Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations includes the following sections:
Overview that discusses our business.
Results of Operations that includes a discussion of our revenue and expenses.
Liquidity and Capital Resources that discusses key aspects of our statements of cash flows, changes in our financial position and our financial commitments.
Overview
Plus Therapeutics is a U.S. healthcare company developing and commercializing precision diagnostics and targeted radiopharmaceuticals for central nervous system (“CNS”) cancers. CNSide Diagnostics, LLC (“CNSide Diagnostics”) is our wholly owned subsidiary that develops and commercializes proprietary laboratory-developed tests, such as CNSide®, designed to identify tumor cells that have metastasized to the central nervous system in patients with carcinomas and melanomas. In radiopharmaceuticals, our lead candidate, rhenium ( 186 Re) obisbemeda, is designed specifically for CNS cancers including recurrent glioblastoma (“GBM”), leptomeningeal metastases (“LM”), and pediatric brain cancers (“PBC”) by direct localized delivery utilizing approved standard-of-care tissue access such as with convection-enhanced delivery (“CED”) and intraventricular brain (Ommaya reservoir) catheters. Our acquired radiotherapeutic candidate, Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere (“ 188 RNL-BAM”) is designed to treat many solid organ cancers including primary and secondary liver cancers by intra-arterial injection.
Traditional approaches to radiation therapy for cancer, such as external beam radiation, have many disadvantages including continuous treatment for four to six weeks (which is onerous for patients), that the radiation damages healthy cells and tissue, and that the amount of radiation delivered is very limited and, therefore, is frequently inadequate to fully destroy the cancer.
Our novel radioactive drug formulations, medical devices and therapeutic candidates have the potential to overcome these disadvantages as they are designed to deliver safe and effective doses of radiation at the tumors—potentially in a single treatment. To achieve this, we have developed innovative approaches to drug formulation, including encapsulating radionuclides such as rhenium isotopes with nanoliposomes and microspheres. Our formulations are intended to achieve elevated patient-absorbed radiation doses and extend retention times such that the clearance of the isotope occurs after significant and essentially complete radiation decay, which will contribute and provide less normal tissue/organ exposure and improved safety margins.
By minimizing radiation exposure to healthy tissues while simultaneously maximizing locoregional delivery and, thereby, efficacy, we hope to reduce the radiation toxicity for patients, improving their quality of life and life expectancy. Our radiotherapeutic platform, combined with advances in neurosurgery, nuclear medicine, interventional radiology, neuro-oncology, and radiation oncology, affords us the opportunity to target a broad variety of cancer types.
The CNSide Cerebrospinal Fluid Assay is currently being utilized in the ReSPECT-LM clinical trial funded by the Cancer Prevention and Research Institute of Texas (“CPRIT”). In connection with our business plan for developing the CNSide Platform, we formed CNSide Diagnostics and our board of directors appointed a board of managers for CNSide Diagnostics. We re-introduced the CNSide Cerebrospinal Fluid Tumor Cell Enumeration test (the “CNSide Test”), which is a laboratory developed test (“LDT”) in August 2025. The laboratory for the CNSide Test in Houston, Texas has received a certificate of accreditation from the Centers for Medicare & Medicaid Services (CMS) which deems the lab compliant with Clinical Laboratory Improvement Amendments (“CLIA”) regulations. Furthermore, CNSide Diagnostics has signed national agreements to provide the CNSide Test with UnitedHealthcare Insurance Company and Humana, Inc. effective September 15 and October 29, 2025, respectively. These agreements expand access to more than 67 million covered lives across the United States.
Our headquarters is located in Houston, Texas, in proximity to world-class cancer institutions and researchers.
Pipeline
Our most advanced investigational drug, rhenium ( 186 Re) obisbemeda, is a patented radiotherapy potentially useful for patients with CNS and other cancers. Preclinical study data describing the use of rhenium ( 186 Re) obisbemeda for several cancer targets have been published in peer-reviewed journals and reported at a variety of medical society peer-reviewed meetings. Besides GBM, LM and PBC, rhenium ( 186 Re) obisbemeda has been reported to have potential applications for head and neck cancer, ovarian cancer, breast cancer and peritoneal metastases.
The rhenium ( 186 Re) obisbemeda technology was part of a licensed radiotherapeutic portfolio that we acquired from NanoTx, Corp. (“NanoTx”) on May 7, 2020. The licensed radiotherapeutic has been evaluated in preclinical studies for several cancer targets and we have an active $3.0 million award from U.S. National Institutes of Health/National Cancer Institute which is expected to provide financial support for the continued clinical development of rhenium ( 186 Re) obisbemeda for recurrent GBM through the completion of a Phase 2 clinical trial, including enrollment of up to 55 patients.
Table of Contents
Rhenium ( 186 Re) obisbemeda versus External Beam Radiation Therapy for Recurrent GBM
Rhenium ( 186 Re) obisbemeda is a novel injectable radiotherapy designed to deliver targeted, high dose radiation directly into GBM tumors in a safe, effective, and convenient manner that may ultimately prolong patient survival. Rhenium ( 186 Re) obisbemeda is composed of the radionuclide Rhenium-186 and a nanoliposomal carrier, and is infused in a highly targeted, controlled fashion, directly into the tumor via precision brain mapping and CED catheters. Potential benefits of rhenium ( 186 Re) obisbemeda compared to standard external beam radiotherapy or external beam radiation therapy (“EBRT”) include:
The rhenium ( 186 Re) obisbemeda radiation dose delivered to patients may be up to 20 times greater than what is possible with commonly used EBRT, which, unlike EBRT and proton beam devices, spares normal tissue and the brain from radiation exposure.
Rhenium ( 186 Re) obisbemeda can be visualized in real-time during administration, possibly giving clinicians better control of radiation dosing, distribution and retention.
Rhenium ( 186 Re) obisbemeda potentially more effectively treats a bulk tumor and microscopic disease that has already invaded healthy tissue.
Rhenium ( 186 Re) obisbemeda is infused directly into the targeted tumor by CED catheter insertion using MRI guided software to avoid critical patient neurological structures and neural pathways and also bypasses the blood brain barrier, which delivers the therapeutic product where it is needed. Importantly, it reduces radiation exposure to healthy cells, in contrast to EBRT, which passes through normal tissue to reach the tumor, continuing its path through the tumor, hence being less targeted and selective.
Rhenium ( 186 Re) obisbemeda is given during a single, short, in-patient hospital visit, and is available in all hospitals with nuclear medicine and neurosurgery, while EBRT requires out-patient visits five days a week for approximately four to six weeks.
ReSPECT-GBM Trial for Recurrent GBM
GBM affects approximately 15,000 patients annually in the U.S. and is the most common and lethal form of brain cancer. The average life expectancy with GBM is less than 24 months, with a one-year survival rate of 40% and a five-year survival rate of around 5%. There is no clear standard of care for recurrent GBM and the few currently approved treatments provide only marginal survival benefit and are associated with significant side effects, which limit dosing and prolonged use. Approximately 90% of patients experience GBM tumor recurrence at or near the original tumor location, yet there are no FDA-approved treatments in the recurrent or progressive setting that can significantly extend a patient’s life. GBM routinely presents with headaches, seizures, vision changes and other significant neurological complications, with a significant compromise in quality of life. Despite the best available medical treatments, the disease remains incurable. Even after efforts to manage the presenting signs and symptoms and completely resect the initial brain tumor, some microscopic disease almost always remains, and tumor regrowth occurs within months. Complete surgical removal of GBM is usually not possible and GBM is often resistant or quickly develops resistance to most available current and investigational therapies. Today, the treatment of GBM remains a significant and it has been nearly a decade since the FDA approved a new therapy for this disease, and these more recent approvals have not the overall survival (“OS”) for GBM patients over past decades, and a significant unmet medical need .
While EBRT has been shown to be safe and has temporary efficacy in many malignancies including GBM, typically at absorbed, fractionated radiation dose of ~30 Gray in GBM, this maximum possible administered dose is always limited by toxicity to the normal tissues surrounding the malignancy and because EBRT requires fractionation to manage toxicity and maximum EBRT limits are typically reached before long-term efficacy reached. Because of this limitation, EBRT cannot provide a cure or long-term control of GBM and GBM always recurs within months after EBRT. In contrast, locally delivered and targeted radiopharmaceuticals that precisely deliver radiation in the form of beta particles such as Iodine-131 for thyroid cancer, are known to be safe and effective and minimize exposure to normal cells and tissues especially with optimal administered dose and minimizing exposure to normal tissue. The locally delivered rhenium ( 186 Re) obisbemeda is designed for and provides patient tolerability and safety. Though no rhenium ( 186 Re) obisbemeda head-to-head trial with chemo, immune, EBRT or systemic radiopharmaceutical products have been conducted, patient tolerability and safety considerations have been reported as expected.
In September 2020, the FDA granted both orphan drug designation and Fast Track designations to rhenium ( 186 Re) obisbemeda for the treatment of patients with GBM.
Rhenium ( 186 Re) obisbemeda is under clinical investigation in a Phase 1/2 multicenter, sequential cohort, open-label, volume and dose escalation study (“ReSPECT-GBM”) of the safety, tolerability, and distribution of rhenium ( 186 Re) obisbemeda given by CED catheters to patients with recurrent or progressive malignant glioma after standard surgical, radiation, and/or chemotherapy treatment. The trial is funded through Phase 2 in large part by a National Institute of Health/National Cancer Institute grant.
We completed Phase 1 of our ReSPECT-GBM Trial and are targeting full enrollment into Phase 2 by the end of 2026.
ReSPECT-LM Clinical Trials for LM
Table of Contents
LM is a rare complication of cancer in which the disease spreads to the membranes (meninges) surrounding the brain and spinal cord. The incidence of LM is growing and occurs in approximately 5%, or more, of people with late-stage cancer, or 110,000 people in the U.S. each year. It is highly lethal with an average one-year survival of just 7%. All solid cancers, particularly breast, lung, GI, and melanoma, have the potential to spread to the leptomeninges.
The ReSPECT-LM Phase 1 clinical trial (ClinicalTrials.gov NCT05034497) was preceded with preclinical studies in which tolerance to doses of rhenium ( 186 Re) obisbemeda as high as 1,075 Gy were shown in animal models with LM without significant observed toxicity. Furthermore, treatment led to a marked reduction in tumor burden in both C6 and MDA-231 LM models.
Upon receiving acceptance of our Investigational New Drug application and Fast Track designation by the FDA for rhenium ( 186 Re) obisbemeda for the treatment of LM in November 2021, we initiated the trial and began screening patients for the ReSPECT-LM Phase 1 clinical trial in the fourth quarter of 2021.
ReSPECT-LM is a multi-center, sequential cohort, open-label, dose escalation study evaluating the safety, tolerability, and efficacy of a single-dose application of rhenium ( 186 Re) obisbemeda administered through intrathecal infusion to the ventricle of patients with LM after standard surgical, radiation, and/or chemotherapy treatment. The primary endpoint of the study is the incidence and severity of adverse events and dose limiting toxicities, together with determining the maximum tolerated and recommended Phase 2 dose. Full enrollment in the Phase 1 trial was achieved at the end of 2024, and we announced the trial completion on February 26, 2025. Trial closeout procedures are now taking place including final data review and monitoring, and a clinical study report and manuscript will be prepared.
On September 19, 2022, we entered into a Cancer Research Grant Contract (the “CPRIT Contract”), effective as of August 31, 2022, with CPRIT, pursuant to which CPRIT provides us a grant of up to $17.6 million (the “CPRIT Grant”) over a three-year period to fund the continued development of rhenium ( 186 Re) obisbemeda for the treatment of patients with LM through Phase 2 of the ReSPECT-LM clinical trial. The CPRIT Grant is subject to customary CPRIT funding conditions, including, but not limited to, a matching fund requirement (one dollar from us for every two dollars awarded by CPRIT), revenue sharing obligations upon commercialization of rhenium ( 186 Re) obisbemeda based on specific dollar thresholds until CPRIT receives the aggregate amount of 400% of the proceeds awarded under the CPRIT Grant, and certain reporting requirements. As of December 31, 2025, we had received approximately $15.9 million in milestone payments under the CPRIT Contract.
Interim results showed that a single treatment with rhenium ( 186 Re) obisbemeda resulted in a consistent decreased cerebrospinal fluid (“CSF”) tumor cell count/ml and was tolerated by all LM patients. Rhenium ( 186 Re) obisbemeda is an outpatient administration and treatment and is easily and safely administered through a standard intraventricular catheter (Ommaya Reservoir), distributed promptly throughout the CSF, and with durable retention in the leptomeninges at least through day seven. All patients have shown well tolerated prompt and durable rhenium ( 186 Re) obisbemeda distribution throughout the subarachnoid space.
In November 2023, the FDA granted orphan drug designation to rhenium ( 186 Re) obisbemeda for the treatment of patients with breast cancer with LM.
On December 12, 2023, we announced our partnership with K2bio to implement the CNSide Test.
On February 26, 2025, we announced the completion of the ReSPECT-LM Phase 1 single-dose escalation trial, having determined a recommended Phase 2 dose. Enrollment in Cohort 6 was completed (75.0 mCi). The Cohort 4 dose (44.1 mCi) was determined to be the recommended Phase 2 dose with no dose-limiting toxicities observed at that dose level. One patient at the Cohort 4 dose was observed to have achieved a complete response, as evidenced by the eradication of tumor cells in the cerebrospinal fluid—a key therapeutic endpoint.
In March 2025, the FDA granted orphan drug designation to rhenium ( 186 Re) obisbemeda for the treatment of LM in patients with lung cancer.
In November 2025, we had our end of phase 1 meeting with the FDA. During this meeting, FDA conveyed that while accelerated approval may be appropriate for this indication, there are insufficient data to support the use of CTCs as an intermediate clinical endpoint, and there was discussion that additional steps would be necessary to validate CTCs as a surrogate endpoint to potentially support other future applications. The FDA recommended that the study evaluate an endpoint with established clinical benefit, such as overall survival, while encouraging further study of reported outcomes and neurologic function as endpoints that could potentially support a marketing application. We were aligned that CTCs could be considered for use as a secondary endpoint. We discussed with the FDA a randomized controlled trial design approach and that the study may include an itrathecal chemotherapeutic as a comparator, as well as approaches to standardize the comparator and any additional interventions available under the trial protocol. The FDA conveyed it may be reasonable to incorporate multiple histologies (i.e., multiple underlying disease etiologies) in a single trial. We plan to consider the Agency’s feedback and propose an updated protocol for our next study for FDA’s feedback.
In December 2025, we reported completion of the ReSPECT-LM single dose trial showed rhenium ( 186 Re) obisbemeda was well-tolerated up to a maximum tolerated dose of 66mCi, with a recommended phase 2 dose of 44.1 mCi, and absorbed doses delivered of >300 Gy observed. We also reported the ReSPECT-LM open label, multidose Phase 1/2 trial initiation to identify maximum tolerated dose across varying dosing intervals and to characterize efficacy of multiple doses at optimal dose selected by assessing response using the CNSide Test. Enrollment in Cohort 1 has begun with delivery of 13.2 mCi at 3 intervals with one patient receiving all doses without dose limiting toxicity.
Table of Contents
Our ReSPECT LM Multi-dose Phase 2 Study is currently enrolling patients.
ReSPECT-PBC Clinical Trial for Pediatric Brain Cancer
The average annual age adjusted mortality rate for children aged 0-14 for malignant brain (and other CNS) tumors is 0.71/100,000, making it the most common cause of death and cancer death in this age group. The 2021 World Health Organization Classification of CNS Tumors classifies gliomas, glioneuronal tumors, and neuronal tumors into six different families: (1) adult-type diffuse gliomas; (2) pediatric-type diffuse low-grade gliomas; (3) pediatric-type diffuse high-grade gliomas (“HGG”); (4) circumscribed astrocytic gliomas; (5) glioneuronal and neuronal tumors; and (6) ependymomas.
In August 2021, we announced plans for treating pediatric brain cancer at the 2021 American Association of Neurological Surgeons Annual Scientific Meeting. In July 2021, we reported that we had received FDA feedback pertaining to a pre-Investigational New Drug Application (“IND”) meeting briefing package in which the FDA stated that we are not required to perform any additional preclinical or toxicology studies.
Pediatric high-grade gliomas can be found almost anywhere within the CNS; however, they are most commonly found within the supratentorium. The highest incidence of supratentorial, high-grade gliomas in pediatrics appears to occur in children aged 15 to 19 years, with a median age of approximately nine years. Overall, pediatric high-grade glioma confers a three-year progression free survival (“PFS”) of 11 ± 3% and three-year OS of 22 ±5%. One-year PFS is as low as 40% in recent trials. Ependymomas are slow-growing central nervous system tumors that involve the ventricular system. Diagnosis is based on MRI and biopsy and survival rate depends on tumor grade and how much of the tumor can be removed. Grade II pathology was associated with significantly improved OS compared to Grade III (anaplastic) pathology (five-year OS = 71 ± 5% vs. 57 ± 10%; p = 0.026). Gross total resection compared to subtotal resection was associated with significantly improved OS (five-year OS = 75 ± 5% vs. 54 ± 8%; p = 0.002).
Overall, pediatric HGG and ependymoma are extremely difficult-to-treat pediatric brain tumors, frequently aggressive, and in recurrent settings, carry an extremely poor prognosis.
Effective September 1, 2024, we entered into an agreement with the Department of Defense office of the Congressionally Directed Medical Research Programs to receive a $3.0 million fund for research and development purposes (“DoD Award”) over a three-year period. The DoD Award will be used to support the planned expansion of our clinical trial for pediatric brain cancer. We anticipate enrolling for our first patient for our Phase 1 ReSPECT-PBC clinical trial in 2026.
Key elements of the trial design include:
Phase 1a/b (dose escalation): This phase will enroll an estimated 24 patients using a modified 3+3 dose escalation scheme to establish the MTD and recommended Phase 2 dose ("RP2D"). Safety assessment and alignment with the FDA will occur at defined intervals.
Phase 2a: This phase will enroll approximately 32 patients (12 with ependymoma and 20 with HGG) at the RP2D to assess efficacy.
We anticipate beginning enrollment in our ReSPECT-PBC clinical trial, with our first patient enrolled, in 2026.
Rhenium-188 NanoLiposome Biodegradable Alginate Microsphere Technology
In January 2022, we announced that we licensed Biodegradable Alginate Microsphere (“BAM”) patents and technology from The University of Texas Health Science Center at San Antonio (“UTHSCSA”) to expand our tumor targeting capabilities and precision radiotherapeutics pipeline. We intend to combine our Rhenium NanoLiposome technology with the BAM technology to create a novel radioembolization technology. Initially, we intend to utilize the Rhenium-188 isotope, 188 RNL-BAM for the intra-arterial embolization and local delivery of a high dose of targeted radiation for a variety of solid organ cancers such as hepatocellular cancer, hepatic metastases, pancreatic cancer and many others.
Preclinical data from an ex vivo embolization experiment in which Technetium99m-BAM was intra-arterially delivered to a bovine kidney perfusion model was presented at the Society of Interventional Radiology Annual Scientific Meeting. The study concluded that the technology required for radiolabeling BAM could successfully deliver, embolize and retain radiation in the target organ. 188 RNL-BAM is a preclinical investigational device we intend to further develop and move into clinical trials. Specifically, in 2022 we transferred the 188 RNL-BAM technology from UTHSCSA, and began planning to develop the product and complete early preclinical studies to support a future FDA IND submission. Our intended initial clinical target is liver cancer which is the sixth most common and third deadliest cancer worldwide. It is a rare disease with increasing U.S. annual incidence (42,000) and deaths (30,000).
The FDA has informed us that 188 RNL-BAM will be regulated as a medical device under the FDCA.
The CNSide CSF Assay Platform
Table of Contents
The CNSide CSF Assay Platform consists of four LDTs used for detection, quantification, and characterization of tumor cells in patients with LM. The CNSide Platform facilitates tumor cell detection/enumeration and biomarker identification using cellular assays (tumor cell enumeration (“TCE”), immunocytochemistry (“ICC”), and fluorescence in situ hybridization (“FISH”)) and molecular assays (next-generation sequencing (“NGS”)). The CNSide Test is currently being used in the ReSPECT-LM trial as an exploratory endpoint.
Since acquiring the CNSide Platform in 2024, we have established infrastructure to support a scalable and centralized testing laboratory in Houston, TX that will service the U.S. market. We have been executing on our commercial market access strategy, which includes prioritized state licensure, proprietary reimbursement codes, commercial and government payor coverage, and value-based pricing to optimize revenue. We re-introduced the CNSide Platform first in Texas in August of 2025, signed a national agreement to provide the CNSide Test with UnitedHealthcare Insurance Company and Humana, Inc., and obtained state licensure for 49 of 50 US states by January 2026, with the remaining license for the state of New York on track for 2027. In parallel, we expect to launch a portfolio of additional CSF tumor characterization tests that expand our CNSide testing platform later in 2026.
When the CNSide CSF Assay Platform was previously commercially available, market acceptance and adoption were widespread, with several national and regional commercial payor agreements in place and the test in regular use at major cancer centers across the U.S. We are now in contact with the legacy payors and healthcare providers to support our commercial scale up in 2026. Finally, we have hired experienced leadership with expertise in the development and commercialization of clinical diagnostic technologies on a large scale.
Recent Developments
Recent Financings
Refer to the “Liquidity and Capital Resources” section below for information on our recent financings.
Results of Operations
CPRIT Grant Revenue
On September 19, 2022, we entered into the CPRIT Contract, effective as of August 31, 2022, with CPRIT, pursuant to which CPRIT will provide us a grant of up to $17.6 million (the “CPRIT Grant”) over a three-year period to fund the continued development of rhenium ( 186 Re) obisbemeda for the treatment of patients with LM through Phase 2 of the ReSPECT-LM clinical trial. The CPRIT Grant is subject to customary CPRIT funding conditions, including, but not limited to, a matching fund requirement (one dollar from us for every two dollars awarded by CPRIT), revenue sharing obligations upon commercialization of rhenium ( 186 Re) obisbemeda based on specific dollar thresholds until CPRIT receives the aggregate amount of 400% of the proceeds awarded under the CPRIT Grant, and certain reporting requirements. Since the inception of the CPRIT Contract, we recognized $5.2 million, $5.8 million, $4.9 million and $0.2 million of grant revenue during the years ended December 31, 2025, 2024, 2023, and 2022, respectively, all of which had been received as of December 31, 2025. The amounts recognized represent CPRIT’s share of the costs incurred for our rhenium ( 186 Re) obisbemeda development for the treatment of patients with LM.
In 2025, we received $5.5 million under the CPRIT Contract. The ability to continue to access the grant remains subject to additional FDA approval of the LM clinical trial, ability to deliver expanded drug supply and continued enrollment of patients. In addition, grant revenue amounts will vary quarter to quarter based on enrollment, mandated safety periods between cohorts and required interactions with FDA.
Research and development expenses
Research and development expenses include costs associated with the design, development, testing, and enhancement of our product candidates, payment of regulatory fees, laboratory supplies, preclinical studies, and clinical studies.
The following table summarizes the components of our research and development expenses for the years ended December 31, 2025 and 2024 (in thousands):
Years ended December 31,
Research and development
Share-based compensation
Total research and development expenses
Research and development expenses for the year ended December 31, 2025 decreased by $2.2 million as compared to the same period in 2024, primarily due to decreases of approximately $1.4 million in clinical development expenses, $0.9 million in compensation expenses, $0.5 million in professional research and development service fees, and $0.3 million in depreciation expense, partially offset by an increase of $0.3 million in research and development licensing expense and $0.6 million in diagnostic expenses.
We expect aggregate research and development expenditures to increase in 2026 as compared to the corresponding comparable period ended December 31, 2025, due to increased costs for the ReSPECT-LM clinical trial (for which CPRIT grant funding is expected to be
Table of Contents
available), manufacturing scale up for rhenium ( 186 Re) obisbemeda commercial and approval trial drug availability and initial patient enrollments in the ReSPECT-PBC clinical trial together with expansion of CNSide research and development teams.
General and administrative expenses
General and administrative expenses include costs for administrative personnel, legal and other professional expenses, and general corporate expenses. The following table summarizes the general and administrative expenses for the years ended December 31, 2025 and 2024 (in thousands):
Years ended December 31,
General and administrative
Share-based compensation
Total general and administrative expenses
General and administrative expenses increased by approximately $2.2 million during the year ended December 31, 2025, as compared to the same period in 2024. The increase was due primarily to an increase of $2.2 million in compensation expenses.
We expect general and administrative expenditures to increase in 2026 as compared with the corresponding comparable period ended December 31, 2025 as we expand the CNSide commercial operations team (including sales, customer service and laboratory operations).
Share-based compensation expenses
Share-based compensation expenses include charges related to options and restricted stock awards issued to employees, directors and non-employees. We measure share-based compensation expenses based on the grant-date fair value of any awards granted to our employees. Such expense is recognized over the requisite service period.
The following table summarizes the components of our share-based compensation expenses for the years ended December 31, 2025 and 2024 (in thousands):
Years ended December 31,
Research and development
General and administrative
Total share-based compensation
Our share-based compensation expenses, which are impacted by grants of stock-based awards, the vesting of such grants, as well as grant-date fair value of stock-based awards, increased for the year ended December 31, 2025 as compared to the same period in 2024 due to an increased number of grants made during the year ended December 31, 2025.
Other Income (Expense)
The following table summarizes interest income, interest expense, and other income and expense for the years ended December 31, 2025 and 2024 (in thousands):
Years ended December 31,
Interest income
Interest expense
Financing expense
Change in fair value of derivative instruments
Warrant issuance costs
Total
Interest income decreased for the year ended December 31, 2025 compared with the same period in 2024 primarily due to reduced accreted income on our available-for-sale securities and a lower interest rate environment in 2025.
The increase in interest expense for the year ended December 31, 2025 as compared to the same period in 2024 was primarily due to interest expense incurred in connection with the Funding Notes and Exchange Notes issued in February 2025, partially offset by the January 2025 payoff of the Pershing Credit Facility.
Table of Contents
The decrease in financing expenses for the year ended December 31, 2025 as compared to the same period in 2024 was primarily due to the March 2025 PIPE and May 2024 PIPE transactions.
The change in the fair value of the derivative instruments for the year ended December 31, 2025 as compared to the same period in 2024 was primarily due to the March 2025 Private Placement (specifically the liability classified March 2025 Series B Warrants, which were remeasured immediately prior to exercise, before being reclassified as equity), offset by the May 2024 Private Placement (specifically the May 2024 Series A Warrants and May 2024 Series B Warrants, which were initially classified as liabilities before being reclassified as equity).
The increase in the warrant issuance costs for the year ended December 31, 2025 as compared to the same period in 2024 was due to the warrant issuance costs from the March 2025 Private Placement and May 2024 Private Placement.
Liquidity and Capital Resources
The Company has funded its research and development activities through raising capital by issuing securities and receipt of research grants. As of December 31, 2025, the Company had approximately $13.1 million in cash and cash equivalents, restricted cash, and short-term investments. We include restricted cash and cash equivalents in our liquidity assessment because the restrictions are expected to be released within one year after the date that the financial statements in this Form 10-K are issued, at which time the funds will be available to support working capital requirements.
Short-term and long-term liquidity
The following is a summary of our key liquidity measures at December 31, 2025 and 2024 (in thousands):
As of December 31,
Cash, cash equivalents and restricted cash
Current assets
Current liabilities
Working capital (deficit)
We incurred net losses of $22.4 million for the year ended December 31, 2025. We have an accumulated deficit of $515.9 million as of December 31, 2025. Additionally, we used net cash of $20.8 million to fund our operating activities for the year ended December 31, 2025. These factors raise substantial doubt about our ability to continue as a going concern.
To date, our operating losses have been funded primarily from outside sources of invested capital from issuance of our common and preferred stocks, proceeds from our now-repaid in full term loan with Oxford Finance, LLC (“Oxford”), our line of credit facility with Pershing and grant funding. We have had, and will continue to have, an ongoing need to raise additional cash from outside sources to fund our future clinical development programs and other operations. There can be no assurance that we will be able to continue to raise additional capital in the future. Our inability to raise additional cash would have a material and adverse impact on our operations and ability to satisfy our obligations.
January 2026 Public Offering
On January 13, 2026, we entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as the underwriter (the “Underwriter”), pursuant to which we (a) agreed to issue and sell, in an underwritten public offering an aggregate of (i) 39,473,684 shares of common stock, par value $ 0.001 per share and (ii) warrants to purchase 39,473,684 shares of common stock, at a combined public offering price of $0.38 per share and warrant, and (b) granted the Underwriter a 30-day option to purchase up to an additional 5,921,052 shares of Common Stock, additional Warrants to purchase up to 5,921,052 shares of Common Stock or any combination thereof, at the public offering price, in each case less underwriting discounts and commissions. Each warrant is immediately exercisable, entitles the holder to purchase one share of common stock at an exercise price of $0.38 per share and expires five (5) years from the date of issuance. On January 14, 2026, the Underwriter exercised its over-allotment option with respect to additional warrants to purchase 5,921,052 shares of Common Stock.
The offering closed on January 15, 2026. Net proceeds from the offering were approximately $13.3 million after deducting the underwriting discounts and commissions and other estimated offering expenses payable by us. We intend to use the net proceeds of this offering for working capital and general corporate purposes.
February 2025 SPEA
On February 13, 2025 (the “SPEA Closing Date”), we entered into a securities purchase and exchange agreement (the “SPEA”) with certain existing accredited investors. Pursuant to the SPEA, on the SPEA Closing Date we issued secured convertible promissory notes (the
Table of Contents
“Funding Notes”) in the aggregate principal amount of $3,362,251 together with common stock purchase warrants (the “Warrants”) to purchase 3,002,009 shares of our common stock at an exercise price of $1.12 per share. The aggregate purchase price for the Funding Note and Warrants was approximately $3.7 million and included payment of $0.125 per Warrant in accordance with the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”).
Exchange Notes
The May 2024 Purchase Agreement included certain limitations and restrictions on our ability to issue securities and provided the May 2024 Private Placement Purchasers other than our directors and executive officers (the “Outside Investors”) participation rights in future equity and equity-linked offerings of securities, subject to certain limited exceptions (the “Financing Restrictions”). On the SPEA Closing Date, pursuant to the SPEA, the Company issued to the Outside Investors secured convertible promissory notes in the aggregate amount of $3,188,922 (the “Exchange Notes”) in exchange for cancellation of the 3,543,247 May 2024 Series A Warrants held by them, and the Outside Investors entered into a second amendment to the May 2024 Purchase Agreement to eliminate the Financing Restrictions.
As described below, we repurchased the Funding Notes and exchanged the Exchange Notes in connection with the March 2025 Private Placement.
March 2025 Private Placement
On March 4, 2025, we entered into a securities purchase agreement (the “March 2025 Purchase Agreement”) with accredited investors, including certain of our existing stockholders, identified on the signature page thereto (collectively, the “March 2025 Private Placement Purchasers”) for a private placement of securities (the “March 2025 Private Placement”) for gross proceeds of approximately $15.0 million. Pursuant to the March 2025 Purchase Agreement, we issued an aggregate of 4,069,738 shares (the “March 2025 Private Placement Shares”) of our common stock and 23,972,400 Prefunded Warrants, with each March 2025 Private Placement Share or Prefunded Warrant accompanied by (i) a Series A common warrant (the “March 2025 Series A Warrants”) to purchase one share of common stock and (ii) one Series B common warrant (the “March 2025 Series B Warrants”) to purchase one share of common stock.
The combined purchase price of $0.66 for each March 2025 Private Placement Share or $0.659 for each Prefunded Warrant in the March 2025 Private Placement, together with one accompanying March 2025 Series A Warrant and one accompanying March 2025 Series B Warrant, represented the applicable “Minimum Price” in accordance with Listing Rule 5635(d) of Nasdaq.
The initial exercise price of each March 2025 Series A Warrant is $1.32 per share of common stock. The March 2025 Series A Warrants are exercisable only following stockholder approval and expire five (5) years thereafter. The number of securities issuable under the March 2025 Series A Warrant is subject to adjustment as described in more detail in the March 2025 Series A Warrant. The March 2025 Series A Warrant exercise price and the related number of shares of common stock issuable upon exercise are subject to a “reset” provision upon certain events and are subject to anti-dilution protection upon any subsequent transaction at a fixed price lower than the warrant exercise price then in effect, as more fully described in the March 2025 Series A Warrant.
The initial exercise price of each March 2025 Series B Warrant is $1.98 per share of common stock or pursuant to an alternative cashless exercise option. The March 2025 Series B Warrants are exercisable only following stockholder approval and expire two and one-half (2.5) years thereafter. The March 2025 Series B Warrant exercise price and the related number of shares of common stock issuable upon exercise are subject to a “reset” provision upon certain events, as more fully described in the March 2025 Series B Warrant, and the March 2025 Series B Warrant alternative cashless exercise provision provides that the March 2025 Series B Warrant can be exercised without further payment to the Company and for three times the number of shares of common stock then subject to the March 2025 Series B Warrant.
Of the securities issued in the March 2025 Private Placement, 22,727,270 of the shares of common stock, or Prefunded Warrants in lieu thereof, and the accompanying 22,727,270 March 2025 Series A Warrants and 22,727,270 March 2025 Series B Warrants, were issued in consideration of new capital subscriptions, and 5,314,870 of the shares of common stock, or Prefunded Warrants in lieu thereof, and the accompanying 5,314,870 March 2025 Series A Warrants and 5,314,870 March 2025 Series B Warrants, were issued in exchange for the cancelation of the Exchange Notes.
The March 2025 Private Placement closed on March 7, 2025. The aggregate gross proceeds at the closing were approximately $15.0 million, before deducting certain expenses payable by us.
On May 2, 2025, our stockholders approved, among other things, the March 2025 Series A Warrants and March 2025 Series B Warrants and an amendment of our Certificate of Incorporation, as amended, to increase the authorized share capital to an amount sufficient to cover the shares of common stock issuable upon the exercise of the March 2025 Series A Warrants and March 2025 Series B Warrants. As part of the March 2025 Series A Warrants and March 2025 Series B Warrants agreement, the exercise price of the March 2025 Series A Warrants and March 2025 Series B Warrants were reset on May 19, 2025 to $0.4373 per share. Prior to modification of the March 2025 Series B Warrants as part of the Letter Agreement (as further described below), certain March 2025 Series B Warrants were cashless exercised for the issuance of 21,482,492 shares of common stock. The liability classified March 2025 Series B Warrants were remeasured immediately prior to exercise, which resulted in a $3.8 million gain on the change in fair value for the year ended December 31, 2025, and a $0.8 million credit to additional paid-in-capital.
Letter Agreement
Table of Contents
On June 17, 2025, the Company and the Purchasers entered into a letter agreement (the “Letter Agreement”) with each of the Purchasers in an effort to, among other items, minimize the dilutive impact of the March 2025 Private Placement. The Letter Agreement extinguished the March 2025 Series A Warrants, modified the March 2025 Series B Warrants, and provided for the return of Private Placement Shares and Pre-Funded Warrants, as further discussed in the following paragraphs.
As part of the Letter Agreement, all March 2025 Series A Warrants were cancelled, which resulted in a $2.7 million gain on change in fair value recorded as capital contribution to additional paid-in capital, as the extinguishment was deemed equivalent to a capital contribution by existing shareholders of the Company.
As part of the same transaction, the March 2025 Series B Warrants were amended ("Amended March 2025 Series B Warrants"), to (a) reduce the overall number of March 2025 Series B Warrant Shares issuable upon exercise of the Series B Warrants to an aggregate of up to 35,536,380 Series B Warrant Shares, (b) reduce the alternative cashless exercise ratio in such March 2025 Series B Warrants from 3:1 to 1:1, and (c) remove provisions contained in the March 2025 Series B Warrants that would otherwise reduce the Company’s stockholders’ equity. As a result of the Letter Agreement, the Amended March 2025 Series B Warrants no longer fail the indexation guidance under ASC 815, Derivatives and Hedging, and the fair value of the warrant liability, in the amount of $11.0 million was reclassified to equity. Immediately prior to reclassification, the March 2025 Series B Warrant liability was remeasured, and $4.5 million was recorded as a capital contribution to additional paid-in capital, as the modification of the March 2025 Series B Warrants was deemed equivalent to a capital contribution by existing shareholders of the Company. After the June 17, 2025 modification, 34,794,54 Amended March 2025 Series B Warrants were cashless exercised.
Lastly, in conjunction with the Letter Agreement, each of the March 2025 Private Placement Purchasers agreed to return an aggregate of 12,241,986 Private Placement Shares and Pre-Funded Warrants issuable for an aggregate of 10,633,650 Pre-Funded Warrant Shares, held by them as of the date of the Letter Agreement, upon request of the Company (the "Letter Agreement Repurchase Option"), which were issued pursuant to the March 2025 Private Placement Purchase Agreement for a value of $0.66 per Private Placement Share and $0.659 per Pre-Funded Warrant. In exchange therefor, the Company agreed to repay the March 2025 Private Placement Purchasers holding such securities 115% of such value, using 90% of the proceeds from any capital raised by the Company subsequent to July 1, 2025. The Company and each of the March 2025 Private Placement Purchasers also agreed to waive any restrictions on subsequent equity sales and variable rate transactions contained in March 2025 Private Placement Purchase Agreement to allow for such repayment.
During the year ended December 31, 2025, we paid the March 2025 Private Placement Purchasers $3.2 million and 5,211,835 shares were returned and cancelled under the terms of the Letter Agreement.
Support Letters
On July 11, 2025, we and certain March 2025 Private Placement Purchasers party to the Letter Agreement entered into that certain letter of support (the “Support Letters”) to modify certain portions of the Letter Agreement as between us and each of such March 2025 Private Placement Purchasers. In the event that we reasonably believe that, within the 30 days (the “Modification Period”) prior to the end of any fiscal quarter, we will have stockholders’ equity in an amount below $3.0 million as of the end of such fiscal quarter (the “Potential Equity Deficiency”), the Subsequent Financing Percentage (as defined in the Letter Agreement) shall be modified from 90% to 50% for any Subsequent Financing (as defined in the Letter Agreement) that occurs during the Modification Period pursuant to the Lincoln Park Purchase Agreement. Upon the end of the Modification Period, the Subsequent Financing Percentage shall be reverted to 90%, and such percentage shall apply to all Subsequent Financings, including all Subsequent Financings pursuant to the Lincoln Park Purchase Agreement. In the event we desire to trigger the modification of the Subsequent Financing Percentage, we agree to supply the purchaser who executed a Support Letter with a pro forma balance sheet to evidence its reasonable belief of the Potential Equity Deficiency approximately 30 days prior to each end of fiscal quarter once the books for prior months are closed. In accordance with the Support Letters, we made a cash payment of $0.5 million to each purchaser for a total cash payment of $2.3 million, which was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as of September 30, 2025. Such payment counted as cash received by the purchaser towards its Maximum Amount. Each Support Letter also grants the purchaser party to the letter a participation right in certain future financings of ours for a period of 12 months.
On October 28, 2025, we entered into an amendment to the Letter Agreement and the Support Letters with certain March 2025 Private Placement Purchasers (the “Amendment Agreement”), pursuant to which (a) the Support Letters were terminated other than with respect to the participation rights granted therein, and (b) the repayment mechanism under the Letter Agreement was modified. As modified, we are no longer required to use 90% of the proceeds from any subsequent financing to repay the March 2025 Private Placement Purchasers. Instead, we are only required to retain sufficient funds in an interest bearing account to cover such repayment obligations and make such repayments upon request by any March 2025 Private Placement Purchaser who executed the Amendment Agreement until each such purchaser has received cash either from us or from reselling securities acquired in the March 2025 Private Placement in an amount equal to 115% of the purchase price such purchaser paid in the March 2025 Private Placement. If such requests are made, the requesting purchaser must return shares acquired in the March 2025 Private Placement at a value of $0.66 per share.
The repayment obligation owed under the Amendment Agreement is accounted for at fair value as a financial liability in accordance with ASC 480. The liability is remeasured each period, with changes to fair value recorded in the statement of operations. As of December 31, 2025, we had a remaining liability of approximately $4.5 million included in accounts payable and accrued expenses on our consolidated balance sheet.
Table of Contents
First Amendment to the February 2025 SPEA
In connection with the March 2025 Purchase Agreement, we entered into that certain First Amendment to the SPEA (the “First Amendment”). The SPEA included certain limitations and restrictions on the Company’s ability to issue securities and provided the Investors participation rights in future equity and equity-linked offerings of securities, subject to certain limited exceptions (the “New Financing Restrictions”). Pursuant to the First Amendment, subject to consummation of the March 2025 Private Placement, we agreed to repurchase from the Investors the Funding Notes and 3,002,009 warrants (the “SPEA Warrants”) issued pursuant to the SPEA for an aggregate purchase price of $4.25 million. In exchange for the repurchase by the Company of the Funding Notes and SPEA Warrants, the Purchasers agreed to consent to the March 2025 Private Placement and eliminate the New Financing Restrictions.
May 2024 Private Placement
In May 2024, we entered into a securities purchase agreement (the “May 2024 Purchase Agreement”), which was subsequently amended, with certain investors, including certain of the our directors and executive officers (the “May 2024 Private Placement Purchasers”), whereby we issued and sold in a private placement (the “May 2024 Private Placement”): (i) 3,591,532 shares of common stock or, at the election of each investor, Pre-Funded warrants (“May 2024 Pre-Funded Warrants”) to purchase shares of common stock exercisable immediately at an exercise price of $0.001 per share. Each share or May 2024 Pre-Funded Warrant was accompanied by (i) a Series A common warrant (“May 2024 Series A Warrants”) to purchase one share of common stock, for an aggregate of 3,591,532 Series A Warrants, and (ii) one Series B common warrant (“May 2024 Series B Warrants”) to purchase one share of common stock, for an aggregate of 3,591,532 May 2024 Series B Warrants. At the closing of the May 2024 Private Placement, we received net proceeds of approximately $7.3 million.
Lincoln Park Purchase Agreement
On June 17, 2025, we entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) and a registration rights agreement pursuant to which Lincoln Park Capital Fund (“Lincoln Park”) committed to purchase up to $50.0 million of shares of our common stock. Under the terms and subject to the conditions of the Lincoln Park Purchase Agreement, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $50.0 million of shares of our common stock. Sales of common stock by us are subject to certain limitations, and can occur from time to time, at our sole discretion, over the 36-month period commencing on June 23, 2025, subject to the satisfaction of certain conditions. Actual sales of shares of common stock to Lincoln Park under the Lincoln Park Purchase Agreement depend on a variety of factors to be determined by us from time to time, including, among others, market conditions, the trading price of the common stock and our determinations as to the appropriate sources of funding for the Company and its operations. As consideration for Lincoln Park’s irrevocable commitment to purchase shares of our common stock upon the terms of and subject to satisfaction of the conditions set forth in the Lincoln Park Purchase Agreement,
On June 23, 2025, a registration statement (the “Initial Registration Statement”) was declared effective covering the resale of up to 17,000,000 shares of our common stock. On August 14, 2025, a registration statement (the “Second Registration Statement”) was declared effective covering the resale of up to 33,000,000 shares of our common stock.
In accordance with the Lincoln Park Purchase Agreement, we were required to pay Lincoln Park an initial commitment fee of $0.5 million, which was paid through the issuance of 1,612,903 shares of common stock on August 14, 2025. The initial commitment fee was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as of September 30, 2025. An additional commitment fee of $0.5 million will be paid in cash or shares of common stock, or a combination of cash and shares of common stock, if and when we sell over $25.0 million of our common stock under the Lincoln Park Purchase Agreement.
As of the year ended December 31, 2025, we issued 50,000,000 shares under the Lincoln Park Purchase Agreement for gross proceeds of approximately $22.6 million. The Company incurred approximately $50,000 for legal fees in connection with the Lincoln Park Purchase Agreement. There are no shares available for resale under our Second Registration Statement in respect of the Lincoln Park Purchase Agreement.
Nasdaq Listing Compliance
Minimum Stockholders’ Equity Requirement
In March 2024, we received notice from the Listing Qualifications staff of Nasdaq (the “Staff”), notifying us that we no longer maintained at least $2.5 million in stockholders’ equity, as required under Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”), and also did not meet any other alternative standard. On October 22, 2024, we held our first hearing before a Nasdaq panel, as a result of which we received additional time, or until March 4, 2025, to regain compliance. A second hearing was held on July 15, 2025. On July 22, 2025, the panel for our second hearing issued a decision granting our request for continued listing on Nasdaq, subject to us demonstrating compliance with (1) the Minimum Stockholders’ Equity Requirement by August 14, 2025; and (2) the Minimum Bid Requirement (as defined below) by September 8, 2025. On August 22, 2025, we received a letter (the “August 2025 Letter”) from Nasdaq confirming our compliance with Nasdaq Listing Rule 5550(b). Specifically, the August 2025 Letter confirmed that we were in compliance with both (1) Nasdaq Listing Rule 5550(b)(2), which requires a market value of listed securities of at least $35 million and (2) the alternative stockholders’ equity threshold under Nasdaq Listing Rule 5550(b)(1), which is the Minimum Stockholders’ Equity Requirement. Accordingly, we satisfied two alternative criteria under Nasdaq Listing Rule 5550. As a result of such compliance, the deadline of September
Table of Contents
8, 2025 per the July 2025 Decision to regain compliance of the $1.00 bid price rule under Nasdaq Listing Rule 5550(a)(2) no longer applied and Nasdaq permitted us the remainder of the previously announced grace period to regain compliance of such rule through November 12, 2025. The August 2025 Letter also provided that, solely with respect to the Minimum Stockholders’ Equity Requirement, we remain subject to a one-year panel monitoring period, through August 22, 2026. If, within that one-year monitoring period, the Staff determines that we no longer satisfy the Minimum Stockholders’ Equity Requirement (and we are not then in compliance with one of the alternative standards under Nasdaq Listing Rule 5550(b)), we will not be permitted to provide the Staff with a plan of compliance and the Staff is not permitted to grant additional time to regain compliance with the Minimum Stockholders’ Equity Requirement nor will we be afforded an applicable cure or compliance period. Instead, the Staff will issue a delist determination letter, and we will have an opportunity to request a new hearing before the Nasdaq Hearings Panel, which request would stay any further action by the Staff pending the ultimate outcome of the hearing.
Minimum Bid Requirement
On May 16, 2025, we received notice from Nasdaq that, because the closing bid price for our common stock had fallen below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). We were provided an initial compliance period of 180 calendar days, or until November 12, 2025, to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days prior to November 12, 2025.
On November 13, 2025, we received a second letter from the Nasdaq Staff advising that we had been granted an additional 180 calendar days, or until May 11, 2026, to regain compliance with the Minimum Bid Requirement, in accordance with Nasdaq Listing Rule 5810(c)(3)(A).
We intend to continue to actively monitor the closing bid price of our common stock and will evaluate available options to regain compliance with the Minimum Bid Requirement. Specifically, we have confirmed to Nasdaq that, if necessary, we will implement a reverse stock split of our outstanding common stock to attempt to regain compliance. If we do not regain compliance within the additional compliance period, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the Minimum Bid Requirement during the 180-day additional compliance period or maintain compliance with the other Nasdaq listing requirements.
Funding and Material Cash Requirements
To date, our operating losses have been funded primarily from outside sources of invested capital from issuance of shares of our common and preferred stocks, proceeds from the now-repaid in full term loan with Oxford, the Pershing Credit Facility and grant funding. However, the Company has had, and will continue to have, an ongoing need to raise additional cash from outside sources through a combination of equity offerings, debt financings and potential collaboration, license or development agreements to fund our future clinical development programs, commercialization of CNSide, and other operations in the next twelve months from the filing of this Form 10-K. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. There can be no assurance that we will be able to continue to raise additional capital in the future. Our inability to raise additional cash would have a material adverse impact on our operations, implementation of our strategy and ability to maintain compliance with applicable requirements, including Nasdaq listing rules.
Our present and future funding and cash requirements will depend on many factors, including, among other things:
the progress, timing and completion of our ongoing and planned clinical trials and nonclinical studies;
our ability to receive, and the timing of receipt of, future regulatory approvals for our product candidates and the costs related thereto;
the development and utility of the CNSide Test;
the scope, progress, results and costs of our ongoing and planned operations;
the costs associated with expanding our operations and building our sales and marketing capabilities;
our ability to establish strategic collaborations;
the cost and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;
the revenue, if any, received from commercial sales of our product candidates, if approved; and
potential new product candidates that the Company identifies and attempts to develop.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any
Table of Contents
adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to our ability to continue as a going concern.
Cash (used in) provided by operating, investing, and financing activities for the year ended December 31, 2025 and 2024 is summarized as follows (in thousands):
Years Ended December 31,
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net change in cash and cash equivalents
Material Cash Obligations
Under the CPRIT Contract, we receive matching funds for approximately two-thirds of the development costs for the development of rhenium ( 186 Re) obisbemeda for the treatment of patients with LM, subject to various funding conditions. The CPRIT Contract is effective for three years, unless otherwise terminated pursuant to the terms of the contract. CPRIT may require us to repay some or all of the disbursed CPRIT grant proceeds (with interest not to exceed 5% annually) in the event of the early termination of the CPRIT Contract.
Other than as described above, we have no purchase commitments or long-term contractual obligations, except for lease obligations as of December 31, 2025. In addition, we have no off-balance sheet arrangements (as defined in the rules and regulations of the SEC) that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Operating activities
Net cash used in operating activities for the year ended December 31, 2025 was $20.8 million compared to $10.6 million in the same period of 2024. Cash used in operating activities increased by $10.2 million during the year ended December 31, 2025 as compared to the same period in 2024, due primarily to an increased net loss and net working capital changes, partially offset by the change in fair value of derivative instruments.
Net cash used in operating activities for the year ended December 31, 2024 was $10.6 million compared to $12.9 million in the same period of 2023. Cash used in operating activities decreased by $2.3 million during the year ended December 31, 2024 as compared to the same period in 2023, due primarily to increased reimbursement under the CPRIT Contract for research and development costs related to the ReSPECT-LM program.
Investing activities
Net cash used in investing activities for the year ended December 31, 2025 of $0.9 million was primarily related to the purchase of short-term investments of $9.4 million which was partially offset by the redemption of short-term investments of $3.8 million and the sale of short-term investments of $4.8 million.
Net cash used in investing activities for the year ended December 31, 2024 was primarily related to purchase of Biocept assets of $0.5 million, purchase of short-term investments of $15.6 million, redemption of short-term investments of $12.2 million, and purchases of fixed assets of $0.1 million.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 was related to $22.6 million in proceeds from the sale of common stock under the Lincoln Park Purchase Agreement, $15.9 million of proceeds from sale of common stock, Pre-Funded Warrants and warrants in connection with the March 2025 Private Placement, $3.7 million of net proceeds from the issuance of notes payable and warrants, and $0.8 million of proceeds from the Pershing Credit Facility, partially offset by $3.3 million repayment on the Pershing Credit Facility, $3.7 million repayment of Notes payable, $3.2 million of costs paid to investors pursuant to the Letter Agreement, $2.3 million of financing costs related to the return and cancellation of Private Placement Shares and Pre-Funded Warrants, and $0.2 million from offering costs for the sale of common stock.
Net cash provided by financing activities for the year ended December 31, 2024 was related to net proceeds of $7.3 million raised by the May 2024 Private Placement, and drawdown of $3.3 million from the Pershing Credit Facility, offset by repurchase of common stock for approximately $0.4 million and repayment of principle balance under the Oxford term loan of $4.0 million.
Table of Contents
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenue, and expenses, and that affect our recognition and disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to impairment assessment of our grants and awards, indefinite lived intangible assets, share-based compensation and fair value of warrants. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The following listing is not intended to be a comprehensive list of all of our accounting policies. Our significant accounting policies are described in Note 2 to our financial statements contained elsewhere in this Form 10-K. In many cases, the accounting treatment of a particular transaction is dictated by U.S. GAAP, with no need for our judgment in its application. There are also areas in which our judgment in selecting an available alternative would not produce a materially different result. We have identified the following as our critical accounting policies.
Grants and Awards
In applying the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), we have determined that government grants are out of the scope of ASC 606 because the funding entities do not meet the definition of a “customer,” as defined by ASC 606, as we do not consider there to be a transfer of control of goods or services. With respect to the grant, we evaluate if it has a collaboration in accordance with ASC Topic 808, Collaborative Arrangements (“ASC 808”). For grants outside the scope of ASC 808, we apply International Accounting Standards No. 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance, by analogy, and revenue is recognized when we incur expenses related to the grant for the amount we are entitled to under the provisions of the contract.
We also consider the guidance in ASC Topic 730, Research and Development, which requires an assessment, at the inception of the grant, of whether the agreement is a liability. If we are obligated to repay funds received regardless of the outcome of the related research and development activities, then we are required to estimate and recognize that liability. Alternatively, if we are not required to repay the funds, then payments received are recorded as revenue or contra-expense as the expenses are incurred. Deferred grant liability represents grant funds received or receivable for which the allowable expenses have not yet been incurred as of the balance sheet date. Grant receivable represents grant funds not yet received for which the allowable expenses have been incurred as of the balance sheet date.
Impairment of Goodwill
We perform our goodwill impairment analysis at the reporting unit level. For the years ended December 31, 2025 and 2024, our company has one reporting unit. We perform our annual impairment analysis by either doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment, or comparing a reporting unit’s estimated fair value to its carrying amount. If a quantitative assessment is performed the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies. Our market capitalization is also considered as a part of this analysis.
In accordance with our accounting policy, we completed the annual evaluation for impairment of goodwill as of December 31, 2025 using the qualitative method and determined that no impairment existed.
Share-based Compensation
Compensation expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized on an accelerated attribution method over the requisite service period. We determine the estimated fair value of each stock option on the date of grant using the Black-Scholes valuation model which uses assumptions regarding a number of complex and subjective variables. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatility is based on an analysis of the historical volatility of our common stock. The expected term represents the period that we expect our stock options to be outstanding. The expected term assumption is estimated using the simplified method set forth in the SEC's Staff Accounting Bulletin 110, which is the mid-point between the option vesting date and the expiration date. We have never declared or paid dividends on our common stock and have no plans to do so in the foreseeable future. Changes in these assumptions may lead to variability with respect to the amount of stock compensation expense we recognize related to stock options.
Warrant Liability
Accounting for liability classified warrants requires management to exercise judgment and make estimates and assumptions regarding their fair value. (For more information about the material inputs and assumptions used to value the liability classified warrants, refer to Note 3 to the consolidated financial statements.) The warrant liabilities are initially recorded at fair value upon the date of issuance and subsequently remeasured to fair value at each reporting date, with changes recognized in the consolidated statements of operations. Changes in the fair value of the liability classified warrants will continue to be recognized until the warrants are exercised, expire or qualify for equity classification.
Table of Contents
In May 2024, the Company issued the May 2024 Series A Warrants and May 2024 Series B Warrants and classified them as liabilities because in certain circumstances they could have been exercised into either shares of common stock or Pre-Funded Warrants at the holder’s option and thus failed the indexation guidance under Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”). On August 9 , 2024, the Company amended and restated the May 2024 Series A Warrants and May 2024 Series B Warrants (the “Amendment and Restatements”) to eliminate the ability of the holder to elect to receive Pre-Funded Warrants in this situation.
As a result of the Amendment and Restatements, the May 2024 Series A Warrants and May 2024 Series B Warrants, as amended, no longer fail the indexation guidance under ASC 815, and the balance of the warrant liability at the amendment date, in the amount of $5.2 million, was reclassified to equity.
As part of the Letter Agreement, the March 2025 Series B Warrants were amended to (a) reduce the overall number of March 2025 Series B Warrant Shares issuable upon exercise of the Series B Warrants to an aggregate of up to 35,536,380 Series B Warrant Shares, (b) reduce the alternative cashless exercise ratio in such March 2025 Series B Warrants from 3:1 to 1:1, and (c) remove provisions contained in the March 2025 Series B Warrants that would otherwise reduce the Company’s stockholders’ equity. As a result of the Letter Agreement, the Amended March 2025 Series B Warrants no longer failed the indexation guidance under ASC 815, Derivatives and Hedging, and the fair value of the warrant liability, in the amount of $11.0 million was reclassified to equity. Immediately prior to reclassification, the March 2025 Series B Warrant liability was remeasured, and $4.5 million was recorded as a capital contribution to additional paid-in capital, as the modification of the March 2025 Series B Warrants was deemed equivalent to a capital contribution by existing shareholders of the Company. After the June 17, 2025 modification, 34,794,54 Amended March 2025 Series B Warrants were cashless exercised.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk
Not applicable.
Table of Contents
Item 8. Financial Statemen ts and Supplementary Data
Page
Report of Independent Registered Public Accounting Firm - CBIZ CPAs P.C. (PC AOB Number 199 )
Report of BDO USA, P.C., Independent Registered Public Accounting Firm (PCAOB ID# 243 )
Consolidated Balance Sheets as of December 31, 2025 and 2024
Consolidated Statements of Operations for the years ended December 31, 2025 and 2024
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2025 and 2024
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024
Notes to Financial Statements
Table of Contents
Report of Indepen dent Registered Public Accounting Firm
To the Stockholders and Board of Directors of Plus Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Plus Therapeutics, Inc. (the “Company”) as of December 31, 2025, the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has recurring losses and negative cash flows from operations and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition – Grant Revenue
As noted in Note 11 of the consolidated financial statements, in September 2022, the Company entered into a Cancer Research Grant Contract (the “CPRIT Contract”), effective as of August 31, 2022, with the Cancer Prevention and Research Institute of Texas (“CPRIT”), pursuant to which CPRIT provides the Company with a CPRIT grant (“CPRIT Grant”) of up to $17.6 million over a three-year period to fund the continued development of rhenium (186Re) obisbemeda for the treatment of patients with leptomeningeal metastases (“LM”). The Company recognized $5.2 million in grant revenue from the CPRIT Grant during the year ended December 31, 2025.
We identified the determination of research and development costs incurred associated with the CPRIT Grant as a critical audit matter because of the significant management judgment and subjectivity involved in determining whether such costs satisfied the funding conditions. This matter required extensive auditor effort and judgment in performing procedures and evaluating audit evidence.
The primary procedures we performed to address this critical audit matter included:
Table of Contents
Reviewing the CPRIT Grant agreement to understand the conditions for which research and development costs satisfy the funding guidelines.
Reviewing evidence of CPRIT’s approval of the research and development costs submitted by the Company that were applied to the CPRIT Grant funding conditions.
Inspecting vendor agreements and a sample of source documents to determine whether the expenses incurred satisfy the CPRIT grant funding conditions.
Valuation and Accounting Assessment of Warrants
As described in Note 15 to the financial statements, the Company issued March 2025 Series A and March 2025 Series B common stock warrants in connection with the March 2025 Private Placement. The Company evaluated the terms of the March 2025 Series A Warrants and March 2025 Series B Warrants under authoritative guidance and concluded that each of the instruments should be accounted for as a liability instrument at fair value at issuance and each subsequent balance sheet date until settlement, with changes in the fair value recorded in the consolidated statement of operations.
On June 17, 2025, the Company and the March 2025 Private Placement Purchasers entered into a letter agreement (the “Letter Agreement”) with each of the March 2025 Private Placement Purchasers in an effort to, among other items, minimize the dilutive impact of the March 2025 Private Placement. The Letter Agreement extinguished the March 2025 Series A Warrants, modified the March 2025 Series B Warrants. The extinguishment of the March 2025 Series A Warrants was recognized as a $2.3 million capital contribution and recorded to additional paid-in capital, as the extinguishment was deemed equivalent to a capital contribution by existing shareholders of the Company. As part of the same transaction, the March 2025 Series B Warrants were amended to (a) reduce the overall number of March 2025 Series B Warrant shares issuable upon exercise of the Series B Warrants, (b) reduce the alternative cashless exercise ratio in such March 2025 Series B Warrants from 3:1 to 1:1, (c) remove provisions contained in the March 2025 Series B Warrants that would otherwise reduce the Company’s stockholders’ equity, and (d) the exercise price of the Amended March 2025 Series B Warrants was reset back to $1.98 per share. As a result of the Letter Agreement, the Amended March 2025 Series B Warrants no longer fail the indexation guidance under ASC 815, Derivatives and Hedging, resulting in a reclassification from liability to equity.
We identified the valuation and accounting assessment of the warrants as critical audit matter as auditing the warrant valuation involves significant judgment, including the selection of valuation models (e.g., Monte Carlo), and the determination of key inputs such as expected volatility, risk‑free interest rates, and expected term and the complexity involved in determining the accounting classification.
The primary procedures we performed to address this critical audit matter included:
Reviewing the terms of the warrant agreements and management’s accounting assessment for the classification of the warrants (liability or equity).
Evaluating the appropriateness of the valuation model used by management to estimate the fair value of the warrants.
Testing the accuracy and completeness of the underlying data used in the valuations, including key terms of the warrant agreements.
Assessing the reasonableness of significant assumptions, such as volatility, risk-free rate, and expected term, by comparing them to observable market data and company-specific factors.
Involved our internal valuation specialist in evaluating the appropriateness of the valuation methodologies and reasonableness of the key assumptions.
Evaluating the adequacy of the financial statement disclosures related to warrant fair value, including description of the valuation techniques and significant assumptions.
/s/ CBIZ CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company’s auditor since 2025.
New York, NY
March 12, 2026
Table of Contents
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Plus Therapeutics, Inc.
Houston, Texas
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheet of Plus Therapeutics, Inc. (the “Company”) as of December 31, 2024, the related consolidated statement of operations, stockholders’ equity (deficit), and cash flows for the year then ended and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.
We have served as the Company’s auditor from 2016 to 2025.
/s/ BDO USA P.C.
Austin, Texas
March 31, 2025
Table of Contents
PLUS THERAPEUTICS, INC.
CONSOLIDATED B ALANCE SHEETS
(in thousands, except share and par value data)
As of December 31,
Assets
Current assets:
Cash and cash equivalents
Restricted cash and cash equivalents
Investments
Grant receivable
Other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Goodwill
Intangible assets, net
Other assets
Total assets
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses
Investor liability pursuant to Letter Agreement
Operating lease liability
Deferred grant liability
Other liabilities
Line of credit
Total current liabilities
Noncurrent operating lease liability
Total liabilities
Commitments and contingencies (Note 7)
Stockholders’ equity (deficit):
Preferred stock, $ 0.001 par value; 5,000,000 shares authorized; 1,952
shares issued and outstanding as of December 31, 2025 and 2024
Common stock, $ 0.001 par value; 2,000,000,000 shares authorized; 138,934,281 shares issued and 138,675,856 outstanding as of December 31, 2025, 100,000,000 shares authorized; 6,154,758 shares issued and 5,896,333 outstanding as of December 31, 2024, respectively
Treasury stock (at cost), 258,425 shares as of December 31, 2025 and 2024, respectively
Additional paid-in capital
Accumulated deficit
Total stockholders’ equity (deficit)
Total liabilities and stockholders’ equity
See Accompanying Notes to these Consolidated Financial Statements
Table of Contents
PLUS THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF OPE RATIONS
(in thousands, except share and per share data)
For the Years Ended December 31,
Grant revenue
Operating expenses:
Research and development
General and administrative
Total operating expenses
Operating loss
Other income (expense):
Financing expense
Change in fair value of derivative instruments
Warrant issuance costs
Interest income
Interest expense
Total other income (expense)
Net loss
Per share information:
Net loss per share of common stock - basic
Weighted average number of shares of common stock outstanding - basic
Net loss per share of common stock - diluted
Weighted average number of shares of common stock outstanding - diluted
See Accompanying Notes to these Consolidated Financial Statements
Table of Contents
PLUS THERAPEUTICS, INC.
CONSOLIDATED STATEMENTS OF ST OCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share data)
Convertible
Additional
Total
preferred stock
Common stock
paid-in
Accumulated
stockholders’
Shares
Amount
Shares
Amount
Treasury Stock
capital
deficit
equity (deficit)
Balance at December 31, 2023
Issuance of common stock
Exercise of pre-funded warrants
Purchase of treasury stock
Stock-based compensation
Reclass of warrants to equity
Net loss
Balance at December 31, 2024
Stock-based compensation
Exercise of pre-funded warrants
Exercise or exchange of March 2025 Series A and B Warrants
Exercise of Series B Warrants from May 2024 PIPE
Exchange of warrants for notes payable
Issuance of common stock, pre-funded warrants and warrants for debt repayment
Cancellation of common stock
Issuance of common stock under Lincoln Park Purchase Agreement, net of issuance costs
Reclassification of 2025 Series B warrant liability to equity
Modification of warrants
Investor fees pursuant to Support Letters
Liability to investors pursuant to Letter Agreement
Restricted stock unit vesting
Net loss
Balance at December 31, 2025
See Accompanying Notes to these Consolidated Financial Statements
Table of Contents
PLUS THERAPEUTICS, INC.
CONSOLIDATED STATEM ENTS OF CASH FLOWS
(in thousands)
For the Years Ended December 31,
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
Accretion of discount on short-term investments
Noncash financing expenses
Change in fair value of derivative instruments
Stock compensation expense
Gain on sale of assets
Increases (decreases) in cash caused by changes in operating assets and liabilities:
Grant receivable
Other assets
Accounts payable and accrued expenses
Other liabilities
Change in operating lease liabilities
Deferred grant liability
Net cash used in operating activities
Cash flows from investing activities:
Purchases of property and equipment
Proceeds from sale of property and equipment
Purchases of intangible assets
Purchases of short-term investments
Proceeds from redemption of short-term investments
Proceeds from sales of short-term investments
Net cash used in investing activities
Cash flows from financing activities:
Principal payments of term loan obligation
Proceeds from credit facility
Repayment of credit facility
Payment of financing costs
Proceeds from issuance of notes payable and warrants
Repayment of notes payable
Proceeds from sale of common stock, pre-funded warrants, and warrants
Proceeds from sale of common stock under Lincoln Park Purchase Agreement
Payment to investors pursuant to Letter Agreement
Offering costs for sale of common stock
Purchase of treasury stock
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period
Supplemental disclosure of cash flows information:
Cash paid during period for:
Interest
Supplemental schedule of non-cash investing and financing activities:
Unpaid offering cost
Unpaid liability to investors pursuant to Letter Agreement
Exchange of warrants for notes payable
Redemption of notes by issuance of common stock, pre-funded warrants and warrants
Right-of-use assets acquired by assuming operating lease liabilities
See Accompanying Notes to these Consolidated Financial Statements
Table of Contents
PLUS THERAPEUTICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Organization and Operations
The Company
Plus Therapeutics, Inc. (the “Company”) is a clinical-stage pharmaceutical company focused on the development, manufacture and commercialization of complex and innovative treatments for patients battling cancer and other life-threatening diseases. CNSide Diagnostics, LLC is a wholly owned subsidiary of Plus Therapeutics, Inc. that develops and commercializes proprietary laboratory-developed tests, such as the CNSide Test, designed to identify tumor cells that have metastasized to the central nervous system in patients with carcinomas and melanomas.
Certain Risks and Uncertainties
The Company’s prospects are subject to the risks and uncertainties frequently encountered by companies in the early stages of development and commercialization, especially those companies in rapidly evolving and technologically advanced industries such as the biotech and medical device field. The Company’s future viability largely depends on its ability to complete development of new products and receive regulatory approvals for those products. No assurance can be given that the Company’s new products will be successfully developed, regulatory approvals will be granted, or acceptance of these products will be achieved.
Going Concern
The Company incurred net losses of $ 22.4 million for the year ended December 31, 2025, and as of December 31, 2025, the Company had an accumulated deficit of $ 515.9 million and cash, cash equivalents, restricted cash, and short-term investments of $ 13.1 million . The Company includes restricted cash and cash equivalents in its liquidity assessment because the restrictions are expected to be released within one year after the date that the financial statements in this Form 10-K are issued, at which time the funds will be available to support working capital requirements. Additionally, the Company used net cash of $ 20.8 million to fund its operating activities for the year ended December 31, 2025. The Company expects that its research and development expenditures will increase in absolute dollars in 2026 and beyond. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
As disclosed in more detail in Note 15, the Company has entered into various financing agreements and raised capital by issuing its common stock. Additionally, i n January 2026, the Company entered into an underwriting agreement in which it raised net proceeds of approximately $ 13.3 million after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company.
The Company continues to seek additional capital from other financing alternatives and other sources in order to ensure adequate funding is available to allow the Company to continue research and product development activities. If sufficient capital is not raised, the Company will at a minimum need to significantly reduce or curtail its research and development and other operations, and this would negatively affect its ability to achieve corporate growth goals.
Should the Company fail to raise additional cash, it would have a material adverse impact on its operations.
The accompanying consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concern.
Nasdaq Listing Compliance
Minimum Stockholders’ Equity Requirement
In March 2024, the Company received notice from the Listing Qualifications staff of Nasdaq (the “Staff”), notifying it that it no longer maintained at least $ 2.5 million in stockholders’ equity, as required under Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”), and also did not meet any other alternative standard. On October 22, 2024, the Company held its first hearing before a Nasdaq panel, as a result of which it received additional time, or until March 4, 2025, to regain compliance. A second hearing was held on July 15, 2025. On July 22, 2025, the panel for its second hearing issued a decision granting its request for continued listing on Nasdaq, subject to the Company demonstrating compliance with (1) the Minimum Stockholders’ Equity Requirement by August 14, 2025 ; and (2) the Minimum Bid Requirement (as defined below) by September 8, 2025 . On August 22, 2025, the Company received a letter (the “August 2025 Letter”) from Nasdaq confirming its compliance with Nasdaq Listing Rule 5550(b). Specifically, the August 2025 Letter confirmed that the Company was in compliance with both (1) Nasdaq Listing Rule 5550(b)(2), which requires a market value of listed securities of at least $ 35 million and (2) the alternative stockholders’ equity threshold under Nasdaq Listing Rule 5550(b)(1), which is the Minimum Stockholders’ Equity Requirement. The August 2025 Letter also provided that, solely with respect to the Minimum Stockholders’ Equity Requirement, it remain subject to a one-year panel monitoring period, through August 22, 2026. If, within that one-year monitoring
Table of Contents
period, the Staff determines that the Company no longer satisfies the Minimum Stockholders’ Equity Requirement (and it is not then in compliance with one of the alternative standards under Nasdaq Listing Rule 5550(b)), it will not be permitted to provide the Staff with a plan of compliance and the Staff is not permitted to grant additional time to regain compliance with the Minimum Stockholders’ Equity Requirement nor will it be afforded an applicable cure or compliance period. Instead, the Staff will issue a delist determination letter, and it will have an opportunity to request a new hearing before the Nasdaq Hearings Panel, which request would stay any further action by the Staff pending the ultimate outcome of the hearing.
Minimum Bid Requirement
On May 16, 2025, the Company received notice from Nasdaq that, because the closing bid price for its common stock had fallen below $ 1.00 per share for 30 consecutive business days, it no longer complied with the minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). The Company was provided an initial compliance period of 180 calendar days, or until November 12, 2025, to regain compliance with the Minimum Bid Requirement. To regain compliance, the closing bid price of its common stock must meet or exceed $ 1.00 per share for a minimum of 10 consecutive business days prior to November 12, 2025.
On November 13, 2025, the Company received a second letter from the Nasdaq Staff advising that it had been granted an additional 180 calendar days, or until May 11, 2026, to regain compliance with the Minimum Bid Requirement, in accordance with Nasdaq Listing Rule 5810(c)(3)(A).
The Company intends to continue to actively monitor the closing bid price of its common stock and will evaluate available options to regain compliance with the Minimum Bid Requirement. Specifically, it has confirmed to Nasdaq that, if necessary, it will implement a reverse stock split of its outstanding common stock to attempt to regain compliance. If the Company does not regain compliance within the additional compliance period, Nasdaq will provide notice that its common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Minimum Bid Requirement during the 180-day additional compliance period or maintain compliance with the other Nasdaq listing requirements.
Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and critical accounting policies involve reviewing assets for impairment, and determining the assumptions used in measuring share-based compensation expense and the fair value of warrants.
Actual results could differ from these estimates. Management’s estimates and assumptions are reviewed regularly, and the effects of revisions are reflected in the financial statements in the periods they are determined to be necessary.
Cash and Cash Equivalents, and Restricted Cash
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
Cash and cash equivalents include cash in readily available checking, savings accounts, money market accounts, and certain treasury bills. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash balances due to the financial position of the depository institution in which those deposits are held.
Restricted cash and cash equivalents relates to the liability owed under the modified Letter Agreement (as described in Note 15, Stockholders’ Equity) pursuant to which the Company is required to retain sufficient funds in an interest bearing account to cover such repayment obligations and make such repayments upon request by any investor who executed the amendment agreement. The restriction will lapse when the related liability is satisfied either from the Company or from reselling securities acquired in the March 2025 Private Placement in an amount equal to 115 % of the purchase price such purchaser paid in the March 2025 Private Placement. The Company includes restricted cash and cash equivalents in current assets because the restrictions are expected to be released within one year.
The following table provides a reconciliation of the components of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total amount presented in the consolidated statements of cash flows:
Table of Contents
As of December 31,
Cash and cash equivalents
Restricted cash and cash equivalents
Total cash, cash equivalents, and restricted cash presented in the consolidated statements of cash flows
Financial Instruments
Financial instruments include cash equivalents, other current assets, and accounts payable. The carrying values of cash equivalents, other current assets, and accounts payable generally approximate fair value due to the short-term nature of these instruments.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation expense, which includes the amortization of capitalized leasehold improvements, is provided for on a straight-line basis over the estimated useful lives of the assets, or the life of the lease, whichever is shorter, and range from three to five years . When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is included in operations. Maintenance and repairs are charged to operations as incurred.
Impairment
The Company assesses its property and equipment and intangible assets for potential impairment when there is a change in circumstances that indicates carrying values of assets may not be recoverable. Such long-lived assets are deemed to be impaired when the undiscounted cash flows expected to be generated by the asset (or asset group) are less than the asset’s carrying amount. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value and would be recorded as a reduction in the carrying value of the related asset and a charge to operating expense. The Company recognized no impairment losses during any of the periods presented in these financial statements.
Goodwill
The Company’s goodwill represents the excess of the cost over the fair value of net assets acquired from its business combinations. The determination of the value of goodwill arising from business combinations requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired.
Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if an event occurs indicating the potential for impairment. Goodwill is considered to be impaired if the Company determines that the carrying value of the reporting unit exceeds its fair value. The Company performed its impairment test by comparing it’s estimated fair value, calculated from the Company’s market capitalization, to its carrying amount. There were no changes in the carrying amount of goodwill during the years ended December 31, 2025 and 2024.
Grant Revenue Recognition
In applying the provisions of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company has determined that government grants are out of the scope of ASC 606 because the funding entities do not meet the definition of a “customer,” as defined by ASC 606, as there is not considered to be a transfer of control of goods or services. With respect to the grant, the Company determines if it is a collaboration arrangement in accordance with ASC Topic 808, Collaborative Arrangements (“ASC 808”). For grants outside the scope of ASC 808, the Company applies International Accounting Standards No. 20, Accounting for Government Grants and Disclosure of Government Assistance, by analogy, and revenue is recognized when the Company incurs expenses related to the grant for the amount the Company is entitled to under the provisions of the contract.
The Company also considers the guidance in ASC Topic 730, Research and Development (“ASC 730”), which requires an assessment, at the inception of the grant, of whether the agreement is a liability. If the Company is obligated to repay funds received regardless of the outcome of the related research and development activities, then the Company is required to estimate and recognize that liability. Alternatively, if the Company is not required to repay the funds, then payments received are recorded as revenue or contra-expense as the expenses are incurred.
Deferred grant liability represents grant funds received or receivable for which the allowable expenses have not yet been incurred as of the balance sheet date. Grant receivable represents grant funds not yet received for which the allowable expenses have been incurred as of the balance sheet date.
Table of Contents
Research and Development
Research and development expenditures, which are charged to operations in the period incurred, include costs associated with the design, development, testing and enhancement of the Company’s products, regulatory fees, the purchase of laboratory supplies, and preclinical and clinical studies as well as salaries and benefits for the Company's research and development employees.
Warrants
Warrants are accounted for as either derivative liabilities or as equity instruments depending on the specific terms of the agreement in accordance with applicable accounting guidance provided in ASC Topic 815 - Derivatives and Hedging . Equity-classified instruments are recorded in additional paid-in capital at issuance and are not subject to remeasurement. Liability-classified warrants are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of warrants in the consolidated statements of operations. The Company periodically evaluates changes in facts and circumstances that could impact the classification of warrants.
Available-for-Sale Securities
The Company’s available-for-sale securities consist of U.S. government and agency securities. Securities with maturities from the date of purchase of less than three months are included in cash equivalents. The Company classifies its marketable securities as available-for-sale and records such assets at estimated fair value in the consolidated balance sheets, with unrealized gains and losses, if any, reported as a component of other comprehensive income (loss) within the consolidated statements of operations and comprehensive income/loss and as a separate component of stockholders’ equity. Realized gains and losses are calculated on the specific identification method and recorded as interest income (loss). At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the decline in fair value below amortized cost is a result of credit losses or other factors, whether the Company expects to recover the amortized cost of the security, the Company’s intent to sell and if it is more likely than not that the Company will be required to sell the securities before the recovery of amortized cost. The Company records changes in allowance for expected credit in other income (expense). There has been no allowance for expected credit recorded during any of the periods presented.
Any premium arising at purchase is amortized to the earliest call date and any discount arising at purchase is accreted to maturity. Accretion of discounts are recorded in interest income in the consolidated statements of operations and comprehensive income/loss.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled. Due to our history of losses, a full valuation allowance has been recognized against our deferred tax assets.
The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. For the years ended December 31, 2025 and 2024 , the Company has no t recorded any interest or penalties related to income tax matters.
Share-Based Compensation
The Company recognizes the fair value of all share-based payment awards in its statements of operations over the requisite vesting period of each award, which approximates the period during which the employee and non-employee director is required to provide service in exchange for the award. The Company estimates the fair value of these options using the Black-Scholes option pricing model using assumptions for expected volatility, expected term, and risk-free interest rate. Expected volatility is based primarily on historical volatility and is computed using daily pricing observations for recent periods that correspond to the expected term of the options. The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method which is an average of the contractual term of the option and its vesting period. The risk-free interest rate is the interest rate for treasury instruments with maturities that approximate the expected term.
Segment Information
For the years ended December 31, 2025 and 2024 , the Company is managed as a single operating segment, and therefore reports its results in one operating segment.
Loss Per Share
Basic per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period increased
Table of Contents
to include, if dilutive, the number of additional common shares that would have been outstanding as calculated using the treasury stock method. Potential common shares were related entirely to outstanding but unexercised options, restricted stock units, warrants and convertible preferred stocks for all periods presented.
Concentration Risk
Although the Company’s contracts with its vendors are not exclusive, the Company currently uses sole source providers for core materials used in its clinical trials.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosure. This ASU includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The Company adopted this ASU prospectively as of January 1, 2025 , and the impact is included in the consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03 Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires an entity to disclose on an annual and interim basis, disaggregated information about specific income statement expense categories. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for the annual period starting on January 1, 2027 and interim periods starting on January 1, 2028. The Company is in the process of analyzing the impact that the adoption of ASU 2024-03 will have on its disclosures.
Fair Value Measurements
Fair value measurements are market-based measurements, not entity-specific measurements. Therefore, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. The Company follows a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable in active markets.
The Company has investments in money market accounts, which are included in cash and cash equivalents on the balance sheets. Certain treasury bills are also considered cash equivalents if their maturities are three months or less at the time of purchase. Fair value inputs for these investments are considered Level 1 measurements within the fair value hierarchy since money market account and treasury bill fair values are known and observable through daily published floating net asset values. The Company obtains the fair value of its Level 2 financial instruments from third-party pricing services. The pricing services utilize industry standard valuation models whereby all significant inputs are observable. The Company validates the prices provided by the third-party pricing services by reviewing their pricing methods and matrices and obtaining market values from other pricing sources. The Company did not adjust or override any fair value measurements as of December 31, 2025 or December 31, 2024. The Company does not have any investments classified as Level 3 and no investment transferred between classification levels during the year ended December 31, 2025.
The following table summarizes the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis as of December 31, 2025 and 2024, respectively (in thousands).
Table of Contents
Fair Value Measurements Using
December 31, 2025
Fair Value
Level 1
Level 2
Level 3
Cash equivalents
Money market
Treasury bills
Total cash equivalents
Investments
Treasury bills
Government agency bonds
Total investments
Fair Value Measurements Using
December 31, 2024
Fair Value
Level 1
Level 2
Level 3
Cash equivalents
Money market
Total cash equivalents
Investments
Treasury bills
Government agency bonds
Money market
Total investments
Liabilities recorded at fair value
Convertible Notes
The Company elected to account for convertible notes (consisting of funding notes and exchange notes) issued on February 13, 2025 at fair value as of the issuance date and immediately before their settlement date of March 4, 2025. The convertible notes are valued using the binomial lattice model with the following key level 3 inputs:
At issuance
At settlement
Interest rate
Remaining term (years)
Volatility
Fair value of common stock
The following table provides a roll forward of the fair value of the convertible notes during the year ended December 31, 2025 (in thousands):
Funding Notes
Exchange Notes
Beginning balance as of January 1, 2025
Issuance
Change in fair value
Settlement
Ending balance as of December 31, 2025
Warrants
The Company issued March 2025 Series A and March 2025 Series B common stock warrants in connection with the March 2025 Private Placement. The March 2025 Series A and March 2025 Series B common stock warrants are accounted for as liabilities at fair value at issuance date, and immediately prior to their extinguishment and modification, respectively, on June 17, 2025. The March 2025 Series A common stock warrants were valued using the Monte Carlo simulation, with the following key level 3 inputs:
Table of Contents
At issuance
At modification and extinguishment
Interest rate
Remaining term (years)
Volatility
The March 2025 Series B Warrants were valued immediately prior to exercise, using the Monte Carlo simulation with the following inputs for the exercises that occurred before the modification on June 17, 2025:
At exercise
Interest rate
Remaining term (years)
Volatility
In addition, the February 2025 Warrants issued in connection with the Funding Notes were required to be classified as liabilities and recorded at fair value. The Company estimated the fair value of the February 2025 Warrants using the Black Scholes model at issuance as of February 13, 2025 and as of their redemption date of March 4, 2025, using the following level 3 inputs:
At issuance
At settlement
Interest rate
Remaining term (years)
Volatility
Fair value of common stock
The table below provides a summary of the fair value of the Company’s warrant liability during year ended December 31, 2024 (in thousands):
Twelve Months Ended December 31, 2024
Warrant liability
Beginning balance as of January 1, 2024
Issuance of warrants
Change in fair value of warrants
Reclassification to equity
Ending balance as of December 31, 2024
The following table provides a roll forward of the fair value of liability classified common stock warrants during the year ended December 31, 2025 (in thousands):
February 2025 Warrants
March 2025 Series A Warrants
March 2025 Series B Warrants
Total
Beginning balance as of January 1, 2025
Issuance
Change in fair value
Settlement
Modification and extinguishment
Reclassification to equity
Ending balance as of December 31, 2025
Investor Liability Pursuant to Letter Agreement and Support Letters
The repayment obligation owed to certain March 2025 Private Placement Purchasers pursuant to the amended Letter Agreement and Support Letters is accounted for at fair value as a financial liability in accordance with ASC 480. The Company measures the fair value of the repayment obligation using Level 3 inputs. As of December 31, 2025, the Company had a liability
Table of Contents
of approximately $ 4.5 million on its consolidated balance sheet related to this repayment obligation. Refer to Note 15 Stockholders’ Equity for further details.
Nonfinancial Assets and Liabilities
The Company applies fair value techniques on a non-recurring basis, if and when necessary, associated with: (1) valuing potential impairment losses related to goodwill and intangible assets which are accounted for pursuant to the authoritative guidance for intangibles—goodwill and other; and (2) valuing potential impairment losses related to long-lived assets which are accounted for pursuant to the authoritative guidance for property, plant and equipment. There was no impairment related to long lived assets, intangible assets, or goodwill during the years ended December 31, 2025 or 2024 .
4. Short-Term Investments
The Company classified short-term investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to facilitate the execution of management strategies. During the year ended December 31, 2025, the unrealized gain on the Company's available-for-sale securities was immaterial, and not presented separately in the consolidated statements of operations.
The Company classified all investments with maturities longer than three months from the date of purchase as short-term investments in the consolidated balance sheets, reflecting its intent and ability to use these assets to meet the liquidity requirements of current operations. The following table summarizes contractual maturities of available-for-sale securities as of December 31, 2025 (in thousands):
Amortized Cost
Estimated Fair Value
Due in one year or less
Due after one year through five years
Due after five years
Total Investments
5. Loss per Share
Basic per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted per share data is computed by dividing net income or loss applicable to common stockholders by the weighted average number of common shares outstanding during the period increased to include, if dilutive, the number of additional common shares that would have been outstanding as calculated using the treasury stock or if-converted method, as applicable. The Pre-Funded Warrants were included in the weighted average shares outstanding calculation (as of the beginning of the period or the date of the grant, whichever was earlier) for basic and dilutive earnings per share given their nominal exercise price.
The March 2025 Series A Warrants and March 2025 Series B Warrants (and for the period in which the February 2025 Warrants, Funding Notes, and Exchange Notes, were outstanding) were participating securities because holders of such instruments would participate in the event a dividend is paid on common stock, however such holders did not have a contractual obligation to share in the Company’s losses. As such, losses were attributed entirely to common stockholders.
The following table sets forth the computation of basic and diluted net loss per share of common stock for the periods indicated, in thousands except share and per share data:
Table of Contents
Year Ended December 31,
Basic and diluted net loss per share of common stock calculation:
Net loss
Change in fair value of derivative instruments
Net loss attributable to common stockholders - diluted
Weighted average shares of common stock outstanding - basic
Net loss per share of common stock - basic
Weighted average shares of common stock - diluted
Net loss per share of common stock - diluted
The following table provides a summary of instruments where underlying shares issuable upon exercise or conversion were excluded from the diluted loss per share calculation for the periods presented because their effect would be anti-dilutive. Additionally, the shares underlying the February 2025 Warrants, Funding Notes and Exchange Notes, each outstanding during the year ended December 31, 2025, were excluded from diluted loss per share as their effect would be anti-dilutive.
As of December 31,
Outstanding stock options
Outstanding restricted stock units
Preferred stock
Outstanding warrants
Total
6. Composition of Certain Financial Statement Captions
Other Current Assets
As of December 31, 2025 and 2024, other current assets were comprised of the following (in thousands):
December 31,
Prepaid services
Deferred costs (Note 7)
Prepaid insurance
Property and Equipment, net
As of December 31, 2025 and 2024, property and equipment, net, were comprised of the following (in thousands):
December 31,
Office and computer equipment
Leasehold improvements
Less accumulated depreciation
Depreciation expense totaled $ 0.2 million and $ 0.6 million for each of the years ended December 31, 2025 and 2024, respectively.
Table of Contents
Intangible Assets, net
As of December 31, 2025 , intangible assets included the net book value of costs incurred for the purchase of Biocept intellectual properties (Note 12) and software upgrades. Amortization expenses totaled $ 0.1 million for each of the years ended December 31, 2025 and 2024.
As of December 31, 2025 intangible assets, net, were comprised of the following (in thousands):
December 31,
Software
Less: Accumulated amortization
Intellectual Property
Less: Accumulated amortization
Total intangible assets, net
As of December 31, 2025, future amortization expense on intangible assets is estimated to be as follows (in thousands):
Year Ending December 31,
Amount
Total future amortization expense
Accounts Payable and Accru ed Expenses
As of December 31, 2025 and 2024, accounts payable and accrued expenses were comprised of the following (in thousands):
December 31,
Accounts payable
Accrued payroll and bonus
Accrued professional fees
Accrued vacation and compensation
Accrued R&D studies
Accrued interest
Accrued other
7. Commitments and Contingencies
Leases
At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on the rate implicit in the lease or an incremental borrowing rate commensurate with the term of the lease. Lease renewable options are included in the estimation of the lease term when it is reasonably certain that the Company will exercise such options.
The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets as long-term assets. Leases with an initial term of 12 months or less are not recorded on the balance sheets. Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term in the statements of operations.
The Company’s existing operating lease agreements generally provide for periodic rent increases, and renewal and termination options. The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants.
Table of Contents
Certain leases require the Company to pay taxes, insurance, and maintenance. Payments for the transfer of goods or services such as common area maintenance and utilities represent non-lease components. The Company elected the package of practical expedients and therefore does not separate non-lease components from lease components.
On October 16, 2025, the Company entered into a lease (the “Houston Lease”) with LG 1 Property Owner LP, pursuant to which the Company agreed to lease approximately 11,370 rentable square feet of space located at 6420 Levit Green Boulevard, Houston, Texas 77021. The Houston Lease is expected to commence on or about November 1, 2026. The Houston Lease provides for a monthly base rent of $ 58,745 , which increases annually by approximately 3 %, plus the Company’s share of the building’s direct expenses. The Houston Lease has an initial term of 120 calendar months. While the premises under the Houston Lease is constructed and designed to fit the Company's business needs and intended purpose, the Company leased temporary space of approximately 11,370 rentable square feet (separate from the premises under the Houston Lease) for a monthly base rent of $ 58,745 . The Company expects to be in the temporary space until leasehold improvements are completed. The Company recognizes lease expense for the short-term temporary space on a straight-line basis over the expected lease term. The deferred rent balance of $ 159,000 representing the difference between the cash payments made and the straight-line lease expense is recorded to "Other liabilities" on the consolidated balance sheets.
The Company’s future minimum annual lease payments under the Houston Lease, including the temporary space, at December 31, 2025 are as follows (in thousands):
Houston Lease
Thereafter
Total minimum lease payments
The Company leases certain office space in Charlottesville, Virginia (the “Charlottesville Lease”). The Charlottesville Lease expires on March 31, 2027.
The Company’s operating lease liabilities and corresponding right-of-use assets are included in the balance sheets. As of December 31, 2025 , the weighted average discount rate used to measure operating lease liabilities and the operating leases remaining term were 12.7 % and 1.25 years, respectively.
The table below summarizes the Company’s operating lease costs from its statements of operations, and cash payments from its statements of cash flows (in thousands).
Year Ended December 31,
Lease expense:
Operating lease expense
Total lease expense
Cash payment information:
Operating cash used for operating leases
Total cash paid for amounts included in the measurement of lease liabilities
Total rent expenses for each of the years ended December 31, 2025 and 2024 was $ 0.4 million and $ 0.2 million, respectively, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.
Table of Contents
The Company’s future minimum annual lease payments under operating leases at December 31, 2025 are as follows (in thousands):
Operating Leases
Total minimum lease payments
Less: amount representing interest
Present value of obligations under leases
Less: current portion
Noncurrent lease obligations
Manufacturing Agreement with SpectronRX
On November 5, 2024, the Company entered into a manufacturing services agreement with SpectronRx for drug product development and manufacturing, which includes an initial commitment fee of $ 0.3 million. Under this agreement, the Company will own all rights to intellectual property related to the products developed, while SpectronRx retains rights to its own technology. SpectronRx is required to negotiate a commercial supply agreement upon six months' written notice before the Company's first commercial manufacturing needs. The agreement will remain in place for five years, automatically renewing for successive one-year terms unless terminated with six months' notice. During the year ended December 31, 2025 and 2024, the Company did not recognize any expenses related to this agreement.
Other Commitments and Contingencies
The Company has entered into agreements with various research organizations for preclinical and clinical development studies, which have provisions for cancellation. Under the terms of these agreements, the vendors provide a variety of services including conducting research, recruiting and enrolling patients, monitoring studies and data analysis. Payments under these agreements typically include fees for services and reimbursement of expenses. The timing of payments due under these agreements is estimated based on current study progress. As of December 31, 2025 , the Company did no t have any clinical research study obligations.
The Company has entered into service and subscription-based agreements, which are recorded in accounts payable and accrued expenses, with an offsetting amount included in deferred costs within other current assets (see Note 6).
Legal proceedings
The Company is subject to various claims and contingencies related to legal proceedings. Due to their nature, such legal proceedings involve inherent uncertainties including, but not limited to, court rulings, negotiations between affected parties and governmental actions. Management assesses the probability of loss for such contingencies and accrues a liability and/or discloses the relevant circumstances, as appropriate.
8. License Agreements
UT Health Science Center at San Antonio (“UTHSCSA”) License Agreement
On December 31, 2021, the Company entered into a Patent and Know-How License Agreement (the “UTHSCSA License Agreement”) with UTHSCSA, pursuant to which UTHSCSA granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of biodegradable alginate microspheres containing nanoliposomes loaded with imaging and/or therapeutic payloads.
NanoTx License Agreement
On March 29, 2020, the Company and NanoTx, Corp. (“NanoTx”) entered into a Patent and Know-How License Agreement (the “NanoTx License Agreement”), pursuant to which NanoTx granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of radiolabeled nanoliposomes.
The transaction terms included an upfront payment of $ 0.4 million in cash and $ 0.3 million in the Company's voting stock. The transaction terms also included success-based milestone and royalty payments contingent on key clinical, regulatory and sales milestones, as well as the requirement to pay 15 % of any non-dilutive monetary awards or grants received from external agencies to support product development of the nanoliposome encapsulated BMEDA-chelated radioisotope, which includes grants
Table of Contents
from the Cancer Prevention & Research Institute of Texas ("CPRIT"). As of December 31, 2025 , there were no accrued payments due to NanoTx as a result of the CPRIT grant received (Note 11 ).
9. Term Loan Obligations
On May 29, 2015 , the Company entered into the Loan and Security Agreement (the “Loan and Security Agreement”), pursuant to which Oxford Finance, LLC (“Oxford”) funded an aggregate principal amount of $ 17.7 million (the “Term Loan”), subject to the terms and conditions set forth in the Loan and Security Agreement.
Pursuant to the Loan and Security Agreement, as amended, the Company made interest only payments through May 1, 2021 , and thereafter was required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through June 1, 2024, the maturity date. On June 3, 2024, the Company paid off the Term Loan by making a final payment in an aggregate amount equal to approximately $ 3.3 million , which included both the balance of outstanding principal and interest and the final payment fee due . The repayment in full of the Term Loan terminated Oxford’s security interest in the Company’s existing and after-acquired assets, as well as all other restrictions and covenants under the Term Loan.
10. Line of Credit Facility
On May 31, 2024, the Company drew down $ 3.3 million on a margin loan facility under a line of credit (the “Pershing Credit Facility”) with Pershing LLC (“Pershing”), an affiliate of The Bank of New York Mellon Corporation. On January 3, 2025, the Pershing Credit Facility was fully repaid and the collateralized marketable securities were fully redeemed. On December 22, 2025, the Company drew down $ 0.8 million under the Pershing Credit Facility.
The available credit line limit under the Pershing Credit Facility fluctuates based on the Company’s request for extensions from time to time, subject to the value of the collateralized marketable securities the Company holds with Pershing, provided that the amount available to draw under the Pershing Credit Facility cannot exceed 91.5 % of the value of the collateralized marketable securities deposited with Pershing. Depending on the value of the marketable securities the Company held with Pershing, Pershing could require the Company from time-to-time to deposit additional funds or marketable securities in order to restore the level of collateral to an acceptable level. The amounts borrowed under the Pershing Credit Facility are due on demand.
Borrowings under the Pershing Credit Facility bear interest at the target interest rate set by the Federal Open Market Committee, subject to a floor of 5.5 %, plus a spread of 1.75 % and applicable fees of 0.5 %, subject to a maximum interest rate of the then applicable Prime Rate as published in The Wall Street Journal plus 3.0 %. Interest payments thereunder are calculated on a monthly basis and, unless paid, are added to the outstanding balance under the Pershing Credit Facility. The proceeds under the Pershing Credit Facility are available for working capital needs and other general corporate purposes. Volatility in the global markets could cause the interest rate to fluctuate from time to time increasing the Company’s costs, or could cause Pershing to terminate the Company’s ability to borrow funds. In addition, borrowings under the Pershing Credit Facility have the effect of limiting the Company’s use of cash and marketable securities.
As of December 31, 2025 and 2024, the Company held collateralized marketable securities with Pershing with a total value of $ 0.8 million and $ 3.5 million, respectively.
11. Grant Revenue
CPRIT Grant
On September 19, 2022, the Company entered into that certain Cancer Research Grant Contract (the “CPRIT Contract”), effective as of August 31, 2022 , with the Cancer Prevention and Research Institute of Texas (“CPRIT”) , pursuant to which CPRIT provides the Company with a CPRIT grant (“CPRIT Grant”) over a three-year period to fund the continued development of rhenium ( 186 Re) obisbemeda for the treatment of patients with leptomeningeal metastases. The CPRIT Grant is subject to customary CPRIT funding conditions, including, but not limited to, a matching fund requirement (one dollar for every two dollars awarded by CPRIT), revenue sharing obligations upon commercialization of rhenium ( 186 Re) obisbemeda based on specific dollar thresholds and tiered low single digit royalty rates until CPRIT receives the aggregate amount of 400 % of the proceeds awarded under the CPRIT Grant, and certain reporting requirements.
The CPRIT Contract will terminate on August 28, 2026 , unless terminated earlier by (a) the mutual written consent of all parties to the CPRIT Contract, (b) CPRIT for an event of default by the Company, (c) CPRIT, if the funds allocated to the CPRIT Grant become legally unavailable during the term of the CPRIT Contract and CPRIT is unable to obtain additional funds for such purposes, and (d) the Company for convenience. CPRIT may require the Company to repay some or all of the disbursed CPRIT Grant proceeds (with interest not to exceed 5 % annually) in the event of the early termination of the CPRIT Contract by CPRIT for an event of default by the Company or by the Company for convenience, or if the Company relocates its principal place of business outside of the state of Texas during the CPRIT Contract term or within three years after the final payment of the grant funds.
Table of Contents
The Company retains ownership over any intellectual property developed under the CPRIT Contract (each, a “Project Result”). With respect to non-commercial use of any Project Result, the Company granted to CPRIT a nonexclusive, irrevocable, royalty-free, perpetual, worldwide license with right to sublicense any necessary additional intellectual property rights to exploit all Project Results by CPRIT, other governmental entities and agencies of the State of Texas, and private or independent institutions of higher education located in Texas, for education, research and other non-commercial purposes.
The Company recognized $ 5.2 million and $ 5.8 million in grant revenue from the CPRIT Contract during the years ended December 31, 2025 and 2024, respectively. The grant revenue receivable balance related to the CPRIT Grant on the consolidated balance sheet as of December 31, 2025 and December 31, 2024 was $ 0.3 million and $ 0.6 million, respectively.
Department of Defense Award
Effective September 1, 2024, the Company entered into an agreement with the Department of Defense office of the Congressionally Directed Medical Research Programs to receive a $ 3.0 million award for research and development purposes (“DoD Award”) over a three year period. The DoD Award will be used to support the planned expansion of the Company’s clinical trial for pediatric brain cancer. On October 4, 2024, the Company received its first payment under the DoD Award in the amount of $ 0.9 million, which was recorded as deferred grant liability as of December 31, 2025. As of December 31, 2025 , no grant revenue was recognized related to the DoD Award.
12. Biocept Asset Acquisitions
On April 26, 2024, the Company, after having its bid accepted by the United States Bankruptcy Court for the District of Delaware, acquired from Biocept, for a total cash payment of $ 400,000 , substantially all of the right, title and interest in a cerebrospinal fluid cancer diagnostic portfolio (the “CNSide Platform”), including (i) intellectual property, (ii) inventory and raw materials, and (iii) data, information, results and reports pertaining to the completed and on-going clinical studies involving the use of the CNSide Platform (including, but not limited to, the FORESEE clinical study that was being conducted by Biocept), related to the development, making, selling, and exporting or importing of the CNSide proprietary cell enumeration test (the “CNSide Test”).
The Company concluded that the acquisition of the Biocept assets was not a business combination, as Biocept did not meet the definition of a business in ASC 805, Business Combination. The Company accounted for the asset purchase transaction under the authoritative guidance for asset acquisitions, and allocated the costs of acquisitions of approximately $ 45,000 among the assets acquired based on the relative fair value of such assets, which is predominately concentrated in the intellectual property acquired including patents and trademarks. The intangible assets acquired from Biocept are capitalized and amortized over a useful life of four years.
13. Income Taxes
Pursuant to the Internal Revenue Code (“IRC”) of 1986, as amended, specifically IRC §382 (“Section 382”) and IRC §383, the Company’s ability to use net operating loss (“NOLs”) and R&D tax credit carry forwards (“tax attribute carry forwards”) to offset future taxable income is limited if the Company experiences a cumulative change in ownership of more than 50 % within a three-year testing period. The Company's use of federal and state NOLs and research credits could be limited further by the provisions of Section 382 depending upon the timing and amount of additional equity securities that the Company has issued or will issue. State NOL carryforwards may be similarly limited. If a change in ownership were to have occurred, NOL and tax credits carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by ownership changes, if any, will not impact the Company’s effective tax rate.
The Company has recorded a full valuation allowance against its net deferred tax assets and due to our net losses for the years ended December 31, 2025 and 2024 , there was no provision or benefit for income taxes recorded.
The table below summarizes the Company’s net loss before income tax provision for the years ended December 31, 2025 and 2024 (in thousands):
Domestic
Foreign
Net loss before provision for income taxes
In accordance with the updated disclosure requirements of ASU 2023-09 for the year ended December 31, 2025, the reconciliation of the income tax benefit at the U.S. federal statutory rate to the provision for income taxes is as follows (in thousands):
Table of Contents
Pre-tax book income - worldwide:
Tax at statutory rate:
State and local income taxes, net of federal income tax effect:(1)
Foreign tax effects
Effect of cross border tax laws
Tax Credits:
R&D Credits
Change in valuation allowance:
Nontaxable or nondeductible items:
Permanent differences
Stock-based compensation
Warrants
Other:
Other
Changes in unrecognized tax benefits:
FIN48
Texas state taxes comprised the majority (greater than 50 percent) of the tax effect in this category.
As previously disclosed for the year ended December 31, 2024 and prior to the adoption of ASU 2023-09, the reconciliation of income tax benefit at the U.S. federal statutory rate to the provision for income taxes is as follows:
Income tax benefit at federal statutory rate
Change in valuation allowance
Income tax benefit at state statutory rate
Share-based compensation
Warrants
NOLs expiring and adjustments to NOL
Research credit
Income taxes paid, net of refunds received, for the year ended December 31, 2025 was negligible.
The tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024 are as follows (in thousands):
Table of Contents
Deferred tax assets:
Accrued expenses
Share-based compensation
Net operating loss carryforwards
Income tax credit carryforwards
Property and equipment, net
Intangible assets
Capitalized R&D
Other, net
Total deferred tax assets
Valuation allowance
Total deferred tax assets, net of allowance
Deferred tax liabilities:
Other
Total deferred tax liability
Net deferred tax assets (liability)
The Company has established a valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realization of such assets. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets are realizable, the valuation allowance will be reduced. The Company has recorded a full valuation allowance of $ 25.9 million as of December 31, 2025 as it does not believe it is more likely than not the net deferred tax assets will be realized. The Company increased its valuation allowance by approximately $ 3.3 million during the year ended December 31, 2025.
At December 31, 2025 , the Company had federal and state tax loss carry forwards of approximately $ 90.7 million and $ 4.8 million, respectively. The federal and state net operating loss carry forwards begin to expire in 2037 and 2044 , if unused, respectively. The federal net operating loss carryover includes $ 87.3 million of net operating losses generated after 2017. Federal net operating losses generated from 2018 onwards carryover indefinitely and may generally be used to offset up to 80 % of future taxable income. At December 31, 2025 , the Company had federal tax credit carry forwards of approximately $ 2.3 million, before reduction for uncertain tax positions. The federal credits will begin to expire in 2039 , if unused. In addition, at December 31, 2025, the Company had state tax credit carry forwards of approximately $ 0.4 million, before reduction for uncertain tax positions. The state credits will begin to expire in 2039 , if unused.
The Company follows the provisions of income tax guidance which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. The guidance requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax positions that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company has no t recognized any liability for uncertain tax positions as of December 31, 2025 and 2024.
Following is a tabular reconciliation of the unrecognized tax benefits activity during the years ended December 31, 2025 and 2024 (in thousands):
Unrecognized Tax Benefits – Beginning
Gross increases – tax positions in prior period
Gross decreases – tax positions in prior period
Gross increase – current-period tax positions
Unrecognized Tax Benefits – Ending
The unrecognized tax benefit amounts are reflected in the determination of the Company’s deferred tax assets. If recognized, none of these amounts would affect the Company’s effective tax rate, since it would be offset by an equal reduction in the deferred tax asset valuation allowance.
Table of Contents
The Company did no t recognize interest related to unrecognized tax benefits in interest expense and penalties in operating expenses for the year ended December 31, 2025.
The Company files income tax returns with the United States and various state jurisdictions. The Company is currently not under examination by the Internal Revenue Service or any other taxing authority.
With few exceptions, the Company’s tax years prior to 2021 are no longer open to examination by the taxing authority. While not open to examination, the tax attributes generated in tax years prior to 2021 remain subject to adjustment by the taxing authorities if utilized in tax years which are still open to examination.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which enacts significant changes to U.S. tax and related laws. Some of the provisions of the new tax law affecting corporations include but are not limited to current deduction of domestic research expenses, increasing the limit of the deduction of interest expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The Company has evaluated the impact the new tax law had on its financial condition and results of operations. OBBBA had no impact on the Company's effective income tax rate, its net deferred federal income tax liability, or current taxes payables. The impact of the tax law changes from the OBBBA is included in the Company’s financial statements.
14. Employee Benefit Plan
The Company implemented a 401(k) retirement savings and profit sharing plan (the “Plan”) effective January 1, 1999. During 2022, the Company commenced safe harbor matching contribu tion for up to 4 % of eligible employee contributions. Total matching contribution under the Plan amounted to approximately $ 0.1 million for the years ended December 31, 2025 and 2024 .
15. Stockholders’ Equity
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock, par value $ 0.001 per share. The Company's board of directors is authorized to designate the terms and conditions of any preferred stock the Company issues without further action by the common stockholders.
Series B and C Preferred Stock
As of December 31, 2025 , there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 27,792 shares of common stock, and 1,014 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 398 shares of common stock.
Common Stock
February 2025 SPEA Agreements
On February 13, 2025 (the “February 2025 Closing Date”), the Company entered into a Securities Purchase and Exchange Agreement (the “February 2025 SPEA”) with certain existing accredited investors (the “February 2025 Purchasers”). Pursuant to the February 2025 SPEA, on the February 2025 Closing Date the Company issued secured convertible promissory notes (the “Funding Notes”) in the aggregate principal amount of $ 3.3 million together with common stock purchase warrants (the “February 2025 Warrants”) to purchase 3,002,009 shares of the Company common stock, par value $ 0.001 and exercise price of $ 1.12 per share (the “February 2025 Warrant Exercise Price”). The aggregate purchase price for the Funding Notes and the February 2025 Warrants was approximately $ 3.7 million (the “Aggregate Purchase Price”) and included proceeds from the February 2025 Purchasers of $ 0.125 per February 2025 Warrant in accordance with Nasdaq listing rules. The Funding Notes would mature on February 13, 2026 , and bore interest at a rate of 10 % per annum, subject to increase upon events of default. The February 2025 Warrants were exercisable for five-years from the date of issuance.
The Funding Notes, accrued interest and February 2025 warrants were repurchased by the Company subsequent to consummation of the March 2025 Private Placement for an aggregate repurchase price of $ 4.2 million.
Security Interest
The obligations of the Company under the February 2025 SPEA, Funding Notes and Exchange Notes (as defined below) were secured by a pledge of substantially all of the assets of the Company pursuant to a security agreement, dated as of the February 2025 Closing Date, among the Company, CNSide Diagnostics, LLC (a subsidiary of the Company, “CNSide Diagnostics”), and Iroquois Master Fund Ltd., as collateral agent for the February 2025 Purchasers (the “Security Agreement”), subject to certain exceptions. The Security Agreement contained certain customary affirmative and negative covenants, including limitations on the Company’s and CNSide Diagnostic’s ability to dispose of assets, subject to customary exceptions. The repayment of the Company’s obligations under the February 2025 SPEA and Notes were guaranteed pursuant to a subsidiary guarantee, dated as
Table of Contents
of the February 2025 Closing Date (the “Subsidiary Guarantee”), by and among CNSide Diagnostics and the February 2025 Purchasers. The Security Agreement and the Subsidiary Guarantee were subsequently terminated after the closing of the private placement pursuant to the March 2025 SPA (as defined below).
Exchange Notes
As disclosed below, the Company entered into the May 2024 Purchase Agreement (defined below), with the May 2024 Purchasers for the private placement of securities, including the May 2024 Series A Warrants to purchase an aggregate of up to 3,591,532 shares of common stock. The May 2024 Purchase Agreement included certain limitations and restrictions on the Company’s ability to issue securities and provided the May 2024 Purchasers and the other investors signatories to the May 2024 Purchase Agreement participation rights in future equity and equity-linked offerings of securities, subject to certain limited exceptions (the “Financing Restrictions”). On the February 2025 Closing Date, pursuant to the February 2025 SPEA, the Company issued to the May 2024 Purchasers secured convertible promissory notes in the aggregate amount of $ 3.2 million (the “Exchange Notes”) in exchange for cancellation of the May 2024 Series A Warrants held by the May 2024 Purchasers, and the May 2024 Purchasers entered into a second amendment to the May 2024 Purchase Agreement to eliminate the Financing Restrictions. The terms and conditions of the Exchange Notes were substantially identical in all material respects to the Funding Notes. The Security Agreement and Subsidiary Guarantee also applied to the obligations under the Exchange Notes. The Exchange Notes were exchanged after the closing of the March 2025 Private Placement as defined below.
Both the Funding Notes and the Exchange Notes contained embedded conversion features that were required to be bifurcated and accounted for as derivative liabilities. The Company evaluated authoritative guidance for accounting for convertible debt instruments and elected to account for the Funding Notes and Exchange Notes at fair value. Consequently, the Company recorded the Funding Notes and Exchange Notes in their entirety at fair value at issuance and immediately before settlement, with changes in fair value recorded as change in fair value of derivative instruments in the consolidated statements of operations between the issuance date and the settlement date.
The Company entered into the transaction due to immediate funding requirements. Under authoritative guidance, if the fair value of a warrant liability exceeds the proceeds received in an arm’s length transaction with no rights or privileges that require separate accounting recognition as an asset identified, then the warrant liability is recorded at fair value with the excess of fair value over proceeds recognized as a loss in earnings. The Exchange Notes, Funding Notes and associated warrants were recorded at fair value on the issuance date at $ 3.8 million, $ 4.0 million and $ 2.7 million, respectively. The excess of the fair value of the instruments issued over cash received of $ 3.7 million and the carrying value of the May 2024 Series A Warrants exchanged of $ 3.7 million, in the amount of $ 3.1 million was recorded as a financing expense in the statement of operations for the year ended December 31, 2025.
Changes in the fair value of Exchange Notes, Funding Notes and February 2025 Warrants between issuance date and settlement date, in the amount of a gain of $ 0.3 million, a gain of $ 0.3 million and a gain of $ 2.2 million, respectively, were recorded as change in the fair value of derivative instruments in the statement of operations for the year ended December 31, 2025.
March 2025 Private Placement
On March 4, 2025, the Company entered into a securities purchase agreement (the “March 2025 SPA”) with accredited investors, including certain existing stockholders of the Company (collectively, the “March 2025 Private Placement Purchasers”) for a private placement of securities (the “March 2025 Private Placement”). The March 2025 SPA, provided for the sale and issuance by the Company of an aggregate of 28,042,140 shares (the “March 2025 Private Placement Shares”) of the Company’s common stock, or, at the election of each March 2025 Private Placement Purchaser, pre-funded warrants to purchase Common Stock (the “March 2025 Pre-Funded Warrants”), exercisable immediately at an exercise price of $ 0.001 per share (the “March 2025 Pre-Funded Warrant Shares”), with each March 2025 Private Placement Share or March 2025 Pre-Funded Warrant accompanied by (i) a Series A common warrant (the “March 2025 Series A Warrants”) to purchase one share of common stock (the “March 2025 Series A Warrant Shares”), and (ii) one Series B common warrant (the “March 2025 Series B Warrants”) to purchase one share of common stock (see below for additional details on the Series B Warrants cashless exercise provisions) (the “March 2025 Series B Warrant Shares,” and together with the March 2025 Series A Warrant Shares, the “March 2025 Common Warrant Shares”). The March 2025 Private Placement Shares, March 2025 Pre-Funded Warrants, March 2025 Pre-Funded Warrant Shares, March 2025 Series A Warrants, March 2025 Series B Warrants, and the March 2025 Common Warrant Shares are collectively referred to herein as the “March 2025 Securities.” Pursuant to the March 2025 SPA, the Company issued to the March 2025 Private Placement Purchasers 4,069,738 March 2025 Private Placement Shares, 23,972,400 March 2025 Pre-Funded Warrants, 28,042,138 March 2025 Series A Warrants and 28,042,138 March 2025 Series B Warrants. As of December 31, 2025, all March 2025 Series A Warrants and March 2025 Series B Warrants were settled as a result of , exchanges or exercises as detailed below.
The combined purchase price of $ 0.66 for each March 2025 Private Placement Share or $ 0.659 for each March 2025 Pre-Funded Warrant in the March 2025 Private Placement, together with one accompanying March 2025 Series A Warrant and one accompanying March 2025 Series B Warrant, represents the applicable “Minimum Price” in accordance with Nasdaq Rule 5635(d).
Table of Contents
The initial exercise price of each March 2025 Series A Warrant issued in the March 2025 Private Placement was $ 1.32 per share of common stock. The March 2025 Series A Warrants were exercisable only following stockholder approval and expire five ( 5 ) years thereafter. The March 2025 Series A Warrants were subject to certain price reset, share combination event and anti-dilution provisions which, if triggered, provided that the number of shares issuable upon exercise of the March 2025 Series A Warrants would downward adjust, subject to a floor price of $ 0.132 (the “Floor Price”), and the number of shares issuable upon exercise therefor would increase such that the aggregate exercise price remained unchanged. The March 2025 Series A Warrants were extinguished as part of the Letter Agreement on June 17, 2025 as discussed below.
The initial exercise price of each March 2025 Series B Warrant issued in the March 2025 Private Placement was $ 1.98 per share of common stock. The March 2025 Series B Warrants were exercisable only following stockholder approval and expire two and one-half ( 2.5 ) years thereafter. The March 2025 Series B Warrants were subject to certain price reset and share combination event provisions which, if triggered, provided that the number of shares issuable upon exercise of the March 2025 Series B Warrants would downward adjust, subject to the Floor Price, and the number of shares issuable upon exercise therefor would increase such that the aggregate exercise price remained unchanged. In addition, the March 2025 Series B Warrant alternative cashless exercise provision provided that the March 2025 Series B Warrant could be exercised without further payment to the Company and for three times the number of shares of common stock then subject to the March 2025 Series B Warrant.
The March 2025 Pre-Funded Warrants will be exercisable from the date of issuance until exercised in full. The March 2025 Pre-Funded Warrants, March 2025 Series A Warrants and March 2025 Series B Warrants may not be exercised to the extent that immediately following such exercise, the holder would beneficially own greater than 4.99 % (or, at the election of the holder, greater than 9.99 %) of the Company’s outstanding common stock.
In connection with the March 2025 Private Placement, the Company issued 3,077,270 shares of common stock, 19,650,000 shares of March 2025 Pre-Funded Warrants in lieu thereof, and accompanying 22,727,270 March 2025 Series A Warrants and 22,727,270 March 2025 Series B Warrants in consideration of new capital subscriptions. In addition, the Company issued 992,468 shares of common stock, 4,322,400 March 2025 Pre-Funded Warrants in lieu thereof, and accompanying 5,314,870 March 2025 Series A Warrants and 5,314,870 March 2025 Series B Warrants, were issued in exchange for the cancelation of approximately $ 3.2 million in aggregate principal amount of the Exchange Notes.
The Company evaluated the terms of the February 2025 Warrants, March 2025 Series A Warrants and March 2025 Series B Warrants under authoritative guidance and concluded that each of the instruments should be accounted for as a liability instrument at fair value at issuance and each subsequent balance sheet date until settlement, with changes in the fair value recorded in the consolidated statement of operations. The March 2025 Pre-Funded Warrants meet the criteria to be recorded as equity in the Company's consolidated balance sheet.
The March 2025 Private Placement closed on March 7, 2025 (the “March 2025 Closing Date”). The aggregate gross proceeds at the March 2025 Closing Date totaled approximately $ 15.0 million. The gross proceeds, along with the fair value of the February 2025 Warrants of $ 0.5 million and Exchange Notes of $ 3.5 million as of the settlement date of March 4, 2025, were first allocated to the warrant liability instruments at their full fair value, totaling $ 13.2 million, with the remainder of $ 5.8 million recorded to common stock and additional paid-in capital in equity of the consolidated balance sheet. Total offering expenses of $ 1.4 million were allocated based on the allocated amount of proceeds to warrant liabilities and equity, with $ 1.0 million recorded as warrant issuance expenses and expensed as incurred, and the remaining $ 0.4 million recorded as common stock issuance costs in additional paid-in capital.
On May 2, 2025, our stockholders approved, among other things, the March 2025 Series A Warrants and March 2025 Series B Warrants and an amendment of our Certificate of Incorporation, as amended, to increase the authorized share capital to an amount sufficient to cover the shares of common stock issuable upon the exercise of the March 2025 Series A Warrants and March 2025 Series B Warrants. As part of the March 2025 Series A Warrants and March 2025 Series B Warrants agreement, the exercise price of the March 2025 Series A Warrants and March 2025 Series B Warrants were reset on May 19, 2025 to $ 0.4373 per share. Prior to modification of the March 2025 Series B Warrants as part of the Letter Agreement (as further described below), certain March 2025 Series B Warrants were cashless exercised for the issuance of 21,482,492 shares of common stock. The liability classified March 2025 Series B Warrants were remeasured immediately prior to exercise, which resulted in a $ 3.8 million gain on the change in fair value for the year ended December 31, 2025, and a $ 0.8 million credit to additional paid-in-capital.
During the year ended December 31, 2025, 57,018,872 March 2025 Series A Warrants and March 2025 Series B Warrants were exercised or exchanged.
Letter Agreement
On June 17, 2025, the Company and the March 2025 Private Placement Purchasers entered into a letter agreement (the “Letter Agreement”) with each of the March 2025 Private Placement Purchasers in an effort to, among other items, minimize the dilutive impact of the March 2025 Private Placement. The Letter Agreement extinguished the March 2025 Series A Warrants, modified the March 2025 Series B Warrants, and provided for the return and cancellation of Private Placement Shares and Pre-Funded Warrants, as further discussed in the following paragraphs.
Table of Contents
As part of the Letter Agreement, all March 2025 Series A Warrants were cancelled. As of March 31, 2025, the fair value of the March 2025 Series A Warrant liability was $ 5.0 million. On June 17, 2025, the March 2025 Series A Warrants were immediately remeasured to fair value prior to their cancellation, which resulted in a $ 0.3 million loss on change in fair value attributable to the March 2025 Series A Warrants for the year ended December 31, 2025. The extinguishment of the March 2025 Series A Warrants was recognized as a $ 2.3 million capital contribution and recorded to additional paid-in capital, as the extinguishment was deemed equivalent to a capital contribution by existing shareholders of the Company.
As part of the same transaction, the March 2025 Series B Warrants were amended (the "Amended March 2025 Series B Warrants"), to (a) reduce the overall number of March 2025 Series B Warrant Shares issuable upon exercise of the Series B Warrants to an aggregate of up to 35,536,380 Series B Warrant Shares, (b) reduce the alternative cashless exercise ratio in such March 2025 Series B Warrants from 3 :1 to 1 :1, (c) remove provisions contained in the March 2025 Series B Warrants that would otherwise reduce the Company’s stockholders’ equity, and (d) reset the exercise price of the Amended March 2025 Series B Warrants back to $ 1.98 per share. As a result of the Letter Agreement, the Amended March 2025 Series B Warrants no longer fail the indexation guidance under ASC 815, Derivatives and Hedging, resulting in a reclassification from liability to equity. Immediately prior to reclassification, the March 2025 Series B Warrant liability was remeasured, and $ 4.5 million was recognized as a capital contribution and recorded to additional paid-in capital, as the modification of the March 2025 Series B Warrants was deemed equivalent to a capital contribution by existing shareholders of the Company. The remeasured fair value of the March 2025 Series B warrant liability, in the amount of $ 11.0 million was reclassified to equity. After the June 17, 2025 modification, 34,794,540 of the Amended March 2025 Series B Warrants were cashless exercised resulting in the issuance of 34,794,540 shares of common stock.
Lastly, in conjunction with the Letter Agreement, each of the March 2025 Private Placement Purchasers agreed to return an aggregate of 12,241,986 Private Placement Shares and Pre-Funded Warrants issuable for an aggregate of 10,633,650 Pre-Funded Warrant Shares, held by them as of the date of the Letter Agreement, upon request of the Company (the "Letter Agreement Repurchase Option"), which were issued pursuant to the March 2025 Private Placement Purchase Agreement for a value of $ 0.66 per Private Placement Share and $ 0.659 per Pre-Funded Warrant. In exchange therefor, the Company agreed to repay the March 2025 Private Placement Purchasers holding such securities 115 % of such value, using 90 % of the proceeds from any capital raised by the Company subsequent to July 1, 2025. The Company and each of the March 2025 Private Placement Purchasers also agreed to waive any restrictions on subsequent equity sales and variable rate transactions contained in March 2025 Private Placement Purchase Agreement to allow for such repayment. During the year ended December 31, 2025, the Company paid the March 2025 Private Placement Purchasers $ 3.2 million and 5,211,835 shares were returned and cancelled under the terms of the Letter Agreement.
Support Letters
On July 11, 2025, the Company and certain March 2025 Private Placement Purchasers party to the Letter Agreement entered into that certain letter of support (the “Support Letters”) to modify certain portions of the Letter Agreement as between the Company and each of such March 2025 Private Placement Purchasers. In the event that the Company reasonably believes that, within the 30 days (the “Modification Period”) prior to the end of any fiscal quarter, the Company will have stockholders’ equity in an amount below $ 3.0 million as of the end of such fiscal quarter (the “Potential Equity Deficiency”), the Subsequent Financing Percentage (as defined in the Letter Agreement) shall be modified from 90 % to 50 % for any Subsequent Financing (as defined in the Letter Agreement) that occurs during the Modification Period pursuant to the Lincoln Park Purchase Agreement. Upon the end of the Modification Period, the Subsequent Financing Percentage shall be reverted to 90 %, and such percentage shall apply to all Subsequent Financings, including all Subsequent Financings pursuant to the Lincoln Park Purchase Agreement. In the event the Company desires to trigger the modification of the Subsequent Financing Percentage, the Company agrees to supply the purchaser who executed a Support Letter with a pro forma balance sheet to evidence its reasonable belief of the Potential Equity Deficiency approximately 30 days prior to each end of fiscal quarter once the books for prior months are closed. In accordance with the Support Letters, the Company made a cash payment of $ 0.5 million to such purchasers for a total cash payment of $ 2.3 million, which was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as of December 31, 2025. Such payment counted as cash received by the purchaser towards its Maximum Amount. Each Support Letter also granted the purchaser party to the letter a participation right in certain future financings of the Company for a period of 12 months.
On October 28, 2025, the Company entered into an amendment to the Letter Agreement and the Support Letters with certain March 2025 Private Placement Purchasers (the “Amendment Agreement”), pursuant to which (a) the Support Letters were terminated other than with respect to the participation rights granted therein, and (b) the repayment mechanism under the Letter Agreement was modified. As modified, the Company is no longer required to use 90 % of the proceeds from any subsequent financing to repay the March 2025 Private Placement Purchasers. Instead, the Company is only required to retain sufficient funds in an interest bearing account to cover such repayment obligations and make such repayments upon request by any March 2025 Private Placement Purchaser who executed the Amendment Agreement until each such purchaser has received cash either from the Company or from reselling securities acquired in the March 2025 Private Placement in an amount equal to 115 % of the purchase price such purchaser paid in the March 2025 Private Placement. If such requests are made, the requesting purchaser must return shares acquired in the March 2025 Private Placement at a value of $ 0.66 per share.
Table of Contents
The repayment obligation owed under the Amendment Agreement is accounted for at fair value as a financial liability in accordance with ASC 480. The liability is remeasured each period, with changes to fair value recorded in the statement of operations. As of December 31, 2025, the Company had a remaining liability of approximately $ 4.5 million included in investor liability pursuant to the letter agreement on its consolidated balance sheet.
During the year ended December 31, 2025, the Company recorded $ 7.7 million as a reduction of additional paid in capital representing the total investor liability pursuant to the letter agreement. This reduction in additional paid in capital is net of $ 0.9 million as a result of the reselling of securities acquired in the March 2025 Private Placement by certain March 2025 Private Placement Purchasers, which was recorded as a reduction of the liability that would have been settled in cash, with a corresponding increase to stockholders’ equity.
First Amendment to the February 2025 SPEA
In connection with entering into the March 2025 SPA, the Company entered into that certain First Amendment to the February 2025 SPEA (the “First Amendment”). The February 2025 SPEA included certain limitations and restrictions on the Company’s ability to issue securities and provided the investors with participation rights in future equity and equity-linked offerings of securities, subject to certain limited exceptions (the “New Financing Restrictions”). Pursuant to the First Amendment, subject to consummation of the March 2025 Private Placement, the Company agreed to repurchase from the Investors $ 3.4 million in principal amount of the Company’s Funding Notes and accrued interest, along with the February 2025 Warrants issued pursuant to the February 2025 SPEA for an aggregate purchase price of $ 4.2 million. In exchange for the repurchase by the Company of the Funding Notes and SPEA Warrants, the February 2025 Purchasers agreed to consent to the March 2025 Private Placement and eliminate the New Financing Restrictions.
May 2024 Private Placement
On May 5, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors, including certain of the Company’s directors and executive officers (“Company Insiders”) (collectively, the “Purchasers”), for the sale and issuance by the Company of its securities (the “Initial Subscription”). On May 8, 2024, the Company entered into a first amendment to the Securities Purchase Agreement (together with the Securities Purchase Agreement, the “Purchase Agreement”), for the sale and issuance by the Company of additional securities to two of the Purchasers (the “Additional Subscription,” and together with the Initial Subscription, the “May 2024 Private Placement”). The Purchase Agreement provides for the sale and issuance by the Company of an aggregate of 3,591,532 shares (the “Private Placement Shares”) of the Company’s common stock or, at the election of each Purchaser, pre-funded warrants (the “Pre-Funded Warrants”), exercisable immediately at an exercise price of $ 0.001 per share, with each Private Placement Share or Pre-Funded Warrant accompanied by (i) a Series A common warrant (“Series A Warrants”) to purchase one share of common stock, for an aggregate of 3,591,532 Series A Warrants, and (ii) one Series B common warrant (“Series B Warrants”) to purchase one share of common stock, for an aggregate of 3,591,532 Series B Warrants.
The combined purchase price for each Private Placement Share and Pre-Funded Warrant from the Initial Subscription was $ 2.022 , and $ 2.158 from the Additional Subscription, in each case together with one accompanying Series A Warrant and one accompanying Series B Warrant provided, that the Company Insiders participated in the Initial Subscription at an offering price of $ 2.04 per Private Placement Share and accompanying Series A Warrant and Series B Warrant.
The exercise price of May 2024 Series A Warrants and Series B Warrants from the Initial Subscription is $ 1.772 per share from the Initial Subscription and $ 1.908 per share from the Additional Subscription, provided that the exercise price for the May 2024 Series A Warrants and Series B Warrants issued to the Company Insiders is $ 1.79 per share. Subject to certain ownership limitations, the May 2024 Series A Warrants will be exercisable until May 9, 2029, which is the five-year anniversary of issuance. Subject to certain ownership limitations, the May 2024 Series B Warrants will be exercisable until June 24, 2025. The Pre-Funded Warrant will not expire until exercised in full.
Prior to the Amendment and Restatements (as defined below), if a holder of a May 2024 Series A Warrant or a Series B Warrant was unable to exercise the warrant due to the limitation contained in the warrant that restricts the holder from owning above a specified beneficial ownership level (generally 4.99 % or 9.99 %) as the result of exercise of the warrant, then the holder had the right to elect upon exercise of the warrant to receive a Pre-Funded Warrant for the same number of shares of common stock that would otherwise have been received upon exercise of the warrant. In addition, prior to the Amendment and Restatements, the May 2024 Series A Warrants and Series B Warrants provided for a call right starting June 24, 2025, in favor of the Company, if the volume-weighted average price of the shares of common stock exceeds specified prices.
The May 2024 Private Offering closed on May 9, 2024. The Company issued 1,439,988 shares of common stock, 2,151,544 Pre-Funded Warrants, 3,591,532 Series A Warrants and 3,591,532 Series B Warrants to purchase shares of its common stock in connection with the May 2024 Private Placement. The net proceeds from the May 2024 Private Placement were approximately $ 7.3 million.
The Company reviewed the terms of the May 2024 Pre-Funded Warrants, Series A Warrants and Series B Warrants under the authoritative accounting guidance as of the issuance date.
Table of Contents
As described above, the May 2024 Series A Warrants and Series B Warrants were initially classified as liabilities for the reason that they could have been exercised into either shares of common stock or May 2024 Pre-Funded Warrants at the holder’s option and thus failed the indexation guidance under ASC 815, Derivatives and Hedging. The May 2024 Series A Warrant and Series B Warrant liability were initially recorded at fair value as of the issuance date, and under the terms of the May 2024 Series A Warrants and Series B Warrants when issued that liability was subject to adjustment to estimated fair value at each balance sheet date until the warrants were settled. Refer below for additional information regarding the amendment of the May 2024 Series A Warrants and Series B Warrants that eliminated the ability of the May 2024 Series A Warrants and Series B Warrants to be exercised into Pre-Funded Warrants, and as a result, the reclassification of the May 2024 Series A and B Warrants from liability to equity section of the consolidated balance sheet.
The May 2024 Pre-Funded Warrants are equity classified because they (1) are freestanding financial instruments that are legally detachable and separately exercisable from the common stock, (2) are immediately exercisable, (3) do not embody an obligation for the Company to repurchase its shares, (4) permit the holder to receive a fixed number of shares of common stock upon exercise, (5) are indexed to the Company’s common stock and (6) meet the equity classification criteria.
The proceeds from the May 2024 Private Placement were first allocated to the full fair value of the May 2024 Series A Warrants and Series B Warrants due to the initial liability classification. As disclosed in Note 3, Fair Value Measurements, the fair value of the May 2024 Series A Warrants and Series B Warrants at issuance was $ 10.9 million. Under authoritative guidance, if the fair value of a warrant liability exceeds the proceeds received in an arm’s length transaction with no rights or privileges that require separate accounting recognition as an asset identified, then the warrant liability is recorded at fair value with the excess of fair value over proceeds recognized as a loss in earnings. The Company recognized approximately $ 3.5 million in financing expense in the consolidated statement of operations during year ended December 31, 2024, which represents the excess of the fair value of the Series A Warrants and Series B Warrants at issuance over the proceeds. During the year ended December 31, 2024, the Company recognized a fair value gain on warrant liability of $ 5.7 million. Proceeds from the May 2024 Private Placement are shown as cash from financing transactions and the gain on warrant liability is included as an adjustment to reconcile the net loss to net cash used in operating activities in the statements of cash flows for the year ended December 31, 2024.
In addition, total offering expenses related to the May 2024 Private Placement of $ 0.4 million were recorded as a component of other expenses as the entire proceeds were allocated to the warrant liability, which, prior to the amendment described below, could be settled with either the Company’s shares of common stock or May 2024 Pre-Funded Warrants, which are exercisable into the Company’s shares of common stock at any time at the holders’ option, but not in cash payment to the holders.
During the year ended December 31, 2025, 497,824 May 2024 Series B Warrants were exercised.
Amendment and Restatement of May 2024 Series A Warrants and Series B Warrants
On August 9, 2024, the Company amended and restated the May 2024 Series A Warrants and Series B Warrants (the “Amendment and Restatements”) issued in the May 2024 Private Placement. The Amendment and Restatements eliminated the ability of the holders of the May 2024 Series A Warrants and Series B Warrants to elect to purchase Pre-Funded Warrants upon exercise of the May 2024 Series A Warrants and Series B Warrants in lieu of shares of common stock if the holder would have been restricted because of the specified beneficial ownership level in the May 2024 Series A Warrants and Series B Warrants.
In addition, the Amendment and Restatements eliminated the Company’s call right under the terms of the May 2024 Series A Warrants to call the May 2024 Series A Warrants after June 24, 2025, if the volume-weighted average price of shares of common stock exceeded specified prices. There were no other changes in the terms of the May 2024 Series A Warrants and Series B Warrants.
As a result of the Amendment and Restatements, the May 2024 Series A Warrants and Series B Warrants, as amended, no longer failed the indexation guidance under ASC 815, Derivatives and Hedging, and the fair value of the warrant liability at the amendment date, in the amount of $ 5.2 million, was reclassified to equity.
Lincoln Park Purchase Agreement
On June 17, 2025, the Company entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park committed to purchase up to $ 50.0 million of shares of the Company’s common stock, $ 0.001 par value per share. Such sales of common stock by the Company are subject to certain limitations and conditions set forth in the Lincoln Park Purchase Agreement including, but not limited to, the filing and effectiveness of a registration statement (a “Lincoln Park Registration Statement”). As of December 31, 2025, under the Lincoln Park Registration Statements, the resale of up to a total of 50,000,000 shares are reserved for issuance and sale under the Lincoln Park Purchase Agreement.
Under the Lincoln Park Purchase Agreement, on any business day selected by the Company over the 36-month period commencing on June 23, 2025 (the "Purchase Date"), the Company may direct Lincoln Park to purchase up to 300,000 shares of common stock on such Purchase Date, so long as the closing stock price on The Nasdaq Capital Market is not below $ 0.10 on the
Table of Contents
applicable Purchase Date (a “Regular Purchase”); provided, however, that (i) a Regular Purchase may be increased to up to 400,000 shares, if the closing sale price per share of the common stock on The Nasdaq Capital Market is not below $ 0.50 on the applicable Purchase Date; and (ii) a Regular Purchase may be increased to up to 500,000 shares, if the closing sale price per share of the common stock on The Nasdaq Capital Market is not below $ 0.75 on the applicable Purchase Date. In any case, Lincoln Park’s maximum obligation under any single Regular Purchase will not exceed $ 1.0 million. The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the Purchase Agreement. The purchase price per share for each such Regular Purchase will be 97 % of the lesser of: (i) the lowest sale price for the common stock on The Nasdaq Capital Market on the date of sale, and (ii) the average of the three lowest closing sale prices for the common stock on The Nasdaq Capital Market during the 10 consecutive business days ending on the business day immediately preceding the purchase date.
The Company also has the right to direct Lincoln Park, on any business day on which the Company has properly submitted a Regular Purchase notice for the maximum amount the Company is then permitted to sell to Lincoln Park in such Regular Purchase, to purchase an additional amount of the common stock (an “Accelerated Purchase”) of additional shares based on criteria established in the Lincoln Park Purchase Agreement. The purchase price per share for each such Accelerated Purchase will be 96.5 % of the lesser of: (i) the volume weighted average price (“VWAP”) during a specific time window on the Accelerated Purchase date as defined in the Lincoln Park Purchase Agreement, and (ii) the closing sale price of the Company’s common stock on The Nasdaq Capital Market on the same Accelerated Purchase date.
In addition to the Regular Purchase and Accelerated Purchase, the Company can sell to Lincoln Park an additional amount of common stock (an “Additional Accelerated Purchases”), which can be initiated multiple times on the same Additional Accelerated Purchase date. The purchase price per share for each such Additional Accelerated Purchase will be 96.5 % of the lesser of: (i) the VWAP during a specific time windows on the Additional Accelerated Purchase date as defined in the Lincoln Park Purchase Agreement, and (ii) the closing sale price of the Company’s common stock on The Nasdaq Capital Market on the same Additional Accelerated Purchase date.
The sales of shares of common stock to Lincoln Park through a Regular Purchase, an Accelerated Purchase and an Additional Accelerated Purchases, depend upon a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The net proceeds under the Lincoln Park Purchase Agreement to the Company depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park.
In accordance with the Lincoln Park Purchase Agreement, the Company was required to pay Lincoln Park an initial commitment fee of $ 0.5 million, which was paid through the issuance of 1,612,903 shares of common stock on August 14, 2025. The initial commitment fee was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as of December 31, 2025. The Company agreed to pay an additional commitment fee of $ 0.5 million, which it elected to pay in shares of its common stock, upon receipt of $ 25.0 million aggregate gross proceeds from sales of common stock to Lincoln Park under the Lincoln Park Purchase Agreement.
As of the year ended December 31, 2025, the Company issued 50,000,000 shares under the Lincoln Park Purchase Agreement for gross proceeds of approximately $ 22.6 million. The Company incurred approximately $ 50,000 for legal fees in connection with the Lincoln Park Purchase Agreement. There are no shares available for resale under the Company's Second Registration Statement in respect of the Lincoln Park Purchase Agreement.
Outstanding Warrants
As of December 31, 2025 and 2024, the Company had the following warrants outstanding:
December 31, 2025
December 31, 2024
May 2024 Series A Warrants
May 2024 Series B Warrants
2024 Pre-Funded Warrants
Total
One share of common stock is issuable for each warrant upon exercise.
Share Repurchase Program and Treasury Stock
On October 31, 2023, the Company announced that its Board had approved a share repurchase program (the “Share Repurchase Program”), with authorization to repurchase up to $ 500,000 of the outstanding shares of the Company’s common
Table of Contents
stock. The Company funded repurchases under the Share Repurchase Program with available cash.
During the year ended December 31, 2024, the Company purchased 179,866 shares of its common stock for approximately $ 0.4 million as treasury stock. As of December 31, 2024, no amount remained authorized for repurchase.
16. Stock-based Compensation
Under the Company’s 2015 New Employee Incentive Plan (the “2015 Plan”), awards may only be granted to employees who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as a material inducement to entering into employment with the Company. As of December 31, 2025 , there were 2,986,025 shares of common stock remaining and available for future issuances under the 2015 Plan.
The Company’s 2020 Stock Incentive Plan (the “2020 Plan”), which replaced the Company’s 2014 Equity Incentive Plan, provides for the award or sale of shares of common stock (including restricted stock), the award of stock units and stock appreciation rights, and the grant of both incentive stock options to purchase common stock to directors, officers, employees and consultants of the Company. The 2020 Plan, as amended, provides for the issuance of up to 21,303,334 shares of common stock, plus the number of shares available for issuance is increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan are forfeited or expire (except as otherwise provided in the 2020 Plan). As of December 31, 2025 , there were 6,864,306 shares remaining and available for future issuances under the 2020 Plan.
Generally, options issued under the 2020 Plan are subject to a two-year or four-year vesting schedule with 25 % of the options vesting on the one year anniversary of the grant date followed by equal monthly installment vesting, and have a contractual term of 10 years.
A summary of stock option activity for the year ended December 31, 2025 is as follows:
Options
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic Value
Balance as of December 31, 2024
Granted
Cancelled/forfeited
Balance as of December 31, 2025
Vested and expected to vest at December 31, 2025
Exercisable at December 31, 2025
The Company settles exercises of stock options with newly issued shares of its common stock. There were no stock options exercised in 2025 or 2024.
As of December 31, 2025 , the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 5.1 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 3.17 years.
The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the requisite service period, which is typically the vesting period of each option. The fair value of each option awarded during the years ended December 31, 2025 and 2024 was estimated on the date of grant using the Black-Scholes-Merton option valuation model based on the following weighted-average assumptions:
December 31,
December 31,
Expected term (years)
Risk-free interest rate
Expected volatility
Dividend yield
Resulting fair value
The weighted average risk-free interest rate represents the interest rate for treasury constant maturity instruments published by the Federal Reserve Board. If the term of available treasury constant maturity instruments is not equal to the expected term of an
Table of Contents
employee option, the Company uses the weighted average of the two Federal Reserve securities closest to the expected term of the employee option.
The dividend yield has been assumed to be zero as the Company (a) has never declared or paid any dividends and (b) does not currently anticipate paying any cash dividends on its outstanding shares of common stock in the foreseeable future.
Generally, restricted stock units represent the right to receive a certain number of shares of common stock subject to certain vesting conditions and other restrictions. The fair value of restricted stock units is determined by the closing market price on the grant date.
A summary of restricted stock unit activity for the year ended December 31, 2025 is as follows:
Shares
Weighted
Average
Grant Date Fair Value
Unvested as of December 31, 2024
Granted
Vested
Cancelled/forfeited
Unvested as of December 31, 2025
Restricted stock units granted during the year ended December 31, 2025 generally vest over a 36-month period upon satisfaction of service conditions. As of December 31, 2025 , the total compensation cost related to non-vested restricted stock units not yet recognized for all the Company’s plans is approximately $ 1.1 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.53 years.
The following table summarizes share-based compensation recognized during the years ended December 31, 2025 and 2024 in the statement of operations (in thousands):
Years ended December 31,
Research and development
General and administrative
Total share-based compensation
17. Segment Information
The Company operates under one reportable business segment to advance the development, manufacturing and commercialization of complex and innovative treatments for patients battling cancer and other life-threatening diseases. The determination of a single reportable business segment is consistent with the consolidated financial information regularly provided to the Company’s CODM. All of the Company's long-term assets and operations are located in the United States. The Company’s CODM is its Chief Executive Officer , who reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance, including comparing actual results to budgets and forecasts to assess variances, identify trends, and guide strategic planning.
In addition to the significant expense categories included within the consolidated statements of operations, the below disaggregated amounts comprise significant research and development and general and administrative expenses. These expenses consist of (1) clinical, manufacturing and research contracts for research and development programs, (2) personnel-related expenses, including salaries, benefits and share-based compensation, (3) professional fees, including third-party costs for goods and services such as lab supplies and contract research, and legal and other professional expenses, and (4) facility and other overhead expenses, including depreciation, occupancy, travel, insurance and other costs.
Table of Contents
Year Ended December 31
(in thousands)
Research and development
Clinical, development and licensing expenses
Personnel related expenses
Professional fees
Facility and other overhead expenses
Total research and development
General and administrative
Personnel related expenses
Professional expenses
Facility and other overhead expenses
Total general and administrative
All of the Company's long-term assets and operations are located in the United States.
18. Subsequent Events
January 2026 Public Offering
On January 13, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lake Street Capital Markets, LLC, as the underwriter (the “Underwriter”), pursuant to which the Company (a) agreed to issue and sell, in an underwritten public offering an aggregate of (i) 39,473,684 shares of common stock, par value $ 0.001 per share and (ii) warrants to purchase 39,473,684 shares of common stock, at a combined public offering price of $ 0.38 per share and warrant, and (b) granted the Underwriter a 30-day option to purchase up to an additional 5,921,052 shares of Common Stock, additional Warrants to purchase up to 5,921,052 shares of Common Stock or any combination thereof, at the public offering price, in each case less underwriting discounts and commissions. Each warrant is immediately exercisable, entitles the holder to purchase one share of common stock at an exercise price of $ 0.38 per share and expires five ( 5 ) years from the date of issuance. On January 14, 2026, the Underwriter exercised its over-allotment option with respect to additional warrants to purchase 5,921,052 shares of Common Stock.
The offering closed on January 15, 2026. Net proceeds from the offering were approximately $ 13.3 million after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company. The Company intends to use the net proceeds of this offering for working capital and general corporate purposes.
Investor Liability Pursuant to Letter Agreement
Subsequent to December 31, 2025, the Company paid the March 2025 Private Placement Purchasers $ 4.5 million to fully satisfy the investor liability owed under the modified Letter Agreement, and 6.8 million shares were returned and cancelled under the terms of the Letter Agreement. Due to the $ 4.5 million payoff, there is no longer a requirement to retain sufficient funds in an interest bearing account to cover such repayment obligations, and as such, the restriction lapsed on the $ 4.5 million of restricted cash and cash equivalents.
Table of Contents
