Except with respect to the items noted below, there have been no material changes to the risk factors affecting the Company from those disclosed in the 2025 Form 10-K. We will need to raise substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, scale back or discontinue some of our therapeutic candidate development programs or commercialization efforts. The development of pharmaceutical drugs is capital intensive. We are currently advancing laromestrocel into clinical development. As a result of the recently completed Private Placement transaction, and based on current operating plans, we expect that our cash and cash equivalents as of June 30, 2026 of $10.1 million, which include proceeds from the Private Placement will be adequate to fund operations into the fourth quarter of 2026. The Company also has access to an At-The-Market (ATM) equity financing vehicle for the sale of up to $10.7 million aggregate market value of shares of the Company’s Class A common stock; however, the ATM facility was under a standstill restriction until June 9, 2026, and thereafter we have restrictions in place regarding our ability to use the ATM facility unless our Class A common stock is trading above $0.80 per share until September 7, 2026. We will require additional funds to advance further. If we are capital constrained, we may not be able to meet our obligations. If we are unable to meet our obligations, or we experience a disruption in our cash flows, it could limit or halt our ability to continue to develop our current investigational product candidate or even to continue operations, either of which occurrence would have a material adverse effect on us. We expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue the research and development of, advance the preclinical and clinical activities of, and seek marketing approval for, our current investigational product candidate. In 2025, the Company began ramping up Biologics License Application (“BLA”) enabling activities, with a focus on clinical spend supporting HLHS study completion and delivering top-line results. If the current ELPIS II trial in HLHS is successful, and the trial results and other available evidence are deemed sufficient by the FDA to support filing a BLA following the readout of top-line results of the ELPIS II data, then we would intend to pursue a potential BLA filing with the FDA and a commercialization partner. Additionally, following a productive Type B meeting with the FDA in March 2025 with respect to the AD regulatory pathway, we are focused on seeking partnership opportunities and/or non-dilutive funding for the AD program, including a proposed single, seamless adaptive Phase 2/3 clinical trial. The Company expects that its current operating plan will require increased spending and additional capital investments to support these initiatives, and intends to seek additional financing through capital raises, non-dilutive funding options, and commercial partnering across all indications. There can be no assurance the Company will be able to attain future financing at terms favorable to the Company or at all. In the event the Company is unable to attain the financing needed, it will need to materially revise its current operational plan. The Company may need to adjust its current and future spending levels if needed based on the level of cash available. In addition, if we obtain marketing approval for any of our current or future investigational product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution. We may also need to raise additional funds sooner if we choose to pursue additional indications and/or geographies for our current investigational product candidates or otherwise expand more rapidly than we presently anticipate. Furthermore, we expect to continue to incur significant costs associated with operating as a public company. If we are unable to raise capital when needed, we could be forced to delay, scale back or discontinue the development and commercialization of one or more of our investigational product candidates, delay our pursuit of potential licenses or acquisitions, or significantly reduce or cease our operations. As a result of the recently completed Private Placement financing discussed in “Capital Raising Efforts” in the LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN section of this 10-Q, and based on current operating plans, we expect that our current cash and cash equivalents will be adequate to fund operations into the fourth quarter of 2026. In past years, we have been able to fund a large portion of our clinical programs with the use of grant funding. Our future capital requirements will depend on and could increase significantly as a result of many factors, including: 41 •the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our current or future investigational product candidates; •the potential additional expenses attributable to adjusting our development plans (including any supply-related matters) in response to global geopolitical conditions and/or future public health crises; •the scope, prioritization and number of our research and development programs; •the costs, timing and outcome of regulatory review of our current or future investigational product candidates; •our ability to establish and maintain collaborations on favorable terms, if at all; •the achievement of milestones or occurrence of other developments that trigger payments under any additional collaboration agreements we obtain; •the extent to which we are obligated to reimburse, or are entitled to reimbursement of, clinical trial costs under future collaboration agreements, if any; •the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; •the extent to which we acquire or license other current or future investigational product candidates and technologies; •the costs of securing manufacturing arrangements for commercial production; and •the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our current or future investigational product candidates. Identifying potential current or future investigational product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve drug sales. In addition, our current or future investigational product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of drugs that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to continue to rely on additional funding to achieve our business objectives. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current or future investigational product candidates. Disruptions in the financial markets in general have made equity and debt financing more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising needs. We cannot guarantee that future financing will be available in sufficient amounts or on terms favorable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our Class A common stock to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. The incurrence of indebtedness could result in fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or current or future investigational product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. If we are unable to obtain funding on a timely basis, we may be required to significantly delay, scale back or discontinue one or more of our research or development programs, activities to prepare for a potential BLA filing, including CMC and manufacturing readiness, or the commercialization of any investigational product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations. If we continue to fail to meet the requirements for continued listing on Nasdaq, our Class A common stock could be delisted from trading on Nasdaq, which would likely reduce the liquidity of our Class A common stock and could cause our trading price to decline. Minimum Bid Price Requirement 42 Our Class A common stock is currently listed for quotation on the Nasdaq Capital Market. We are required to meet listing requirements in order to maintain our listing on Nasdaq. We could lose our listing on Nasdaq if the closing bid price of our Class A common stock does not increase or if in the future, we fail to meet any of the other Nasdaq listing requirements. The loss of our Nasdaq listing would in all likelihood make our Class A common stock significantly less liquid and adversely affect its value. On September 22, 2025, we received a notice from the Listing Qualifications Department of Nasdaq that our Class A common stock did not meet the $1.00 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”) as a result of the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days. The notice does not result in the immediate delisting of the Company’s Class A common stock and, pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company had an initial period of 180 calendar days, or until March 23, 2026 to regain compliance with the Minimum Bid Price Requirement. On March 24, 2026, following submission of a request by the Company, the Company received written notice from Nasdaq granting a second compliance period of an additional 180 calendar days, or until September 21, 2026 (the “Compliance Date”), to regain compliance with the Minimum Bid Price Requirement, as permitted pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(ii), due to the Company’s satisfaction of the continued listing requirements for the market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, as well as its intention to cure the deficiency during the additional compliance period. If, at any time before the Compliance Date, the bid price closes at $1.00 or more per share for a minimum of ten consecutive business days (subject to Nasdaq’s discretion to increase the minimum period to up to 20 consecutive business days pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq would provide written notification to the Company that it again complies with the Minimum Bid Price Requirement and the Class A common stock will continue to be eligible for listing on The Nasdaq Capital Market unless other eligibility deficiencies exist. On April 15, 2026, the Listing Qualifications Department of Nasdaq opted to exercise its discretion to increase the minimum period pursuant to Nasdaq Listing Rule 5810(c)(3)(H). However, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iii), if the Company’s Class A common stock has a closing bid price of $0.10 or less for ten consecutive trading days before the Compliance Date, Nasdaq can issue a Staff Determination Letter, which, unless appealed, would subject our Class A common stock to immediate suspension and delisting. If the Company does not regain compliance with the Minimum Bid Price Requirement by the Compliance Date, Nasdaq will begin delisting procedures. In the event of a delisting from the Nasdaq Capital Market, our Class A common stock would likely be traded in the over-the- counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market, or Exchange-listed stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed stocks. Accordingly, our Class A common stock would be less liquid than it would be otherwise. Also, the prices of OTC stocks are often more volatile than Exchange-listed stocks. Additionally, many institutional investors are prohibited from investing in OTC stocks, and it might be more challenging to raise capital when needed. The Company intends to monitor the closing bid price of the Class A common stock and assess its available options to regain compliance with the Minimum Bid Price Requirement, if necessary, and continue listing on The Nasdaq Capital Market. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other applicable Nasdaq listing rules. If among such options the Company elects to pursue a reverse stock split to regain compliance with the Minimum Bid Price requirement, there can be no assurance that it would accomplish this objective for any meaningful period of time, or at all, or that it would result in any permanent or sustained increase in the market price of our Class A common stock; and if such an event would be viewed unfavorably by the market, it could have the effect of reducing our market capitalization. Furthermore, pursuant to a recent modification to Nasdaq’s listing standards, if a company effects a reverse stock split and within one year thereafter becomes non-compliant with the Minimum Bid Price Requirement, it would immediately receive a notification letter from the Nasdaq Listing Qualifications Department commencing delisting proceedings, with no opportunity for a compliance period. Audit Committee Composition On March 4, 2026, we notified Nasdaq that, as a result of the March 3, 2026 resignation of Mr. Richard Kender as a member of the Board and as chairman of the Audit Committee, we are temporarily no longer in compliance with Nasdaq Listing Rule 5605(c)(2)(A), which requires that the audit committee of a listed company be composed of at least three independent directors and that at least one member meets the financial sophistication requirements. Following the election of three new members of the Board at the Company’s annual meeting of stockholders held on July 1, 2026, the Board approved the reconstitution of the Audit Committee to consist of Ms. Leah Rush Cann (Chair), Dr. Deborah Ascheim, Dr. George Paletta and Ms. Ursula Ungaro. Each such member of the Audit Committee qualifies as independent, and Ms. Cann further 43 qualifies as an audit committee financial expert under Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended, and she meets the financial sophistication requirements under Nasdaq Listing Rule 5605(c)(2)(A).