Material Agreement, Bankruptcy (Form 8-K)

Item 1.01 Entry into a Material Definitive Agreement

The information set forth below in Item 1.03 of this Current Report on Form 8-K under the caption "Asset Purchase Agreement" is hereby incorporated by reference in this Item 1.01.

Item 1.03 Bankruptcy or Receivership.

Asset Purchase Agreement

On March 30, 2026, Lipella Pharmaceuticals Inc. (the "Company") filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Western District of Pennsylvania (the "Bankruptcy Court") at Case No. 26-20879-CMB (the "Bankruptcy Case").

On May 14, 2026, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with XRAIY (the "Purchaser") pursuant to which the Purchaser agreed to purchase substantially all of the assets of the Company (such assets, the "Purchased Assets," and such transaction, the "Sale"). The Bankruptcy Court authorized and approved the Sale and the Asset Purchase Agreement, pursuant to section 363 of the Bankruptcy Code, by Order dated June 4, 2026, at Doc. No. 115 (the "Sale Order").

A copy of the Sale Order is attached hereto as Exhibit 2.1. A copy of the Asset Purchase Agreement is attached hereto as Exhibit 2.2.

Cautionary Note Regarding the Company's Common Stock

The Company cautions that trading in the Company's common stock during the pendency of the Chapter 11 Case is highly speculative and poses substantial risks. Trading prices for the Company's common stock may bear little or no relationship to the actual recovery, if any, by holders of the Company's common stock in the Chapter 11 Case.