Context Therapeutics Inc.: Form 10-Q for the period ended Jun 30, 2026

You should read the following discussion of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and other financial information included in this report and our audited consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026. In addition to historical information, the following discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks referred to under Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K and Part II, Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q. Please also see the section entitled “Note Regarding Forward-Looking Statements.”

Overview

We are a clinical-stage biopharmaceutical company advancing TCE bispecific antibodies for solid tumors. Our goal is to build an innovative portfolio of TCE bispecific therapeutics, including CTIM-76, a CLDN6 x CD3 TCE, and CT-202, a Nectin-4 x CD3 TCE.

We had also been developing CT-95, a Mesothelin (“MSLN”) x CD3 TCE. However, on August 5, 2026, we announced a portfolio prioritization and capital allocation strategy, pursuant to which we discontinued internal development of CT-95 and will focus our development efforts on CTIM-76 and CT-202.

CTIM-76 is a CLDN6 x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors and absent from or expressed at low levels in healthy adult tissues. On May 2, 2024, we announced the FDA cleared our IND application to support the initiation of a Phase 1 dose escalation and expansion trial of CTIM-76 in patients with CLDN6-positive gynecologic and testicular cancers. We dosed the first patient in our CTIM-76 Phase 1 clinical trial in January 2025. On April 2, 2026, the FDA granted Fast Track designation to CTIM-76 for the treatment of platinum-resistant ovarian cancer in patients that have received all standard of care therapies. We presented interim Phase 1a clinical data for our CTIM-76 trial in June 2026.

CTIM-76 is advancing into every-three-week (“Q3W”) dosing in patients with platinum-resistant ovarian cancer (“PROC”). In the second half of 2026, we plan to evaluate CTIM-76 using a Q3W dosing regimen in less heavily pretreated PROC patients to further characterize its clinical profile in a larger and more commercially relevant patient population. We expect to share initial Phase 1a data for our CTIM-76 Q3W trial in the second quarter of 2027. Initiation of a Phase 1b dose expansion trial for CTIM-76 is anticipated in the first quarter of 2027.

CT-202 is a Nectin-4 x CD3 TCE that targets Nectin-4, a cell surface protein that is highly and frequently overexpressed in a variety of solid tumors, including bladder, colorectal, lung and breast. Nectin-4 is a clinically validated target for cancer therapy using a traditional antibody-drug conjugate, but it is also associated with certain adverse events, including neuropathy and rash. CT-202 is a pH-dependent TCE that is designed to be preferentially active within the tumor microenvironment. In April 2026, we received Human Research Ethics Committee approval and Clinical Trial Notification acknowledgement by the Australian Therapeutic Goods Administration to initiate a first-in-human Phase 1 clinical trial of CT-202. The first patient in our Phase 1 clinical trial evaluating CT-202 in patients with Nectin-4-positive urothelial, colorectal, and triple-negative breast cancers is expected to be dosed in the third quarter of 2026. We also expect to share initial Phase 1a data from the CT-202 trial in the second half of 2027.

CT-95 is an MSLN x CD3 TCE that is intended to redirect T-cell-mediated lysis toward malignant cells expressing MSLN. The first patient in our CT-95 Phase 1 trial was dosed in April 2025. We expect to wind down the CT-95 Phase 1 trial promptly in connection with our decision to discontinue internal development of CT-95.

We were incorporated in April 2015 under the laws of the State of Delaware. Since inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development, organizing and staffing our company, business planning and raising capital. We operate as one business segment and have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations. We have funded our operations primarily through the sale of common stock, warrants, convertible debt, and convertible preferred stock. Our net loss was $23.2 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $154.1 million.

Collaboration and License Agreements

CTIM-76: Integral Molecular Collaboration and Licensing Agreement

In April 2021, we entered into a collaboration and licensing agreement with Integral Molecular, Inc. (“Integral”) for the development of a CLDN6 bispecific antibodies for cancer therapy. On February 29, 2024, we further amended (the "Integral Second Amendment") the collaboration and licensing agreement with Integral (as amended, the “Integral License Agreement”) to reflect updated financial terms. In the course of our further due diligence review of CTIM-76, we determined that certain of the licensed rights under the Integral License Agreement may incorporate intellectual property rights currently held by a third party. Specifically, at the time of the Integral Second Amendment, we were aware of issued patents in the United States and certain foreign jurisdictions expiring in January 2034, and then in 2025 became aware of a patent that issued in the United States expiring in March 2042, in each instance that potentially covers certain parts of the intellectual property included in CTIM-76.While we believe we will have reasonable defenses against any potential claim of infringement, we may not be successful in such efforts, and we also may not be able to obtain a license to such patents on commercially reasonable terms, or at all.

As part of the Integral Second Amendment, Integral’s right to receive certain future payments was reduced as follows: aggregate development and regulatory milestone payments were reduced from $55 million to $15 million, aggregate sales milestone payments were reduced from $130 million to $12.5 million, and a tiered royalty of 8-12% that commenced at first commercial sale was reduced to a flat royalty rate of 6% on net sales beginning no sooner than February 1, 2034. The Integral Second Amendment also narrowed the license grant from Integral to us to only cover CTIM-76, removed any further obligation of us to reimburse Integral for any independently obtained research funding Integral applied against CTIM-76 research, and included mutual releases by the parties.

The reduced development and regulatory milestones now reflect a payment due at each of: (i) first patient’s first screening visit in a Phase 1b/2 or Phase 2 clinical trial for CTIM-76; (ii) first patient’s first screening visit in a Phase 3 clinical trial for CTIM-76; (iii) United States marketing approval for CTIM-76; (iv) European Union marketing approval for CTIM-76; (v) United Kingdom marketing approval for CTIM-76; (vi) and Japan marketing approval for CTIM-76. The amended commercial milestones now also reflect a payment due upon the achievement of annual net sales of $500 million and annual net sales of $1 billion.

CT-95: Link Purchase Agreement

On July 9, 2024, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) pursuant to which we acquired CT-95 (formerly known as LNK-101), from Link (assignment for the benefit of creditors), LLC (“Link”), which succeeded to the assets of Link Immunotherapeutics Inc. The FDA previously cleared the IND application for CT-95.

Pursuant to the Asset Purchase Agreement, we purchased all of the assets of Link associated with CT-95, including patent rights, know-how, regulatory filings, and inventory of drug substance and drug product (the “Transferred Assets”), on an “as is” and “where is” basis. CT-95 patents are currently being prosecuted and/or maintained in the United States, Europe, Canada, Australia, Japan and Taiwan. We also assumed certain liabilities relating to the Transferred Assets. In consideration of the Transferred Assets, we made a one-time payment to Link of $3.75 million.

CT-202: BioAtla License Agreement

On September 23, 2024, we entered into a license agreement (the “BioAtla License Agreement”) with BioAtla, Inc. ("BioAtla"), pursuant to which we obtained an exclusive, worldwide license to develop, manufacture and commercialize two licensed antibodies (the “BioAtla Assets”), including BA3362 (renamed by us as CT-202), BioAtla’s Nectin-4 x CD3 TCE.

As partial consideration for the exclusive license under the BioAtla License Agreement, we made an upfront payment of $11.0 million, and BioAtla was eligible to receive up to $122.5 million in additional milestone payments based upon the achievement of specified preclinical, clinical, development and commercial milestones, as well as tiered mid-single-digit to low double-digit royalties on future net sales for products containing the BioAtla Assets, subject to standard reductions. As discussed below, BioAtla’s eligibility to receive these milestone payments and royalties was terminated in connection with the BioAtla License Agreement Amendment (as defined below). In October 2025, we achieved a $2.0 million development milestone under the BioAtla License Agreement, which we paid to BioAtla during the year ended December 31, 2025.

On May 14, 2026 (the “BioAtla License Amendment Date”), we entered into a First Amendment (the “BioAtla License Agreement Amendment”) to the BioAtla License Agreement. Pursuant to the BioAtla License Agreement Amendment, among other things, we agreed to pay BioAtla $4.5 million within five business days of the BioAtla License Amendment Date and an additional $2.0 million by August 1, 2026. Both payments have since been made. The BioAtla License Agreement Amendment also modified our rights under the BioAtla License Agreement such that the exclusive licenses granted with respect to the BioAtla Assets are irrevocable, royalty-free, fully paid-up and non-terminable. The BioAtla License Agreement Amendment also eliminated (i) our research and development and certain reporting obligations regarding the BioAtla Assets, and (ii) BioAtla’s rights to terminate the BioAtla License Agreement. As a result of the BioAtla License Amendment, BioAtla is not entitled to receive future milestone payments or royalties under the BioAtla License Agreement with respect to the BioAtla Assets.

Financial Overview

Currently, our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, as well as general and administrative expenditures. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or any future product candidates. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our current and any future product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. In addition, if we obtain regulatory approval for any product candidate, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, we have incurred and continue to incur significant costs associated with operating as a public company, including legal, accounting, investor relations and other expenses. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenses on other research and development activities.

As of June 30, 2026, we had cash and cash equivalents of $43.0 million. Based on our current operating plan and anticipated milestones, we believe that our cash and cash equivalents as of June 30, 2026 will be sufficient to fund our operations into the fourth quarter of 2027. If the Company is unable to obtain additional financing, the lack of liquidity could have a material adverse effect on the Company’s future prospects.

We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic transactions and/or marketing, distribution or licensing arrangements. 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. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.

At-the-Market Offering

On December 2, 2024, we entered into a Sales Agreement (the “ATM Sales Agreement”) with Leerink Partners LLC (the “Agent”). Pursuant to the terms of the ATM Sales Agreement, we may offer and sell shares of common stock having an aggregate offering amount of up to $75.0 million from time to time through the Agent (the “ATM Shares”). Sales of the ATM Shares may be made in sales deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"). On October 24, 2025, we entered into Amendment No. 1 to Sales Agreement (the “ATM Sales Agreement Amendment”, and together with the ATM Sales Agreement, the “Amended ATM Sales Agreement”) to provide for an increase in the aggregate offering amount under the Amended ATM Sales Agreement, such that following the filing of a new prospectus supplement with respect to the ATM Shares on October 24, 2025, we may offer and sell ATM Shares having an aggregate offering price of up to $75.0 million, exclusive of ATM Shares previously sold in December 2024. The Agent will be entitled to a commission from us of up to 3.0% of the gross proceeds from the sale of ATM Shares sold under the Amended ATM Sales Agreement.

Private Placement

On May 1, 2024, we entered into a securities purchase agreement (the “Purchase Agreement”) for the private placement (the “Private Placement”) of (i) 59,032,259 shares (the “PIPE Shares”) of our common stock at a purchase price of $1.55 per PIPE Share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 5,482,741 shares of common stock (the “Warrant Shares”) at a purchase price of $1.549 per Pre-Funded Warrant. The Pre-Funded Warrants have an exercise price of $0.001 per share of common stock, are immediately exercisable and remain exercisable until exercised in full. During the year ended December 31, 2025, 2,178,200 Pre-Funded Warrants were exercised on a cashless basis, resulting in the issuance of 2,174,983 shares of common stock. As of June 30, 2026, 3,304,541 Pre-Funded Warrants remained outstanding.

Components of Our Results of Operations

Operating Expenses

Research and Development Expenses

Research and development expenses have consisted primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred, including:

• expenses incurred to conduct the necessary discovery-stage laboratory work, preclinical studies and clinical trials required to obtain regulatory approval;
• personnel expenses, including salaries, benefits and share-based compensation expense for our employees and consultants engaged in research and development functions;
• costs of funding research performed by third parties, including pursuant to agreements with contract research organizations (“CROs”) that conduct our clinical trials, as well as investigative sites, consultants and CROs that conduct our preclinical and clinical studies;
• expenses incurred under agreements with contract manufacturing organizations, including manufacturing scale-up expenses, milestone-based payments, and the cost of acquiring and manufacturing preclinical study and clinical trial materials;
• fees paid to consultants who assist with research and development activities;
• license payments and acquisitions of acquired in-process research and development assets that have no alternative future use;
• expenses related to regulatory activities, including filing fees paid to regulatory agencies; and
• allocated expenses for facility costs, including rent, utilities and maintenance.

We track outsourced development costs and other external research and development costs to specific product candidates on a program-by-program basis. However, we do not track our internal research and development expenses on a program-by-program basis as they primarily relate to compensation, early research and other costs which are deployed across multiple projects under development.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including share-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and any future product candidates and prepare regulatory filings for our current and any future product candidates.

General and Administrative Expenses

General and administrative expenses have consisted primarily of personnel expenses, including salaries, benefits and share-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and business development functions. General and administrative expense also includes corporate facility costs not otherwise included in research and development expense, including rent, utilities and insurance, as well as legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.

We expect that our general and administrative expenses will increase in the future to support our continued research and development activities, potential commercialization efforts and increased costs of operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, legal support and accountants, among other expenses. Additionally, we will continue to incur significant costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the SEC, insurance and investor relations costs. If any of our current or future product candidates obtain U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team.

Interest Income

Interest income consists of interest earned on our cash and cash equivalents.

Other Income (Expense)

Other income (expense) is primarily due to the recognition of foreign currency gains or losses as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Results of Operations

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025:

Research and Development Expenses

Research and development expenses increased by approximately $4.7 million for the three months ended June 30, 2026 as compared to the same period in 2025. The following table summarizes our research and development expenses for the three months ended June 30, 2026 as compared to the same period in 2025:

CTIM-76 expenditures increased by $0.8 million primarily due to an increase of $0.7 million in clinical costs related to the CTIM-76 Phase 1 trial. CT-95 costs increased by $44,000 primarily due to an increase of $0.5 million in clinical costs, which were offset by a $0.4 million decrease in preclinical, contract manufacturing, and diagnostic development expenses. CT-202 expenses increased by $4.4 million primarily due to $6.5 million in consideration paid under the BioAtla License Agreement Amendment entered into in May 2026 and a $0.6 million increase in clinical costs mainly related to the CT-202 Phase 1 trial start up. These increases were partially offset by a decrease of $2.0 million in contract manufacturing and a $0.8 million decrease in preclinical expenses. Personnel-related costs, which include salaries, benefits and share-based compensation expense, decreased by $0.5 million, primarily due to $0.4 million of termination benefits expensed in the second quarter of 2025.

In connection with our portfolio prioritization and decision to discontinue internal development of CT-95, we expect costs associated with CT-95, including clinical trial and related development expenses, to decrease in future periods as we wind down the CT-95 Phase 1 trial.

General and Administrative Expenses

General and administrative expenses increased by approximately $0.5 million for the three months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily driven by a $0.3 million increase in professional fees. Salaries and personnel related costs also increased by $0.2 million, mainly as a result of higher share-based compensation expense as compared to the same period in 2025.

Interest Income

Interest income decreased by approximately $0.5 million for the three months ended June 30, 2026 as compared to the same period in 2025, primarily as a result of lower average cash and cash equivalent balances during the three months ended June 30, 2026 due to cash used to fund ongoing operations.

Other Income (Expense)

Other expense was approximately $10,000 for the three months ended June 30, 2026, as compared to other income of approximately $27,000 for the same period in 2025. This change is primarily due to foreign currency losses during the three months ended June 30, 2026, as compared to foreign currency gains during the prior year period, in each case as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table sets forth our results of operations for the six months ended June 30, 2026 and 2025:

* Percentage not meaningful

Research and Development Expenses

Research and development expenses increased by approximately $8.3 million for the six months ended June 30, 2026 as compared to the same period in 2025. The following table summarizes our research and development expenses for the six months ended June 30, 2026 as compared to the same period in 2025:

CTIM-76 expenditures increased by $2.0 million primarily due to an increase of $1.9 million in clinical costs related to the CTIM-76 Phase 1 trial. CT-95 expenses increased by $0.7 million primarily due to an increase of $1.4 million in clinical costs related to the CT-95 Phase 1 trial, partially offset by a $0.7 million decrease in preclinical, contract manufacturing, and diagnostic development expenses. CT-202 expenses increased by $5.3 million primarily due to $6.5 million in consideration paid under the BioAtla License Agreement Amendment entered into in May 2026 and a $0.9 million increase in clinical costs mainly related to the CT-202 Phase 1 trial start up. These increases were partially offset by a decrease of $1.5 million in contract manufacturing costs and a decrease of $0.6 million in preclinical costs. Personnel-related costs, which include salaries, benefits and share-based compensation expense, increased by approximately $0.3 million, primarily due to higher headcount offset by lower termination benefits incurred compared to the same period 2025.

In connection with our portfolio prioritization and decision to discontinue internal development of CT-95, we expect costs associated with CT-95, including clinical trial and related development expenses, to decrease in future periods as we wind down the CT-95 Phase 1 trial.

General and Administrative Expenses

General and administrative expenses increased by approximately $0.8 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily driven by a $0.5 million increase in professional fees. Salaries and personnel related costs, including share-based compensation, also increased $0.3 million mainly due to higher headcount and compensation adjustments.

Interest Income

Interest income decreased by approximately $0.9 million for the six months ended June 30, 2026 as compared to the same period in 2025, primarily as a result of lower average cash and cash equivalent balances during the six months ended June 30, 2026 due to cash used to fund ongoing operations.

Other Income (Expense)

Other income was approximately $0.1 million for the six months ended June 30, 2026, as compared to approximately $20,000 for the same period in 2025. This change is primarily due to higher foreign currency gains during the six months ended June 30, 2026, as compared to foreign currency gains during the prior year period, in each case as a result of exchange rate fluctuations on transactions denominated in a currency other than our functional currency.

Liquidity and Capital Resources

Overview

Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception through June 30, 2026, we have funded our operations through the sale of common stock, warrants, convertible debt, and convertible preferred stock. As of June 30, 2026, we had $43.0 million in cash and cash equivalents and an accumulated deficit of $154.1 million.

Based on our current operating plan and anticipated milestones, we expect our cash and cash equivalents at June 30, 2026 will be sufficient to fund our operations into the fourth quarter of 2027. We have based these estimates on assumptions that may prove to be imprecise, and we could utilize our available capital resources sooner than we expect.

Sources of Liquidity

At-the-Market Offering

Pursuant to the terms of the Amended ATM Sales Agreement, we may offer and sell shares of common stock having an aggregate offering amount of up to $75.0 million. As of June 30, 2026, $75.0 million remained available for sale under the Amended ATM Sales Agreement.

Private Placement

Pursuant to the May 2024 Private Placement, we sold (i) 59,032,259 shares of common stock at a purchase price of $1.55 per share, and (ii) Pre-Funded Warrants to purchase 5,482,741 shares of common stock at a purchase price of $1.549 per Pre-Funded Warrant.The aggregate gross proceeds from the Private Placement were approximately $100 million, before deducting offering expenses of $5.2 million,

Funding Requirements

Our primary use of cash is to fund operating expenses, which consist of research and development expenditures and various general and administrative expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

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 current and any future product candidates that we may pursue;
• the costs of manufacturing our current and any future product candidates for clinical trials and in preparation for regulatory approval and commercialization;
• the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our current and any future product candidates that we may pursue;
• the costs of preparing, filing and prosecuting 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;
• expenses needed to attract and retain skilled personnel;
• costs associated with being a public company;
• the costs required to scale up our clinical, regulatory and manufacturing capabilities;
• the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for our current and any future product candidates for which we receive regulatory approval; and
• revenue, if any, received from commercial sales of our current and any future product candidates, should any of our product candidates receive regulatory approval.

We will need additional funds to meet our operational needs and capital requirements for clinical trials, other research and development expenditures, and general and administrative expenses. We currently have no credit facility or committed sources of capital.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic transactions and/or marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic transactions or marketing, or distribution or licensing 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. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated:

Comparison of the Six Months Ended June 30, 2026 and 2025

Operating Activities

During the six months ended June 30, 2026, we used $18.4 million of cash in operating activities. Cash used in operating activities reflected our net loss of $23.2 million and a net change in our operating assets and liabilities of $2.7 million, partially offset by an in-process research and development charge of $6.5 million and non-cash share-based compensation expense of $0.9 million. The primary uses of cash were to fund our operations related to the development of our product candidates.

During the six months ended June 30, 2025, we used $10.9 million of cash in operating activities. Cash used in operating activities reflected our net loss of $13.4 million, partially offset by a change in our operating assets and liabilities of $1.8 million and non-cash share-based compensation expense of $0.7 million. The primary uses of cash were to fund our operations related to the development of our product candidates.

Investing Activities

During the six months ended June 30, 2026, cash used in investing activities was attributable to a payment of $4.5 million under the BioAtla License Agreement Amendment, and purchases of property and equipment totaling $56,000.

During the six months ended June 30, 2025, we used approximately $34,000 of cash to purchase property and equipment.

Financing Activities

We did not have cash flows from financing activities during the six months ended June 30, 2026.

During the six months ended June 30, 2025, we used approximately $15,000 of cash in financing activities related to the payment of remaining offering costs from the sale of ATM Shares under our ATM Sales Agreement.

Off-Balance Sheet Arrangements

During the periods presented, we did not have, nor do we currently have, any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Critical Accounting Policies and Estimates

During the six months ended June 30, 2026, there were no material changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 23, 2026.

Recent Accounting Pronouncements

See Note 3 to our unaudited condensed consolidated financial statements found elsewhere in this Quarterly Report for a description of recent accounting pronouncements applicable to our unaudited condensed consolidated financial statements.

Emerging Growth Company and Smaller Reporting Company Status

In April 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from complying with new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Other exemptions and reduced reporting requirements under the JOBS Act include, without limitation, the requirements for providing an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, an exemption from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation, and less extensive disclosure about our executive compensation arrangements. We will remain an emerging growth company until December 31, 2026, unless we earlier cease to qualify as an emerging growth company as a result of our total annual gross revenues, issuance of non-convertible debt securities or status as a large accelerated filer.

We are also a “smaller reporting company,” meaning that the market value of our common equity held by non-affiliates was less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We will continue to be a smaller reporting company while either (i) the market value of our common equity held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common equity held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item 3.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. 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. 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 June 30, 2026, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

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

Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 23, 2026. Other than as described below, there have been no material changes to the risk factors described in that report. The occurrence of any of the events or developments described in our Risk Factors could adversely affect our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

We may not be able to regain or maintain compliance with the continued listing standards of Nasdaq.

Our common stock is listed on the Nasdaq Capital Market, and we are therefore subject to its continued listing requirements, including requirements with respect to the market value of publicly-held shares, market value of listed shares, minimum bid price per share, and minimum stockholders’ equity, among others, and requirements relating to board and committee independence. If we fail to satisfy one or more of the requirements and are unable to timely regain compliance, we may be delisted from the Nasdaq Capital Market.

For example, on July 29, 2026, we received a letter from Nasdaq notifying us that, because the closing bid price for our common stock had closed below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2)

(the “Minimum Bid Price Requirement”). Nasdaq’s notice has no immediate effect on the listing of our common stock, and, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have until January 25, 2027 to regain compliance with the Minimum Bid Price Requirement by maintaining a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days, unless Nasdaq exercises its discretion to extend this ten-day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). In the event that we do not regain compliance by January 25, 2027, we may be eligible for additional time to regain compliance with the Minimum Bid Price Requirement.

We actively monitor our stock price, and, as appropriate, will consider implementing available options to regain or maintain compliance with the Minimum Bid Price Requirement. There can be no assurance, however, that we will be able to regain or maintain compliance with the Minimum Bid Price Requirement and meet Nasdaq’s other continued listing requirements. To the extent that we are unable to regain compliance with the Minimum Bid Price Requirement or fail to maintain compliance with Nasdaq’s other continued listing requirements, there is a risk that our common stock may be delisted from Nasdaq. Delisting from Nasdaq may adversely affect our ability to raise additional financing through the public or private sale of equity securities, significantly affect the ability of investors to trade our securities, or negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in potential business development opportunities. Furthermore, if we are delisted from Nasdaq and we are not able to list our common stock on another exchange, our common stock may be eligible to trade on an over-the-counter system, such as the OTCQB market, where an investor may find it more difficult to sell our common stock or obtain accurate quotations as to the market value of our common stock. We cannot assure you that our common stock, if delisted from Nasdaq, will be listed on another national securities exchange or quoted on an over-the-counter quotation system.