Medicus Pharma Ltd.: Form 10-Q for the period ended Jun 30, 2026

This Item and other sections of this Quarterly Report contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that impact our business. In particular, we encourage you to review the risks and uncertainties described in "Risk Factors" in Part I, Item 1A in the 2025 Annual Report and Part II, Item 1A of this Quarterly Report. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this Quarterly Report. These forward-looking statements are made as of the date of this Quarterly Report, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. All amounts are expressed in United States dollars unless otherwise stated. This discussion should be read in conjunction with the Company's interim unaudited condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025.

Company Overview

Medicus Pharma Ltd. (the "Company") is a clinical stage, multi-strategy, biotech/life sciences company focused on investing in and accelerating clinical development programs of novel and potentially disruptive therapeutic assets. The Company looks into opportunities across all therapeutic areas where an unmet need exists for improved patient safety and efficacy. The Company is opportunistically exploring to expand its drug development pipeline through qualified and accretive acquisitions and partnerships.

The Company has three wholly owned subsidiaries, Medicus Pharma Inc., a company incorporated in the state of Delaware on October 12, 2023, SkinJect, Inc. ("SkinJect"), a company incorporated in the state of Pennsylvania on March 3, 2015 and, for purposes of engaging in the Secured Promissory Notes (as defined below) transactions, MDCX Holdings, LLC, a limited liability company organized in the state of Utah on May 19, 2026.

The Company also has one non-wholly owned subsidiary, Antev Limited ("Antev"), a company formed in England and Wales, of which it owns 98.6% of the issued and outstanding shares.

SkinJect is focused on the development of a novel "innovation combination product", as an investigational new drug, using uniquely designed, patent protected dissolvable microneedle arrays ("C-MNA" or "P-MNA") and doxorubicin containing dissolvable microneedle arrays ("D-MNA") for the treatment of certain skin cancers. To that end, the Company licensed certain technology co-developed by the University of Pittsburgh and Carnegie Mellon University. The Company established and validated fabrication processes relative to the C-MNAs or P-MNAs and D-MNAs, completed pre-clinical testing and secured approval to proceed with clinical trials activity from the Food and Drug Administration ("FDA").

The Company has advanced SkinJect through a multi-stage clinical program. An initial Phase 1 dose-escalation study ("SKNJCT-001") established that the D-MNA patch was well tolerated with no dose-limiting toxicity in patients with basal cell carcinoma ("BCC"). The Company also initiated a study ("SKNJCT-002") to evaluate device penetration in healthy volunteers, but paused the study after enrolling seven of a planned 15 subjects due to variability in array application and ultimately closed the study without further enrollment - no adverse events were reported. The Company also conducted a Phase 2 study ("SKNJCT-003") which was a randomized, double-blinded, three arm study evaluating two dose levels of D-MNA compared with a device-only control (C-MNA or P-MNA) in patients with nodular type basal cell carcinoma ("nBCC"). The SKNJCT-003 study, conducted across sites in the United States and in Europe, reported topline results in March 2026 showing 73% clinical clearance and 40% histological clearance in the D-MNA arm compared to 38% clinical clearance in the device-only P-MNA arm in the 200-µg patient cohort at Day 57 of the study. The Company provided further updates on the results of the SKNJCT-003 study in June 2026, showing 55% histological clearance and 64% clinical clearance in patients in the 200 ug cohort that were treated with SkinJect. The Company is conducting a separate Phase 2 study in the United Arab Emirates ("SKNJCT-004") and, in September 2025, gained FDA alignment to pursue the 505(b)(2) regulatory pathway to treat BCC using D-MNA.

The Company is separately pursuing SkinJect as a treatment for Gorlin Syndrome (Nevoid Basal Cell Carcinoma Syndrome), a rare inherited genetic disorder associated with lifelong development of multiple basal cell carcinomas and recurrent skin cancers. In support of this program, the Company is pursuing a registrational Phase 2b study design ("SKNJCT-005") and filed applications for Orphan Drug Designation and Rare Pediatric Disease Designation.

In August 2025, the Company completed its acquisition of Antev, a UK-based clinical biotech company developing Teverelix, a next-generation gonadotropin-releasing hormone ("GnRH") antagonist, as a first in market product for cardiovascular high-risk prostate cancer patients and patients with first acute urinary retention ("AUR") episodes due to enlarged prostate. The Company has received FDA clearance to proceed with a Phase 2b dose-optimization study of Teverelix in men with advanced prostate cancer ("APC") and has submitted an optimized Phase 2 study design for the prevention of recurrent AUR in men with benign prostatic hyperplasia. The Company has also submitted an investigational new drug application to the United Arab Emirates ("UAE") Department of Health, Abu Dhabi ("DOH") for its planned PRECISION-E2 study, a first-of-its-kind, Phase 2a genomics-enabled clinical trial, that will evaluate Teverelix in women with symptomatic endometriosis in the UAE.

The Company continues to engage with the FDA and international regulators to advance these programs toward registrational development and to pursue further developmental opportunities.

Recent Developments

On April 6, 2026, the Company announced its submission of an optimized Phase 2 clinical study design to the FDA for Teverelix, for the prevention of recurrent AUR in men with benign prostatic hyperplasia as part of the Company's existing open investigational new drug for Teverelix.

On April 17, 2026, the Company announced its submission of an orphan drug designation application to the FDA for SkinJect for the treatment of BCC in patients with Gorlin Syndrome, a rare genetic disorder characterized by the development of multiple, recurrent skin cancers.

On April 21, 2026, the Company received written notice from the Listing Qualifications Department of Nasdaq, notifying the Company that the closing bid price for the common shares had been below $1.00 per share for the previous 30 consecutive business days, and that the Company is therefore not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(a)(2). In accordance with the Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until October 19, 2026, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the common shares must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-day period. The notice has no immediate effect on the listing or trading of the common shares on the Nasdaq Capital Market.

On May 6, 2026, the Company announced results from a pre-specified expanded dataset analysis demonstrating positive dose response from its Phase 2 SKNJCT-003 study evaluating safety and efficacy of D-MNA to treat nBCC of the skin, the most common type of skin cancer. This additional pre-specified analysis, builds upon the previously reported positive topline results, provides expanded biological, histologic, and safety insights that further strengthen SkinJect's therapeutic profile and future registrational discussions with the FDA. The expanded analysis showed clear and consistent dose response relationship across endpoints, demonstrating stronger separation between the 200ug cohort and control, particularly at Day 57. These additional findings are also consistent with prior Phase 1 clinical observations in the SKNJCT-001 study in March 2021, and interim analysis of SKNJCT-003 in March 2025, reinforcing reproducibility across studies.

On June 3, 2026, the Company announced its submission of Protocol SKNJCT-005 to the FDA under the Company's existing Investigational New Drug ("IND") application, for SkinJect into registrational development for patients with Gorlin Syndrome, also called Nevoid Basal Cell Carcinoma Syndrome, a rare inherited genetic disorder associated with lifelong development of multiple basal cell carcinomas and recurrent skin cancers, often resulting in repeated surgical procedures. The submitted protocol outlines a Phase 2b, open-label study designed to generate efficacy and safety data intended to support a future new drug application for SkinJect in Gorlin Syndrome.

On June 8, 2026, the Company announced its submission of a substantial modification application through the European Union Clinical Trials Information System supporting the planned Phase 2b study of Teverelix in APC. The planned Phase 2b study is designed to optimize dose selection and further characterize the pharmacokinetic, pharmacodynamic, efficacy and safety profile of Teverelix ahead of planned registrational development. Medicus has previously engaged extensively with the FDA regarding its APC development strategy, including future studies focused on patients with elevated cardiovascular risk.

On June 11, 2026, the Company announced its submission of an IND application to the DOH for PRECISION-E2, a first-of-its-kind, Phase 2a genomics-enabled clinical trial evaluating Teverelix in women with symptomatic endometriosis in the UAE. The PRECISION-E2 study is designed to combine clinical outcomes, hormonal biomarkers, pharmacokinetic and pharmacodynamic measurements, and genomic analyses to better understand treatment response variability in women suffering from endometriosis.

On June 15, 2026, the Company announced its submission of Rare Pediatric Disease Designation ("RPDD") request to the FDA for SkinJect, the Company's investigational D-MNA patch, for the treatment of BCC in patients with Gorlin Syndrome, also known as Nevoid Basal Cell Carcinoma Syndrome. The RPDD submission was made pursuant to Section 529 of the Federal Food, Drug, and Cosmetic Act and follows the Company's previously announced Orphan Drug Designation ("ODD") application (DRU-2026-11578), and Registrational study design (SKNJCT-005) which remains under FDA review. The design of the Company's Gorlin Syndrome development program has been informed through engagement with clinical experts and the Gorlin Syndrome Alliance, a patient advocacy group focused on the needs and priorities of this unique patient population.

On June 24, 2026, the Company participated in the 2026 Bio International Conference in San Diego, California, where Dr. Faisal Mehmud, Chief Medical Officer of Medicus, delivered a company presentation highlighting clinical, regulatory and strategic advancements across the Company's development portfolio. The presentation included, among other updates, the updated positive decision-grade dataset from the Phase 2 SKNJCT-003 study, which demonstrated a clear dose-response relationship and clinically meaningful complete response rates (55% histological clearance and 64% clinical clearance) in patients in the 200 ug cohort that were treated with SkinJect.

On July 16, 2026, the Company announced it received written feedback from the FDA and central Institutional Review Board approval, with modifications, for its optimized Phase 2 clinical study of Teverelix in men following a first episode of AUR. The Company submitted the optimized protocol to the FDA on April 2, 2026, under its existing IND application for Teverelix. The redesigned study is expected to enroll approximately 126 patients across the United States and Europe, compared with approximately 390 patients contemplated under the Company's previously disclosed development plan, and is intended to generate an early pharmacodynamic signal while supporting dose optimization, route selection and future clinical development.

On July 27, 2026, the Company announced that the FDA completed its safety review of the Company's IND application for SKNJCT-005 and issued a "Study May Proceed" letter authorizing the initiation of the Company's NDA-enabling registrational Phase 2b clinical study evaluating SkinJect 200 mcg in patients with Gorlin Syndrome presenting with multiple BCCs.

On July 31, 2026, the Company announced that the UAE DOH has granted IND authorization for the Company's PRECISION-E2 Phase 2a clinical study evaluating Teverelix in women with moderate-to-severe symptomatic endometriosis.

On August 3, 2026, the Company announced the appointment of Faisal Mehmud, MD, MRCP, as chief executive officer of Antev, effective August 30, 2026. Dr. Mehmud will continue to serve as Chief Medical Officer of Medicus and Co-Chairman of Antev.

Share Consolidation

On June 25, 2024, the Company's shareholders approved an amendment to the Company's articles of incorporation to provide for a share consolidation (the "Share Consolidation"), or reverse stock split, of the Company's issued and outstanding common shares at such a consolidation ratio to be determined by the Company's board of directors in its sole discretion, to permit the Company to satisfy all conditions and necessary regulatory approvals to list the common shares on a U.S. national securities exchange as the Company's board of directors may determine in its sole discretion. Our board of directors approved the Share Consolidation on October 15, 2024, and the Share Consolidation was completed by the Company on October 28, 2024, at the ratio of 1-for-2.

After the completion of the Share Consolidation, the number of the Company's issued and outstanding common shares decreased from 21,693,560 to 10,846,721. The par value of the Company's common shares remains unchanged at $0 per share after the Share Consolidation. The Share Consolidation was completed in preparation for a U.S. listing.

On June 3, 2026, at the Company's 2026 Annual General and Special Meeting of shareholders, the Company's shareholders approved a special resolution authorizing the Board, in its discretion, to effect a consolidation of the Company's common shares on the basis of a consolidation ratio to be determined by the Board, up to a maximum ratio of 50 pre-consolidation common shares for every one post-consolidation Common Share, if the Board determines such a consolidation is necessary or desirable, including, without limitation, for the purpose of meeting any applicable stock exchange or regulatory requirements. As of the date hereof, the Board has neither effected such share consolidation nor announced an intention to do so.

Initial Public Offering

On November 14, 2024, the Company completed its initial public offering with the sale of 970,000 Units at the price of $4.125 per Unit, with each Unit (the "Unit") consisting of one common share and one warrant (the "Public Warrants" and with the Regulation A Warrants and the June 2030 Warrants, each as defined below, the "Warrants"). The Public Warrants expire five years from their date of issuance on November 15, 2029. In addition, the underwriters exercised an option to purchase 145,500 Public Warrants (the "Overallotment Warrants") at a price of $0.01 per warrant.

Total gross proceeds from our initial public offering were $4.0 million, including the proceeds from the Overallotment Warrants. The Company incurred total issuance costs of $2.1 million, including underwriter fees, and legal and other professional fees incurred directly related to the issuance. No Public Warrants issued as part of our initial public offering were exercised during the three and six months ended June 30, 2026.

Regulation A Offering

On March 10, 2025, the Company completed an offering (the "Regulation A Offering") of 1,490,000 units at $2.80 per unit pursuant to Tier II of Regulation A under the Securities Act, with each unit consisting of one common share and one warrant (each, a "Regulation A Warrant"). The Regulation A Warrants have an exercise price of $2.80 and expire on March 10, 2030. The aggregate gross proceeds to the Company from the Regulation A Offering were $4.2 million. No Regulation A Warrants were exercised during the three and six months ended June 30, 2026.

Debentures

On May 2, 2025, the Company entered into a securities purchase agreement with YA II PN, Ltd. ("Yorkville"), under which the Company has issued and sold three debentures (the "Initial Debentures") to Yorkville in an aggregate principal amount totaling $5,000,000. The Initial Debentures were issued at a discounted price of 90% for proceeds to the Company of $4,500,000. Interest accrued on the outstanding principal amount of each Initial Debenture at an annual rate of 8%, subject to a potential increase to 18% per annum upon the occurrence of certain events of default. The Initial Debentures had a maturity date of February 2, 2026.

On September 17, 2025, the Company entered into a securities purchase agreement with Yorkville to issue a new debenture (the "Debenture") with the principal amount of $8,000,000 issued at a discount of $633,707 for proceeds of approximately $7,366,293. Interest accrued on the outstanding principal amount of the Debenture at an annual rate of 8%, subject to a potential increase to 18% per annum upon the occurrence of certain events of default. The Debenture had a maturity date of September 17, 2026 and was to be partially repaid using proceeds from the SEPA (as defined below). On May 27, 2026, the Company used part of the proceeds of its issuance of the Secured Promissory Notes to repay and extinguish the outstanding balance and accrued interest owing on the Debenture.

June 2025 Public Offering

On June 2, 2025, the Company closed a public offering with gross proceeds of $7.0 million (the "June 2025 Public Offering"). The Company issued 2,260,000 units at a price of $3.10 per unit. Each unit consisted of one common share of the Company and one warrant to purchase one common share (the "June 2030 Warrants"). The June 2030 Warrants have an exercise price of $3.10 per share and will expire on June 2, 2030. No June 2030 Warrants were exercised during the three and six months ended June 30, 2026.

Warrant Inducement

On July 14, 2025, the Company entered into a warrant inducement agreement (the "Warrant Inducement Agreement") with an institutional investor, pursuant to which the investor agreed to exercise existing Regulation A Warrants to purchase up to 1,340,000 of the Company's common shares issued on March 10, 2025 and with an exercise price of $2.80 per common share, in consideration for receiving the 2,680,000 warrants (the "Series A and B Warrants") with an exercise price of $3.75. In accordance with the Warrant Inducement Agreement, the investor exercised its existing warrants for cash, for gross proceeds of $3.8 million to the Company.

On December 5, 2025, the Company entered into a warrant inducement agreement with an institutional investor (the "Second Warrant Inducement Agreement"), pursuant to which the investor agreed to exercise existing Series A and B Warrants to purchase up to 2,680,000 of the Company's common shares issued on July 14, 2025 with an amended exercise price of $1.92 per common share, in consideration for receiving 4,020,000 warrants (the "Series C and D Warrants") with an exercise price of $2.00. In accordance with the Second Warrant Inducement Agreement, the investor exercised its existing warrants for cash, for gross proceeds of approximately $5.1 million to the Company.

At-The-Market Program

On December 29, 2025, we entered into an equity distribution agreement (the "Equity Distribution Agreement") with Maxim Group LLC and Yorkville Securities, LLC, an affiliate of Yorkville as agents (together, the "Agents"), whereby the Agents may sell up to $15.3 million of our common shares as part of an at-the-market program (the "ATM"). On April 23, 2026, the Company and the Agents entered into an amendment to the Equity Distribution Agreement, up-sizing the ATM program from $15.3 million to up to $50 million.

Secured Promissory Notes

On May 27, 2026, the Company entered into and closed on a note purchase agreement with Streeterville Capital, LLC, providing for the issuance of two secured promissory notes: (i) a Secured Promissory Note A in the original principal amount of $12,864,225 carrying an 8.75% interest rate and a 6.7% original issue discount (the “Note A”) and (ii) a Secured Promissory Note B in the original principal amount of $10,000,000 carrying a 5% interest rate with no original issue discount (the “Note B” and together with the Note A, the “Secured Promissory Notes”). The Secured Promissory Notes will mature on November 27, 2027.

Results of Operations

The following table outlines our statements of loss and comprehensive loss for the three and six months ended June 30, 2026 and 2025:

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General and administrative

General and administrative expenses increased by $1,994,573 or 43.6% for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and increased by $4,767,197 or 61.9% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily due to an increase in consulting fees, salaries and wages with increased headcount at board and management level and fees, expenses related to business development and investor relations and stock-based compensation. General and administrative expenses primarily include professional fees, consulting fees, salaries, wages and benefits, general office, insurance, administration expenditures, costs related to business development and investor relations, public relations, market awareness, advocacy and stock-based compensation associated with maintaining investor relations, public relations, market awareness, advocacy, director and officer insurance and compliance with applicable securities law requirements. In addition, there are additional costs, recurring and non-recurring, associated with increased regulatory requirements following the Company's initial public offering, transition to U.S. domestic issuer status, multiple financing transactions and the Antev acquisition.

Research and development ("R&D")

Research and development expenses consist of costs incurred to research and develop our product candidates and are expensed as incurred. We do not track total R&D expense by program, therapeutic indication or product candidate, as our internal resources are shared across programs and our development priorities shift over time. We separately identify external costs that are directly attributable to the SkinJect and Teverelix programs, which primarily include costs related to clinical, manufacturing, and regulatory activities, as well as certain professional services and intellectual property costs. Internal personnel costs (salaries and benefits, including share-based compensation) are shared across programs, are not attributable to a single product candidate, and are presented as unallocated. Of the total research and development expense noted in the table below, the external, third-party costs that were directly attributable to our product candidates were as follows:

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(1) Total research and development expense reconciles to the amount reported on the Company's consolidated statements of operations for each period presented.

R&D expenses increased by $4,166,307 or 120.9% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase is primarily due to the development of Teverelix, offset with a reduction in costs relating to SkinJect as we come to the end of its Phase 2 trials. We expect our R&D expenses to increase going forward with the costs of two separate Phase 2 trials associated with Teverelix advancing.

The principal risks related to the Company's future performance are that the trials are unsuccessful, the Company does not receive FDA approval to proceed with the next stages of its multiple research and development tracks, or the Company is unsuccessful in obtaining future funding needed to continue its research and development tracks. These are customary risks for a development stage pharmaceutical Company and are less acute than for a Company with a less advanced product. Nevertheless, there can be no assurance that the Company will be able to complete its trials, that the trials will be successful, or that the product will ultimately reach commercialization.

Other income (expense)

Other income (expense) for the three and six months ended June 30, 2026, was an expense of $205,638 and $650,872, respectively, compared to an expense of $159,996 and $136,130 for the three and six months ended June 30, 2025, respectively. Other income (expense) for the three and six months ended June 30, 2026 is primarily related to interest expense of $205,638 and $523,789, respectively, a loss on SEPA settlements of $nil and $127,083, respectively. Other income (expense) for the three and six months ended June 30, 2025 consisted primarily of finance income of $40,004 and $63,870, respectively, more than offset by a $200,000 change in the fair value of debentures recognized in each period.

Liquidity and Capital Resources

We are a clinical stage development company, and we currently do not earn any revenues from our drug development programs and are therefore considered to be in the R&D stage. As required, the Company will continue to finance its operations through the sale of equity or pursue alternative funding sources available to the Company in the future. The continuation of our R&D activities is dependent on our ability to obtain financing.

The financial statements and this Management's Discussion and Analysis of Financial Condition and Results of Operations (this "MD&A") have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.

The Company expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. In addition to the ATM, SEPA and Secured Promissory Notes (as defined herein), management believes that the Company has access to additional capital resources through public and/or private equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, it is possible that the Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. Further, the terms of any financing may adversely affect the holdings or the rights of the Company's shareholders. If the Company is unable to secure additional capital, it may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays or entirely prevent the Company's continued efforts to progress its research and development program, pursue product portfolio expansion or commercialize its current or future products, each of which is critical to the realization of the Company's business plan and its future operations. This uncertainty, along with the Company's history of losses, indicates that substantial doubt exists about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued. The financial statements and this MD&A do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

The Company is subject to risks associated with any specialty biotechnology company that has substantial expenditures for research and development. There can be no assurance that the Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable.

As of June 30, 2026, the Company had cash and cash equivalents of $15,174,128 and restricted cash of $10,017,412 compared to cash and cash equivalents of $8,705,218 and restricted cash of $nil as of December 31, 2025. During the six months ended June 30, 2026, the Company received $21,385,000 of net proceeds from the issuance of the Secured Promissory Notes, $12,399,815 of net proceeds from the issuance of common shares under the ATM and $4,102,740 of proceeds from the issuance of common shares under the SEPA. For the six months ended June 30, 2026, cash used in operating activities was $15,953,129 compared to $9,409,825 for the six months ended June 30, 2025. As of June 30, 2026, the Company had an accumulated deficit of $85,007,966 (December 31, 2025 – $64,348,118) and net loss of $11,684,427 and $20,726,738 for the three and six months ended June 30, 2026, respectively (June 30, 2025 - $6,176,084 and $11,278,492, respectively). The Company has a working capital of $6,140,096 as of June 30, 2026.

On March 10, 2025, the Company completed the Regulation A Offering of 1,490,000 units at $2.80 per unit. None of the 1,490,000 Regulation A Warrants have been exercised during the three and six months ended June 30, 2026.

On June 2, 2025, the Company closed its public offering with gross proceeds of $7.0 million. The Company issued 2,260,000 units at a price of $3.10 per unit. Each unit consisted of one common share of the Company and one June 2030 Warrant. The June 2030 Warrants have an exercise price of $3.10 per share and will expire June 2, 2030. As of June 30, 2026, no June 2030 Warrants have been exercised.

On July 14, 2025, the Company entered into the Warrant Inducement Agreement with an institutional investor, pursuant to which the investor agreed to exercise existing Regulation A Warrants to purchase up to 1,340,000 of the Company's common shares issued on March 10, 2025 and with an exercise price of $2.80 per common share, in consideration for receiving the 2,680,000 Series A and B Warrants with an exercise price of $3.75. In accordance with the Warrant Inducement Agreement, the investor exercised its existing warrants for cash, for gross proceeds of $3.8 million to the Company.

On December 5, 2025, the Company entered into The Second Warrant Inducement Agreement with an institutional investor, pursuant to which the investor agreed to exercise existing Series A and B Warrants to purchase up to 2,680,000 of the Company's common shares issued on July 14, 2025 with an amended exercise price of $1.92 per common share, in consideration for receiving 4,020,000 Series C and D Warrants with an exercise price of $2.00. In accordance with the Second Warrant Inducement Agreement, the investor exercised its existing warrants for cash, for gross proceeds of approximately $5.1 million to the Company.

On December 29, 2025, the Company entered into the Equity Distribution Agreement with Maxim Group LLC and Yorkville Securities, LLC, an affiliate of Yorkville as agents, whereby the Agents may sell up to $15.3 million of our common shares as part of an at-the-market program. On April 23, 2026, the Company and the Agents entered into an amendment to the Equity Distribution Agreement, up-sizing the ATM program from $15.3 million to up to $50 million. As of June 30, 2026, the Company has issued 28,248,981 common shares as part of the program. The gross proceeds from the issuances were $12,868,181.

As of June 30, 2026, no Public Warrants issued as part of the initial public offering have been exercised for cash for nil proceeds to the Company.

As of June 30, 2026, the Company had issued 5,336,780 common shares at an aggregate market price of $4,229,823 for net proceeds of $4,102,740 under the SEPA.

Standby Equity Purchase Agreement

The Company entered into a standby equity purchase agreement dated February 10, 2025 (the "SEPA") with Yorkville, an investment fund managed by Yorkville Advisors Global, LP. Pursuant to the SEPA, the Company has the option, at its sole discretion, to sell up to $15,000,000 of the Company's common shares to Yorkville at any time during the 36-months following the date of the SEPA.

Yorkville's obligation to purchase the common shares is subject to a number of conditions, including that the Company file a registration statement with the SEC registering the resale of the common shares issuable thereunder, and that the registration statement is declared effective by the SEC. Such current registration statement, as amended, was originally filed with the SEC on September 29, 2025 and declared effective by the SEC on November 14, 2025.

The issuance of common shares under the SEPA is subject to further limitations, including that the common shares beneficially owned by Yorkville and its affiliates at any one time will not exceed 4.99% of the then-outstanding common shares.

Common shares issued and sold to Yorkville under the SEPA will be priced at 97% of the market price (as defined in the SEPA) of the common shares during a specified three-day pricing period. The Company reserves the right to set a minimum acceptable price for the common share issuances.

As of June 30, 2026, the Company issued 5,336,780 common shares at market price of $4,229,823 for proceeds of $4,102,740. During the six months ended June 30, 2026, $3,223,980 of the gross proceeds were held back to partially repay the Company's outstanding debenture and interest to Yorkville, which was fully repaid and extinguished on May 27, 2026. As of June 30, 2026, the Company has capacity to issue up to approximately $2.5 million worth of common shares under the SEPA.

Cash flows

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Cash flows used in operating activities

Cash flows used in operating activities for the six months ended June 30, 2026, were $15,953,129 compared to cash flows used in operating activities of $9,409,825 for the six months ended June 30, 2025. The increase is primarily due to increased spending on research and development and general and administrative expenses.

Cash flows provided by financing activities

Cash flows provided by financing activities for the six months ended June 30, 2026, were $32,354,942 compared to cash flows provided by financing activities of $14,915,048 for the six months ended June 30, 2025. The increase is primarily due to increased proceeds from the issuance of common shares in equity offerings and under the SEPA, during the six months ended June 30, 2026, compared to proceeds from the issuance of common shares and warrants, net of offering costs from the Regulation A Offering, during the six months ended June 30, 2025.

Contractual Obligations

We have no significant contractual arrangements other than those noted in our financial statements.

Off-Balance Sheet Arrangements

As of June 30, 2026, we have not entered into any off-balance sheet arrangements.

Critical Accounting Policies

There have been no material changes to our critical accounting policies and estimates from the information provided in the MD&A section in our Annual Report.

Updated share information

As of June 30, 2026, we had 60,168,044 common shares issued and outstanding. In addition, there were 5,510,000 common shares issuable upon the exercise of outstanding stock options and 7,281,795 common shares issuable upon the exercise of warrants.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements.

Subsequent Events

On July 16, 2026, the Company announced it received written feedback from the FDA and central Institutional Review Board approval, with modifications, for its optimized Phase 2 clinical study of Teverelix in men following a first episode of AUR. The Company submitted the optimized protocol to the FDA on April 2, 2026, under its existing IND application for Teverelix. The redesigned study is expected to enroll approximately 126 patients across the United States and Europe, compared with approximately 390 patients contemplated under the Company's previously disclosed development plan, and is intended to generate an early pharmacodynamic signal while supporting dose optimization, route selection and future clinical development.

On July 27, 2026, the Company announced that the FDA completed its safety review of the Company's IND application for SKNJCT-005 and issued a "Study May Proceed" letter authorizing the initiation of the Company's NDA-enabling registrational Phase 2b clinical study evaluating SkinJect 200 mcg in patients with Gorlin Syndrome presenting with multiple BCCs.

On July 31, 2026, the Company announced that the UAE DOH has granted IND authorization for the Company's PRECISION-E2 Phase 2a clinical study evaluating Teverelix in women with moderate-to-severe symptomatic endometriosis.

On August 3, 2026, the Company announced the appointment of Faisal Mehmud, MD, MRCP, as chief executive officer of Antev, effective August 30, 2026. Dr. Mehmud will continue to serve as Chief Medical Officer of Medicus and Co-Chairman of Antev.

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our "Certifying Officers"), the effectiveness of our disclosure controls and procedures as of June 30, 2026, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of June 30, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q include the risk factors described in the 2025 Annual Report. Any of these risk factors could result in a significant or material adverse effect on the Company's business, financial condition and/or results of operations. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in the 2025 Annual Report.