Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and plan of operations together with our accompanying financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included elsewhere in this Annual Report on Form 10-K. All amounts in this report are in U.S. dollars, unless otherwise noted.

Overview

We are a clinical-stage biotechnology company focused on identifying, developing, and commercializing innovative therapies to address significant unmet medical needs, with an initial focus on kidney disease. Founded in 2016, we were established to create a streamlined and efficient drug development platform capable of accelerating the advancement of promising therapies from discovery to commercialization. Currently, our two programs are focused on kidney disease, an area we believe we have the potential to offer medical benefit. Our initial focus is on developing drugs and getting them approved in the U.S., and then to partner with global biopharmaceutical companies in the rest of the world. As we grow the company and build our team, we intend to focus on identifying medical conditions within and outside of kidney disease. Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs. We believe, however, that our management team's broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company.

Our current development programs are focused on two novel therapies: oxylanthanum carbonate, a next-generation phosphate binder for the treatment of hyperphosphatemia in chronic kidney disease patients on dialysis, and UNI-494, a novel drug candidate in development for the treatment of acute kidney injury. oxylanthanum carbonate and UNI-494 were initially developed by and licensed to us from Spectrum Pharmaceuticals ("Spectrum") and Sphaera Pharma, respectively. Spectrum conducted a Phase 1 clinical trial with oxylanthanum carbonate in 2012, prior to the grant of our license in 2018. Sphaera conceived and performed initial characterization of various potential pro-drug linkers, including the initial patent application. As discussed herein, after completing IND enabling preclinical studies, we have completed a Phase I clinical study in healthy volunteers with UNI-494 in 2024.

Chronic kidney disease (CKD) is the gradual loss of kidney (renal) function that can get worse over time leading to lasting damage and possibly Stage 5 or end-stage renal disease (ESRD). CKD affects nearly 36 million Americans; approximately 550,000 of them have end stage renal disease and require dialysis. Hyperphosphatemia is common in people with CKD and has been directly linked to increased morbidity and mortality for people on dialysis. For an estimated 75% of people in the U.S. on dialysis, hyperphosphatemia remains uncontrolled due to challenges with the six currently available phosphate binders, namely insufficient potency, pill burden and unpalatable formulations. To address this significant and growing challenge, Unicycive is developing oxylanthanum carbonate, which leverages proprietary nanoparticle technology to address the shortcomings of current therapies by delivering higher potency that enables fewer and smaller pills - all in a formulation that is more acceptable for patients because it is swallowed, not chewed. With OLC, if approved, people on dialysis and their physicians may have a better option to control hyperphosphatemia.

AKI is a sudden episode of kidney failure or kidney damage (within the first 90 days of injury). After 90 days, the patient is considered to have progressed into CKD. AKI affects more than 2 million U.S. patients and costs the healthcare system in excess of $9 billion per year. More than 300,000 patients per year in the U.S. die due to AKI. Currently there are no FDA approved medicines to treat DGF and/or AKI. Treatment options for AKI include continuous renal replacement therapy, renal transplant, and dialysis. In most cases the damage to the kidney is irreversible, and the patient needs to have a renal transplant or be on dialysis for life. Therefore, there is a high unmet medical need. If approved, UNI-494 has the potential to be a first-in-class drug for the treatment of AKI.

Our business model is to license technologies and drugs in order to pursue development, regulatory approval, and commercialization of those products in global markets. Many biotechnology companies utilize similar strategies of in-licensing and then developing and commercializing drugs. We believe, however, that our management team's broad network, expertise in the biopharmaceutical industry, and successful track record gives us an advantage in identifying and bringing these assets into our company.

Since our formation we have devoted substantially all of our resources to developing our product candidates. We have incurred significant operating losses to date. Our net losses were $36.7 million and $26.6 million for the years ended December 31, 2024 and 2025 respectively. As of December 31, 2025, we had an accumulated deficit of $127.8 million. We expect that our operating expenses will increase significantly as we advance our product candidates through pre-clinical and clinical development, seek regulatory approval, and prepare for and, if approved, proceed to commercialization; acquire, discover, validate, and develop additional product candidates; obtain, maintain, protect and enforce our intellectual property portfolio; and hire additional personnel.

We have funded our operations primarily from the sale and issuance of common stock, convertible promissory notes and from a loan, including cash and deferred salary from our Chief Executive Officer and principal stockholder.

Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of our current product candidates and future product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through private or public equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into agreements to raise capital as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our current product candidates and future product candidates.

We plan to continue to use third-party service providers, including contract manufacturing organizations, to carry out our pre-clinical and clinical development and to manufacture and supply the materials to be used during the development and commercialization of our product candidates.

Recent Developments

On October 28, 2025,we announced an update from our meeting with the U.S. Food and Drug Administration (FDA) and timing of the resubmission of our New Drug Application (NDA) for oxylanthanum carbonate (OLC) following receipt of a CRL on June 30, 2025. The Type A FDA meeting was held to discuss the resolution of the single deficiency identified in the CRL related to the compliance status of a third-party manufacturing vendor. No other concerns have been identified to us, including pre-clinical, clinical, or safety data submitted as part of the NDA. Following receipt of the official meeting minutes from the Type A meeting and engaging in discussions with our third-party manufacturing vendor, we resubmitted our NDA to the FDA in December 2025. In January 2026, the FDA accepted the resubmission of the NDA for OLC, deeming the resubmission to be a Class II complete response which has a six-month review period from the date of resubmission, and set a PDUFA target action date of June 29, 2026

Subsequent to December 31, 2025, pursuant to a sales agreement dated November 13, 2024 between the Company and Guggenheim Securities, LLC, as amended by Amendment No. 1 thereto dated November 14, 2025, the Company sold 3,123,537 shares of common stock at an average price of $6.51 per share, resulting in net proceeds to the Company of approximately $19.6 million.

Components of Results of Operations

Research and Development Expenses

Substantially all of our research and development expenses consist of expenses incurred in connection with the development of our product candidates. These expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees and allocated overheads, including information technology costs and utilities and expenses for the issuance of shares pursuant to the anti-dilution clause in the purchase of in process research and development technology. We expense both internal and external research and development expenses as are incurred.

We do not allocate our costs by product candidate, as a significant amount of research and development expenses include internal costs, such as payroll and other personnel expenses, laboratory supplies and allocated overhead, and external costs, such as fees paid to third parties to conduct research and development activities on our behalf, are not tracked by product candidate.

We expect our research and development expenses to increase substantially for at least the next few years, as we seek to initiate additional clinical trials for our product candidates, complete our clinical programs, pursue regulatory approval of our product candidates and prepare for the possible commercialization of such product candidates. Predicting the timing or cost to complete our clinical programs or validation of our commercial manufacturing and supply processes is difficult and delays may occur because of many factors, including factors outside of our control. For example, if the FDA or other regulatory authorities were to require us to conduct clinical trials beyond those that we currently anticipate, we could be required to expend significant additional financial resources and time on the completion of clinical development. Furthermore, we are unable to predict when or if our product candidates will receive regulatory approval with any certainty.

General and Administrative Expenses

General and administrative expenses consist principally of payroll and personnel expenses, including salaries and bonuses, benefits and stock-based compensation expenses, professional fees for legal (including patent costs), consulting, accounting and tax services, including information technology costs and utilities, and other general corporate overhead expenses.

We anticipate that our general and administrative expenses will increase as a result of increased personnel costs, expanded infrastructure and higher consulting, legal and accounting services costs associated with complying with the applicable stock exchange and the SEC requirements, investor relations costs and director and officer insurance premiums associated with being a public company.

Other Expenses

Other expenses consist of the change in fair value of our warrant liability, interest income and interest expense.

Results of Operations

Comparison of the Years Ended December 31, 2024 and 2025 (in thousands)

		Years Ended December 31,												%
		2024				2025				Change				Change
Operating expenses:
Research and development		$	20,014			$	9,121			$	(10,893	)			(54	)%
General and administrative			12,103				20,396				8,293				69	%
Total operating expenses			32,117				29,517				(2,600	)			(8	)%
Loss from operations			(32,117	)			(29,517	)			2,600				(8	)%
Other income (expenses):
Interest income			1,261				1,012				(249	)			(20	)%
Interest expense			(71	)			(71	)			-				0	%
Change in fair value of warrant liability			(5,802	)			2,021				7,823				(135	)%
Total other income (expenses)			(4,612	)			2,962				7,574				(164	)%
Net loss		$	(36,729	)		$	(26,555	)			10,174				(28	)%

Research and Development Expenses

Research and development expenses decreased by approximately $10.9 million, or 54%, from approximately $20.0 million for the year ended December 31, 2024 to approximately $9.1 million for the year ended December 31, 2025. This decrease was primarily driven by a reduction in drug development costs of $8.0 million and a decline in clinical costs of $3.4 million. These decreases were partially offset by increased costs, including $0.2 million in consulting and professional services and $0.2 million in labor. Additionally, stock-based compensation rose by $0.1 million.

General and Administrative Expenses

General and administrative expenses increased by $8.3 million, or 69%, from approximately $12.1 million for the year ended December 31, 2024 to approximately $20.4 million for the year ended December 31, 2025. This increase was primarily driven by a $2.4 million rise in marketing expenses associated with the commercial launch, $3.5 million in higher consulting and professional service costs, and $1.8 million in labor and related expenses. Additionally, rent, travel, supplies, and other costs increased by $0.5 million, while stock-based compensation grew by $0.1 million.

Other Income (Expenses)

Other income (expenses) improved by $7.6 million, or 164%, from an expense of $4.6 million for the year ended December 31, 2024, to income of $3.0 million for the year ended December 31, 2025. This was primarily driven by a favorable change in the fair value of our warrant liability, partially offset by a decrease of earned interest income during the year as a result of lower average cash balances available for interest-bearing accounts.

Liquidity and Capital Resources

Sources of Liquidity

Since our formation through December 31, 2020, we have funded our operations with the sale of common and preferred stock, convertible notes and from a loan from our Chief Executive Officer and principal stockholder.

As a result of our initial public offering ("IPO"), on July 13, 2021 we began trading on the Nasdaq Capital Market under the symbol "UNCY", and on July 15, 2021 we received approximately $22.3 million in net proceeds after deducting the underwriting discounts, commissions and offering expenses. We have used the net proceeds from the IPO to complete pre-clinical and clinical studies, submit regulatory filings to the FDA, and for general and corporate purposes, including hiring additional management and conducting market research and other commercial planning.

Future revenue streams may consist of collaboration or licensing revenue as well as product sales.

On March 3, 2023, we entered into a securities purchase agreement with certain healthcare-focused institutional investors that may provide up to $130.0 million in gross proceeds through a private placement and that included initial upfront funding of $30.0 million.

On March 13, 2024, we entered into a securities purchase agreement with certain accredited investors to provide $50 million in gross proceeds through a private placement. Pursuant to the securities purchase agreement, we issued institutional purchasers $50.0 million in shares of Series B Convertible Preferred Stock. We received $46.2 million in net proceeds.

On November 13, 2024, we entered into a sales agreement, with Guggenheim Securities, LLC pursuant to which, we may offer and sell shares of common stock having an aggregate offering price of up to $50.0 million, subject to certain limitations and in accordance with the terms of the sales agreement, from time to time through or to Guggenheim Securities, LLC acting as sales agent or principal. On November 14, 2025, the Company entered into an Amendment No. 1 to sales agreement with Guggenheim Securities LLC to increase the number of shares that may be sold under the sales agreement to $100,000,000 (collectively with the November 13, 2024 sales agreement, the "Sales Agreement"). During the period from October 1, 2025 through December 31, 2025, the Company sold 1,263,882 shares of common stock pursuant to the Sales Agreement, at an average price of $5.77 per share and paid $0.2 million in commissions, resulting in net proceeds to the Company of approximately $6.6 million. During the year ended December 31, 2025, the Company sold 9,310,618 shares of common stock pursuant to the Sales Agreement, at an average price of $5.40 per share and paid $1.4 million in commissions, resulting in net proceeds to the Company of approximately $45.2 million.

Future Funding Requirements

We have incurred net losses since our inception. For the year ended December 31, 2025, we had a net loss of $26.6 million, and we expect to incur substantial additional losses in future periods. As of December 31, 2025, we had an accumulated deficit of $127.8 million.

We anticipate that our current cash will be sufficient to fund our operations for more than 12 months from the date of this report.

We expect to continue incurring losses in the future and will be required to raise additional capital in the future to complete our clinical trials, pursue product development initiatives and penetrate markets for the sale of our products. We believe that we will continue to have access to capital resources through possible equity offerings, debt financings, corporate collaborations or other means. There can be no assurance that we will be able to obtain additional financing on terms acceptable to us, on a timely basis or at all. If we are unable to secure additional capital, we may be required to curtail any clinical trials and development of new or existing products and take additional measures to reduce expenses in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations. Based on our current level of expenditures, we believe that we have sufficient resources such that there is not substantial doubt about our ability to continue operations for at least one year after the date that these financial statements are available to be issued.

We anticipate that we will need to raise substantial additional capital, the requirements for which will depend on many factors, including:

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the scope, timing, rate of progress and costs of our drug discovery efforts, pre-clinical development activities, laboratory testing and clinical trials for our current product candidates and future product candidates;

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the number and scope of clinical programs we decide to pursue;

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the cost, timing and outcome of preparing for and undergoing regulatory review of our current product candidates and future product candidates;

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the scope and costs of development and commercial manufacturing activities;

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the cost and timing associated with commercializing our current product candidates and future product candidates, if they receive marketing approval;

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the extent to which we acquire or in-license other product candidates and technologies;

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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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our ability to establish and maintain collaborations on favorable terms, if at all;

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our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our current product candidates and future product candidates and, ultimately, the sale of our products, following FDA approval;

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the impact, if any, of the coronavirus pandemic on our business operations;

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our ability to access capital;

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our implementation of operational, financial and management systems; and

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the costs associated with being a public company.

A change in the outcome of any of these or other variables with respect to the development of any of our current product candidates or future product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Adequate funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or we may also be required to sell or license to others rights to our product candidates in certain territories or indications that we would prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to supplement our funds, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially affect our business and financial condition.

Summary of Cash Flows

The following table sets forth the primary sources and uses of cash for each of the periods presented below (in thousands):

		Years ended December 31,
		2024				2025
Net cash (used in) provided by:
Operating activities		$	(28,575	)		$	(31,317	)
Investing activities			(72	)			(12,095	)
Financing activities			45,088				46,468
Net increase in cash and cash equivalents		$	16,441			$	3,056

Cash Flows from Operating Activities

Net cash used in operating activities was $31.3 million for the year ended December 31, 2025. Cash used in operating activities was primarily due to the use of funds for development costs associated with our drug candidates, labor costs, consulting services, and other corporate expenditures for investor relations, compliance, and legal services. We incurred a net loss of $26.6 million after including the effect of non-cash adjustments for stock compensation and change in fair value of our warrant liability.

Net cash used in operating activities was $28.6 million for the year ended December 31, 2024. Cash used in operating activities was primarily due to the use of funds for development costs associated with our drug candidates, labor costs, consulting services, and other corporate expenditures for investor relations, compliance, and legal services. We incurred a net loss of $36.7 million after including the effect of non-cash adjustments for stock compensation and change in fair value of our warrant liability.

Cash Flows from Investing Activities

Net cash used in investing activities was $12.1 million for the year ended December 31, 2025 and was due primarily to the purchase of marketable securities.

Net cash used in investing activities was $72,000 for the year ended December 31, 2024 and was due to the purchase of furniture and fixtures for our corporate office.

Cash Flows from Financing Activities

Net cash provided by financing activities was $46.5 million during the year ended December 31, 2025, due primarily to sales made under the sales agreement with Guggenheim Securities LLC dated November 13, 2024 as amended by Amendment No. 1 thereto dated November 14, 2025.

Net cash provided by financing activities was $45.1 million during the year ended December 31, 2024 due primarily to the private placement financing agreement we signed on March 13, 2024 and sales made under the sales agreement with Guggenheim Securities LLC dated November 13, 2024, partially offset by dividends paid to preferred stockholders.

Off-Balance Sheet Arrangements

As of December 31, 2025 and through the filing date of this Annual Report on Form 10-K, we do not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies, Significant Judgments and Use of Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are 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. Actual results may differ from these estimates under different assumptions or conditions. We consider our critical accounting policies and estimates to be related to debt and equity classification, warrant liabilities, research and development, and stock-based compensation. There have been no other material changes to our critical accounting policies and estimates during the year ended December 31, 2025 from those used for the year ended December 31, 2024. The below policies represent our critical accounting policies.

Debt and Equity Classification

In conjunction with the issuance of Series A-1 Preferred Stock in March 2023, and in conjunction with the issuance of Series B-1 Preferred Stock in March 2024, we initially account for the preferred stock as temporary or mezzanine equity. The Series A-1 and Series B-1 Preferred Stock do not fall within the scope of ASC 480, Distinguishing Liabilities from Equity, do not contain any embedded derivatives that require bifurcation, and are not classified as liabilities. However, as the Series A-1 and Series B-1 Preferred Stock, at issuance, are contingently redeemable upon the occurrence of an event that is not solely within our control, they are required to be initially classified as mezzanine equity and measured at the amount of net proceeds received. As the Series A-1 and Series B-1 Preferred Stock are not currently redeemable or probable of becoming redeemable, no subsequent remeasurement is required.

Warrant Liabilities

In conjunction with the issuance of Series A-1 Preferred Stock (see Note 10), we established a warrant liability as of March 3, 2023, representing the fair value of warrants that may be issued, subject to shareholder approval, upon conversion of the Series A-1 Preferred Stock. We account for these warrants as liabilities (in accordance with ASC 480, Distinguishing Liabilities from Equity) on the balance sheets as a result of certain redemption clauses that are not within the control of the Company. The warrant liabilities are initially measured at fair value, resulting in an implied discount on the related preferred stock financing arrangement (recognized as a partial offset to the carrying value of the Series A-1 Preferred Stock), and are remeasured at fair value each reporting period. Changes in the fair value of the warrant liabilities are recognized in earnings during each period. The warrant liabilities are measured using Level 3 fair value inputs. See Note 10 to our audited financial statements included elsewhere in this Annual Report on Form 10-K for a description of warrant liabilities and the related valuations

Research and Development

We expense costs when incurred related to the research and development associated with the design, development and testing of product candidates, as well as acquisition of product candidates or compounds. Research and development expenses include fees paid to third parties to conduct certain research and development activities on our behalf, consulting costs, costs for laboratory supplies, product acquisition and license costs, certain payroll and personnel-related expenses, including salaries and bonuses, employee benefit costs and stock-based compensation expenses for our research and product development employees. We expense both internal and external research and development expenses as they are incurred.

Stock-Based Compensation

We account for stock-based compensation for all share-based payments made to employees and non-employees by estimating the fair value on the date of grant and recognizing compensation expense over the requisite service period on a straight-line basis. We recognize forfeitures related to stock-based compensation as they occur. We estimate the fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes model requires the input of subjective assumptions, including expected common stock volatility, expected dividend yield, expected term, risk-free interest rate, and the public market closing price of the Company's underlying common stock on the date of grant.

JOBS Act Accounting Election

On April 5, 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have chosen to take advantage of the extended transition periods available to emerging growth companies under the JOBS Act for complying with new or revised accounting standards until those standards would otherwise apply to private companies provided under the JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates for complying with new or revised accounting standards.

Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," we intend to rely on certain of these exemptions, including, without limitation, (i) providing an auditor's attestation report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with the requirement adopted by the Public Company Accounting Oversight Board ("PCAOB") regarding the communication of critical audit matters in the auditor's report on financial statements. We will remain an "emerging growth company" until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Recent Accounting Pronouncements

See the section titled "Summary of Significant Accounting Policies-Recent Accounting Pronouncements" in Note 2 to our audited financial statements included elsewhere in this Annual Report on Form 10-K for additional information.