Rocket One Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.

We are a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. We are focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA).

Recent Developments

On April 1, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to sell to such investors 2,857,144 shares of common stock of the Company at a purchase price of $0.70 per share of common stock. For each share of common stock purchased by the investors, the Company, in a private placement pursuant to the Purchase Agreement, concurrently issued to such investors an unregistered warrant (each a “Warrant” and, collectively, the “Warrants”) to purchase one share of common stock at an exercise price of $0.85 per share. The Warrants are exercisable six months from the date of issuance (the “Initial Exercise Date”) for a period of five-years from the Initial Exercise Date. In connection with the offering, gross proceeds were approximately $2,000,000, and the Company received net proceeds of $1,611,879, after deducting placement agent’s fees and other offering expenses paid by the Company of $388,121. Additionally, in connection with the offering, the Company issued placement agent warrants to the designees of the placement agent, Wainwright, to purchase up to 142,857 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable at an exercise price of $0.875 per share and expire on April 1, 2031.

Results of Operations

Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025

Operating Costs and Expenses

Research and Development Expenses

For the three months ended March 31, 2026, research and development expenses were approximately $1,519,000. Specifically, during the three months ended March 31, 2026, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $1,431,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $12,000 related to manufacturing and preclinical activities; and (iii) HT-VA approximately $45,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $31,000 payable to members of our scientific advisory board for services.

For the three months ended March 31, 2025, research and development expenses were approximately $1,959,000. Specifically, during the three months ended March 31, 2025, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $459,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $198,000 related to manufacturing and preclinical activities; and (iii) HT-ALZ, approximately $12,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $37,000 payable to members of our scientific advisory board for services and recorded approximately $1,253,000 of in-process research and development expenses in connection with the acquisition of patent applications.

We expect our research and development activities to continue to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following:

• employee-related expenses, which include salaries and benefits, and rent expenses;
• fees related to in-licensed products and technology;
• expenses incurred under agreements with CROs, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities;
• the cost of acquiring and manufacturing clinical trial materials; and
• costs associated with non-clinical activities and regulatory approvals.

General and Administrative Expenses

For the three months ended March 31, 2026, general and administrative expenses amounted to approximately $1,129,000 as compared to $1,517,000 for the three months ended March 31, 2025, a decrease of $388,000, or 25.6%. For the three months ended March 31, 2026 and 2025, general and administrative expenses consisted of the following (rounded to the nearest $1,000):

During the three months ended March 31, 2026, the decrease in general and administrative expenses of approximately $388,000 was primarily attributed to (1) a decrease in compensation and related expenses of $256,000, primarily attributable to a decrease in stock-based compensation of approximately $220,000 in connection with the issuance of stock options during the three months ended March 31, 2025 as compared none during the three months ended March 31, 2026, and a decrease in other compensation and related expenses of $33,000, (2) during the three months ended March 31, 2026, professional and consulting expenses decreased by approximately $118,000 which was primarily attributable to a decrease in legal and consulting fees of approximately $48,000 and a decrease in accounting fees of approximately $76,000, offset by an increase in directors’ fees of approximately $6,000, (3) a decrease in rent expense of $3,000, and (4) a decrease in other general and administrative expenses of $11,000.

We anticipate that our general and administrative expenses will continue to increase in future periods, reflecting continued and increasing costs associated with:

• support for our research and development activities;
• stock compensation granted to key employees and non-employees;
• support of business development activities; and
• increased professional fees and other costs associated with regulatory requirements that we are subject to.

Other Income (Expenses), net

For the three months ended March 31, 2026, other expense, net was approximately $44,000, which resulted from the recording of a realized loss of crypto assets of $44,000.

For the three months ended March 31, 2025, other income, net was approximately $181, which resulted from interest income.

Net Loss

For the three months ended March 31, 2026 and 2025, we incurred a net loss of approximately $2,692,000, or $0.17 per common share (basic and diluted), and $3,476,000, or $0.27 per common share (basic and diluted), respectively.

Liquidity and Capital Resources

Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent on our ability to raise additional capital to fund our research and development (“R&D”) activities and meet our obligations on a timely basis. To date we have funded our operations primarily through the sale of equity and debt securities. As of March 31, 2026, we had approximately $4,047,000 in cash and cash equivalents, working capital of approximately $3,425,000 and an accumulated deficit of approximately $75,572,000. Net cash used in operating activities was $3,050,000 and $2,788,000 for the three months ended March 31, 2026 and 2025, respectively. We incurred net losses of approximately $2,692,000 and $3,476,000 for the three months ended March, 2026 and 2025, respectively. We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future as we continue our pre-clinical and clinical development of our product candidates. We have not yet commercialized any products and have never generated any revenue from product sales. We do not believe that our existing cash as of March 31, 2026 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date that our unaudited condensed consolidated financial statements are available to be issued. If funding is not available, or not available on terms acceptable to the Company, our current development plan and plans for expansion of our general and administrative infrastructure may be curtailed. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these consolidated financial statements are issued. Our unaudited condensed consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern.

On November 8, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which we could offer and sell shares of our common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales manager pursuant to our effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose). We will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. On November 13, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $2,439,256 pursuant to a prospectus supplement dated November 13, 2025 for a current offering up to $4,821,200. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,790,780 and (2) the termination of the ATM Agreement by either us or Wainwright, as set forth therein. During the three months ended March 31, 2026, we issued an aggregate of 756,187 shares of our common stock for net proceeds of approximately $701,000, after deducting sales agent commissions and other offering expenses payable by us pursuant to the ATM Agreement. On April 16, 2026, the amount that the Company could offer and sell pursuant to the ATM Agreement was updated pursuant to a prospectus supplement to a registration statement on Form S-3 (File No. 333-291566) dated April 16, 2026 for a current offering up to approximately $1,555,000. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,790,780 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein.

We have entered into certain license, sublicense, sponsored research and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license maintenance fee payments; (ii) out-of-pocket expense payments, including, but not limited to, payments related to intellectual property and research related expenses; (iii) development and commercialization expense payments; (iv) annual and quarterly minimum payments; (v) diligence expense payments; and (vi) revenue interest payments. In addition, subject to the achievement of certain development and/or commercialization events, we may also be required to make certain: (i) minimum royalty payments, ranging from middle to high five figures, (ii) sales-based royalties and running royalties, ranging from low single digits to low double digits; and (iii) milestone payments, of up to approximately $25 million (if all milestones in all of our current agreements are achieved).

Additional funding will be necessary to fund our future clinical and pre-clinical activities. We may obtain additional financing through sales of our equity and debt securities or entering into strategic partnership arrangements, or a combination of the foregoing. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light of the economic downturn. If we are unable to secure adequate additional funding as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates.

Cash Flows from Operating Activities

For the three months ended March 31, 2026, net cash used in operating activities was approximately $3,050,000, which primarily resulted from a net loss of approximately $2,692,000, an increase in prepaid expenses and other current assets of approximately $387,000 a decrease in accounts payable and accrued expenses of approximately $14,000, and a decrease in lease costs of $1,000, offset by approximately $44,000 of realized loss on crypto assets.

For the three months ended March 31, 2025, net cash used in operating activities was approximately $2,788,000, which primarily resulted from a net loss of approximately $3,476,000, offset by approximately $851,000 of non-cash research and development-acquired patent, $220,000 in stock-based compensation and a lease costs of $4,000, an increase in prepaid expenses and other current assets of $371,000 and a decrease in accounts payable and accrued expenses of $16,000.

Cash Flows from Investing Activities

During the three months ended March 31, 2026, the Company received proceeds of $147,000 from the sale of crypto assets.

The Company did not have any cash flows from investing activities for the three months ended March 31, 2025.

Cash Flows from Financing Activities

For the three months ended March 31, 2026, net cash provided by financing activities was approximately $701,000, which resulted from net proceeds from the issuance of common stock of approximately $701,000.

For the three months ended March 31, 2025, net cash provided by financing activities was approximately $7,067,000, which resulted from net proceeds from the issuance of common stock of $1,442,000 and proceeds from the exercise of warrants of approximately $5,625,000.

Our ultimate success is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly traded company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all.

We plan to pursue our plans with respect to the research and development of our pre-clinical products which will require resources beyond those that we currently have, ultimately requiring additional capital from third-party sources. We currently do not expect to generate any revenue.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made; and
• changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material.

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for an additional discussion of our significant accounting policies.

Stock-based compensation

The Company accounts for stock-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. Options are generally issued fully vested. The Company accounts for forfeited awards as they occur.

The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

The Company grants restricted stock awards under its equity incentive plan. Restricted stock awards are granted to employees and non-employees. The restricted stock awards are measured based on the grant-date fair value. In general, the restricted stock awards vest over a service period of zero to three years. Stock-based compensation expense is generally recognized based on the straight-line basis over the requisite service period and forfeitures are accounted for as they occur.

The Company has issued warrants to non-employees. The warrants are measured based on the grant-date fair value. In general, the warrants vest over a term of zero to ten years. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term.

Recently Issued Accounting Standards Not Yet Effective or Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the disclosure impact that ASU 2025-11 may have on its financial statement presentation and disclosures.

The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. 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 such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 27, 2026 (“Annual Report”), as subsequently updated, amended or superseded by our other filings made with the SEC. There have been no material changes in our risk factors from those previously disclosed in our Annual Report and other filings made with the SEC. You should carefully consider the risks in our filings with the SEC which could materially affect our business, financial condition or future results. The risks in our SEC filings are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.