You should read the following discussion of our financial condition and results of operations in conjunction with our unaudited interim condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report and the audited financial statements and related notes and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 included in our Annual Report. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled "Risk Factors" under Part II, Item 1A of this Quarterly Report and Part I, Item 1A of our Annual Report.
Overview
We are a biotechnology company developing novel small molecule therapeutics to treat diseases across several therapeutic areas, including, central nervous system (“CNS”) disorders, lysosomal storage disorders (“LSDs”) and metabolic disorders through molecular chaperoning to stabilize misfolded proteins and increase their activity, as well as other diseases that can be targeted through protein inactivation or modulation, such as oncology. We use our computational target and drug discovery platform, Magellan™, to discover novel allosteric binding sites on proteins implicated in a disease and to identify proprietary small molecules that bind these sites to modulate protein function and treat the underlying cause of the disease. We believe that Magellan™ is uniquely suited to identify allosteric binding sites on the protein surface, which are different from the active (or orthosteric) binding site where the natural ligand of the protein binds. Targeting an allosteric binding site instead of the active binding site of a protein provides numerous advantages, including: the ability to regulate proteins implicated in disease through several different mechanisms of action covering both functional and conformational effects, including stabilization, destabilization, targeted degradation, allosteric
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inhibition, and allosteric activation of the targeted protein; improved specificity of small molecules because binding to an allosteric binding site is non-competitive with the natural substrate that binds to the active binding site; and the ability to identify small molecules with more favorable drug-like properties. We have used our drug discovery platform to identify novel allosteric sites and small molecules for all of our pipeline programs. We plan to continue to advance our existing research programs and initiate additional programs targeting allosteric binding sites identified with the Magellan™ platform in various therapeutic areas through academic partnerships, co-development and licensing arrangements.
Our clinical stage product candidate, GT-02287, is being developed for the treatment of Parkinson’s disease with and without GBA1 mutations. Following the recent acceptance of "rexaceract" as the International Nonproprietary Name (INN) for GT-02287, all references made to GT-02287 within the program will transition to this established nonproprietary name. We have generated an extensive preclinical data package providing evidence of the mechanism of action, in vivo pharmacology, and safety of rexaceract. In preclinical models of GBA1 Parkinson’s disease, rexaceract has been shown to restore glucocerebrosidase, or GCase, function in the lysosome, reduce toxic lipid substrates and toxic forms of alpha-synuclein, reduce endoplasmic reticulum stress, improve mitochondrial health and overall survival of dopaminergic neurons, increasing dopamine levels, restoring locomotor and cognitive function, and reducing plasma-based neurodegeneration marker, neurofilament light chain (NfL), back to the level of control animals.
As of June 30, 2026, two clinical studies of rexaceract have been completed, and one is ongoing. Rexaceract was initially characterized in a first-in-human Phase 1a clinical study to assess the safety, tolerability, pharmacokinetics, and food effect of rexaceract in healthy participants. The study design included a single ascending dose part during which the study participants received one dose of rexaceract at different dose levels, and a multiple ascending dose part during which the study participants received one daily dose of rexaceract for 14 days at different dose levels. The Phase 1a study started in September 2023 and was completed in July 2024 and the quality assurance audited interim report was finalized in the third quarter of 2024. In the second quarter of 2025, a Phase 1 relative bioavailability study in healthy volunteers was initiated. The purpose of this study was to compare two oral formulations of rexaceract. This study was completed in the third quarter of 2025.
In March 2025, we enrolled the first participant with Parkinson’s disease in our two-part Phase 1b safety and tolerability study to further evaluate the safety, tolerability and biomarker evidence of activity for rexaceract. In Part 1 of this study, participants dose daily with rexaceract for 90 days. In August 2025, we amended the Phase 1b clinical study to include an additional nine (9) months of daily oral administration of rexaceract in the optional Part 2 of the Phase 1b. Participants enrolled in the Phase 1b are also followed for clinical signs of worsening or improvement. Through September 2025 a total of 21 patients were enrolled in the Phase 1b. Samples of cerebrospinal fluid were taken at the initiation of dosing and at day 90 following completion of Part 1, and blood samples were taken at multiple timepoints. In November 2025 a total of 19 patients had completed Part 1 of the Phase 1b. Of the 19 patients who completed Part 1 of the Phase 1b, a total of 16 patients elected to continue on daily oral administration of rexaceract. We expect to complete Part 2 of the Phase 1b study in October 2026.
We continue to monitor the impacts on our operations and access to financing from; global and worsening macroeconomic conditions, such as the war in Ukraine, the recent conflict in Iran and the Middle East, global geopolitical tension, exchange rate fluctuations, supply chain disruptions, liquidity concerns and increases in commodity, energy and fuel prices.
Recent Developments
In January 2026, we released additional biomarker and clinical data from the Phase 1b study of rexaceract in Parkinson's disease. Participants with elevated baseline cerebrospinal fluid glucosylsphingosine demonstrated a reduction in levels following three months of treatment, and in the efficacy analysis they showed an improvement in combined MDS-UPDRS Part II and Part III scores compared to the rest of the participants. We hosted a virtual KOL event the same day featuring key opinion leaders to contextualize the results.
In March 2026, we presented new data on our lead candidate rexaceract at the AD/PD 2026 Conference in Copenhagen. In addition to the elevated baseline cerebrospinal fluid glucosylsphingosine that was associated with an improvement in combined MDS-UPDRS Part II and Part III scores following administration of rexaceract reported earlier,
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the new data showed those same participants also had a decrease in cerebrospinal fluid levels of DOPA decarboxylase (DDC), an enzyme responsible for synthesizing dopamine from its precursor L-DOPA, following rexaceract treatment. DDC is elevated in people with Parkinson’s disease, so a reduction could suggest a slowing of neurodegeneration. In the ongoing Phase 1b Parkinson's disease study, 16 of 19 participants elected to enter the nine-month extension, and an independent Data Monitoring Committee endorsed continuation without modification. We also unveiled preclinical data on a structurally distinct series of allosteric GCase modulators, led by GT-04686, now ready to advance into IND-enabling studies.
In June 2026, the U.S. Food and Drug Administration (“FDA”) authorized our Investigational New Drug (“IND”) application for rexaceract, allowing initiation of Phase 2 clinical development of rexaceract in Parkinson’s disease with or without a GBA1 mutation in the United States. Both the Phase 1a and Phase 1b studies of rexaceract were conducted in Australia. The planned Phase 2a study of oral rexaceract in treated and untreated participants with early Parkinson’s disease is expected to enroll participants across sites in the United States, Australia, and Europe. The initiation of the Phase 2a study is anticipated to occur during the third quarter of 2026.
Financial Condition
Since our inception in 2017, we have devoted substantially all of our resources to identify and develop next-generation brain-penetrant allosteric small molecules for the treatment of devastating diseases with high-unmet medical needs using our Magellan™ platform. Our operations have consisted primarily of expanding our operations, securing financing, performing research, conducting preclinical and clinical studies and developing and securing our in-licensed technology. To date, we do not have any product candidates approved for sale and have not generated any revenue from product sales, and as a result, we face risks associated with early-stage biotechnology companies whose product candidates are in development. We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. We expect our research and development expenses to remain significant and to increase to support progress in our research and development activities. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities. These efforts require significant amounts of additional capital for us to complete our research and development programs, achieve our research and development objectives, defend our intellectual property rights, and recruit and retain skilled personnel, and key members of management. Even if our product development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.
At our annual meeting held on June 24, 2025, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to increase our authorized shares of common stock from 50,000,000 to 100,000,000. The amendment did not change any of the current rights and privileges of our common stock or its par value, and did not affect the number of shares of our common stock outstanding.
In July 2025, we completed the public offering of 4,501,640 shares of our common stock and warrants to purchase 2,250,820 shares of our common stock. The warrants were offered and sold at a rate of one warrant for every two shares of common stock purchased. The public offering price for each set of two shares of common stock and accompanying warrant to purchase one share of common stock was $3.11, yielding an effective price of $1.55 per share and $0.01 per warrant. Each warrant has an exercise price of $1.65 per share of common stock and was immediately exercisable on the date of issuance. The public offering resulted in gross proceeds of $7.0 million, which included $1.0 million in offering expenses, such as underwriter fees and legal, audit, and advisory costs, for net proceeds of $6.0 million. As of December 31, 2025, 1,146,821 public warrants were exercised resulting in the issuance of 1,146,821 shares of common stock and net proceeds to us of $1.9 million. During the six months ended June 30, 2026, 1,250 public warrants were exercised resulting in the issuance of 1,250 shares of common stock and additional net proceeds to us of $2 thousand.
Following completion of the July 2025 public offering, the underwriter exercised the over-allotment option that was granted in connection with the public offering to purchase an additional 675,246 shares of common stock, and warrants to purchase 337,623 shares of common stock, which resulted in additional gross proceeds of $1.1 million, which included $0.1 million in offering expenses, such as underwriter fees, for net proceeds of $1.0 million. In connection with the public
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offering, we issued the underwriter warrants to purchase 362,382 shares of common stock at an exercise price of $1.94 per share as consideration for the services provided. The underwriter warrants provide for cashless exercise.
On July 20, 2025, 225,387 warrants issued in 2020 in connection with the Series B Preferred Stock to designees of the placement agent were not exercised within their five year exercisable period and were therefore forfeited. On May 6, 2025, 200,000 warrants issued in 2021 to an investment bank for banking services and financial advisory were not exercised within their four year exercisable period and were therefore forfeited.
In September 2024, we entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Oppenheimer & Co. Inc., serving as agent (“Oppenheimer”) with respect to an at-the-market (“ATM”) offering program (the “2024 ATM Program”). Under the 2024 ATM Program we may offer and sell, from time to time at our sole discretion, shares of common stock having an aggregate offering price of up to $50.0 million. We pay Oppenheimer a commission equal to 3.0% of the gross sales proceeds of any shares sold through Oppenheimer under the Distribution Agreement. For the three months ended June 30, 2026, we sold an aggregate of 779,040 shares of common stock at an average selling price of $1.97 per share under the 2024 ATM Program, for total gross proceeds of $1.5 million, which included $46 thousand of sales commissions and $94 thousand of other offering expenses for net proceeds of $1.4 million. For the six months ended June 30, 2026, we sold an aggregate of 963,702 shares of common stock at an average selling price of $2.05 per share under the 2024 ATM Program, for total gross proceeds of $2 million, which included $59 thousand of sales commissions and $94 thousand of other offering expenses for net proceeds of $1.8 million. As of June 30, 2026, we sold an aggregate of 9,411,509 shares of common stock at an average selling price of $2.54 per share under the 2024 ATM Program, for total gross proceeds of $23.9 million, which included $0.7 million of sales commissions and $0.4 million in other offering expenses for net proceeds of $22.8 million. From July 1, 2026 through August 7, 2026, we sold an aggregate of 300,229 shares of common stock through the 2024 ATM Program at an average selling price of $1.85 for total gross proceeds of $0.56 million, which included $17 thousand of sales commissions for net proceeds of $0.54 million.
From inception through June 30, 2026, we have raised an aggregate of $122 million of gross proceeds through equity financing, including the issuance of convertible preferred stock, our initial public offering, secondary offerings and previous sales under our ATM programs. We have outstanding warrants exercisable for an aggregate of 5.3 million shares of our common stock at a weighted-average exercise price per share of $2.37 through June 30, 2026 related to public and private offerings.
As of June 30, 2026, we had cash and cash equivalents of $13.1 million. We have incurred recurring losses and negative cash flows from operations since inception and as of June 30, 2026 and December 31, 2025, had an accumulated deficit of $111.6 million and $101.4 million, respectively. We anticipate incurring additional losses until such time, if ever, that we can generate sales of our product candidates currently in development. We have not generated any product revenues and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, we will need significant additional financing to fund our operations and to develop our product candidates. Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.
Going Concern
As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $111.6 million and $101.4 million, respectively, and as of June 30, 2026, we had cash and cash equivalents of $13.1 million. During the three and six months ended June 30, 2026, we incurred net losses of $4.7 million and $10.3 million, respectively. During the six months ended June 30, 2026, we incurred negative cash flows from operations of $9.4 million. Our current operating plan indicates that we will continue to incur losses from operations and negative cash flows from operating activities. Our projected cash outflows for the upcoming periods raise substantial doubt about our ability to continue as a going concern for at least 12 months from the issuance of the financial statements included elsewhere in this Quarterly Report. We will need to raise additional capital to fund continued operations beyond the second quarter of 2027. We plan to address our liquidity needs
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by taking steps to improve our operations and cash position, including identifying access to future capital and potential cost-reduction measures.
Financing Requirements; Current Financing Environment
Until such time, if ever, as we can generate substantial product revenues to support our business and corporate strategy, we expect to finance our cash needs through a combination of public and private equity offerings, including at-the-market offerings, debt financings, government or private party grants, collaborations, strategic alliances and licensing arrangements. We may not be able to obtain financing on acceptable terms, or at all, and we may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect our holdings or the rights of our stockholders. If we are unable to obtain funding, we could be required to delay, limit, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, or grant rights to develop, sell and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves, which could adversely affect our business prospects.
Uncertain macroeconomic conditions, including the risk of inflation, fluctuating interest rates, changing international trade and import policies, potential impact of tariffs, instability in the financial system, global geopolitical tensions, such as the ongoing conflict between Russia and Ukraine and between the United States and Iran and elsewhere in the Middle East continue to have unpredictable impacts on global societies, economies, financial markets, and business practices. Recently worsening global macroeconomic conditions, liquidity concerns at and failures of banks and other financial institutions, volatility in the capital markets, and related market uncertainty, may impact our ability to obtain additional financing when needed on favorable terms or at all.
Strategic Transactions; Collaboration and Licensing Agreements
We routinely evaluate business development opportunities for the advancement of our lead program, rexaceract, our earlier stage pipeline, and our MagellanTM computational platform technology, including potential licensing, co-development, commercialization, and other strategic alternatives. These discussions may involve pharmaceutical companies, biotechnology companies, or other strategic partners.
While we continue to assess opportunities that could enhance shareholder value and support the advancement of our development programs, there can be no assurance that any such discussions will result in the execution of a definitive agreement. We intend to pursue transactions that we believe align with our strategic objectives, strengthen our financial position, and accelerate the development and potential commercialization of our lead candidate.
Components of Our Consolidated Results of Operations
Revenue
We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future, if at all. If we fail to complete the development of our product candidates in a timely manner or fail to obtain their regulatory approval and successfully commercialize them, we will not generate revenues in the future.
Operating Expenses
Our operating expenses since inception have consisted solely of research and development and general and administrative costs.
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Research and Development Expenses
Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, which include:
● expenses incurred under collaborations with third parties, including contract research organizations (“CROs”) and universities, that conduct research, preclinical and clinical studies, such as in-vitro and in-vivo absorption, distribution, metabolism and excretion (“ADME”), cell model studies, in-vivo pharmacology and pharmacokinetic studies, toxicology studies and chemical synthesis, stability studies, manufacturing and control materials, process characterization, scale-up and transfer, clinical trial expenses, on our behalf;
● employee salaries, benefits and other related costs, including stock-based compensation expenses, for employees engaged in research and development functions and overhead allocations consisting of various support and facilities-related expenses, which include rent, utilities and maintenance of our facilities, depreciation, travel and conference expenses;
● fees paid to consultants who assist with research and development activities and related travel expenses; and
● the cost of sponsored research, which includes laboratory materials and supplies, manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical studies.
The following table provides a breakdown of our research and development expenses by major category:
Three Months Ended Six Months Ended
June 30, June 30,
2026 2025 Change 2026 2025 Change
Preclinical activities, clinical activities and outside services $ 1,224,330 $ 1,987,530 $ (763,200) $ 2,971,590 $ 3,443,572 $ (471,982)
Personnel expenses 949,193 1,155,449 (206,256) 2,065,578 2,256,211 (190,633)
Other 139,585 155,823 (16,238) 341,889 225,789 116,100
Research grants (174,904) (539,830) 364,926 (477,513) (909,589) 432,076
Total research and development expenses $ 2,138,204 $ 2,758,973 $ (620,769) $ 4,901,544 $ 5,015,983 $ (114,439)
We recognize research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued research and development expenses. We anticipate that our research and development expenses will increase substantially in future periods to support progress in our research and development activities, including the progression of the clinical trials for product candidates we are developing. These increases will likely also result from expanded infrastructure and increased insurance costs. Such expenses are offset by contributions from research grants, which are recorded as a reduction to research and development expenses when we have reasonable assurance of collection and based on our best estimate of the periods in which the related expenditures are incurred and activities performed.
Our primary research and development focus since inception has been the application of our Magellan™ platform to various indications and targets, and more recently the development of our clinical stage lead product candidate rexaceract for the treatment of Parkinson’s disease and other neurodegenerative diseases. As of June 30, 2026 our efforts have led to the advancement of rexaceract through Phase 1 testing and preparing to initiate Phase 2 clinical testing during third quarter of 2026.
Research and development activities are central to our business model. Product candidates in later stages of clinical development generally incur higher development costs than those in earlier stages of clinical development,
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primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses may increase in the foreseeable future as we (i) increase personnel costs, including stock-based compensation, (ii) continue preclinical development of our lead compounds, (iii) progress our clinical trials for certain product candidates, (iv) continue to discover and develop additional product candidates, and (v) pursue later stages of clinical development of product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries, bonuses and other related costs, including stock-based compensation, for personnel in our executive, finance, corporate and business development and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters, professional fees for accounting, auditing, tax and consulting services, insurance costs, travel expenses, and facility-related expenses, and other operating costs.
We will continue to focus on preserving our liquidity resources while we seek to maximize shareholders’ value.
Other Financial Income (Expense)
Other financial income (expense) consists of interest income, interest expense, and foreign exchange gain or loss, net.
Consolidated Results of Operations
The following table summarizes our results of operations for the three and six months ended June 30, 2026 and 2025.
Three Months Ended Six Months Ended
June 30, June 30,
Increase Increase
2026 2025 (Decrease) 2026 2025 (Decrease)
Operating expenses:
Research and development $ (2,138,204) $ (2,758,973) $ (620,769) $ (4,901,544) $ (5,015,983) $ (114,439)
General and administrative (2,543,448) (2,330,553) 212,895 (5,133,653) (4,442,919) 690,734
Total operating expenses (4,681,652) (5,089,526) (407,874) (10,035,197) (9,458,902) 576,295
Loss from operations (4,681,652) (5,089,526) (407,874) (10,035,197) (9,458,902) 576,295
Other income (expense):
Interest income, net 61,062 42,568 18,494 154,114 82,981 71,133
Foreign exchange gain (loss), net 49,089 (620,924) 670,013 (116,084) (721,510) 605,426
Loss before income tax (4,571,501) (5,667,882) (1,096,381) (9,997,167) (10,097,431) (100,264)
Income tax (104,070) (141,205) (37,135) (287,136) (241,714) 45,422
Net loss $ (4,675,571) $ (5,809,087) $ (1,133,516) $ (10,284,303) $ (10,339,145) $ (54,842)
Net loss per share:
Net loss per share attributable to common stockholders - basic and diluted $ (0.11) $ (0.19) $ (0.08) $ (0.24) $ (0.35) $ (0.11)
Weighted average common stock - basic and diluted 42,879,541 30,341,523 42,556,688 29,518,045
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Comparison of the Three Months and Six Months Ended June 30, 2026 and 2025
Research and development expenses
Research and development expenses decreased by $0.6 million to $2.1 million for the three months ended June 30, 2026, as compared to $2.8 million for the three months ended June 30, 2025. Research and development expenses decreased by $0.1 million to $4.9 million for the six months ended June 30, 2026, as compared to $5.0 million for the six months ended June 30, 2025. The decrease in research and development expenses were primarily related to lower costs associated with our lead program compound rexaceract for the treatment of Parkinson’s Disease and optimization of the pipeline together with lower research and development personnel expenses, partially offset by the expiration of the grant awarded by Innosuisse under the Swiss Accelerator program in April 2026 and unfavorable foreign exchange currency translation as the Swiss franc and Australian dollar strengthened against the U.S. dollar.
General and administrative expenses
General and administrative expenses increased by $0.2 million to $2.5 million for the three months ended June 30, 2026, as compared to $2.3 million for the three months ended June 30, 2025. General and administrative expenses increased by $0.7 million to $5.1 million for the six months ended June 30, 2026, as compared to $4.4 million for the six months ended June 30, 2025. The increase in general and administrative expenses for the period were primarily attributable to higher professional fees, higher personnel costs, and unfavorable foreign exchange currency translation as the Swiss franc strengthened against the U.S. dollar.
Interest income, net
Interest income, net increased by $18 thousand to $61 thousand for the three months ended June 30, 2026, as compared to $43 thousand for the three months ended June 30, 2025. Interest income, net increased by $71 thousand to $154 thousand for the six months ended June 30, 2026, as compared to $83 thousand for the six months ended June 30, 2025. The increase was mainly attributable to interest income from a higher balance in our money market fund over the comparative periods.
Foreign exchange (loss) gain, net
Foreign exchange loss, net decreased by $670 thousand, resulting in a gain of $49 thousand for the three months ended June 30, 2026, as compared to a loss of $621 thousand for the three months ended June 30, 2025. Foreign exchange loss, net decreased by $605 thousand to $116 thousand for the six months ended June 30, 2026, as compared to $722 thousand for the six months ended June 30, 2025. The decrease was due to the unfavorable foreign currency exchange as the Swiss franc and Australian dollar strengthened against the U.S. dollar.
Income taxes
Income taxes were $104 thousand and $141 thousand for the three months ended June 30, 2026 and 2025, respectively. The decrease was mainly attributable to lower corporate taxes in Australia. Income taxes were $287 thousand and $242 thousand for the six months ended June 30, 2026 and 2025, respectively. The increase was mainly attributable to higher corporate taxes in Australia.
Liquidity and Capital Resources
Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We have not yet received approval for or commercialized any products or technologies, and we do not expect to generate revenue from sales of any products in the near term, if at all. As described in additional detail under “Financial Condition” above, we have funded our operations to date primarily through a combination of sales of our securities and research grants.
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As of June 30, 2026 and December 31, 2025, we had $13.1 million and $20.8 million in cash and cash equivalents, respectively, and an accumulated deficit of $111.6 million and $101.4 million, respectively. We had indebtedness of $0.34 million and $0.40 million as of June 30, 2026 and December 31, 2025, respectively. Our cash and cash equivalents available as of June 30, 2026 are expected to be sufficient to fund our anticipated operating and capital requirements into the second quarter of 2027 but will not be sufficient to finance our operations for one year from the issuance of the financial statements included in this Quarterly Report. Therefore, we have reported that there is substantial doubt about our ability to continue as a going concern. Please refer to the discussion above titled “Going Concern”.
Our ability to continue operations after our current cash resources are exhausted depends on our ability to obtain additional financing or to achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the direction of our research and development programs, competitive and technical advances, patent developments, regulatory changes, or other developments. If adequate additional funds are not available when required, or if we are unsuccessful in entering into partnership agreements for further development of our pipeline, management may need to curtail our development efforts and planned operations to conserve cash.
Until such time, if ever, as we can generate substantial product revenues to support our business and corporate strategy, we expect to finance our cash needs through a combination of public and private equity offerings, debt financings, government or private party grants, collaborations, strategic alliances, and licensing arrangements. As of June 30, 2026, we did not maintain any lines of credit or equity capital committed for funding with the exception of the 2024 ATM Program.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all, including as a result of interest rate uncertainty, liquidity concerns at, and failures of, banks and other financial institutions, volatility in the capital markets and related market uncertainty. Further, if we are unable to obtain additional funding to support our current or proposed activities and operations, we may not be able to continue our operations as currently anticipated, which may require us to suspend or terminate any ongoing development activities, modify our business plan, curtail various aspects of our operations, cease operations, or seek relief under applicable bankruptcy laws.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
Six Months Ended
June 30,
2026 2025
Cash used in operating activities $ (9,407,532) $ (8,920,509)
Cash provided by financing activities 1,770,383 4,863,760
Effect of exchange rate changes (117,042) 369,605
Net decrease in cash, cash equivalents and restricted cash $ (7,754,191) $ (3,687,144)
Cash Flows from Operating Activities
Operating cash flow used during the six months ended June 30, 2026 increased compared to the prior-year period primarily due to a higher net loss (excluding non-cash items such as stock-based compensation and foreign currency transaction gains or losses) and changes in working capital. During the six months ended June 30, 2026 and 2025, we used
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$9.4 million and $8.9 million of cash, respectively, in operating activities primarily to fund our operations related to the development of our pipeline and product candidates as well as related general and administrative support activities.
Cash Flows from Financing Activities
During the six months ended June 30, 2026 and 2025, cash provided by financing activities was $1.8 million and $4.9 million, respectively, primarily due to net proceeds from the issuance of shares pursuant to the 2024 ATM Program.
Funding Requirements
Our primary use of cash is to fund our operating expenses, which consist of research and development and general and administrative expenditures. We expect our expenses and capital requirements to increase significantly in connection with our ongoing activities, particularly as we advance our lead product candidates and other development programs through the clinical process. Accordingly, beyond our current cash balance and proceeds from the 2024 ATM Program, if any, we will require substantial additional funding to support our operations.
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 number and characteristics of the product candidates we pursue;
● the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates;
● costs associated with growing our workforce;
● the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;
● the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;
● the extent to which we encounter increased costs as a result of global and macroeconomic conditions, including high interest rates, supply chain disruptions, fluctuating exchange rates, and increases in commodity, energy and fuel prices;
● 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;
● our ability to establish additional collaborations on favorable terms, if at all;
● the costs required to scale up our clinical, regulatory and manufacturing capabilities;
● the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;
● the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval;
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● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; and
● the impact of geopolitical and macroeconomic events, including tariffs, future bank failures, increased geopolitical tensions between the United States and China, the ongoing conflicts between Russia and Ukraine and between the United States and Iran and elsewhere in the Middle East, and global pandemics, on United States and global economic conditions including changes in monetary and fiscal policy, United States political developments and other sources of instability that may impact our ability to access capital on acceptable terms, if at all.
We will need additional funding to meet our operational needs and capital requirements for our preclinical studies and clinical trials, other research and development expenditures, and business development activities. Because of the numerous risks and uncertainties associated with the development of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials.
Until such time, if ever, we can generate substantial product revenue, we expect to finance our operations through a combination of public and private equity offerings, debt financings, at-the-market offerings, government or private party grants, collaborations, strategic alliances, and licensing arrangements. We may not be able to obtain additional funds through equity or debt financings when needed on favorable terms or at all.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, defined benefit pension liability, stock-based compensation and recognition of research grants. Our actual results may differ from these estimates under different assumptions or conditions. During the six months ended June 30, 2026, there were no material changes to our critical accounting policies. For additional information, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 2 — Summary of Significant Accounting Policies” of our Annual Report and Item 1 of Part I, “Financial Statements — Note 2 — Summary of Significant Accounting Policies” of this Quarterly Report. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments, or conditions.
Jumpstart Our Business Startups (“JOBS”) Act
We qualify as an “emerging growth company”, as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to public companies that are not emerging growth companies. These provisions include, but are not limited to: being permitted to report only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial conditions and results of operations disclosure; an exemption from compliance with the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, registration statements and proxy statements; and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. As a result, the information we provide might be different from the information that is available for other public companies. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some
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investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and the market price of our common stock may be more volatile.
We will remain an emerging growth company until the earliest of (i) the last day of our first fiscal year in which we have total annual gross revenue of $1.235 billion or more, (ii) December 31, 2026, (iii) the date on which we have issued more than $1.0 billion of non-convertible debt instruments during the previous three fiscal years or (iv) the date on which we are deemed a “large accelerated filer” under the rules of the SEC with at least $700 million of outstanding equity securities held by non-affiliates.