the long-term lease liabilities are included in other current liabilities and other noncurrent liabilities, respectively, on the Companys condensed consolidated balance sheets. The components of lease expense and supplemental cash flow information as of and for the three and six months ended June 30, 2025 and 2024 are as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Lease Cost: Operating lease cost $ 53 $ 61 $ 116 $ 124 Other Information: Cash paid for amounts included in the measurement of lease liabilities for the period ended $ 58 $ 67 $ 168 $ 126 Weighted average remaining lease term - operating leases (in years) 2.5 3.4 2.5 3.4 Average discount rate - operating leases 10.00 % 10.00 % 10.00 % 10.00 % Weighted average remaining lease term - financing leases (in years) 1.6 2.4 1.6 2.4 Average …

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Note 9 Stock-based Compensation 2019 Equity Incentive Plan As of June 30, 2025, the Company had 661,030 shares available for future grant pursuant to the 2019 Incentive Plan. 2021 Employment Inducement Plan As of June 30, 2025, the Company had 121,611 shares available for future grant under the 2021 Inducement Plan. Stock Options Stock option activity for the six months ended June 30, 2025 was as follows (in thousands, except share, per share, and remaining life data): Number of Options Weighted Average Exercise Price Weighted Average Remaining Life Intrinsic Value Outstanding at December 31, 2024 721,399 $ 21.98 7.2 years $ 11 Granted 53,300 $ 5.28 Exercised $ Cancelled (1,000 ) $ 34.81 Outstanding at June 30, 2025 773,699 $ 22.41 6.8 years $ Exercisable as of June 30, 2025 658,619 $ 21.97 6.7 years $ Vested and expected to vest as of June 30, 2025 765,426 $ 22.41 6.8 years $ The weighted-average grant date fair value of options granted during the six months ended June 30, 2025 and 2024, was $3.19 and $3.57, respectively. During the six months ended June 30, 2025, no options were exercised. During the six months ended June 30, 2024, options were exercised for proceeds of $15,200. The fair value of the 21,300 and 314,070 options that vested during the six months ended June 30, 2025 and 2024 was approximately $0.3 million and $2.1 million, respectively. The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of the sto …

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Note 3 FAIR VALUE MEASUREMENTS Financial assets and liabilities are recorded at fair value. The Company uses a three-level hierarchy, which prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. Fair value focuses on an exit price and is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in those financial instruments. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Level 3 Significant unobservable inputs that cannot be corroborated by market data. The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Companys Level 1 financial assets are mo …

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Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The Company adopted this accounting standard on December 31, 2024. The adoption has no impact on our financial statements nor resulted in incremental disclosures within the footnotes to the consolidated financial statements. See Note 2 under Segment Information for additional information In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The pronouncements amendments are effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company will adopt this guidance on a prospective basis in the annual financial statements for the year ending December 31, 2025. As it only requires additional disclosures, this pronouncement will not have a significant impact on the Companys consolidated financial condition or …

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Note 2 Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary and have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 8-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation. Intercompany transactions are eliminated in the condensed consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and notes thereto for the preceding fiscal year contained in the Companys Annual Report on Form 10-K filed on April 9, 2025 with the United States Securities and Exchange Commission (the SEC). The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025. The condensed consolidated balance sheet as of …

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Note 7 Common Stock As of June 30, 2025 and December 31, 2024, the Company was authorized to issue 500,000,000 shares of common stock with a par value of $0.0001 per share. As of June 30, 2025 and December 31, 2024, 8,301,204 and 6,840,291 shares were outstanding, respectively. At-the-Market Issuance of Common Stock On August 15, 2022, the Company entered into an At-the-Market Issuance Agreement (the Issuance Agreement) with B. Riley Securities, Inc. (the Sales Agent). Pursuant to the terms of the Issuance Agreement, the Company may sell from time to time through the Sales Agent shares of the Companys common stock having an aggregate offering price of up to $50,000,000 (the Shares). Sales of Shares, if any, may be made by means of transactions that are deemed to be at the market offerings as defined in Rule 415 under the Securities Act, including block trades, ordinary brokers transactions on the Nasdaq Capital Market or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or by any other method permitted by law. Under the terms of the Issuance Agreement, the Company may also sell Shares to the Sales Agent as principal for its own accounts at a price to be agreed upon at the time of sale. Any sale of Shares to the Sales Agent as principal would be pursuant to the terms of a separate agreement between the Company and the Sales Agent. The Company has no obligation to sell any of the Shares under the Iss …

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Note 12 Subsequent Events Management of the Company evaluated events that have occurred after the balance sheet dates through the date these condensed consolidated financial statements were issued. On August 6, 2025, the Company entered into a Loan Agreement and Promissory Note (the Loan Agreement) pursuant to which the Company obtained $1,500,000 in bridge financing (the Bridge Loan). The Company intends to use the proceeds of the Bridge Loan to continue its pursuit of strategic alternatives. In connection with the Bridge Loan, the Company entered into a Security Agreement and Intellectual Property Security Agreement pursuant to which the Company granted the lender a security interest in all of its assets, properties and rights, including its intellectual property rights. The Bridge Loan bears interest at a per annum rate equal to 12.0% and matures on November 4, 2025 (the Maturity Date). The Maturity Date may be extended by up to 60 days if the Company delivers evidence that it has entered into definitive documentation for a Qualifying Transaction (as defined in the Loan Agreement) prior to the Maturity Date. The Loan Agreement also includes a loan premium provision that would require the Company to pay an additional amount equal to double the then outstanding principal balance of the Bridge Loan upon the occurrence of certain triggering events. On August 27, 2025, by letter received, the Nasdaq Hearings Panel (the Panel) of The Nasdaq Stock Market LLC (Nasdaq) determined t …

SubsequentEventsTextBlock · excerpt; the full note is in the filing