Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Some of the statements in this Annual Report on Form 10-K are "forward-looking statements" within the meaning of the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our current beliefs, goals and expectations about matters such as our expected financial position and operating results, our business strategy and our financing plans. The forward-looking statements in this report are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. The forward-looking statements generally can be identified by the use of terms such as "believe," "expect," "anticipate," "intend," "plan," "foresee," "may," "guidance," "estimate," "potential," "outlook," "target," "forecast," "likely" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals are, or may be, forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from any future results, performance and achievements expressed or implied by these statements. We cannot guarantee that our forward-looking statements will turn out to be correct or that our beliefs and goals will not change. Our actual results could be very different from and worse than our expectations for various reasons. You should carefully review all information, including the discussion of risk factors under "Part I. Item 1A: Risk Factors" and elsewhere in this annual report. Any forward-looking statements in this Form 10-K are made only as of the date hereof and, except as may be required by law, we do not have any obligation to publicly update any forward-looking statements contained in this Form 10-K to reflect subsequent events or circumstances.

Overview

We are a clinical stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology products based off our proprietary Tri-specific Killer Engager (TriKE^®) technology platform. Our TriKE^® platform generates proprietary therapeutics designed to harness and enhance the cancer killing abilities of a patient's own natural killer cells, or NK cells. Once bound to an NK cell, our moieties are designed to enhance the NK cell, and precisely direct it to one or more specifically-targeted proteins expressed on a specific type of cancer cell or virus infected cell, ultimately resulting in the targeted cell's death. TriKE^® is composed of recombinant fusion proteins and interleukin 15 (IL-15), can be designed to target any number of tumor antigens on hematologic malignancies, sarcomas or solid tumors and do not require patient-specific customization.

Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ under different estimates and assumptions. The accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to gain an understanding of our financial statements because they inherently involve significant judgments and uncertainties.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include accruals for potential liabilities, assumptions used in deriving the fair value of warrant liabilities, valuation of equity instruments issued for services, and valuation of deferred tax assets. Actual results could differ from those estimates.

Warrant Liability

We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and Hedging." For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

Our use of derivative financial instruments is generally limited to warrants issued by us that do not meet the criteria for equity treatment and are recorded as liabilities. We do not use financial instruments or derivatives for any trading purposes.

Stock-Based Compensation

We periodically issue stock-based compensation to officers, directors, employees, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date.

Stock-based payments made to officers, directors, employees, and consultants in exchange for goods and services, including grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation. Stock based payments to officers, directors, employees, and consultants, which are generally time vested, are measured at the grant date fair value and depending on the conditions associated with the vesting of the award, compensation cost is recognized on a straight-line or graded basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if we had paid cash for the services. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

Operating Expenses

		Years Ended December 31,
		2025				2024				$ Change				% Change
Operating Expenses:
Research and development		$	3,472,000			$	5,798,000			$	(2,326,000	)			(40	)%
Selling, general and administrative			8,518,000				8,336,000				182,000				2	%
Stock compensation			432,000				230,000				202,000				88	%
Total Operating Expenses		$	12,422,000			$	14,364,000			$	(1,942,000	)			(14	)%

Research and Development Expenses

Research and development expenses decreased by approximately $2.3 million for the year ended December 31, 2025, compared to the prior year, primarily due to a decrease in production and materials costs.

Research and development expenses relate to our continued licensing, development and production of our most advanced TriKE® product candidates GTB-3650 and GTB-5550 along with the progression on other promising candidates. In late June 2024, we received clearance from the FDA with respect to our IND Application in relation to our next generation GTB-3650 camelid nanobody product. Study enrollment began in early 2025 and we have advanced into the clinic, enrolling patients, and performing tests for data collection throughout the year. In late January 2026, we received clearance from the FDA with respect to our IND Application in relation to GTB-5550, with a Phase 1 dose escalation basket trial that is expected to initiate mid-2026.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses remained relatively flat, increasing by only $182,000 for the year ended December 31, 2025, compared to the prior year.

Other Income (Expense)

		Years Ended December 31,
		2025				2024				$ Change				% Change
Other Income (Expense):
Interest income		$	123,000			$	402,000			$	(279,000	)			(69	)%
Interest expense			(127,000	)			-				(127,000	)			100	%
Change in fair value of warrant liability			241,000				800,000				(559,000	)			(70	)%
Loss on initial recognition of Greenshoe Rights liability			(28,736,000	)			-				(28,736,000	)			100	%
Change in fair value of Greenshoe Rights liability			11,413,000				-				11,413,000				100	%
Gain on settlement of vendor payable			998,000				-				998,000				100	%
Other			156,000				-				156,000				100	%
Total Other Income (Expense)		$	(15,932,000	)		$	1,202,000			$	(17,134,000	)			(1,425	)%

Interest Income

Interest income decreased by $279,000 for the year ended December 31, 2025, compared to the prior year primarily due to lower highly liquid and short-term investment balances.

Interest Expense

Interest expense of $127,000 for the year ended December 31, 2025, consists of straight line amortization of the pre-funded warrants underlying an aggregate of 300,000 shares of common stock issued in connection with the Committed Equity Facility.

Change in Fair Value of Warrant Liability

The change in fair value of warrant liability decreased by $559,000 for the year ended December 31, 2025, compared to the prior year, primarily due to the decline in the Company's stock price at December 31, 2025, as compared to the prior year.

Loss on Initial Recognition and Change in Fair Value of Greenshoe Rights Liability

The Greenshoe Rights connected to the Series L Preferred Stock issued in the May 2025 equity offering required classification as a liability and marked to market at each reporting date as required under GAAP. The Company recognized other income (expense) for the change in the fair value of the Greenshoe Rights liability at each reporting date. The Greenshoe Rights liability was extinguished and reclassified to equity as of the date of the redemption rights waiver of the Series L 10% Convertible Preferred Stock effective in September 2025 (see Note 10 of the accompanying financial statements).

Gain on Settlement of Vendor Payable

In June 2025, a legal services firm currently engaged by the Company agreed to reduce the Company's prior year unpaid fees by approximately $1 million..

Other

In May 2025 the Company issued warrants underlying 24,390 shares of common stock exercisable at $2.24 per share with a fair value of approximately $44,000 in exchange for the waiver of a variable rate transaction ("VRT"). The Company classified this transaction as other expense. The Company also recorded other income of $200,000 in June 2025 due to the extinguishment of an accrual of consulting fees recorded in prior years.

Net Loss

		Years Ended December 31,
		2025				2024				$ Change				% Change
Net Loss		$	(28,354,000	)		$	(13,162,000	)		$	(15,192,000	)			115	%

Net loss increased approximately $15.2 million for the year ended December 31, 2025, primarily due to the change in fair value of greenshoe rights liability, slightly offset by a decrease in research and development expenses, as described above.

Liquidity and Capital Resources

The accompanying financial statements have been prepared assuming that we will continue as a going concern. We do not have any product candidates approved for sale and have not generated any revenue from our product sales. We have sustained operating losses since inception, and we expect such losses to continue into the foreseeable future. Historically, we have financed our operations through public and private sales of common stock, the issuance of preferred and common stock, the issuance of convertible debt instruments, and strategic collaborations. For the year ended December 31, 2025, we recorded a net loss of approximately $28.4 million and used cash in operations of approximately $12.9 million. These factors raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company's independent registered public accounting firm, in its report on the Company's December 31, 2025 financial statements, raised substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Accordingly, the financial statements have been prepared on a basis that assumes we will continue as a going concern, and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

We have evaluated the significance of the uncertainty regarding our financial condition in relation to our ability to meet our obligations, which has raised substantial doubt about our ability to continue as a going concern. While it is very difficult to estimate our future liquidity requirements we will need to obtain additional financing. If we are unable to obtain additional financing, we believe existing cash resources will not be sufficient to enable us to fund the anticipated level of operations through one year from the date the accompanying financial statements are issued. There can be no assurances that we will be able to secure additional financing on acceptable terms. In the event that we do not secure additional financing, we will be forced to delay, reduce, or eliminate some or all of our discretionary spending, which could adversely affect our business prospects, ability to meet long-term liquidity needs and the ability to continue operations.

Cash Flows

		Years Ended December 31,
		2025				2024
Statements of Cash Flow Data:
Net cash used in operating activities		$	(12,914,000	)		$	(12,904,000	)
Net cash provided by investing activities			-				12,893,000
Net cash provided by financing activities			15,775,000				2,976,000
Net increase in cash and cash equivalents and restricted cash			2,861,000				2,965,000
Cash and cash equivalents and restricted cash, beginning of period			4,044,000				1,079,000
Cash and cash equivalents and restricted cash, end of period		$	6,905,000			$	4,044,000

Operating Activities

Net cash used in operating activities was approximately $12.9 million for the year ended December 31, 2025, and was primarily due to a net loss of approximately $28.4 million and a decrease in accounts payable and accrued expenses of $2.6 million, offset by the reclassification the Greenshoe Right liability to equity amounting to approximately $17.3 million.

Net cash used in operating activities was approximately $12.9 million for the year ended December 31, 2024, and was primarily due to a net loss of approximately $13.2 million, a decrease in the fair value of warrant liability of $800,000, and partially offset an increase in accounts payable and accrued expenses of approximately $900,000.

Investing Activities

Net cash provided by financing activities for the year ended December 31, 2024, resulted primarily from proceeds from the sale of short-term investments.

Financing Activities

Net cash provided by financing activities was approximately $16 million for the year ended December 31, 2025, and resulted from net proceeds from the issuance of Series L Preferred Stock and warrants, and net proceeds from the exercise of warrants for cash and inducement warrants.

Net cash provided by financing activities approximately $3.0 million for the year ended December 31, 2024, and resulted from net proceeds from issuance of common stock and warrants.

Working Capital (Deficit)

The following table summarizes total current assets, liabilities, and working capital (deficit) for the years ended December 31, 2025 and 2024:

		As of December 31
		2025				2024				Increase/(Decrease)
Current assets		$	8,106,000			$	4,232,000			$	3,874,000
Current liabilities		$	2,319,000			$	5,902,000			$	(3,583,000	)
Working capital (deficit)		$	5,787,000			$	(1,670,000	)		$	7,457,000

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as of December 31, 2025.