Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes thereto and the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Form 10-K") filed with the Securities and Exchange Commission on March 31, 2026. In addition to historical financial information, this discussion and analysis contains forward-looking statements that involve risks, assumptions, and uncertainties, including statements of our plans, objectives, expectations, intentions, forecasts, and projections. Our actual results and the timing of selected events could differ materially from those discussed in these forward-looking statements as a result of several factors, including those set forth under Part I, Item 1A "Risk Factors" of the Form 10-K, which you should read carefully to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in the "Part I - Financial Information," including the related notes to the condensed consolidated financial statements contained therein.

Overview

Our Company (f/k/a NAS-ONC, Inc.) was formed in 2008, devoted to developing new drugs with new delivery modes. As a clinical-stage biopharmaceutical company, we have focused on establishing superior treatments for intracranial malignancies, i.e., aggressive cancers located in the brain. These cancer types include primary brain cancers, such as glioblastoma, and secondary brain cancers, that have arrived through metastatic spread from other cancers throughout the body, such as melanoma or breast and lung cancer. Brain-localized malignancies are particularly difficult to treat because the blood-brain barrier prevents efficient entry of most pharmacotherapeutic agents into the brain. As a result, these patients are faced with poor prognoses and shortened average life expectancy. NeOnc is developing novel drug delivery methods to be used in combination with novel drug candidates.

NTHI's lead product candidate is NEO100, a highly purified form of perillyl alcohol that is administered to patients via intranasal delivery. NEO100 is being evaluated in three sponsor-initiated clinical trials under two active investigational new drug (IND) applications - NEO100-01 in adults with recurrent IDH-mutant astrocytoma, NEO100-02 in meningioma and NEO100-03 in pediatric brain tumors - and has been made available to additional patients through an expanded access (compassionate use) program. NEO100 has received Fast Track designation from the United States Food and Drug Administration (FDA) for the treatment of high-grade glioma. NeOnc is also developing a second product candidate, NEO212, an oral conjugate of temozolomide and NEO100, which is completing its Phase 1 clinical trial.

We have completed human safety testing of NEO100 in the Phase 1 portion of our NEO100-01 trial, the results of which were published in Neuro-Oncology Advances in 2021; no treatment-related Grade 3 or 4 adverse events were observed and the maximum tolerated dose was not reached at the highest dose tested (1,152 mg/day), which was carried forward into Phase 2a. We have completed patient enrollment in the Phase 2a portion of NEO100-01, which enrolled 24 patients with recurrent IDH1-mutant grade 4 (21 patients) or grade 3 (3 patients) astrocytoma. In the analysis, progression-free survival at six months, the trial's primary endpoint, was 48.9% as assessed by the RANO 2.0 criteria, exceeding the protocol-defined benchmark of 20%; median overall survival from the start of NEO100 treatment was 26.1 months, with 61.5% of patients alive at 12 months and 54.7% alive at 24 months; and no treatment-related Grade 3 or higher adverse events, treatment-related serious adverse events or discontinuations due to treatment-related adverse events were observed. Five patients remained on NEO100 treatment at the time of the interim database lock, and the trial remains active while those patients continue treatment and survival follow-up. The Phase 2a results have been accepted for presentation as a late-breaking abstract at the Society for Neuro-Oncology 2026 Annual Meeting.

Based on these data, we intend to seek accelerated approval of NEO100 for the treatment of recurrent IDH-mutant grade 4 astrocytoma, a population for which no therapy is currently approved, on the basis of the NEO100-01 Phase 2a results supported by the Phase 1 and expanded access experience, with clinical benefit to be verified in a randomized confirmatory Phase 3 trial, NEO100-012. In October 2026, we submitted to the FDA meeting requests and briefing packages for two Type B meetings under the NEO100 IND: an End-of-Phase nonclinical and clinical meeting, to obtain the FDA's feedback on the proposed accelerated approval strategy and on the design of NEO100-012; and a chemistry, manufacturing and controls (CMC) meeting with the FDA's Office of Pharmaceutical Quality, to obtain feedback on the manufacturing and control strategy to support an NDA. The FDA has not yet confirmed the dates of these meetings.

NEO100-02 is a Phase 2 trial of intranasal NEO100 in patients with residual, progressive or recurrent meningioma, conducted under the NEO100 IND. The trial is currently active and recruiting.

NEO100-03 is a Phase 1b trial of intranasal NEO100 in children and young adults with recurrent pediatric-type high-grade glioma - including diffuse midline glioma, H3 K27-altered, and diffuse hemispheric glioma, H3 G34-mutant - and other recurrent malignant pediatric brain tumors, conducted under a separate IND. The trial is open and enrolling at pediatric centers in the United States and, through our Middle East clinical collaboration, in the United Arab Emirates, and two patients have been enrolled and treated to date under expanded use.

NEO212 is an oral conjugate of temozolomide and NEO100 designed to improve delivery of temozolomide to the brain and to overcome temozolomide resistance. Following the filing and acceptance of an IND, NEO212 has been evaluated in a Phase 1 dose-escalation clinical trial in patients harboring primary and secondary (metastatic) malignant brain cancer types. Phase 1 dose escalation is complete, and we will present the NEO212 Phase 1 data at the Society for Neuro-Oncology 2026 Annual Meeting. We believe the Phase 1 results are very encouraging: no myelosuppression was observed with NEO212, in contrast to the hematologic toxicity that characterizes standard-of-care temozolomide, and two patients had objective responses - one with recurrent glioblastoma and one with a brain metastasis from lung cancer - each of whom has remained on NEO212 treatment for more than 20 months, a duration of treatment that is rare in these patient populations. We have met with the FDA regarding the NEO212 program, and the FDA provided CMC clearance to advance NEO212 into a Phase 2 clinical trial and indicated that the NEO212 program may proceed under the FDA's accelerated approval pathway. We have since modified the design of the planned Phase 2 trial from a single-arm study to a randomized, controlled trial with three parallel patient cohorts - brain metastases, IDH1-mutant astrocytoma and recurrent IDH1-wildtype glioblastoma - in which patients in each cohort will be randomized to NEO212 or a control arm. We made this change to align the NEO212 program with the FDA's current expectations for the design of trials intended to support accelerated approval, which favor randomized, controlled trials over single-arm studies, and to provide clarity on the patient populations in which NEO212 is being evaluated. We are scheduled to meet with the FDA on November 23, 2026 for an End-of-Phase 1 Type B meeting to seek feedback on the proposed patient populations, trial design, endpoints and dose selection for the next stage of development, and on whether the proposed trial design could support a potential accelerated approval pathway.

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. Amounts received for compassionate use of NEO100 are recorded as a reduction of research and development expense.

Investment and Joint Venture

In June 2025, the Company (through its wholly-owned subsidiary - NuroMENA Holdings Ltd. "NuroMENA") entered into a heads of terms with a family office in the Middle-East to form an investment and joint venture. The heads of terms was terminated on January 22, 2026 after the family office did not provide evidence of a committed investment by the deadline set by the Company. No investment was made, no NuroMENA shares were issued to the investor, no board seats were allocated to the investor, and the Company has no further obligations under the heads of terms.

Asset Acquisition

In October 2025, the Company paid $500,000 to McMaster University pursuant to a Patent Purchase Agreement, and U.S. Patent No. 11,788,057 B2 (the "Patent") was formally assigned effective October 8, 2025. The Patent covers proprietary technologies combining 3D bioprinting, artificial intelligence, and quantum modeling that are designed to enable the creation of patient-derived three-dimensional brain tumor models for high-throughput preclinical drug screening.

Liquidity and Going Concern

Since our inception, we have incurred significant operating losses. For the three and nine months ended September 30, 2026, the Company incurred a net loss of $4,440,209 and $27,500,185, respectively. We had an accumulated deficit of $140,254,840 as of September 30, 2026, compared to $112,754,655 as of December 31, 2025. As of September 30, 2026, we had cash and cash equivalents of $6,166,342, which is not sufficient to fund our operations for one year from the issuance date of this Form 10-Q. We expect to continue to incur 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 clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern one year from the issuance date of this Form 10-Q. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company is actively taking steps to mitigate the substantial doubt about the Company's ability to continue as a going concern, including pursuing additional financing through its at-the-market offering program and other equity or debt financings (see Note 1). If the Company is unable to obtain additional capital and continue as a going concern, it may have to further scale back operations or liquidate its assets and cease operations entirely, and the values received for assets in liquidation or dissolution could be significantly lower than the values reflected in these financial statements. Accordingly, these financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Components of Results of Operations

Revenue

We occasionally receive a fee from a patient for a "right to try" humanitarian program. Such revenues are not part of our core business.

Operating Expenses

Our operating expenses consist of (i) research and development expenses, (ii) legal and professional expenses, (iii) general and administrative expenses, (iv) stock-based compensation and (v) advisory fees, principally to related parties.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts and preclinical and clinical studies under our research programs, which include:

●

employee-related expenses, including salaries, benefits and stock-based compensation expense for our research and development personnel;

●

costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;

●

costs of manufacturing drug products and drug supply related to our current or future product candidates;

●

costs of conducting preclinical studies and clinical trials of our product candidates;

●

consulting and professional fees related to research and development activities, including equity-based compensation to non-employees;

●

costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;

●

costs related to compliance with clinical regulatory requirements;

	●	license fees and milestone payments made pursuant to license and collaboration agreements; and
	●	facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed.

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

●

the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

●

establishing an appropriate safety profile;

●

successful enrollment in and completion of clinical trials;

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whether our product candidates show safety and efficacy in our clinical trials;

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receipt of marketing approvals from applicable regulatory authorities;

●

establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

●

obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

●

commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

●

continued acceptable safety of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as we commence clinical trials and continue the development of our current and future product candidates. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

Legal and Professional Expenses

Legal and professional expenses consist of costs related to corporate and intellectual property legal costs and accounting and auditing fees. We also anticipate increased expenses associated with being a public company, including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the Securities and Exchange Commission, or the SEC, and listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums, and investor relations costs.

General and Administrative Expenses

General and administrative expenses include salaries and other compensation-related costs, including stock-based compensation, for personnel in executive, finance and accounting, business development, operations and administrative roles. Other significant costs include insurance costs, travel costs, facility and office-related costs not included in research and development expenses.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside service providers, among other expenses. In addition, if we obtain regulatory approval for any of our product candidates and do not enter a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

Stock Based Compensation

Stock-based compensation expense results from recognizing the grant-date fair value of restricted stock on a straight-line basis over the requisite service period. Expense for awards with performance conditions is recognized when achievement of the performance condition becomes probable.

Interest Expense

Interest expense primarily relates to the convertible notes issued in 2025, which contained an original issue discount ("OID") and were repaid in January 2026. The Company also had interest expense related to interest accrued on outstanding litigation settlements and on unremitted restricted stock tax withholding obligations.

Advisory fees

Advisory fees principally represent amounts due AFH Holdings, a related party, for strategic advisory, capital markets and financing services (see Note 4).

Amortization

Amortization on debt issuance costs resulted from the grant of warrants for a line of credit commitment. The fair value of the warrants was determined using the Black Scholes valuation method and the fair value is being amortized over the term of the line of credit commitment.

Costs related to equity offerings are deferred and charged to additional paid-in capital as securities are sold, and are not amortized (see Note 2).

Grant Income

Grant income represents allowable costs incurred under the Company's two NIH STTR grants, including subcontractor costs incurred by USC (see Note 11).

Gain (Loss) on Change in Fair Value of Derivative Liabilities

Gain (loss) on change in fair value of derivative liability related to the equity line of credit relates to the fair value of the discount offered to Mast Hill on shares purchased under the Equity Purchase Agreement, which terminated on October 22, 2026.

Change in fair value of derivative liability related to Series A preferred stock reflects the remeasurement of the conversion feature bifurcated from the Series A Convertible Preferred Stock, which was remeasured to $0 and derecognized upon redemption of the Series A Convertible Preferred Stock in September 2026 (see Note 8).

Comparison of the three months ended September 30, 2026 and 2025:

Results of Operations

The following table summarizes our results of operations for the periods presented:

		For the Three Months Ended September 30,
		2026				2025				Change
Operating Expenses:
Research and development		$	1,307,468			$	715,038			$	592,430
Legal and professional			894,752				276,378				618,374
General and administrative			636,620				902,985				(266,365	)
Stock based compensation			267,565				5,040,246				(4,772,681	)
Advisory fee - principally related parties			2,727,945				-				2,727,945
Total Operating Expenses			5,834,350				6,934,647				(1,100,297	)
Loss From Operations			(5,834,350	)			(6,934,647	)			1,100,297
Other Income (Expense):
Interest and other income			15,412				6,815				8,597
Grant income			95,044				-				95,044
Amortization of debt issuance costs			(167,951	)			(438,111	)			270,160
Interest expense			(97,508	)			(869,815	)			772,307
Other income (expense)			(105,651	)			-				(105,651	)
Change in fair value of derivative liability related to Series A preferred stock			1,654,795				-				1,654,795
Loss on change in fair value of derivative liability related to sales of common stock through equity line of credit			-				(380,162	)			380,162
Net Loss		$	(4,440,209	)		$	(8,615,920	)		$	4,175,711
Deemed dividend - redemption of Series A Convertible Preferred Stock			(2,655,996	)			-				(2,655,996	)
Deemed dividend - down round adjustment of warrants			(177,930	)			-				(177,930	)
Net loss attributable to common stockholders		$	(7,274,135	)		$	(8,615,920	)		$	1,341,785

Revenue

No revenue was generated for fees for a "right to try" humanitarian program during the three months ended September 30, 2026 and 2025.

Research and Development Expenses

The following table summarizes the components of our research and development expenses for the periods presented:

		For the Three Months Ended September 30,
		2026				2025
Research and development costs by project:
NEO100-01		$	458,204			$	163,036
NEO100-02			275,140				125,586
NEO212-01			364,047				343,368
NEO216			293				-
NEO100-03 - Pediatric			126,802				70,653
Laboratory			-				-
Other			82,982				12,395
Total		$	1,307,468			$	715,038

		For the Three Months Ended September 30,
		2026				2025				Change
Clinical trial expense		$	1,224,486			$	702,643			$	521,843
Research and laboratory			82,982				12,395				70,587
Total research and development expense		$	1,307,468			$	715,038			$	592,430

Research and development expenses were $1,307,468 and $715,038 for the three months ended September 30, 2026 and 2025, respectively. A portion of these expenses amounting to approximately $0 and $382 for the three months ended September 30, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr. Chen is a member of the faculty. The total increase of $592,430 was primarily due to:

	●	An increase in clinical trial expense, primarily for the NEO100-01 and NEO100-02 trials and the NEO100-03 pediatric trial, reflecting:
	●	The addition of clinical trial sites for NEO100 and NEO212 clinical trials.

●

The increased drug product manufacturing activity to support ongoing and planned clinical trials.

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The start of the clinical trial for the NEO100-03 clinical trial.

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Increased patient recruitment efforts.

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Data lockdown and analysis activities associated with the NEO100 clinical trial.

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Costs associated with designing the Phase 2a trial for NEO212, including meetings and correspondence with the U.S. Food and Drug Administration ("FDA") regarding the program's clinical development pathway.

Legal and Professional Expenses

Legal and professional expenses were $894,752 and $276,378 for the three months ended September 30, 2026 and 2025, respectively. The increase of $618,374 was primarily attributable to investment banking associated with investment banking advisory fees under the Company's strategic and capital markets advisory engagement, legal fees related to corporate and securities matters, including the Third Addendum to the Company's advisory agreement with AFH and the redemption of the Series A Convertible Preferred Stock, increased intellectual property legal fees, and increased audit fees associated with the Company's expanded reporting requirements as a public company.

General and Administrative Expenses

General and administrative expenses were $636,620 and $902,985 for the three months ended September 30, 2026 and 2025, respectively. The decrease of $266,365 was primarily due to the reversal of previously accrued compensation and lower business development costs during the three months ended September 30, 2026, as well as lower travel expenses compared with the three months ended September 30, 2025, when the Company incurred expenses in pursuit of a strategic partnership in the Middle East. These decreases were partially offset by continued advertising, marketing and investor relations costs.

Stock Based Compensation

Stock-based compensation expense, which is a non-cash expense, was $267,565 and $5,040,246 for the three months ended September 30, 2026 and 2025, respectively. Expense for the three months ended September 30, 2026 resulted from the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods. Stock-based compensation expense for the three months ended September 30, 2025 reflected the amortization of the grant date fair value of shares of restricted stock over their respective service periods following the Listing Date that occurred on March 26, 2025. The decrease of $4,772,681 reflects the vesting in prior periods of awards granted in connection with the Listing. Since stock-based compensation is a non-cash item, it does not affect our cash position or our cash used in operating activities.

Advisory Fee

Advisory fee expense, a related party, was $2,727,945 and $0 for the three months ended September 30, 2026 and 2025, respectively. In September 2026, the Company and AFH entered into a Third Addendum to the Letter of Intent and Advisory Services Agreement, which increased AFH's annual advisory fee from 2.5% to 4.0% of the Company's fully diluted market capitalization as of December 31 of each fiscal year, effective January 1, 2025. Advisory fee expense for the three months ended September 30, 2026 consisted of the resulting increase in the 2025 advisory fee from $4,546,575 to $7,274,520 (see Note 4). As of September 30, 2026, the Company had an outstanding accrued advisory fee - related party balance of $2,727,945 payable to AFH.

Interest and Other Income

Interest and other income was $15,412 and $6,815 for the three months ended September 30, 2026 and 2025, respectively. Interest and other income for the three months ended September 30, 2026 and 2025 related primarily to interest earned on our money market account.

Grant Income

Grant income was $95,044 for the three months ended September 30, 2026. Grant income for the three months ended September 30, 2026 related to the Company's two Small Business Technology Transfer ("STTR") grants from the National Institutes of Health ("NIH"), awarded in August 2025 and September 2025, respectively, pursuant to which the Company's academic research collaborator at USC serves as subcontractor. The Company recognizes grant income for the gross amount of allowable costs incurred, including subcontractor costs incurred by USC (see Note 11). There was no comparable grant income during the three months ended September 30, 2025, as no allowable expenses had been incurred under the grants, which were awarded in August 2025 and September 2025.

Amortization of Debt Issuance Costs

Amortization of debt issuance costs was $167,951 and $438,111 for the three months ended September 30, 2026 and 2025, respectively. Amortization of debt issuance costs in both periods primarily reflected the ongoing amortization of debt issuance costs associated with the warrants issued in connection with the line of credit with HCWG. Amortization for the three months ended September 30, 2025 also included related to the Equity Purchase Agreement with Mast Hill and debt issuance costs associated with the convertible promissory notes.

Interest Expense

Interest expense was $97,508 and $869,815 for the three months ended September 30, 2026 and 2025, respectively. The decrease of $772,307 was primarily due to the repayment in January 2026 of the convertible promissory notes, which eliminated the accretion of the original issue discount. Interest expense for the three months ended September 30, 2026 related primarily to interest accrued on the OEP litigation settlement and of interest accrued on unremitted income tax withholdings on shares of common stock withheld from recipients upon the vesting of restricted stock. Interest expense for the three months ended September 30, 2025 related primarily to the accretion of the original issue discount on the convertible promissory notes and accrued interest for a litigation matter.

Other Income (Expense)

Other expense was $105,651 and $0 for the three months ended September 30, 2026 and 2025, respectively. Other expense for the three months ended September 30, 2026 consisted of penalties accrued in connection with the unremitted income tax withholdings on shares of common stock that were withheld from recipients upon the vesting of shares of restricted stock to satisfy the recipients' tax obligations. As of September 30, 2026, the Company had not remitted such withholding taxes to the applicable taxing authorities, and accordingly the Company has accrued interest recorded in interest expense, and penalties recorded in other expense. The accrued interest and penalties are included within accrued restricted stock tax withholding obligations in the condensed consolidated balance sheets.

Change in fair value of derivative liability related to Series A preferred stock

The change in fair value of the derivative liability related to Series A preferred stock was a gain of $1,654,795 and $0 for the three months ended September 30, 2026 and 2025, respectively. In connection with the issuance of the Company's Series A Convertible Preferred Stock in June 2026, the Company bifurcated an embedded variable-rate conversion feature as a derivative liability, measured at fair value with changes recognized in the condensed consolidated statements of operations. On September 14, 2026, in connection with the redemption of all outstanding shares of Series A Convertible Preferred Stock, the derivative liability was remeasured from $1,654,795 at June 30, 2026 to $0, as the holders' conversion right could no longer arise, and was derecognized (see Note 8). There was no comparable activity during the three months ended September 30, 2025, as the Series A Preferred Stock was not issued until June 2026.

Loss on Change in Fair Value of Derivative Liability - Equity Line of Credit

Loss on change in fair value of derivative liability related to sales of common stock through the equity line of credit was $0 and $380,162 for the three months ended September 30, 2026 and 2025, respectively. The loss for the three months ended September 30, 2025 related to the discount at which Mast Hill Fund, LP purchased shares of common stock under the Equity Purchase Agreement, draws under which commenced in July 2025.

Deemed Dividends

During the three months ended September 30, 2026, net loss attributable to common stockholders included deemed dividends of $2,655,996 on the redemption of the Series A Convertible Preferred Stock, representing the excess of cash paid over the carrying amount of the Series A Convertible Preferred Stock, and $177,930 from the down round adjustment of the exercise price of the warrants issued in the January 2026 PIPE (see Note 8). The deemed dividends are non-cash, have no effect on net loss or total stockholders' equity, and increased net loss per share attributable to common stockholders by $0.11.

Comparison of the nine months ended September 30, 2026 and 2025:

Results of Operations

The following table summarizes our results of operations for the periods presented:

		For the Nine Months Ended September 30,
		2026				2025				Change
Operating Expenses:
Research and development		$	5,243,477			$	2,350,602			$	2,892,875
Legal and professional			3,369,139				1,754,287				1,614,852
General and administrative			2,020,888				2,736,732				(715,844	)
Stock based compensation			8,651,875				25,964,096				(17,312,221	)
Advisory fee - principally related parties			7,674,520				11,737,806				(4,063,286	)
Total Operating Expenses			26,959,899				44,543,523				(17,583,624	)
Loss From Operations			(26,959,899	)			(44,543,523	)			17,583,624
Other Income (Expense):
Interest and other income			20,942				327,377				(306,435	)
Grant income			624,945				-				624,945
Amortization of debt issuance costs			(528,067	)			(798,311	)			270,244
Interest expense			(1,314,502	)			(1,227,487	)			(87,015	)
Other income (expense)			(939,879	)			-				(939,879	)
Change in fair value of derivative liability related to Series A preferred stock			1,593,474				-				1,593,474
Gain (loss) on change in fair value of derivative liability related to sales of common stock through equity line of credit			2,801				(380,162	)			382,963
Net Loss		$	(27,500,185	)		$	(46,622,106	)		$	19,121,921
Deemed dividend - redemption of Series A Convertible Preferred Stock			(2,655,996	)			-				(2,655,996	)
Deemed dividend - down round adjustment of warrants			(177,930	)			-				(177,930	)
Net loss attributable to common stockholders		$	(30,334,111	)		$	(46,622,106	)		$	16,287,995

Revenue

No revenue was generated for fees for a "right to try" humanitarian program during the nine months ended September 30, 2026 and September 30, 2025.

Research and Development Expenses

The following table summarizes the components of our research and development expenses for the periods presented:

		For the Nine Months Ended September 30,
		2026				2025
Research and development costs by project:
NEO100-01		$	2,339,227			$	811,674
NEO100-02			684,478				327,373
NEO212-01			1,225,381				798,997
NEO216			75,629				-
NEO100-03 - Pediatric			293,811				169,663
Laboratory			470,930				192,377
Other			154,021				50,518
Total		$	5,243,477			$	2,350,602

		For the Nine Months Ended September 30,
		2026				2025				Change
Clinical trial expense		$	4,618,526			$	2,107,707			$	2,510,819
Research and laboratory			624,951				242,895				382,056
Total research and development expense		$	5,243,477			$	2,350,602			$	2,892,875

Research and development expenses were $5,243,477 and $2,350,602 for the nine months ended September 30, 2026 and 2025, respectively. A portion of these expenses amounting to approximately $0 and $164,449 for the nine months ended September 30, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr. Chen is a member of the faculty. The total increase of $2,892,875 was primarily due to higher clinical trial expense, principally for the NEO100-01 trial and, to a lesser extent, the NEO212-01, NEO100-02 and NEO100-03 pediatric trials, reflecting:

●

The addition of clinical trial sites for NEO100 and NEO212 clinical trials.

	●	The increased drug product manufacturing activity to support ongoing and planned clinical trials.
	●	The recruitment for NEO212.

●

The start of the clinical trial for the NEO100-03 pediatric trial.

●

Increased patient recruitment efforts.

●

Data lockdown and analysis activities associated with the NEO100-01 clinical trial.

●

Costs associated with designing the Phase 2a trial for NEO212, including meetings and correspondence with the U.S. Food and Drug Administration ("FDA") regarding the program's clinical development pathway.

Research and laboratory expense was substantially unchanged, as the reversal of previously accrued laboratory fees payable to USC during the three months ended September 30, 2026 offset higher research costs, including subcontractor costs incurred by USC under the NIH grants.

Legal and Professional Expenses

Legal and professional expenses were $3,369,139 and $1,754,287 for the nine months ended September 30, 2026 and 2025, respectively. The increase of $1,614,852 was primarily attributable to investment banking advisory fees under the Company's strategic and capital markets advisory engagement. Additionally, the increase reflected incremental legal fees associated with the preparation and filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, its Registration Statement on Form S-3 and related prospectus supplement, the Second and Third Addenda to the Company's advisory agreement with AFH Holding & Advisory, LLC, the Series A Convertible Preferred Stock issuance and redemption, and other corporate and securities matters, as well as increased audit fees associated with the Company's expanded reporting requirements as a public company. These increases were partially offset by costs incurred in 2025 in connection with the Listing.

General and Administrative Expenses

General and administrative expenses were $2,020,888 and $2,736,732 for the nine months ended September 30, 2026 and 2025, respectively. The decrease of $715,844 was primarily due to a reduction in advertising and marketing expense in connection with the Company's direct public listing, a reduction in D&O insurance premiums, and a reduction in rent, travel, and other costs incurred during the nine months ended September 30, 2025 in connection with a marketing campaign and in pursuit of a strategic partnership in the Middle East, as well as the reversal of previously accrued compensation and credits to general business and insurance expenses during the nine months ended September 30, 2026. This decrease was partially offset by an increase in business development and travel costs during the nine months ended September 30, 2026.

Stock Based Compensation

Stock-based compensation expense, which is a non-cash expense, was $8,651,875 and $25,964,096 for the nine months ended September 30, 2026 and 2025, respectively. Expense for the nine months ended September 30, 2026 primarily resulted from the acceleration of vesting of certain outstanding restricted stock awards approved by the Board of Directors in April 2026, which resulted in the recognition of previously unrecognized compensation expense associated with those awards, in addition to the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods for awards not subject to the acceleration. Stock-based compensation expense for the nine months ended September 30, 2025 included the recognition of expense from the original grant dates of certain restricted stock through the Listing Date that occurred on March 26, 2025, reflecting a cumulative catch-up upon removal of the listing contingency, in addition to amortization of the grant date fair value of those shares of restricted stock over their respective service periods following the Listing Date. Since stock-based compensation is a non-cash item, it does not affect our cash position or our cash used in operating activities.

Advisory Fee

Advisory fee expense, primarily to a related party, was $7,674,520 and $11,737,806 for the nine months ended September 30, 2026 and 2025, respectively. Advisory fee expense for the nine months ended September 30, 2026 consisted primarily of the annual advisory fee to AFH (see Note 4). On June 11, 2026, the Company and AFH entered into a Second Addendum to the Letter of Intent and Advisory Services Agreement, which amends and clarifies the methodology for determining AFH's annual advisory fee. Under the Second Addendum, effective retroactively to January 1, 2025, AFH is entitled to an annual advisory fee equal to 2.5% of the Company's fully diluted market capitalization as of December 31 of each fiscal year. On September 16, 2026, the Company and AFH entered into a Third Addendum, which increased the annual advisory fee to 4.0% of the Company's fully diluted market capitalization, effective January 1, 2025, resulting in a 2025 advisory fee of $7,274,520. As of September 30, 2026, the Company had an outstanding accrued advisory fee - related party balance of $2,727,945 payable to AFH for the unpaid portion of the 2025 advisory fee. Advisory fee expense for the nine months ended September 30, 2025 was substantially comprised of the $11,328,565 fee earned upon the Listing Date on March 26, 2025 in accordance with the AFH advisory agreement then in effect.

Interest and Other Income

Interest and other income was $20,942 and $327,377 for the nine months ended September 30, 2026 and 2025, respectively. Interest and other income for the nine months ended September 30, 2026 and 2025 related primarily to interest earned in our money market account.

Grant Income

Grant income was $624,945 for the nine months ended September 30, 2026. Grant income for the nine months ended September 30, 2026 related to the Company's two Small Business Technology Transfer ("STTR") grants from the National Institutes of Health ("NIH"), awarded in August 2025 and September 2025, respectively, pursuant to which the Company's academic research collaborator at USC serves as subcontractor. The Company recognizes grant income for the gross amount of allowable costs incurred, including subcontractor costs incurred by USC (see Note 11). There was no comparable grant income during the nine months ended September 30, 2025, as no allowable expenses had been incurred under the grants, which were awarded in August 2025 and September 2025.

Amortization of Debt Issuance Costs

Amortization of debt issuance costs was $528,067 and $798,311 for the nine months ended September 30, 2026 and 2025, respectively. Amortization of debt issuance costs in both periods primarily reflected the ongoing amortization of debt issuance costs associated with the warrants issued in connection with the line of credit with HCWG. Amortization for the nine months ended September 30, 2025 also included the amortization of deferred offering costs related to the Equity Purchase Agreement with Mast Hill and debt issuance costs associated with the convertible promissory notes.

Interest Expense

Interest expense was $1,314,502 and $1,227,487 for the nine months ended September 30, 2026 and 2025, respectively. The increase of $87,015 was primarily related to the accretion of the original issue discount on the short-term OID loan through its repayment in January 2026 (see Note 6), interest accrued on the Company's unremitted restricted stock tax withholding obligations, and accrued interest on litigation settlements. Interest expense for the nine months ended September 30, 2025 related primarily to the $300,000 original issue discount on the short-term related party loan, the accretion of the original issue discount on the convertible promissory notes, and accrued interest for a litigation matter.

Other Income (Expense)

Other expense was $939,879 and $0 for the nine months ended September 30, 2026 and 2025, respectively. Other expense for the nine months ended September 30, 2026 consisted of penalties accrued in connection with the unremitted income tax withholdings on shares of common stock that were withheld from recipients upon the vesting of restricted stock to satisfy the recipients' tax obligations. As of September 30, 2026, the Company had not remitted such withholding taxes to the applicable taxing authorities, and accordingly the Company has accrued interest recorded in interest expense, and penalties recorded in other income (expense). The accrued interest and penalties are included within accrued restricted stock tax withholding obligations in the condensed consolidated balance sheets.

Change in fair value of derivative liability related to Series A preferred stock

The change in fair value of the derivative liability related to Series A preferred stock was a gain of $1,593,474 and $0 for the nine months ended September 30, 2026 and 2025, respectively. In connection with the issuance of the Company's Series A Convertible Preferred Stock in June 2026, the Company bifurcated an embedded variable-rate conversion feature as a derivative liability, measured at fair value with changes recognized in the condensed consolidated statements of operations. The derivative liability was recognized at its issuance-date fair value and, on September 14, 2026, in connection with the redemption of all outstanding shares of Series A Convertible Preferred Stock, was remeasured to $0, as the holders' conversion right could no longer arise, and derecognized (see Note 8). There was no comparable activity during the nine months ended September 30, 2025, as the Series A Preferred Stock was not issued until June 2026.

Gain (Loss) on Change in Fair Value of Derivative Liability

Gain (loss) on change in fair value of derivative liability was a gain of $2,801 and a loss of $380,162 for the nine months ended September 30, 2026 and 2025, respectively. The derivative liability is created from the settlement feature embedded in the Company's equity line of credit agreement with Mast Hill Fund, LP. Under the agreement, shares of common stock are purchased at a discount due to the five-day settlement period between the commitment date and the issuance date. This discount feature creates a variable settlement mechanism that is required to be accounted for as a derivative liability. The gain (loss) represents the change in fair value of this derivative liability from each draw under the agreement through the corresponding settlement date. The gain for the nine months ended September 30, 2026 related to draws under the Equity Purchase Agreement during the three months ended March 31, 2026. The loss for the nine months ended September 30, 2025 related to draws under the Equity Purchase Agreement in July 2025 and September 2025.

Deemed Dividends

Net loss attributable to common stockholders for the nine months ended September 30, 2026 included deemed dividends of $2,655,996 on the redemption of the Series A Convertible Preferred Stock and $177,930 from the down round adjustment of the exercise price of the warrants issued in the January 2026 PIPE (see Note 8). The deemed dividends are non-cash and have no effect on net loss or total stockholders' equity.

Cash Flows

The following table summarizes our cash flow for the periods indicated:

		For the Nine Months Ended September 30,
		2026				2025				Change
Net cash provided by (used in):
Operating activities		$	(16,846,814	)		$	(16,772,776	)		$	(74,038	)
Financing activities			22,954,427				18,221,108				4,733,319
Net increase in cash and cash equivalents		$	6,107,613			$	1,448,332			$	4,659,281

Operating Activities

During the nine months ended September 30, 2026, net cash used in operating activities was $16,846,814, consisting primarily of our net loss of $27,500,185, offset by stock-based compensation of $8,651,875, accretion of original issue discount on the convertible promissory notes of $714,601, amortization of debt issuance costs of $528,067, amortization of right of use asset of $57,753, amortization of intangible asset of $25,463, transaction costs expensed on the issuance of Series A Convertible Preferred Stock of $127,478, an increase in accrued expense of $1,886,044, an increase in accounts payable of $1,190,168, and an increase in accrued advisory fee of $970,804. These were offset by a gain on change in fair value of derivative liability related to Series A Convertible Preferred Stock of $1,593,474, decreases in accounts payable and accrued expenses - related parties of $608,437, accrued compensation of $255,108 and lease liability of $51,599, an increase in prepaid expenses and other of $828,334, an increase in deferred offering costs of $161,930, and a gain on change in fair value of derivative liability related to the equity line of credit of $2,801.

During the nine months ended September 30, 2025, net cash used in operating activities was $16,772,776, consisting primarily of our net loss of $46,622,106, offset by stock-based compensation of $25,964,096, accretion of original issue discount on the bridge loan - related party of $300,000, accretion of original issue discount on the convertible promissory notes of $820,794, amortization of debt issuance costs of $1,161,311, amortization of right of use asset of $36,461, loss on change in fair value of derivative liability of $380,162, and an increase in accrued advisory fee of $3,675,569. These were offset by a decrease in accounts payable and accrued expenses of $1,657,722, an increase in prepaid expenses and other of $267,160, an increase in other assets of $47,177, a decrease in accrued compensation of $479,775, and a decrease in lease liability of $37,229.

Financing Activities

During the nine months ended September 30, 2026, cash provided by financing activities was $22,954,427, consisting primarily of proceeds from the issuance of common stock and warrants in connection with our PIPE financing of $15,071,783, net proceeds from the Registered Direct Offering of $13,874,916, proceeds from the issuance of Series A Convertible Preferred Stock of $5,000,000, net proceeds from sales of common stock under the ATM Agreement of $1,200,668, and proceeds from sales of common stock under the equity purchase agreement of $663,727, offset by the repayment of the OID loan of $6,666,667, the redemption of the Series A Convertible Preferred Stock for $5,790,000 and payment of issuance costs related to the Series A Convertible Preferred Stock of $400,000.

During the nine months ended September 30, 2025, cash provided by financing activities was $18,221,108 consisting primarily of proceeds from the sale of common stock of $11,324,372, proceeds from the issuance of convertible promissory notes of $4,000,000, proceeds from sales of common stock under the equity purchase agreement of $3,196,736, and proceeds from related party loans of $300,000, offset by repayment of related party loans of $600,000.

Liquidity and Capital Resources

Sources of Liquidity/Going Concern

Since our inception, we have funded our operations through the sale and issuance of common stock and debt financings from related and third parties. Our historical sources of liquidity, including the issuances of common stock under our private placements, sales under the Equity Purchase Agreement with Mast Hill Fund, LP, the line of credit with HCWG, and our convertible debt financings, are described in the "Liquidity and Capital Resources" section of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these arrangements during the nine months ended September 30, 2026 except as described below.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Since our inception, we have not generated any revenue from product sales or any other sources, except humanitarian use, and we have incurred significant operating losses. We have not yet commercialized any products, and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. As reflected in the accompanying condensed consolidated financial statements, we have incurred recurring net losses since our inception. For the nine months ended September 30, 2026, we incurred a net loss of $27,500,185, and we had an accumulated deficit of $140,254,840 at September 30, 2026. At September 30, 2026, we had cash and cash equivalents totaling $6,166,342. These factors raise substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our strategies. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

In January 2026, the Company entered into the first of a series of related Securities Purchase Agreements providing for the issuance, in one or more closings, of up to an aggregate of 2,222,222 shares of common stock and warrants to purchase up to 2,222,222 shares of common stock at an exercise price of $9.00 per share, for aggregate gross proceeds of up to approximately $16,000,000. During the nine months ended September 30, 2026, we completed closings under four Securities Purchase Agreements for an aggregate of 2,093,305 shares of common stock and warrants to purchase 2,093,305 shares of common stock, resulting in gross proceeds of $15,071,783. The offering of securities under the PIPE Financing terminated on April 30, 2026. During the three months ended September 30, 2026, sales of common stock under the ATM Agreement and the Registered Direct Offering triggered the down-round provision in these warrants, reducing their exercise price to $8.01 per share (see Note 8).

In June 2026, the Company entered into a Securities Purchase Agreement providing for the issuance of shares of Series A Convertible Preferred Stock for aggregate gross proceeds of $5,000,000. During the nine months ended September 30, 2026, the Company completed the closing under the Securities Purchase Agreement, resulting in gross proceeds of $5,000,000 and net proceeds of approximately $4,600,000, after deducting issuance costs of $400,000. On September 14, 2026, the Company redeemed all outstanding shares of Series A Convertible Preferred Stock for $5,790,000 in cash. See Note 8 to the condensed consolidated financial statements for additional information regarding the terms of the Series A Convertible Preferred Stock.

On September 10, 2026, the Company closed a registered direct offering of 2,610,715 shares of common stock, pre-funded warrants to purchase up to 960,715 shares of common stock and warrants to purchase up to 3,571,430 shares of common stock at an exercise price of $4.20 per share, at a combined offering price of $4.20 per share and accompanying warrant, resulting in gross proceeds of approximately $15.0 million and net proceeds of approximately $13.9 million after deducting placement agent fees and other offering costs (see Note 8).

While the proceeds from the PIPE Financing, the Registered Direct Offering, and sales under the ATM Agreement have provided additional liquidity during the nine months ended September 30, 2026, management does not believe these proceeds, together with the Company's other available resources, are sufficient to fund operations for at least twelve months from the date of issuance of these financial statements, and substantial doubt about the Company's ability to continue as a going concern therefore remains, as discussed above.

The ability to continue as a going concern is dependent on us raising additional capital and attaining and maintaining profitable operations in the future to meet our obligations and repay our liabilities arising from normal business operations when they come due. Since inception, we have funded our operations primarily through equity and debt financings and we expect to continue to rely on these sources of capital in the future. We have the following financing facilities available to us:

●

On October 11, 2024, the Company entered into a Line of Credit Agreement ("the Agreement") with HCWG for borrowings of up to $10.0 million. No amounts have been borrowed under the facility through September 30, 2026.

●

On April 2, 2026, the Company filed a shelf registration statement on Form S-3, pursuant to which the Company may offer and sell up to $300,000,000 of common stock, preferred stock, debt securities, warrants, and units, from time to time. In connection with the Shelf Registration Statement, the Company entered into an At-the-Market Equity Offering Sales Agreement (the "ATM Agreement") with BTIG, LLC and A.G.P/Alliance Global Partners, as sales agents, pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to $75,000,000, subject to any applicable limits when using Form S-3. During the nine months ended September 30, 2026, the Company sold 258,300 shares of common stock under the ATM Agreement for gross proceeds of $1,238,257 and net proceeds of $1,200,668, and $73,761,743 remained available under the ATM Agreement as of September 30, 2026. The Registered Direct Offering was also completed under the shelf registration statement.

No assurance can be given that we will be able to draw upon such facilities if needed. Further, 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 us. Even if we are 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 the case of equity financing, or grant unfavorable terms in licensing agreements.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue our research and development, initiate and conduct preclinical studies and clinical trials, and seek marketing approval for our current and any of our future product candidates. In addition, if we obtain marketing approval for any of our current or our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We intend to finance our operations over the next 12 months primarily through existing cash balances and the proceeds from the funds available through our Line of Credit Agreement with HCWG and sales under the ATM Agreement, each as described above. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our future capital requirements will depend on a number of factors, including:

●

the costs of conducting preclinical studies and clinical trials;

●

the costs of manufacturing;

●

the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;

●

the costs, timing, and outcome of regulatory review of our product candidates;

●

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

●

the achievement of milestones or the occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

●

the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

●

the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

●

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

●

our headcount growth and associated costs as we expand our business operations and research and development activities; and

●

the costs of operating as a public company.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect your rights as a common stockholder. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise funds through potential collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Critical Accounting Estimates

Stock-Based Compensation

We account for stock-based compensation, including restricted stock, in accordance with ASC 718 (Accounting Standards Codification Topic 718, Compensation-Stock Compensation). Shares of restricted stock are measured at fair value on the grant date based on our common stock price and expensed over the vesting period. For awards with performance or market conditions, expense is recognized based on the probability of achievement and may be accelerated. We account for forfeitures as they occur. Changes in stock price, or performance assumptions can materially affect stock-based compensation expenses. Management reviews these assumptions quarterly and updates estimates as necessary. We consider the accounting for restricted stock a critical estimate due to the judgment involved and its material impact on our financial results.

Common Stock Purchase Warrants

We consider the valuation of our common stock purchase warrants a critical accounting estimate. The fair value of the warrants issued in the January 2026 PIPE was determined using a Monte Carlo Simulation model, and the fair value of the RD Warrants was determined using a binomial lattice model and the Black-Scholes model. These models require significant judgment in the selection of key inputs, including expected volatility, expected term, risk-free interest rate, and the fair value of our common stock. Expected volatility is estimated based on the historical volatility of a peer group of guideline public companies, given our limited trading history as a public company. The expected term reflects, among other factors, our assumptions regarding the likelihood and timing of liquidity events. For warrants with down-round protective provisions, additional judgment is required in modeling the timing, probability, and pricing of assumed future financing events that could trigger an adjustment to the warrant exercise price and, when the provision is triggered, in measuring the value of the effect of the adjustment, which is recognized as a deemed dividend. Changes in these assumptions, particularly expected volatility, expected term, and stock price, can materially affect the estimated fair value of our warrants and the allocation of offering proceeds among the securities issued, as well as net loss attributable to common stockholders when a down-round adjustment occurs. Our warrants are classified in equity and are not remeasured after issuance.

Series A Convertible Preferred Stock

We consider the accounting for our Series A Convertible Preferred Stock a critical accounting estimate. Management exercised significant judgment in determining that the Series A Convertible Preferred Stock should be classified as permanent equity under ASC 480, and that the embedded variable-rate conversion feature should be bifurcated and separately accounted for as a derivative liability under ASC 815. The derivative liability was initially recorded at fair value, with subsequent changes in fair value recognized in the condensed consolidated statements of operations until the redemption of the Series A Convertible Preferred Stock on September 14, 2026, when it was remeasured to $0 and derecognized. The fair value of the derivative liability was estimated using a Monte Carlo Simulation model, which required significant judgment in the selection of key inputs, including expected volatility, risk-free interest rate, the probability and timing of conversion events, and the fair value of our common stock. Expected volatility was estimated based on the historical volatility of a peer group of guideline public companies, given our limited trading history as a public company. The redemption resulted in a deemed dividend equal to the excess of the cash paid over the carrying amount of the Series A Convertible Preferred Stock. As no shares of Series A Convertible Preferred Stock remained outstanding at September 30, 2026, these estimates will not affect future periods.

Registered Direct Offering Warrants

We consider the accounting for the Registered Direct Warrants and Pre-Funded Warrants issued in the Registered Direct Offering a critical accounting estimate. Management exercised significant judgment in concluding the Registered Direct Warrants are indexed to our own stock and classified in equity under ASC 815-40, including in evaluating the provisions governing settlement upon a fundamental transaction, under which holders may receive consideration based on the Black-Scholes value of the unexercised Registered Direct Warrants. A conclusion that the Registered Direct Warrants require liability classification would result in their remeasurement to fair value at each reporting date, with changes recognized in our results of operations. The net proceeds of the Registered Direct Offering were allocated between the common stock and the Pre-Funded Warrants and RD Warrants on a relative fair value basis. The fair value of the RD Warrants was determined using a binomial lattice model and the Black-Scholes model, which require significant judgment in the selection of key inputs, including expected volatility, risk-free interest rate, the fair value of our common stock and the likelihood of a fundamental transaction during the term of the warrants. Changes in these assumptions would affect the allocation of proceeds among the securities issued within additional paid-in capital but would not affect our results of operations, as the warrants are classified in equity and are not remeasured after issuance.