Serina Therapeutics, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our audited consolidated financial statements for the years ended December 31, 2025 and 2024 in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2026, as amended on March 27, 2026. Past operating results are not necessarily indicative of results that may occur in future periods.

The following discussion includes forward-looking statements. See “Forward-Looking Statements,” above. Forward‑looking statements are not guarantees of future performance and our actual results may differ materially from those currently anticipated and from historical results depending upon a variety of factors, including, but not limited to, those discussed in Part I, Item 1A.

All information presented in this report is based on our fiscal year. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ending December 31 and the associated quarters, months and periods of those fiscal years.

Overview

We are a clinical-stage biotechnology company developing a pipeline of wholly owned drug product candidates to treat neurological diseases and other indications. Our POZ platform provides the potential to improve the integrated efficacy and safety profile of multiple modalities including small molecules, RNA-based therapeutics and antibody-based drug conjugates (“ADCs”). Our proprietary POZ technology is based on a synthetic, water soluble, low viscosity polymer called poly(2-oxazoline). Our POZ technology is engineered to provide greater control in drug loading and more precision in the rate of release of attached drugs. The therapeutic agents in our product candidates are typically well-understood and marketed drugs that are effective but are limited by pharmacokinetic profiles that can include toxicity, side effects and short half-life. We believe that by using POZ technology, drugs with narrow therapeutic windows can be designed to maintain more desirable and stable levels in the blood.

The following discussion should be read in conjunction with Note 1 to our unaudited condensed consolidated interim financial statements and the related notes included in Item 1 of this Report.

Since inception our operations have been financed primarily by aggregate net proceeds from the issuance of common stock, private placements, convertible preferred stock, convertible notes, warrant exercises and our at-the-market ("ATM") program. Since our inception in 2006, we have had significant operating losses. Our operating loss was $6.3 million and $5.9 million for three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $70.4 million and $24.5 million in cash and cash equivalents.

Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations within one year of the unaudited condensed consolidated interim financial statements issuance date, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development.

Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our accounts payable and accrued expenses. We expect to continue to incur net losses for the foreseeable future, and we expect our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In particular, we expect our expenses to increase as we continue our development of, and seek regulatory approvals for, our product candidates, as well as hire additional personnel, pay fees to outside consultants, attorneys, and accountants, and, incur other increased costs associated with being a public company. In addition, if and when we seek and obtain regulatory approval to commercialize any product candidate, we will also incur increased expenses in connection with commercialization and marketing of any such product. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will increase significantly in connection with our ongoing activities as we:

• advance our lead product candidate, SER-252 through Phase I clinical trials;
• advance our other product candidates;
• advance our preclinical programs to clinical trials;
• further invest in our pipeline;
• seek regulatory approval for our investigational medicines;
• maintain, expand, protect, and defend our intellectual property portfolio;
• secure facilities to support continued growth in our research, development, and commercialization efforts; and
• increase our headcount to support our development efforts and to expand our clinical development team.

We have not had any products approved for sale. We do not expect to generate any product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. As a result, until such time, if ever, that we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including collaborations, licenses, or similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed or on favorable terms, if 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, including our research and development activities. If we are unable to raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs.

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses and analyzes data in our unaudited condensed consolidated interim financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual conditions may differ from our assumptions and actual results may differ from our estimates.

An accounting policy is deemed critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate are reasonably likely to occur, that could materially impact the financial statements. Other than noted below, management believes that there have been no significant changes during the three months ended March 31, 2026 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on March 25, 2026, as amended on March 27, 2026.

Tranche Liability

Commitments to issue common stock and warrants in connection with future equity financings are accounted for as outstanding contingently issuable instruments. The contingently issuable instruments are evaluated to determine if they are freestanding and their classification as equity or liability instruments. We have determined the accounting classification of the contingently issuable instruments, as either liability or equity, by first assessing whether they meet liability classification in accordance with ASC 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, then in accordance with ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. Under ASC 480, instruments are considered liability classified if they are mandatorily redeemable, thereby obligating us to settle the instrument or the underlying shares by paying cash or other assets, or instruments that must or may require settlement by issuing a variable number of shares. If the contingently issuable instruments do not meet liability classification under ASC 480-10, we assess the requirements under ASC 815-40, which states that contracts that require or may require the issuer to settle the contract for cash are liabilities recorded at fair value, irrespective of the likelihood of the transaction occurring that triggers the net cash settlement feature. If the instruments do not require liability classification under ASC 815-40, and in order to conclude equity classification, we also assesses whether they are indexed to our common stock and whether they are classified as equity under ASC 815-40 or other applicable U.S. GAAP. After all relevant assessments, we conclude whether the instruments are classified as liability or equity. Liability classified contingently issuable instruments are recorded as a tranche liability at fair value upon issuance and subsequently remeasured to fair value each reporting period until settlement with all changes in fair value recorded in the unaudited condensed consolidated statements of operations and comprehensive loss. Equity classified contingently issuable instruments are recorded at fair value upon issuance and are not subsequently remeasured.

Components of Operating Results

Operating Expenses

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

Research and Development

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

• personnel costs, which include salaries, benefits and equity-based compensation expense;
• expenses incurred under agreements with consultants and contract organizations that conduct research and development activities on our behalf;
• costs related to production of preclinical and clinical materials, including fees paid to contract manufacturers;
• laboratory and vendor expenses related to the execution of preclinical studies and planned clinical trials; and
• facility related costs, laboratory supplies and equipment used for internal research and development activities.

We expense all research and development costs in the periods in which they are incurred. Costs for certain research and development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and service providers.

Our research and development expenses are not currently tracked on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying and developing product candidates and therefore have not implemented the systems and procedures to track research and development expenses on a program-by-program basis. We track research and development expenses based on the type of expense as further described below under “Results of Operations – Research and Development Expenses.” Substantially all our historical research and development costs were incurred in the development of our preclinical candidates and advancing research on our POZ lipid technology.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, including investments in conducting clinical trials, manufacturing and otherwise advancing our programs. The process of conducting the clinical research necessary to obtain regulatory approval is costly and time consuming, and the successful development of our product candidates is highly uncertain.

Because of the numerous risks and uncertainties associated with product development and the current stage of development of our product candidates and programs, we cannot reasonably estimate or know the nature, timing, and estimated costs necessary to complete the remainder of the development of our product candidates or programs. We are also unable to predict if, when, or to what extent we will obtain approval and generate revenues from the commercialization and sale of any of our product candidates. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

• successful completion of preclinical studies and initiation of clinical trials for future product candidates;
• successful enrollment and completion of clinical trials for our current product candidates;
• data from our clinical programs that support an acceptable risk benefit profile of our product candidates in the intended patient populations; acceptance by the U.S. Food and Drug Administration (the “FDA”) or other applicable regulatory agencies of the Investigational New Drug (“IND”) applications, clinical trial applications and/or other regulatory filings for SER-252 and other product candidates;
• expansion and maintenance of a workforce of experienced scientists and others to continue to develop our product candidates;
• successful application for and receipt of marketing approvals from applicable regulatory authorities;
• obtainment and maintenance of intellectual property protection and regulatory exclusivity for our product candidates;
• making of arrangements with contract manufacturing organizations for, or establishment of, commercial manufacturing capabilities;
• establishment of sales, marketing and distribution capabilities and successful launch of commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;
• acceptance of our product candidates, if and when approved, by patients, the medical community and third party payors;
• effective competition with other therapies;
• obtainment and maintenance of coverage, adequate pricing, and adequate reimbursement from third party payors, including government payors;
• maintenance, enforcement, defense, and protection of our rights in our intellectual property portfolio;
• avoidance of infringement, misappropriation, or other violations with respect to others’ intellectual property or proprietary rights; and
• maintenance of a continued acceptable safety profile of our products following receipt of any marketing approvals.

We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our preclinical studies and clinical trials. We may elect to discontinue, delay, or modify clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. On November 3, 2025, we announced that we received a notice from the FDA, placing a clinical hold on our IND application for SER-252, our lead development program for advanced Parkinson’s disease. The FDA requested additional information related to a commonly used excipient in the formulation of SER-252. The FDA’s feedback did not relate to the active drug substance or its proposed mechanism of action.

In January 2026, we announced that the FDA had cleared its IND application for SER-252, which allowed us to proceed with regulatory and site-level activities to support initiation of a planned Phase 1b registrational clinical study evaluating SER-252 in patients with advanced Parkinson’s disease and in February 2026 we enrolled and dosed our first patient into the clinic. Research and development activities account for a significant portion of our operating expenses.

We expect our research and development expenses to increase for the foreseeable future as we continue to implement our business strategy, which includes advancing SER-252 and our other product candidates, through clinical development, expanding our research and development efforts, including hiring additional personnel to support our research and development efforts, and seeking regulatory approvals for our product candidates that successfully complete clinical trials. In addition, product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials. As a result, we expect our research and development expenses to increase as our product candidates advance into later stages of clinical development. However, we do not believe that it is possible at this time to accurately project total program specific expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel costs, and other expenses for outside professional services, including legal, recruiting, audit and accounting, insurance and facility related costs not otherwise included in research and development expenses. Personnel costs consist of salaries, benefits and equity-based compensation expense for our personnel in executive and other administrative functions. We expect our general and administrative expenses to increase over the next several years to support our continued research and development activities, manufacturing activities, increased costs of expanding our operations and operating as a public company. These increases will likely include increases related to the hiring of additional personnel and legal, regulatory, and other fees and services associated with maintaining compliance with the New York Stock Exchange American Company Guide and SEC requirements, director and officer insurance costs, and investor relations costs associated with being a public company.

Other (Expense) Income, net

Our other (expenses) income are comprised of interest income on our cash equivalents, changes in fair value of our liability-classified instruments (convertible notes, warrants, and tranche liability), gains/(losses) from extinguishment of such liabilities, interest accrued from the convertible notes and foreign currency transaction gains/(losses).

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

The table presented below shows our operating expenses for the periods presented (in thousands):

Research and Development Expenses

Research and development expenses were $3.2 million for the three months ended March 31, 2026, compared to $3.0 million for the same period in 2025. The increase of $0.2 million was primarily due to increases of $0.4 million in salaries, payroll related expenses and stock based compensation as a result of increased headcount and $0.1 million increased spend in clinical related activities. These increases were primarily offset by decrease in amortization of $0.3 million for a prepaid technology access fee that was fully amortized in 2025.

General and Administrative Expenses

General and administrative expenses were $3.1 million for the three months ended March 31, 2026, compared to $2.9 million for the same period in 2025. The increase of $0.2 million was primarily driven by a $0.1 million increase in compensation expense, a $0.1 million increase in investor outreach activities and $0.1 million in miscellaneous expense amounts that were individually insignificant. These increases were primarily offset by a decrease of $0.1 million in consultant expenses.

Other (Expense) Income, Net

Other expense was $0.6 million for the three months ended March 31, 2026, compared to other income of $1.0 million for the same period in 2025. The $1.6 million increase in expense was primarily attributable to the non-cash loss on extinguishment of financial commitment assets and contingent warrants from the amendment of our convertible notes in connection with our March 2026 PIPE (as defined below).

See Note 5, Fair Value Measurements, and Note 6, Stockholders’ Equity (Deficit), to our unaudited condensed consolidated interim financial statements included elsewhere in this Report for additional information on fair value adjustments of associated to the tranche liabilities in connection with the March 2026 PIPE, convertible promissory notes, Legacy Serina warrants, and the liability classified Merger Warrants and Contingent Warrants.

Liquidity and Capital Resources

Sources of Liquidity

We had $24.5 million in cash and cash equivalents as of March 31, 2026 and received an additional $5.2 million of cash proceeds in April 2026 the from the March 2026 PIPE. Our operations have been financed primarily by the issuance of common stock, private placements, convertible preferred stock, convertible notes, warrant exercises and our ATM program.

In April 2025, we entered into a securities purchase agreement with certain investors for a private placement of 965,250 shares of newly authorized Series A Preferred Stock, at a purchase price of $5.18 per share, resulting in net proceeds of $4.9 million. Each share of Series A Preferred Stock is convertible into shares of our common stock, at a conversion price of $5.18 per share, subject to standard anti-dilution adjustments, and earns cumulative annual dividend at a rate of 8% per annum that are declared annually beginning on March 31, 2026 and paid in shares of the Company’s common stock (“PIK Shares”). As of March 31, 2026, 75,528 PIK Shares have been declared and issued. In April 2026, upon closing of the March 2026 PIPE, requirements were satisfied for the automatic conversion of all outstanding shares of the Series A Preferred Stock and any accrued but unissued PIK Shares into shares of the Company's common stock. The conversion price of the Series A Preferred Stock was also automatically adjusted to $2.25 per share from $5.18 per share.

Additionally, on April 25, 2025, we entered into a sales agreement (the “Sales Agreement”) with JonesTrading Institutional Services LLC (the “Sales Agent”), with respect to an at-the-market program (the “ATM”) under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $13.3 million through the Sales Agent. We pay the Sales Agent a commission up to 3.0% of the gross sales proceeds of any shares sold under the Sales Agreement. In 2026, we have sold 3.1 million shares of our common stock at an gross average price of $3.35, resulting in gross proceeds of $10.4 million under the ATM. To date, we have issued 3.6 million shares of common stock under the ATM program at a gross average per share price of $3.67, resulting in gross proceeds of $13.2 million.

On September 9, 2025, we entered into an the “2025 Convertible Note” with a member of our Board of Directors, making available to Serina an aggregate principal amount of up to $20.0 million. Under the 2025 Convertible Note, borrowings were to be drawn at our discretion in five tranches tied to certain clinical and operational milestones. See the section entitled “Components of Operating Results” above for a discussion of the impact of recent FDA communication on the clinical study.

The 2025 Convertible Note was convertible, at the option of the holder, into shares of our common stock, at any time until the maturity date at a conversion price of $5.18 per share. The conversion price was subject to standard anti-dilution adjustments.

In September 2025, we drew down the first tranche of $5.0 million under the 2025 Convertible Note, incurring $0.1 million in transaction costs which were accounted for as a debt discount.

On March 17, 2026, the Company entered into the March 2026 PIPE, a private placement of common stock and pre-funded warrants led by a member of the Board of Directors, at $2.25 per share. Each share of common stock and pre-funded warrant was accompanied by redeemable warrants to purchase a number of shares equal to 50% of the aggregate shares purchased at an exercise price of $5.00 per share. The redeemable warrants expire four years from the date of issuance and are callable by us upon the earlier of (i) 30 days following the dosing of the first patient in Cohort 2 of the SER-252 Phase 1b SAD study, or (ii) September 30, 2026, and in each case subject to the Company’s share price exceeding $10.00 per share on the relevant date. Under the terms of the agreements, the initial funding provided for at least $15.0 million of gross proceeds, with one or more additional closings for aggregate gross proceeds of at least $5.0 million and up to $15.0 million to be funded within 20 days after the initial closing, subject to the satisfaction of customary closing conditions. To date, gross proceeds of $21.2 million have been received. In connection with the closing of the March 2026 PIPE, the 2025 Convertible Note was amended to remove any further obligations to borrow or loan funds under the note.

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

Since inception, we have had significant operating losses and negative cash flows and as of March 31, 2026, we had an accumulated deficit of $70.4 million. Our losses from operations, negative operating cash flows and accumulated deficit, as well as the additional capital needed to fund operations within twelve months of the issuance date of our condensed consolidated financial statements included in this Report, raise substantial doubt about our ability to continue as a going concern. We expect to incur substantial expenditures in the foreseeable future for the development of our product candidates and will require additional financing to continue this development. Our unaudited consolidated interim financial statements have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The unavailability or inadequacy of financing to meet future capital needs could force us to modify, curtail, delay, or suspend some or all aspects of planned operations.

Funding Requirements

Any product candidates we may develop may never achieve commercialization, and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. Our primary uses of capital are, and we expect will continue to be, costs related to pre-clinical and clinical research, clinical studies, manufacturing, and development services; laboratory expenses and costs for related supplies; compensation and related expenses; license payments or milestone obligations that may arise; legal and other regulatory expenses and general overhead costs.

We believe that our cash on hand will not be sufficient to enable us to fund our operations at least twelve months following the issuance of the condensed consolidated financial statements based on our current plan. To finance our operations beyond that point, we will need to raise additional capital, which cannot be assured. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. 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 raise capital, we will need to delay, reduce, or terminate planned activities to reduce costs.

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 progress, costs and results of IND enabling studies for our lead product candidate SER-252 and our potential future clinical trials for SER-252;
• the scope, progress, results and costs of discovery research, preclinical development, laboratory testing and clinical trials for our other product candidates;
• the costs, timing, and outcome of regulatory review of our product candidates;
• our ability to enter into contract manufacturing arrangements for supply of active pharmaceutical ingredient (“API”), and manufacture of our product candidates and the terms of such arrangements;
• our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such arrangements;
• the payment or receipt of milestones and receipt of other collaboration-based revenues, if any; the costs and timing of any future commercialization activities, including product manufacturing, sales, marketing, and distribution, for any of our product candidates for which we may receive marketing approval;
• the amount and timing of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval;
• the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property and proprietary rights and defending any intellectual property related claims;
• the extent to which we acquire or in license other products, product candidates, technologies, or data referencing rights;
• the ability to receive additional nondilutive funding, including grants from organizations and foundations; and
• the costs of operating as a public company.

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

Cash Flows

The following table summarizes the major sources and uses of cash for the periods set forth below (in thousands):

Operating Activities

Net loss for the three months ended March 31, 2026 was $6.9 million. Net cash used in operating activities during this period amounted to $4.6 million. The $2.3 million difference between the net loss and net cash used in operating activities during the three months ended March 31, 2026 was comprised of non-cash items of $1.8 million and changes in operating assets and liabilities totaling $0.5 million. The non-cash items consisted of $1.6 million loss from extinguishment of financial commitment assets and contingent warrants, $1.1 million in stock-based compensation and $0.2 million in non-cash lease and interest expense. These non-cash items were reduced by the non-cash gain of $1.1 million from the change in the fair value of liability-classified instruments. The net $0.5 million cash from operating assets and liabilities primarily consisted of a $0.9 million increase in accounts payable and $0.2 million increase in accrued expenses. These cash increases were partially offset by the decrease of $0.5 million in prepaid and other current assets and $0.1 million in lease liabilities.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2026 of $26.1 million is attributable to $15.9 million of net proceeds from our March 2026 PIPE and $10.2 million net proceeds from our ATM. See Note 6, Stockholders’ Equity (Deficit), to our unaudited condensed consolidated financial statements included elsewhere in this Report for additional information.

Under SEC rules and regulations, as a smaller reporting company, we are not required to provide the information required by this Item.

Evaluation of Disclosure Controls and Procedures

It is management’s responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Exchange Act. Our management, including our principal executive officer and principal financial officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this Report. Following this review and evaluation, the principal executive officer and principal financial officer determined that our disclosure controls and procedures were effective as of March 31, 2026.

Changes in Internal Controls

Other than as described above, there was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on the Effectiveness Over Financial Reporting

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable and not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance such improvements will be sufficient to provide us with effective internal control over financial reporting.

Our business, financial condition, results of operations and future growth prospects are subject to various risks, including those described under “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 25, 2026, as amended on March 27, 2026 (collectively, the “Form 10-K”), which we encourage you to review. There have been no material changes from the risk factors disclosed in the Form 10-K, except as set forth below:

Our March 2026 purchase agreement involving a member of our Board of Directors and related governance arrangements may result in conflicts of interest, dilution, stockholder approval risks, and increased investor influence over our affairs.

In the March 2026 PIPE, Gregory H. Bailey, M.D., a current member of our Board of Directors, acting as lead investor, and certain other investors, purchased shares of the Company’s common stock, pre-funded warrants, and redeemable warrants. As a result of this transaction, and subject to stockholder approval and future warrant exercises, Dr. Bailey and the other investors may acquire significant ownership interests in the Company, resulting in dilution to existing stockholders and potentially increasing the influence of these investors over matters submitted to stockholders. If all required stockholder approvals are obtained at the Company’s 2026 Annual Meeting of Stockholders currently scheduled for June 17, 2026, the Company expects that Dr. Bailey will beneficially own approximately 37.9% of the then-outstanding shares of the Company’s common stock.

Although the transaction was reviewed and approved by a special committee of independent and disinterested directors, transactions involving directors may present actual or perceived conflicts of interest and may be subject to heightened scrutiny by stockholders, regulators, proxy advisory firms, or courts. Any such scrutiny could result in reputational harm, stockholder litigation, increased costs, or adverse effects on the trading price of our common stock.

In addition, pursuant to the March 2026 PIPE, Dr. Bailey was appointed as Co‑Chairman of our Board of Directors, and the investors obtained the right, subject to specified conditions, to designate an additional non‑executive director. These governance rights may lead to increased investor influence over the composition of our Board and our strategic direction and could result in decisions that do not align with the interests of all stockholders.

Further, the issuance of shares to Dr. Bailey requires stockholder approval under NYSE American rules. If such approval is not obtained in a timely manner, or at all, the anticipated issuance of shares underlying the pre‑funded warrants will be delayed or may not occur, which could negatively affect our capital structure, liquidity planning, and investor confidence. Our obligation to continue seeking stockholder approval at subsequent meetings until approval is obtained may also result in additional costs and management distraction.

The potential issuance of a substantial number of shares upon exercise of the pre‑funded warrants and redeemable warrants, as well as the perception of future dilution or changes in control, could adversely affect the market price and volatility of our common stock and our ability to raise additional capital on favorable terms.