Gain Therapeutics, Inc.: Form 10-Q for the period ended Sep 30, 2025

You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and the audited financial statements and related notes and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" under Part II, Item 1A of this Quarterly Report and Part I, Item 1A of our Annual Report.

Overview

We are a biotechnology company developing novel small molecule therapeutics to treat diseases across several therapeutic areas, including, central nervous system (CNS) disorders, lysosomal storage disorders (LSDs) and metabolic disorders through molecular chaperoning to stabilize misfolded proteins and increase their activity, as well as other diseases that can be targeted through protein inactivation or modulation, such as oncology. We use our computational target and drug discovery platform, Magellan™, to discover novel allosteric binding sites on proteins implicated in a disease and to identify proprietary small molecules that bind these sites to modulate protein function and treat the underlying cause of the disease. We believe that Magellan™ is uniquely suited to identify allosteric binding sites on the protein surface, which are different from the active (or orthosteric) binding site where the natural ligand of the protein binds. Targeting an allosteric binding site instead of the active binding site of a protein provides numerous advantages, including: the ability to regulate proteins implicated in disease through several different mechanisms of action covering both functional and conformational effects, including stabilization, destabilization, targeted degradation, allosteric inhibition, and allosteric activation of the targeted protein; improved specificity of small molecules because binding to an allosteric binding site is non-competitive with the natural substrate that binds to the active binding site; and the ability to identify small molecules with more favorable drug-like properties. We have used our drug discovery platform to identify novel allosteric sites and small molecules for all of our pipeline programs. We plan to continue to advance our existing research programs and initiate additional programs targeting allosteric binding sites identified with the Magellan™ platform in various therapeutic areas through academic partnerships, co-development and licensing arrangements.

Our clinical stage product candidate, GT-02287, is being developed for the treatment of Parkinson’s disease with and without GBA1 mutations. We have generated an extensive preclinical data package providing evidence of the mechanism of action, in vivo pharmacology, and safety of GT-02287. In preclinical models of GBA1 Parkinson’s disease, GT-02287 has been shown to restore glucocerebrosidase, or GCase, function in the lysosome, reduce toxic lipid substrates and toxic forms of alpha-synuclein, reduce endoplasmic reticulum stress, improve mitochondrial health and overall survival of dopaminergic neurons, increasing dopamine levels, restoring locomotor and cognitive function, and reducing plasma-based neurodegeneration marker, neurofilament light chain (“NfL”), back to the level of control animals. In a Phase 1 first-in-human study (n = 72), GT-02287 was safe and generally well tolerated up to and including the highest planned dose level, enabling further development in GBA1 Parkinson’s patients. Additionally, administration of GT-02287 was associated with a mean increase in GCase activity of 53% among healthy volunteers at doses that were predicted to be in the therapeutic range based on preclinical models and will be carried forward in later stage trials of GT-02287. The good safety and tolerability profile and the observed range of plasma exposure levels achieved after oral administration further bolster GT-02287’s best in-class potential.

We continue to monitor the impacts on our operations and access to financing, global and worsening macroeconomic conditions, such as the war in Ukraine, the Hamas-Israel conflict, global geopolitical tension, exchange rate fluctuations, supply chain disruptions, liquidity concerns and increases in commodity, energy and fuel prices.

Recent Developments

In October 2025 we presented early results from its Phase 1b clinical study in patients with Parkinson’s disease at the International Congress of Parkinson’s Disease and Movement Disorders®. GT-02287 was generally well tolerated, with no treatment-emergent serious adverse events observed. Additionally, participants in the open label trial appear to be benefitting from stabilization and trending improvements in their MDS-UPDRS scores after 90 days of GT-02287 administration.

In September 2025 we elected to extend the open label study for an additional 9 months to allow participants interested in remaining on GT-02287 to continue on the study. The majority of participants have elected to remain on the open label extension.

Financial Condition

Since our inception in 2017, we have devoted substantially all of our resources to identify and develop next-generation brain-penetrant allosteric small molecules for the treatment of devastating diseases with high-unmet medical needs using our Magellan™ platform. Our operations have consisted primarily of expanding our operations, securing financing, performing research, conducting preclinical and clinical studies and developing and securing our in-licensed technology. To date, we do not have any product candidates approved for sale and have not generated any revenue from product sales, and as a result, we face risks associated with early-stage biotechnology companies whose product candidates are in development. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. We expect our research and development expenses to remain significant and to increase to support progress in our research and development activities. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities. These efforts require significant amounts of additional capital for us to complete our research and development programs, achieve our research and development objectives, defend our intellectual property rights, and recruit and retain skilled personnel, and key members of management. Even if our product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.

At our annual meeting held on June 24, 2025, the stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to increase our authorized shares of common stock from 50,000,000 to 100,000,000. The amendment did not change any of the current rights and privileges of our common stock or its par value, and did not affect the number of shares of our common stock outstanding.

In July 2025, we completed the public offering of 4,501,640 shares of our common stock and warrants to purchase 2,250,820 shares of our common stock. The warrants were offered and sold at a rate of one warrant for every two shares of common stock purchased. The public offering price for each set of two shares of common stock and accompanying warrant to purchase one share of common stock was $3.11, yielding an effective price of $1.55 per share and $0.01 per warrant. Each warrant has an exercise price of $1.65 per share of common stock and was immediately exercisable on the date of issuance. The public offering resulted in gross proceeds of $7.0 million, which included $1.0 million in offering expenses, such as underwriter fees and legal, audit, and advisory costs, for net proceeds of $6.0 million. In the third quarter ended September 30, 2025, 25,300 public warrants were exercised resulting in the issuance of 25,300 shares of common stock and additional net proceeds of $42 thousand. In October 2025, 60,615 public warrants were exercised resulting in the issuance of 60,615 shares of common stock and additional net proceeds of $100 thousand.

Following completion of the July 2025 public offering, the underwriter exercised the over-allotment option that was granted in connection with the public offering to purchase an additional 675,246 shares of common stock, and warrants to purchase 337,623 shares of common stock, which resulted in additional gross proceeds of $1.1 million, which included $0.1 million in offering expenses, such as underwriter fees, for net proceeds of $1.0 million. In connection with the public offering, we issued the underwriter warrants to purchase 362,382 shares of common stock at an exercise price of $1.94 per share as consideration for the services provided. The underwriter warrants provide for cashless exercise.

On July 20, 2025, 225,387 warrants issued in 2020 in connection with the Series B Preferred Stock to designees of the placement agent were not exercised within their five year exercisable period and were therefore forfeited. On May 6, 2025, 200,000 warrants issued in 2021 to an investment bank for banking services and financial advisory were not exercised within their four year exercisable period and were therefore forfeited.

In September 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Oppenheimer & Co. Inc., serving as agent (“Oppenheimer”) with respect to an at-the-market (“ATM”) offering program (the “2024 ATM Program”). Under the 2024 ATM Program we may offer and sell, from time to time at our sole discretion, shares of common stock having an aggregate offering price of up to $50.0 million. We pay Oppenheimer a commission equal to 3.0% of the gross sales proceeds of any shares sold through Oppenheimer under the Distribution Agreement. For the nine months ended September 30, 2025, we sold an aggregate of 2,512,062 shares of common stock at an average selling price of $2.05 per share under the 2024 ATM Program, for total gross proceeds of $5.16 million, which included $0.25 million of sales commissions and other offering expenses for net proceeds of $4.91 million. As of September 30, 2025, we sold an aggregate of 4,109,190 shares of common stock at an average selling price of $2.02 per share under the 2024 ATM Program, for total gross proceeds of $8.3 million, which included $0.44 million of sales commissions and other offering expenses for net proceeds of $7.86 million. From October 1, 2025 through November 11, 2025, we sold an aggregate of 703,987 shares of common stock through the 2024 ATM Program at an average selling price of $2.15 for total gross proceeds of $1.51 million, which included $45 thousand in sales commissions and other offering expenses for net proceeds of $1.47 million.

In June 2024, we completed the public offering of 7.1 million shares of our common stock and 1.0 million pre-funded warrants (the “Pre-Funded Warrants”) to purchase an equal amount of our common stock at the nominal exercise price of $0.0001. The public offering price was $1.35 per share while the purchase price of each pre-funded warrant was equal to the public offering price at which a share of common stock was sold to the public in this offering, minus $0.0001. The public offering resulted in gross proceeds of $11.0 million, which included $1.2 million of underwriting commissions and other expenses connected with the financing round. In the first quarter ended March 31, 2025, 454,893 Pre-Funded Warrants were exercised resulting in the issuance of 454,893 shares of common stock. In the second quarter ended June 30, 2025, 576,709 Pre-Funded Warrants were exercised resulting in the issuance of 576,709 shares of common stock.

As part of the public offering in June 2024, we granted the underwriter an over-allotment option to purchase up to an additional 1,222,222 shares of our common stock, at the public offering price of $1.35, less underwriting discounts and commissions. In July 2024, the underwriter partially exercised the over-allotment option and purchased an additional 337,076 shares of our common stock at the offering price mentioned above. The exercise of the over-allotment option resulted in gross proceeds of $0.46 million, which included $42 thousand of underwriting commissions and other expenses connected with the exercise of the option. We also issued 593,965 warrants to purchase an equal amount of our common stock at an exercise price of $1.6875 per share to the underwriter as consideration for the services provided, which provide for cashless exercise.

From inception through September 30, 2025, we have raised an aggregate of $103 million of gross proceeds through equity financing, including the issuance of convertible preferred stock, our initial public offering, secondary offerings and previous sales under our ATM Programs. We have outstanding warrants for 7.6 million shares of our common stock at a weighted-average exercise price per share of $2.26 through September 30, 2025 related to public and private offerings. Of the 7.6 million outstanding warrants, 7.2 million warrants are exercisable at a weighted-average exercise price per share of $2.27 as of September 30, 2025.

As of September 30, 2025, we had cash and cash equivalents of $8.8 million. We have incurred recurring losses and negative cash flows from operations since inception and as of September 30, 2025 and December 31, 2024, had an accumulated deficit of $96.8 million and $81.2 million, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate sales of our product candidates currently in development. We have not generated any product revenues and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, we will need significant additional financing to fund our operations and to develop our product candidates. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

Going Concern

As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $96.8 million and $81.2 million, respectively, and as of September 30, 2025, we had cash and cash equivalents of $8.8 million. During the three and nine months ended September 30, 2025, we incurred net losses of $5.3 million and $15.6 million, respectively. During the nine months ended September 30, 2025, we incurred negative cash flows from operations of $13.8 million. Our current operating plan indicates that we will continue to incur losses from operations and negative cash flows from operating activities. Our projected cash outflows for the upcoming periods raise substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Quarterly Report. We will need to raise additional capital to fund continued operations beyond the first quarter of 2026. We plan to address our liquidity needs by taking steps to improve our operations and cash position, including identifying access to future capital and potential cost-reduction measures.

Financing Requirements; Current Financing Environment

Until such time, if ever, as we can generate substantial product revenues to support our business and corporate strategy, we expect to finance our cash needs through a combination of public and private equity offerings, including at-the-market offerings, debt financings, government or private party grants, collaborations, strategic alliances and licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect our holdings or the rights of our stockholders. If we are unable to obtain funding, we could be required to delay, limit, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, or grant rights to develop, sell and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, which could adversely affect our business prospects.

Uncertain macroeconomic conditions, including the risk of inflation, fluctuating interest rates, changing international trade and import policies, potential impact of tariffs, instability in the financial system, the war in Ukraine, the conflict between Hamas and Israel, global geopolitical tension, and the post COVID-19 environment continue to have unpredictable impacts on global societies, economies, financial markets, and business practices. Recently worsening global macroeconomic conditions, liquidity concerns at and failures of banks and other financial institutions, volatility in the capital markets, and related market uncertainty, may impact our ability to obtain additional financing when needed on favorable terms or at all.

Strategic Transactions; Collaboration and Licensing Agreements

In connection with our business development activities, we are looking to enter into collaboration and licensing arrangements with third parties, to use our licensed Magellan™ computational platform technology to discover novel allosteric sites on proteins and identify proprietary small molecules that bind these sites and may be developed into pharmaceutical products. We expect to continue to identify and evaluate collaboration, co-development and licensing opportunities that may be similar to or different from the collaboration and licensing arrangements that we have entered into.

Components of Our Consolidated Results of Operations

Revenue

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future, if at all. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval and successfully commercialize them, we will not generate revenues in the future.

Total Operating Expenses

Our operating expenses since inception have consisted solely of research and development and general and administrative costs.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, which include:

• expenses incurred under collaborations with third parties, including contract research organizations (“CROs”) and universities, that conduct research, preclinical and clinical studies, such as in-vitro and in-vivo absorption, distribution, metabolism and excretion (“ADME”), cell model studies, in-vivo pharmacology and pharmacokinetic studies, toxicology studies and chemical synthesis, stability studies, manufacturing and control materials, process characterization, scale-up and transfer, clinical trial expenses, on our behalf;
• employee salaries, benefits and other related costs, including stock-based compensation expenses, for employees engaged in research and development functions and overhead allocations consisting of various support and facilities-related expenses, which include rent, utilities and maintenance of our facilities, depreciation, travel and conference expenses;
• fees paid to consultants who assist with research and development activities and related travel expenses; and
• the cost of sponsored research, which includes laboratory materials and supplies, manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical studies.

The following table provides a breakdown of our research and development expenses by major category:

We recognize research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses. We anticipate that our research and development expenses will increase substantially in future periods to support progress in our research and development activities, including the progression of the clinical trials for product candidates we are developing. These increases will likely also result from expanded infrastructure and increased insurance costs. Such expenses are offset by contributions from research grants, which are recorded as a reduction to research and development expenses when we have reasonable assurance of collection and based on our best estimate of the periods in which the related expenditures are incurred and activities performed.

Our primary research and development focus since inception has been the application of our Magellan™ platform to various indications and targets, and more recently the development of our clinical stage lead product candidate GT-02287 for the treatment of Parkinson’s disease and other neurodegenerative diseases.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses may increase in the foreseeable future as we (i) increase personnel costs, including stock-based compensation, (ii) continue preclinical development of our lead compounds, (iii) progress our clinical trials for certain product candidates, (iv) continue to discover and develop additional product candidates, and (v) pursue later stages of clinical development of product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, bonuses and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses, and other operating costs.

We will continue to focus on preserving our liquidity resources while we seek to maximize shareholders’ value.

Other Financial Income (Expense)

Other financial income (expense) consists of interest income, interest expense, and foreign exchange gain or loss.

Consolidated Results of Operations

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

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

Research and development expenses

Research and development expenses increased by $0.2 million to $2.8 million for the three months ended September 30, 2025, as compared to $2.6 million for the three months ended September 30, 2024. The increases in research and development expenses were primarily related to costs associated with the ongoing Phase 1b clinical trial and unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar. The increases were partially offset by optimization of our pipeline costs and lower research and development personnel costs.

Research and development expenses decreased by $1.7 million to $7.9 million for the nine months ended September 30, 2025, as compared to $9.6 million for the nine months ended September 30, 2024. The decreases in research and development expenses were primarily related to the recognition of research grant income, the research and development tax incentive program tax credit, the optimization of our pipeline costs and lower research and development personnel costs. The decreases were partially offset by unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar.

General and administrative expenses

General and administrative expenses increased by $0.1 million to $1.9 million for the three months ended September 30, 2025, as compared to $1.8 million for the three months ended September 30, 2024. The increases in general and administrative expenses for the period were primarily attributable to higher stock-based compensation, higher personnel costs, and unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar. The increases were partially offset by lower legal and professional fees related to general corporate matters.

General and administrative expenses decreased by $1.1 million to $6.4 million for the nine months ended September 30, 2025, as compared to $7.5 million for the nine months ended September 30, 2024. The decreases in general and administrative expenses for the period were primarily attributable to lower stock-based compensation. The decreases were partially offset by higher legal and professional fees related to general corporate matters and unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar.

Interest income, net

Interest income, net decreased by $27 thousand to $78 thousand for the three months ended September 30, 2025, as compared to $105 thousand for the three months ended September 30, 2024. Interest income, net decreased by $144 thousand to $161 thousand for the nine months ended September 30, 2025, as compared to $305 thousand for the nine months ended September 30, 2024. The decreases were mainly attributable to lower interest income from treasury securities that reached final maturity in April 2024 and a lower balance in our money market fund over the comparative periods.

Foreign exchange (loss) gain, net

Foreign exchange loss, net decreased by $94 thousand to a loss of $27 thousand for the three months ended September 30, 2025, as compared to $121 thousand for the three months ended September 30, 2024. The decrease was mainly attributable to stabilization of exchange rates within the three month period.

Foreign exchange loss, net increased by $0.9 million to a loss of $0.7 million for the nine months ended September 30, 2025, as compared to a gain of $0.1 million for the nine months ended September 30, 2024 due to the unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar.

Income taxes

Income taxes were $549 thousand and $11 thousand for the three months ended September 30, 2025 and 2024, respectively. Income taxes were $791 thousand and $32 thousand for the nine months ended September 30, 2025 and 2024, respectively. The increases were mainly attributable to higher corporate taxes in Australia.

Liquidity and Capital Resources

Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We have not yet received approval for or commercialized any products or technologies, and we do not expect to generate revenue from sales of any products in the near term, if at all. As described in additional detail under “Financial Condition” above, we have funded our operations to date primarily through a combination of sales of our securities and research grants.

As of September 30, 2025 and December 31, 2024, we had $8.8 million and $10.4 million in cash and cash equivalents, respectively, and an accumulated deficit of $96.8 million and $81.2 million, respectively. We had indebtedness of $0.4 million as of September 30, 2025 and December 31, 2024. For the nine months ended September 30, 2025, we raised $7.1 million in net proceeds from our July 2025 public offering and $4.9 million in net proceeds under the 2024 ATM Program. Our cash and cash equivalents available as of September 30, 2025 are expected to be sufficient to fund our anticipated operating and capital requirements into the first quarter of 2026 and will not be sufficient to finance our operations for one year from the issuance of the financial statements included in this Quarterly Report. Therefore, we have reported that there is substantial doubt about our ability to continue as a going concern. Please refer to the discussion above titled “Going Concern”.

Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes, or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.

Until such time, if ever, as we can generate substantial product revenues to support our business and corporate strategy, we expect to finance our cash needs through a combination of public and private equity offerings, debt financings, government or private party grants, collaborations, strategic alliances, and licensing arrangements. As of September 30, 2025, we did not maintain any lines of credit or equity capital committed for funding with the exception of the 2024 ATM Program.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and 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. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all, including as a result of interest rate uncertainty, liquidity concerns at, and failures of, banks and other financial institutions, volatility in the capital markets and related market uncertainty. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to continue our operations as currently anticipated, which may require us to suspend or terminate any ongoing development activities, modify our business plan, curtail various aspects of our operations, cease operations, or seek relief under applicable bankruptcy laws.

Cash Flows

The following table summarizes our cash flows for each of the periods presented:

Cash Flows from Operating Activities

Operating cash flow used during the nine months ended September 30, 2025 decreased compared to the prior-year period primarily due to a lower net loss (excluding non-cash items such as stock-based compensation and foreign currency transaction gains or losses) and changes in working capital. During the nine months ended September 30, 2025 and 2024, we used $13.8 million and $15.4 million of cash, respectively, in operating activities primarily to fund our operations related to the development of our pipeline and product candidates as well as related general and administrative support activities.

Cash Flows from Investing Activities

During the nine months ended September 30, 2024, net cash provided by investing activities was $5.0 million due to the maturity of marketable securities.

Cash Flows from Financing Activities

During the nine months ended September 30, 2025, cash provided by financing activities was $12.0 million due to net proceeds from the issuance of shares pursuant to the 2024 ATM Program and net proceeds from the issuance of shares and warrants exercised in connection with our July 2025 public offering, partially offset by a repayment of $0.1 million of our long-term debt.

During the nine months ended September 30, 2024, cash provided by financing activities was $10.7 million mainly related to the following: $10.2 million provided by net proceeds from issuance of shares and warrants in the June 2024 public offering, $0.6 million provided by net proceeds from the issuance of shares pursuant to the 2024 ATM Program, and $0.2 million provided by the exercise of public warrants and stock options, partially offset by $0.3 million payment of deferred offering costs.

Funding Requirements

Our primary use of cash is to fund our operating expenses, which consist of research and development and general and administrative expenditures.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

• the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;
• the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;
• the extent to which we encounter increased costs as a result of global and macroeconomic conditions, including interest rate uncertainty, supply chain disruptions, fluctuating exchange rates, and increases in commodity, energy and fuel prices;
• the costs of preparing, filing and processing patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;
• the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;
• our ability to establish additional collaborations on favorable terms, if at all;
• the costs required to scale up our clinical, regulatory and manufacturing capabilities;
• the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;
• the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval; and
• revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

We will need additional funding to meet our operational needs and capital requirements for our preclinical studies and clinical trials, other research and development expenditures, and business development activities. Because of the numerous risks and uncertainties associated with the development of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.

Until such time, if ever, we can generate substantial product revenue, we expect to finance our operations through a combination of public and private equity offerings, debt financings, at-the-market offerings, government or private party grants, collaborations, strategic alliances, and licensing arrangements. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. 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. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, defined benefit pension liability, stock-based compensation and recognition of research grants. Our actual results may differ from these estimates under different assumptions or conditions. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies. For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 2 — Summary of Significant Accounting Policies” of our Annual Report and Item 1 of Part I, “Financial Statements — Note 2 — Summary of Significant Accounting Policies” of this Quarterly Report. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.

Jumpstart Our Business Startups (“JOBS”) Act

We qualify as an “emerging growth company”, as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to public companies that are not emerging growth companies. These provisions include, but are not limited to: being permitted to report only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial conditions and results of operations disclosure; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, the information we provide might be different from the information that is available for other public companies. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and the market price of our common stock may be more volatile.

We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (ii) December 31, 2026, (iii) the date on which we have issued more than $1.0 billion of non-convertible debt instruments during the previous three fiscal years or (iv) the date on which we are deemed a “large accelerated filer” under the rules of the SEC with at least $700 million of outstanding equity securities held by non-affiliates.

Under SEC rules and regulations, because we are a “smaller reporting company”, we are not required to provide the information required by this item in this Quarterly Report.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. Based upon the evaluation, our Chief Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 14, 2025, and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, filed with the SEC on August 12, 2025. No material changes to such risk factors have occurred during the quarter ended September 30, 2025, other than as set forth below:

Inadequate funding for the FDA, the SEC and other U.S. government agencies or the EMA or comparable foreign regulatory authorities, including from government shut downs, or other disruptions to these agencies’ staffing and operations, including significant leadership, personnel, and policy changes, could prevent our product candidates and any future product candidates or products from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA, the EMA or comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government priorities and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and enact statutory, regulatory and policy changes. Average review times at the FDA or other regulatory authorities have fluctuated in recent years as a result. Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

In addition, government funding of the SEC and other government agencies on which our operations may rely, and those that fund research and development activities that is required by third parties we enter into agreements with, is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other federal agencies, including substantial leadership departures, personnel cuts, and policy changes, may also slow the time necessary for new drugs to be reviewed and/or approved, which would harm our business.

Currently, federal agencies in the U.S. are operating under a federal government shutdown due to the expiration of the continuing resolution on September 30, 2025. The duration of the current government shutdown is unknown. For example, in prior years the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. A prolonged government shutdown, significant leadership, personnel, and/or policy changes, or other substantial modification in agency activities (including due to global health concerns, the aims of the current administration, or geopolitical factors) could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.