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

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on March 13, 2025 (the “Annual Report”) with the U.S. Securities and Exchange Commission (the “SEC”). This discussion, particularly information with respect to our future results of operations or financial condition, business strategy, plans and objectives for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special note regarding forward-looking statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under Part 1, Item 1A of the Annual Report for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. References in this Quarterly Report on Form 10-Q to “we,” “us,” “our” and similar first-person expressions refer to Cadrenal Therapeutics, Inc. (“Cadrenal”).

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified under Part 1, Item 1A of the Annual Report. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Company Overview

The Company

Cadrenal is focused on developing novel differentiated products to address key gaps in currently available anticoagulation therapeutics. Our lead product candidate is tecarfarin, a novel late-stage, reversible Vitamin K antagonist (a warfarin replacement) designed to prevent heart attacks, strokes, and deaths due to blood clots in patients requiring chronic anticoagulation. Tecarfarin is specifically designed to overcome metabolic factors that can make warfarin less reliable. Cadrenal has also recently acquired the assets of eXIthera Pharmaceuticals (“eXIthera”), including its proprietary portfolio of investigational intravenous (“IV”) and oral Factor XIa inhibitors. The lead asset in this additional portfolio is frunexian, a first-in-class, Phase 2-ready IV Factor XIa inhibitor designed for acute care settings where contact activation of coagulation by medical devices or artificial surfaces plays a significant role. Frunexian is the only IV FXIa inhibitor in clinical development targeting the acute/critical care hospital setting exclusively.

Tecarfarin Historical Considerations

At the time the initial investigational new drug (“IND”) application for tecarfarin was filed by its founding sponsor, warfarin was the only marketed oral anticoagulant, and the strategy was to develop tecarfarin as an alternative vitamin K antagonist (“VKA”) with superior efficacy and safety over warfarin for a broad range of indications including atrial fibrillation (“AFib”), deep vein thrombosis (“DVT”), pulmonary embolism (“PE”), prevention of pulmonary embolism in patients with venous thrombosis, DVT prevention in patients undergoing certain surgical procedures, thrombosis prevention in patients with mechanical heart valves, and prevention of thrombotic complications in patients after a myocardial infarction (heart attack), among others.

While tecarfarin clinical trials were being conducted by the initial IND sponsor, the direct-acting oral anticoagulants (“DOACs”) were advancing through clinical trials and ultimately approved after demonstrating that they were non-inferior to warfarin in specific indications, including AFib in the general population, prevention of pulmonary embolism in patients with venous thrombus, and prevention of deep vein thrombosis in patients undergoing specific surgical procedures, among others. These DOAC clinical studies led to a change in the standard of care for a large percentage of the population that had previously been treated with warfarin, as well as for some of the same population initially targeted by the prior tecarfarin IND sponsor. The DOACs also did not require monthly blood testing and monitoring, thus more convenient for patients. Therefore, the original broad-label development plan for tecarfarin had to be re-evaluated and modified.

Accordingly, we have refocused the development of tecarfarin for orphan cardiovascular conditions where patients are unable to achieve sufficiently reliable chronic anticoagulation with warfarin, and where DOACs have either failed or their efficacy and safety remain unproven, including patients with end-stage kidney disease (“ESKD”) and AFib, and patients with left ventricular assist devices (“LVADs”). While warfarin-treated patients have fared better than DOAC-treated patients in comparative studies in certain of these cardiovascular conditions, the event rates in these studies remain unacceptably high. At the same time, the quality of anticoagulation in warfarin-treated patients in these high-risk circumstances is frequently sub-optimal, and, importantly, sub-optimal anticoagulation is strongly associated with much higher adverse event rates. Thus, there continues to be a need for more reliable anticoagulation than can be achieved with warfarin in patients who are not addressed—or even addressable—by DOACs.

Cadrenal is pursuing a pipeline-in-a-product approach with tecarfarin. Tecarfarin has orphan drug and fast-track designations from the United States Food and Drug Administration (“FDA”) for the prevention of systemic thromboembolism (blood clots) of cardiac origin in patients with ESKD and AFib. Tecarfarin also has an orphan drug designation from the FDA for the prevention of thrombosis and thromboembolism in patients with an implanted mechanical circulatory support device, which includes LVADs, a mechanical heart pump.

Tecarfarin has been evaluated in eleven (11) human clinical trials in over 1,000 individuals (269 patients were treated for at least six months, and 129 patients were treated for one year or more). In Phase 1, Phase 2, and Phase 2/3 clinical trials, tecarfarin has generally been well-tolerated in both healthy adult subjects and patients with chronic kidney disease (“CKD”). In the Phase 2/3 trial, EMBRACE-AC, the largest tecarfarin trial with 607 patients, including those with mechanical heart valves, only 1.6% of the blinded tecarfarin subjects suffered from major bleeding, and there were no thrombotic events.

Over the course of the year, the development strategy for tecarfarin has continued to evolve. We are focused on the two areas for which we already have orphan designation - LVAD and ESKD with AFib. We have recently completed the manufacturing of tecarfarin drug product in accordance with current good manufacturing practices (cGMP) and are evaluating opportunities for additional Phase 2 trials that will provide important data to de-risk and streamline subsequent registration activities in both areas. This evaluation is ongoing and may include advancing clinical trials in 2026 for stable LVAD patients currently treated with warfarin and/or dialysis patients currently treated with warfarin who would be switched to tecarfarin.

Recent Developments

On September 12, 2025, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with eXIthera Pharmaceuticals (“eXIthera”), to acquire its assets, including its proprietary portfolio of investigational IV and oral Factor XIa inhibitors, including the compounds known as frunexian (EP-7041) and EP-7327 and certain other compounds, as well as all intellectual property, regulatory filings (including two inactive Investigational New Drug Applications filed with the FDA), clinical and non-clinical data, Chemistry, Manufacturing, and Controls materials (“CMC”), drug substance inventory, books and records, and the exclusive license agreement (the “Haisco License Agreement”) with Sichuan Haisco Pharmaceutical Co., Ltd. (“Haisco”), which relates to development of eXIthera’s lead asset, frunexian, in the Chinese market (collectively, the “Assets”). The transactions contemplated by the Asset Purchase Agreement were consummated on September 12, 2025 (the “Closing”).

The Purchase Price for the Assets consists of (i) $50,000 of transaction closing costs, (ii) the assumption of specific assumed liabilities related to post-closing obligations arising from the Haisco License Agreement, (iii) certain milestone payments, and (iv) royalty payments. We have agreed to pay milestone payments to eXIthera in the aggregate amount of up to $15 million, payable in cash or in our common stock in our sole discretion, upon the achievement of the following clinical and regulatory milestone events:

• $500,000 upon the occurrence of the first patient dosed in first Phase 2 study initiated after the Closing with respect to frunexian or an Other IV Compound (as such term is defined in the Asset Purchase Agreement);
• $500,000 upon the occurrence of the first patient dosed in first Phase 1 study initiated after the Closing with respect to EP-7327 or an Other Oral Compound (as such term is defined in the Asset Purchase Agreement);
• $1,000,000 upon the occurrence of the first patient dosed in first Phase 3 study initiated after the Closing with respect to frunexian or an Other IV Compound;
• $1,000,000 upon the occurrence of the first patient dosed in first Phase 3 study initiated after the Closing with respect to EP-7327 or an Other Oral Compound);
• $6,000,000 on the date the FDA grants approval of a New Drug Application (“NDA”) for frunexian or an Other IV Compound;
• $6,000,000 on the date the FDA grants approval of an NDA for EP-7327 or an Other Oral Compound.

The royalties due to eXIthera by us shall be calculated as follows: 2% of annual net sales of pharmaceutical products containing any of the compounds that are the subject of the Asset Purchase Agreement which are covered by a valid patent, payable from the first commercial sale of a product in each country until the later of: (a) expiration of the last-to-expire valid patent claim that would be infringed by the commercialization in that country, (b) expiration of regulatory exclusivity in that country (including when generic competition occurs), or (c) ten years from the first commercial sale of the product in that country. Additionally, we will pay eXIthera 50% of all royalties actually received by us from Haisco under the existing Haisco License Agreement following the potential future commercialization of frunexian by Haisco.

The Factor XIa inhibitors are the latest and most exciting class of broad-use anticoagulants currently under development around the world. The eXIthera acquisition significantly enhances our pipeline, adding product candidates that address large and underserved segments of the current $38 billion global anticoagulation market. Frunexian is a first-in-class, Phase 2-ready IV Factor XIa inhibitor designed for acute care settings where contact activation of coagulation by medical devices or artificial surfaces plays a significant role, such as cardiopulmonary bypass, catheter thrombosis, and other blood-contacting implanted devices or artificial surfaces. The acquisition also includes EP-7327, an oral Factor XIa inhibitor, for the prevention and treatment of major thrombotic conditions.

These newly acquired small molecules are mechanism-based inhibitors, which bind to Factor XIa and inhibit enzyme activity. As a result, the product candidates are highly potent, which can be an advantage for a target like Factor XIa that requires a high degree of target engagement for efficacy. Unlike other IV small molecules under development, it is the only one specifically targeting the acute/critical care hospital setting. All other agents, whether small molecules or antibodies, are targeting chronic indications. Moreover, the non-small molecule inhibitors are not suited to acute use because of their pharmacodynamics. At present, only frunexian has the potential to replace heparin and other IV-delivered anticoagulants in select acute care hospital settings, with the potential to provide substantial cost savings to the US healthcare system. While the current standard of care for cardiac surgery is heparin, the high doses of heparin used for cardiopulmonary bypass have their own substantial risk of bleeding complications, especially with repeat cardiac surgical procedures.

ATM Facility

During the nine months ended September 30, 2025, we sold 236,728 shares of common stock through our at-the-market (ATM) facility with H.C.W. These sales were made at a weighted average price of $16.96 per share, resulting in total gross proceeds of approximately $4,015,598 and net proceeds of approximately $3,830,951.

From October 1, 2025 through November 10, 2025, we sold 16,091 shares of common stock through our at-the-market (ATM) facility. These sales were made at a weighted average price of $14.16 per share, resulting in total gross proceeds of approximately $227,772 and net proceeds of approximately $219,890.

Results of Operations

Results of Operations for the Three Months Ended September 30, 2025 and 2024

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

General and administrative expenses

General and administrative expenses were $2.0 million for the three months ended September 30, 2025, compared to $1.7 million for the three months ended September 30, 2024, an increase of approximately $0.4 million, or 22%. The increase was primarily driven by a $0.3 million increase in expenses related to being a public company, $0.2 million increase in stock-based compensation, and a $0.1 million increase in consulting expenses. These increases were partially offset by a $0.1 million decrease in patent expenses, $0.1 million decrease in personal-related expenses, and a $0.1 million decrease in other expenses.

Research and development expenses

Research and development expenses were $0.7 million for the three months ended September 30, 2025, compared to $0.8 million for the three months ended September 30, 2024, respectively, a decrease of $0.1 million, or 12%. The decrease was primarily attributable to a $0.3 million reduction in consulting expenses, partially offset by a $0.2 million increase in transaction-related expenses associated with the Asset Purchase Agreement completed in September 2025, which was expensed as in-process research and development (IPR&D). We anticipate research and development expenses to increase when we commence clinical trials.

Interest and dividend income

Interest and dividend income for the three months ended September 30, 2025, and 2024 were $0.1 million and $0.1 million, respectively. This income represents the interest and dividends earned from our investments in money market funds.

Results of Operations for the Nine Months Ended September 30, 2025 and 2024

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

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General and administrative expenses

General and administrative expenses were $7.0 million for the nine months ended September 30, 2025, compared to $4.0 million for the nine months ended September 30, 2024, an increase of approximately $3.0 million, or 73%. The increase was primarily attributable to a $1.5 million increase in expenses related to being a public company, a $0.8 million increase in stock-based compensation, a $0.3 million increase in consulting expenses, and a $0.1 million increase in personnel-related expenses.

Research and development expenses

Research and development expenses were $3.4 million for the nine months ended September 30, 2025, compared to $2.7 million for the nine months ended September 30, 2024, an increase of $0.7 million, or 29%. The increase was primarily attributable to a $0.5 million increase in chemistry, manufacturing, and controls (“CMC”) expenses , a $0.3 million increase in personnel-related costs, primarily associated with our former Chief Medical Officer’s severance agreement entered into in February 2025, $0.2 million increase in transaction-related expenses associated with the Asset Purchase Agreement completed in September 2025, which was expensed as in-process research and development (IPR&D), a $0.1 million increase in stock-based compensation, and a $0.1 million increase in clinical trial preparation costs. These increases were partially offset by a $0.5 million decrease in consulting expenses. We anticipate research and development expenses to increase when we commence clinical trials.

Interest and dividend income

Interest and dividend income for the nine months ended September 30, 2025, and 2024 were $0.1 million and $0.2 million, respectively. This represents the interest and dividends earned from our investments in money market funds.

Liquidity and Capital Resources

Since inception, we have incurred recurring losses and used cash in operating activities as we continue to advance our development programs. To date, we have funded our operations primarily through the issuance of convertible and promissory notes, our initial public offering completed in January 2023, a private placement completed in July 2023, the warrant inducement transaction completed in November 2024, and the sale of common stock through our at-the-market (“ATM”) facility.

For the nine months ended September 30, 2025, we reported a net loss of $10.2 million, which included $1.6 million of non-cash expenses, and cash used in operating activities of $10.0 million. We expect to continue to incur operating losses and negative cash flows for the foreseeable future as we advance our clinical and regulatory activities. Based on our current operating plan, we believe that our existing cash resources will not be sufficient to fund our operating and capital requirements for the next 12 months. To meet anticipated funding needs, we plan to seek additional capital through strategic partnerships, equity offerings, and/or debt financings. However, there can be no assurance that additional funding will be available on acceptable terms or at all. These factors raise substantial doubt about our ability to continue as a going concern for at least one year following the issuance of the accompanying financial statements. If we are unable to obtain additional financing, we may be required to delay or reduce the scope of our development programs, implement cost-saving measures, or cease operations entirely. The accompanying financial statements do not include any adjustments that might result from this uncertainty.

Cash Flows

The following table summarizes our cash flows for the period presented:

Operating activities

During the nine months ended September 30, 2025, cash used in operating activities was $10.0 million. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $8.6 million in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, used $1.4 million in cash primarily from a $0.9 million decrease in accounts payable, a $0.4 million decrease in accrued liabilities, and a $0.1 million increase in deferred offering costs.

During the nine months ended September 30, 2024, cash used in operating activities was $5.6 million. Net loss adjusted for the non-cash items as detailed on the statement of cash flows, used $5.8 million in cash, and the changes in operating assets and liabilities, as detailed on the statement of cash flows, provided $0.2 million in cash primarily from a $0.3 million increase in accounts payable, a $0.1 million increase in accrued liabilities partially offset by a $0.1 million increase in deferred offering costs, and a $0.1 million increase in prepaid expenses.

Financing activities

During the nine months ended September 30, 2025, net cash provided by financing activities totaled $3.9 million from the use of our ATM facility and proceeds from the exercise of stock options.

During the nine months ended September 30, 2024, net cash provided by financing activities totaled $1.5 million. During the period, we utilized our ATM facility, which generated proceeds of $1.5 million, net of fees.

Critical Accounting Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of financial instruments, the fair value of stock-based awards, deferred tax assets and valuation allowance, income tax uncertainties, and certain accruals. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimated under different assumptions or conditions.

Stock-Based Compensation

We measure our stock-based awards granted to employees, consultants and directors based on the estimated grant-date fair values of the awards and recognize the compensation over the requisite service period. We use the Black-Scholes option-pricing model to estimate the fair value of our stock option awards. Stock-based compensation is recognized using the straight-line method. As the stock compensation expense is based on awards ultimately expected to vest, it is reduced by forfeitures. We account for forfeitures as they occur.

Acquisitions

We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs, which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.

Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

For asset acquisitions, a cost-accumulation model is used to determine the acquisition cost. Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. When a transaction accounted for as an asset acquisition includes an in-process research and development (“IPR&D”) asset, the IPR&D asset is only capitalized if it has an alternative future use other than in a particular research and development project. For an IPR&D asset to have an alternative future use: (a) we must reasonably expect that we will use the asset acquired in the alternative manner and anticipate economic benefit from that alternative use, and (b) our use of the asset acquired is not contingent on further development of the asset subsequent to the acquisition date (that is, the asset can be used in the alternative manner in the condition in which it existed at the acquisition date). Otherwise, amounts allocated to IPR&D that have no alternative use are expensed to research and development. Asset acquisitions may include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is paid or probable of payment, at which point the consideration is allocated to the assets acquired on a relative fair value basis.

OFF-BALANCE SHEET ARRANGEMENTS

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. We have adopted and maintain disclosure controls and procedures (as defined Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is collected, recorded, processed, summarized, and reported within the time periods specified in the rules of the SEC. Our disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. 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. Based on the evaluation of our disclosure controls and procedures as of September 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such a date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2025, there were no changes in our internal control over financial reporting (as defined in Rules 13a 15(f) and 15d 15(f) of the Exchange Act) that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Investing in our securities involves a high degree of risk. Please refer to Part I, Item 1A, “Risk Factors,” contained in our Annual Report for a description of certain significant risks and uncertainties to which our business, financial condition and results of operations are subject. Except as set forth below, there have been no material changes from these risk factors as of the date of filing of this Quarterly Report on Form 10-Q.

Our financial statements have been prepared assuming that we will continue as a going concern.

We had an accumulated deficit of approximately $35.9 million as of September 30, 2025 and a net loss of approximately $10.2 million for the nine months ended September 30, 2025. We expect to incur significant expenses and continued losses from operations for the foreseeable future. We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for the next twelve months. We will require additional financing as we continue to execute our business strategy, including the need for additional funds for the commencement of our planned clinical trials. Our unaudited financial statement for the nine months ended September 30, 2025, were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date and we expect our expenses to increase in connection with the commencement of our planned clinical trials. These factors raise substantial doubt about our ability to continue as a going concern for one year after the financial statements are issued. Our unaudited financial statements for the quarter ended September 30, 2025 contain an explanatory paragraph with respect to this uncertainty. Our liquidity may be negatively impacted as a result of research and development cost increases in addition to general economic and industry factors. In order to meet our expected obligations, we intend to raise additional funds through partnering and equity and debt financings or a combination of these potential sources of liquidity. There can be no assurance that funding will be available on acceptable terms, on a timely basis, or at all. The various ways that we could raise capital carry potential risks. Any additional financing will likely involve the issuance of our equity securities, which will have a dilutive effect on our stockholders. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. If we raise funds through partnering, such as collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or grant licenses on terms that are not favorable to us. If we do not succeed in raising additional funds on acceptable terms or at all, we may be unable to complete the planned clinical trials. As such, we cannot conclude that such plans will be effectively implemented within one year after the date that the financial statements included in this Quarterly Report are filed with the SEC and there is uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt about our ability to continue as a going concern.

The shutdown of the U.S. federal government may adversely affect our business.

A prolonged or recurring shutdown of the U.S. federal government may adversely affect our business operations and regulatory compliance. During such shutdowns, while the SEC’s EDGAR system remains operational, the unavailability of SEC staff to review filings, issue comments, or declare registration statements effective may delay our ability to complete public offerings, respond to comment letters, or obtain timely regulatory approvals. These delays could impact our access to capital markets, hinder strategic transactions, and create uncertainty around our disclosure obligations. Additionally, the lack of interpretive guidance or exemptive relief during a shutdown may increase legal and compliance risks. We continue to monitor developments and adjust our regulatory strategies accordingly, but there can be no assurance that future shutdowns will not materially affect our operations or financial condition.

Inadequate funding for the FDA, the SEC and other government agencies, including from government shutdowns, or other disruptions to these agencies’ staffing and operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services 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.

Currently, federal agencies in the United States are operating under a federal government shutdown due to the expiration of the continuing resolution that expired on September 30, 2025. The duration of the current government shutdown is unknown. In addition, the current U.S. administration is focused on reducing costs of the federal government generally, including significantly reducing the number of government employees. Without appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted. The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.

Our business depends on timely interactions with the FDA, including the review of regulatory submissions, scheduling of formal meetings, and oversight of clinical trials. Disruptions at the FDA and other federal agencies, including substantial leadership departures, personnel cuts, policy changes and those related to the federal government shutdown, may result in reduced staffing or suspension of non-essential FDA operations, which could delay or cancel meetings with the FDA, hinder regulatory guidance, delay the implementation or enforcement of regulatory requirements in a timely fashion or at all, and postpone the review of IND applications, New Drug Applications (NDAs), and Biologics License Applications (BLAs). These disruptions may also affect the initiation, conduct, and monitoring of clinical trials, particularly those requiring FDA authorization or ongoing regulatory engagement. Interruptions in FDA activities could materially delay our development timelines, increase operational costs, and adversely impact our ability to complete our planned clinical trials and to advance product candidates toward approval and commercialization. Any such delays or uncertainties may have a significant negative effect on our business, financial condition, and results of operations.

If the current U.S. federal government shutdown is prolonged or if the FDA, National Institutes of Health (“NIH”), SEC or the United States Patent and Trademark Office (“USPTO”) experiences significant decreases in funding or personnel, it could significantly impact the ability of the FDA to issue licenses needed for conduct of our clinical trials, the NIH to conduct research or provide grants, and the abilities of the FDA and the USPTO to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, 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.

There is substantial uncertainty as to whether and how the new administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates and any products for which we obtain approval. Additionally, the new administration could also issue or promulgate executive orders, regulations, policies or guidance that adversely affect us or create a more challenging or costly environment to pursue the development of new therapeutic candidates. Complying with any new legislation and regulatory requirements could be time-intensive and expensive.