Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

(in thousands, except for share amounts and per share data)

You should read the following discussion and analysis of our financial condition and results of operations (the "MD&A") together with our unaudited consolidated financial statements and related notes appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q (the "Quarterly Report"), and with our audited financial statements and notes thereto for the year ended December 31, 2024 included in our annual report on Form 10-K initially filed with the Securities Exchange Commission (the "SEC") on April 15, 2025, as amended on April 29, 2025 and July 28, 2025 (the "2024 Annual Report").

Special Note Regarding Forward-Looking Statements

In addition to historical information, some of the statements contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements on our current expectations and any projections about future events. The following information and any forward-looking statements should be considered in light of factors discussed elsewhere in this Quarterly Report, along with the risks identified under the "Part I - Item 1A" in our 2024 Annual Report and in our other filings made with the Securities Exchange Commission (the "SEC").

We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Quarterly Report. Statements made herein are as of the date of the filing of this Quarterly Report with the SEC and should not be relied upon as of any subsequent date. Even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of results or developments in future periods. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

We are a clinical-stage biopharmaceutical company advancing therapeutics for cancer patients that are designed to overcome key hurdles in immune suppression and drug resistance.

Our mission is to advance our portfolio of innovative therapeutics to reverse key mechanisms of therapeutic resistance and immune suppression and transform the way cancer is treated. We have leveraged molecular insights of the mechanisms of therapeutic resistance and immune suppression to develop a new class of novel drugs that are designed to target drug resistance and checkpoints of immune suppression. As of the date of this Quarterly Report, our product candidates have not been approved as safe or effective by the FDA or any other comparable foreign regulator.

Since inception, our operations have focused on organizing and staffing our Company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates, and undertaking preclinical and clinical studies and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales.

Since inception, we have incurred significant operating losses. Our net losses were $4,082 and $2,603, respectively, for the nine months ended September 30, 2025 and the year ended December 31, 2024. As of September 30, 2025, we had an accumulated deficit of $12,897. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel, and operate as a public company.

We will not generate revenue from product sales unless and until we successfully complete our clinical trials and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we will likely incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings and other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Our failure to raise capital or enter into such agreements as and when needed could have a material adverse effect on our business, results of operations and financial condition. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing.

Recent Developments

Equity Line of Credit Agreement (ELOC)

On November 12, 2024, we entered into an ELOC agreement (the "ELOC Agreement") with Helena Global Investment Opportunities I LTD ("Helena"), pursuant to which Helena agreed to purchase from the Company up to $30,000 of common stock (the "ELOC Shares"), which the Company may exercise at any time following effectiveness of a registration statement at a price equal to the 95% of the lowest trading price during the three days following the Company's notice to Helena to exercise the ELOC Agreement. The Company issued 670,641 shares of restricted common stock (the "Commitment Fee Shares") to Helena as a "Commitment Fee" for the ELOC Agreement. The ELOC Agreement became available for the Company's use following the filing and effectiveness of a resale registration statement registering the ELOC Shares for resale. Following effectiveness of the resale registration statement (the "Effective Date"), the Commitment Fee Shares were subject to a "true-up" pursuant to which, as the shares were valued at less than $900 on the Effective Date, additional shares were issued to Helena to bring the ELOC Shares to the full $900 value.

The ELOC Agreement will terminate upon the following events: (i) the first day of the month next following the 36-month anniversary of the date of the ELOC Agreement or (ii) the date on which Helena has purchased the full $30,000 of ELOC Shares. The ELOC Agreement may also be terminated by the Company after its commencement, at the Company's discretion, provided that there are no advance notices outstanding for which common stock has yet to be issued, and the Company has paid all amounts owed to Helena under the ELOC Agreement, including the Commitment Fee shares.

At the Company's annual meeting of shareholders on June 10, 2025, a majority of the Company's shareholders approved the issuance in excess of 19.99% of the Company's common stock at a price below market value, in accordance with the terms of the ELOC Agreement and in compliance with Rule 713 of the NYSE American LLC Company Guide.

During the nine months ended September 30, 2025, in connection with its ELOC agreement with Helena, the Company sold 3,510,000 shares of its common stock to Helena for net proceeds of $3,205. The shares were issued to Helena during the nine months ended September 30, 2025.

Boustead Securities LLC ("Boustead") and D. Boral Capital LLC ("D. Boral") acted as placement agents (the "Placement Agents") in the ELOC offering and, following each exercise, are entitled to cash compensation of 7%, 1% non-accountable fees and warrants equal to 7%. To date, the Placement Agents have received total cash compensation equal to $313,225 and a total of 245,750 warrants to purchase common stock, exercisable at exercise prices of $0.40, $0.46 and $1.2308 per share, which warrants will expire five years from the date of grant.

January 2025 PIPE Offering

On January 14, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") and registration rights agreement (the "Registration Rights Agreement") with the investor name therein (the "Investor") for the sale and issuance of 2,500,000 units (the "Pre-Funded Units"), with each Pre-Funded Unit consisting of a pre-funded warrant (the "Pre-Funded Warrant") to purchase one share of common stock, exercisable for $0.001 per share, and a common warrant (the "Common Warrant") to purchase one and one half shares of common stock, exercisable at $1.40 per share (the "January 2025 PIPE Offering").

On January 16, 2025, the Company closed the January 2025 PIPE Offering for a total purchase price of $3,498 (or $1.399 per Pre-Funded Unit), with an additional $2 payable upon the Investor's exercise of the Pre-Funded Warrants in full.

In advance of closing, on January 16, 2025, the Company and the Investor entered into an amended and restated Purchase Agreement (the "A&R Purchase Agreement"), which amended the terms of the Purchase Agreement to include a requirement that the Company obtain shareholder approval prior to issuing in excess of 19.99% of the Company's common stock and also amended the Common Warrants to make them immediately exercisable and reduce the exercise period from 5.5 years to five years. Other terms of the Purchase Agreement and Common Warrants remained the same.

Boustead and D. Boral acted as co-placement agents for the January 2025 PIPE Offering. In conjunction therewith, on January 16, 2025, the Company entered into a Placement Agent Agreement with Boustead (the "Placement Agent Agreement"). Under the terms of the Placement Agent Agreement, at closing, the Company paid the Placement Agents (i) a cash commission equal to 8% of the gross proceeds (including a 1% non-accountable expense fee) and (ii) warrants to purchase a total of 175,000 shares of common stock, exercisable at $1.40 per share, with the total cash and warrant compensation split equally between the Placement Agents.

On January 20, 2025, the Company obtained the approval of 55.4% of the shareholders (the "Majority Shareholders") for the issuance in excess of 19.99% of the Company's common stock at a price below market value, in compliance with Rule 713 of the NYSE American LLC Company Guide. On February 10, 2025, the Company filed the definitive Schedule 14C and the shareholder approval became effective on March 1, 2025.

Components of Results of Operations

Net Sales

We have not generated any sales to date. No revenue was recorded from any sources during the nine months ended September 30, 2025 and 2024.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development Expenses

Dr. Ramachandran Murali is our Vice President of Research and Development. Dr. Murali is a doctor and scientist at Cedars-Sinai Medical Center and is the inventor, with others, of three of the patented technologies that are subject to the Kairos-Cedars license agreements.

We are engaged in rolling out our Phase 1 and Phase 2 clinical trials for ENV105 and a Phase 1 trial for KROS201. In addition, we are continuously performing preclinical research including animal models of disease, medicinal chemistry laboratory studies, formulation, and toxicology and biodistribution studies. Our clinical development costs may vary significantly based on factors such as: per patient trial costs; the number of trials required for approval; the number of sites included in the trials; the location where the trials are conducted; the length of time required to enroll eligible patients; the number of patients that participate in the trials; the number of doses that patients receive; the drop-out or discontinuation rates of patients; potential additional safety monitoring requested by regulatory agencies; the duration of patient participation in the trials and follow-up; the cost and timing of manufacturing our product candidates; the phase of development of our product candidates; and the efficacy and safety profile of our product candidates.

The successful development and commercialization of product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following: the timing and progress of nonclinical and clinical development activities; the number and scope of nonclinical and clinical programs we decide to pursue; raising necessary additional funds; the progress of the development efforts of parties with whom we may enter into collaboration arrangements; our ability to maintain our current development program and to establish new ones; our ability to establish new licensing or collaboration arrangements; the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; the receipt and related terms of regulatory approvals from applicable regulatory authorities; the availability of drug substance and drug product for use in production of our product candidate; establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally; our ability to protect our rights in our intellectual property portfolio; the commercialization of our product candidates, if and when approved; obtaining and maintaining third-party insurance coverage and adequate reimbursement; the acceptance of our product candidate, if approved, by patients, the medical community and third-party payors; competition with other products; the impact of any business interruptions to our operations, including the timing and enrollment of patients in our planned clinical trials, or to those of our manufacturers, suppliers, or other vendors resulting from any pandemic or public health crisis; and a continued acceptable safety profile of our therapies following approval.

A change in the outcome of any of these variables with respect to the development of our product candidates could significantly change the costs and timing associated with the development of that product candidate. We may never succeed in obtaining regulatory approval for any of our product candidates.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, corporate and business development, as well as administrative functions. General and administrative expenses also include legal fees relating to patent, corporate, IPO-related matters, and SEC reporting matters; professional fees for accounting, auditing, tax and administrative consulting services; insurance costs; administrative travel expenses; marketing expenses and other operating costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our business operations. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs, as well as investor and public relations expenses associated with being a public company.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024:

		September 30, 2025				September 30, 2024
Revenues		$	-			$	-
Operating expenses:
Research and development			608				14
General and administrative			827				369
Total operating expenses			1,435				383
Loss from operations			(1,435	)			(383	)
Other expenses:
Interest expense			-				(12	)
Financing costs			-				(537	)
Debt discount amortization			-				(115	)
Interest income			37				-
Total other income (expenses)			37				(664	)
Net loss			(1,398	)			(1,047	)

Research and Development Expenses

The table below summarizes our research and development expenses for the three months ended September 30, 2025 and 2024:

Research and Development Expenses:		September 30, 2025				September 30, 2024
Clinical trial and related expenses		$	608				14
Total research and development expenses		$	608				14

Research and development expenses were $608 and $14 for the three months ended September 30, 2025 and 2024, respectively. The increase in R&D expenses in 2025 primarily related to our Phase 2 trial in prostate cancer beginning in 2024.

General and Administrative Expenses

The table below summarizes our general and administrative expenses for the three months ended September 30, 2025 and 2024:

General and Administrative Expenses:		September 30, 2025				September 30, 2024
Stock-related expenses		$	61			$	34
Officer compensation and wages			57				-
Patent related expenses			17				114
Legal expenses			70				-
Accounting expenses			25				30
Other professional service expenses and fees			77				93
Fees relating to license agreements			-				29
Insurance expenses			97				12
Vendor advances amortization expense			254				-
Intangible amortization expense			40				40
Other expenses			129				17
Total general and administrative expenses		$	827			$	369

General and administrative expenses were $827 and $369 for the three months ended September 30, 2025 and 2024, respectively. Significant changes between periods consisted of the increase in vendor advance amortization expense in 2025 relating to our vendor advances in 2025.

Other Income (Expenses)

Other income (expenses) was $37 and $(664) for the three months ended September 30, 2025 and 2024, respectively. In 2025, other income was interest income earned from our money market account. In 2024, other expenses were interest expense of $12, financing costs of $537 and debt discount amortization of $115.

Comparison of the Nine months Ended September 30, 2025 and 2024

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024:

		September 30, 2025				September 30, 2024
Revenues		$-				$-
Operating expenses:
Research and development			1,597				242
General and administrative			2,560				655
Total operating expenses			4,157				897
Loss from operations			(4,157	)			(897	)
Other expenses:
Interest expense			-				(35	)
Financing costs							(537	)
Debt discount amortization			-				(154	)
Interest income			75				-
Total other expenses, net			75				(726	)
Net loss		$	(4,082	)		$	(1,623	)

Research and Development Expenses

The table below summarizes our research and development expenses for the nine months ended September 30, 2025 and 2024:

Research and Development Expenses:		September 30, 2025				September 30, 2024
Clinical and related expenses		$	1,597				242
Total research and development expenses		$	1,597				242

Research and development expenses were $1,597 and $242 for the nine months ended September 30, 2025 and 2024, respectively. The increase in R&D expenses in 2025 primarily related to our Phase 2 trial in prostate cancer beginning in 2024.

General and Administrative Expenses

The table below summarizes our general and administrative expenses for the nine months ended September 30, 2025 and 2024:

General and Administrative Expenses:		September 30, 2025				September 30, 2024
Stock-related expenses		$	197				34
Officer compensation and wages			172				-
Patent related expenses			70				123
Legal expenses			148				2
Accounting expenses			185				102
Other professional service expenses and fees			213				125
Fees relating to license agreements			-				93
Insurance expenses			300				33
Vendor advances amortization expense			759				-
Intangible amortization expense			120				120
Other expenses			396				23
Total general and administrative expenses		$	2,560				655

General and administrative expenses were $2,560 and $655 for the nine months ended September 30, 2025 and 2024, respectively. Significant changes between periods consisted of the increase in vendor advance amortization expense in 2025, relating to our vendor advances in 2025; and the increase in insurance costs in 2025, relating to our increased costs of directors and officers liability insurance as a public company.

Other Income (Expenses)

Other income (expenses) was $75 and $(726) for the nine months ended September 30, 2025 and 2024, respectively. In 2025, other income was interest income earned from our money market account. In 2024, other expenses were interest expense of $35, financing costs of $537 and debt discount amortization of $154.

Liquidity and Capital Resources

During the nine months ended September 30, 2025, the Company incurred a net loss of $4,082 and used cash in operations of $2,357. During that period, the Company closed a private financing in which the Company received net proceeds of $3,058 and closed three financings from our ELOC for net proceeds of $3,602. At September 30, 2025, the Company had cash and cash equivalents totaling $5,575 and shareholders' equity of $7,664. The Company expects its current cash reserves to fund the Company's operations for at least 12 months from the date of this filing.

The Company's ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future, which will primarily be accomplished by raising additional capital to meet its operating needs and repay its liabilities arising from normal business operations when they come due. Since inception, the Company has funded its operations primarily through equity and debt financings and the Company expects to continue to rely on these sources of capital until such time as it is able to generate revenue.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, such financing may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution to our stockholders, in the case of equity financing.

Cash Flows

The table below summarizes our cash flow activities for the nine months ended September 30, 2025 and 2024:

		September 30,				September 30,
Net cash provided by (used in):		2025				2024
Operating activities		$	(2,357	)		$	(2,152	)
Investing activities			-				-
Financing activities			6,660				5,276
Net increase (decrease) in cash		$	4,303			$	3,124

Operating Activities

During the nine months ended September 30, 2025, we used cash from operating activities of $2,357, compared to $2,152 used during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we incurred a net loss of $4,082 and had non-cash expenses of $2,301, compared to a net loss of $1,623 and non-cash expenses of $845 during the nine months ended September 30, 2024. The primary non-cash expense in 2025 was the amortization of vendor advances of $1,958.

The net change in operating assets and liabilities during the nine months ended September 30, 2025 used cash of $576, compared to $1,374 used during the nine months ended September 30, 2024. The primary use of cash relating to operating assets and liabilities during the nine months ended September 30, 2025, was the decrease in accounts payable and accrued expenses. The primary use of cash during the nine months ended September 30, 2024, was the increase in vendor advances.

Financing Activities

During the nine months ended September 30, 2025, we provided cash from financing activities of $6,660, compared to $5,276 provided during the nine months ended September 30, 2024. For the nine months ended September 30, 2025, cash provided by financing activities consisted of proceeds from our private financing of $3,058 and proceeds of $3,602 from our ELOC. Net cash provided in 2024 was from net proceeds from our IPO of $5,524 and proceeds from notes payable - officers of $142. Net cash used in 2024 consisted of the payment of deferred offering costs of $390.