Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Security and Exchange Commission ("SEC") on March 31, 2025 (the "2024 Annual Report on Form 10K"), under "Risk Factors", available on the SEC EDGAR website at www.sec.gov, Part II, and Item 1A of the report, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those risks noted above.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements", within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "objective," "ongoing," "plan," "predict," "project," "potential," "should," "will," or "would," and or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, including the risks set forth in the 2024 Annual Report on Form 10-K. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.

The forward-looking statements contained in this Quarterly Report on Form 10-Q include, among other things, statements about:

Overview

We are a pre-revenue, development-stage biopharmaceutical company focused on developing new medicines to treat pain and fatigue-related disorders. Our pipeline is focused on two separate pillars: Na_v 1.7 modulation to treat chronic and acute pain disorders and combination antiviral therapies targeting reactivated herpes virus mediated illnesses. The proprietary non-opioid Na_V 1.7 analgesic program is centered on our lead development candidate Halneuron^®, which is a voltage-gated sodium channel modulator, a mechanism known to be effective for reducing pain. The antiviral program includes IMC-1 and IMC-2, which are novel, proprietary, fixed dose combinations of nucleoside analog, anti-herpes antivirals and the anti-inflammatory agent celecoxib for the treatment of FM and LC.

Na_v1.7 Non-Opioid Analgesic Program

Our lead product candidate, Halneuron^®, is in Phase 2b clinical development for the treatment of chemotherapy-induced neuropathic pain ("CINP") ("HALT-CINP-203"). The active pharmaceutical ingredient is highly purified Tetrodotoxin ("TTX"), a potent sodium channel modulator found in the ovaries of puffer fish and several other marine animals. Halneuron^® works as an analgesic by modulating the activity of Na_v1.7, a key sodium channel located in the peripheral nervous system involved in pain signal transmission. By reducing the activity of the Na_v1.7 channel, Halneuron^® has the potential to reduce pain associated with conditions involving neuropathic pain, chronic pain and acute forms of pain.

In the first quarter of 2025, we commenced dosing of patients in the HALT-CINP-203 clinical trial in the United States. HALT-CINP-203 is a double-blind, placebo controlled clinical trial to access the efficacy and safety of Halneuron^® in approximately 200 patients with moderate to severe neuropathic pain caused by previous platinum and/or taxane based chemotherapy. The primary efficacy endpoint is the change from baseline to week 4 in the weekly average of daily 24-hour recall pain intensity scores, comparing Halneuron^® to the placebo. The secondary endpoints include patient global impression of change, PROMIS fatigue, PROMIS sleep, PROMIS-29, pain interference, hospital anxiety and depression scale and neuropathic pain symptom inventory. We expect to conduct an interim analysis of data from approximately 40-50% of the patients enrolled in HALT-CINP-203 in the fourth quarter of 2025. The planned interim analysis is designed to explore one of four possible outcomes, (i) early stopping due to achievement of statistically significant pain reduction with the smaller sample size, (ii) a futility determination, (iii) a recommendation to continue the study to the planned sample size of 200 total patients, or (iv) a recommendation to increase the HALT-CINP patients sample size based on the Halneuron^® observed treatment effect size versus placebo at the interim analysis. Top-line data from the trial are expected in the second-half of 2026.

Antiviral Program

Concurrent with the Combination in October 2024, Halneuron^® became our lead program and the primary focus of our day-to-day operations. However, we continue to explore the best options to advance development of IMC-1 and IMC-2 which are novel, proprietary, fixed dose combinations of nucleoside analog, anti-herpes antivirals and the anti-inflammatory agent celecoxib. IMC-1 is a novel combination of famciclovir and celecoxib intended to synergistically suppress herpesvirus activation and replication, with the end goal of reducing a patient's viral mediated disease burden. IMC-2 is a combination of valacyclovir and celecoxib that like IMC-1, is intended to synergistically suppress herpesvirus activation and replication with a more specific activity against the Epstein-Barr virus (herpesvirus HHV-4). We have reached agreement with FDA on the primary endpoint of

fatigue reduction as an approvable endpoint for new Long-COVID development candidates, such as IMC-2. Based on prior research and support from key opinion leaders in the infectious disease community, we continue to believe IMC-2 holds great value for reducing the fatigue associated with Long-COVID illness. However, recent 40% National Institute of Health budget cuts, including research funding related to COVID and Long-COVID illness, create less certainty as regards to funding and potential partnership of the IMC-2 program. Unmet medical need related to fibromyalgia remains high, and finding an IMC-1 Phase 3 program partner remains one of our top business development priorities.

Exchange and Cancellation Agreement

On October 7, 2024, the Company entered into a Loan Agreement (the "Loan Agreement") with Conjoint Inc., a Delaware corporation ("Lender"). Pursuant to the Loan Agreement, Lender agreed to make a loan to the Company in the aggregate principal amount of $19,500,000, of which (i) $16,500,000 was disbursed on October 7, 2024 and (ii) $3,000,000 was disbursed on February 18, 2025. Prior to the Debt Exchange and Cancellation Transaction described below, the Loan Agreement bore interest at the Secured Overnight Financing Rate ("SOFR") plus 2.00%. The Loan Agreement was payable in full with principal and accrued interest on October 7, 2027.

On March 12, 2025, we entered into a Debt Exchange and Cancellation Agreement (the "Exchange and Cancellation Agreement") with Lender. Pursuant to the Exchange and Cancellation Agreement, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through March 12, 2025, was deemed repaid and all of the Company's obligations satisfied in full and cancelled in exchange for 284.2638 shares of the Company's Series A-1 Non-Voting Convertible Preferred Stock, par value $0.0001 ("Series A-1 Preferred Stock" and such transaction, the "Debt Exchange and Cancellation Transaction"). Following the stockholder approval of the conversion of Series A-1 Preferred Stock into shares of Common Stock in accordance with the listing rules of the Nasdaq Stock Market, each share of Series A-1 Preferred Stock will automatically convert into 10,000 shares of Common Stock.

Registered Direct Offering

On March 12, 2025, we entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a registered direct offering of 578,950 shares of our Common Stock at a price of $8.26 per share (the "March 2025 Offering"), pursuant to an effective shelf registration statement on Form S-3 (File No. 333-263700). The March 2025 Offering closed on March 14, 2025, and the gross proceeds from the March 2025 Offering were approximately $4.78 million. The net proceeds of the March 2025 Offering were approximately $4.25 million after deducting placement agent fees and offering expenses payable by the Company.

Results of Operations

Below is a summary of the results of operations:

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Three and Six Months Ended June 30, 2025 and 2024

Research and Development Expenses

Research and development expenses increased by $2.2 million and $4.3 million for the three and six months ended June 30, 2025, respectively, compared to prior periods. The increase of $2.2 million for the three months ended June 30, 2025 was primarily due to the impact of the Combination including increases in expenses related to the ongoing HALT-CINP-203 clinical trial of $1.6 million, drug development and manufacturing costs of $0.5 million, and salaries and related personnel costs of $0.2 million offset by a decrease in regulatory costs of $0.1 million. The increase in expenses of $4.3 million for the six months ended June 30, 2025 compared to the prior year period was also primarily due to the impact of the Combination including increases in expenses for clinical trials of $3.4 million related to the HALT-CINP-203 study, drug development and manufacturing costs of $0.6 million and salaries and related personnel costs of $0.4 million offset by a decrease in regulatory costs of $0.1 million.

General and Administrative Expenses

General and administrative expenses increased by $0.6 million and $1.6 million for the three and six months ended June 30, 2025, respectively, compared to prior periods. The increase of $0.6 million for the three months ended June 30, 2025 was primarily due to increases in expenses for legal and professional fees of $0.2 million, salaries and related personnel costs of $0.2 million, expenses associated with being a public company of $0.1 million and other general and administrative costs of $0.1 million. The increase in expenses of $1.6 million for the six months ended June 30, 2025 compared to the prior year period was primarily due to increases in expenses for legal and professional fees of $0.8 million related to the Combination, franchise tax fees of $0.2 million, salaries and related personnel costs of $0.5 million and other general and administrative costs of $0.1 million.

Liquidity and Capital Resources

Since our inception, we have financed our operations through public offerings of common stock and proceeds from private placements of membership interests and convertible promissory notes. To date, we have not generated any revenue from the sale of products and we do not anticipate generating any revenue from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of June 30, 2025, our principal source of liquidity was our cash, which totaled $13.4 million.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. For example, the ongoing conflicts between Israel-Hamas and Ukraine-Russia, the effect of these wars and the resulting sanctions by the U.S. and European governments, has created extreme volatility in the global capital markets and is expected to have further global economic consequences, including

disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, if at all.

Equity Financings

On March 14, 2025, we closed a registered direct offering of 578,950 shares of our Common Stock, raising gross proceeds of approximately $4.78 million and net proceeds of approximately $4.25 million, after deducting placement agent fees and offering expenses.

On May 22, 2024, we closed a public offering of 340,000 shares of our Common Stock, raising gross proceeds of $1.7 million and net proceeds of approximately $1.4 million, after deducting placement agent fees and offering expenses.

Debt Financings

On February 18, 2025, we received $3,000,000 in loan proceeds pursuant the Loan Agreement dated October 7, 2024 with the Lender. There were no debt financings during the three and six months ended June 31, 2024. There was no debt outstanding at June 30, 2025 due to the Debt Exchange and Cancellation Transaction discussed above. At December 31, 2024, the debt with related party, net of issuance costs was $15,381,077.

Future Capital Requirements

We anticipate our cash on hand at June 30, 2025 of approximately $13.4 million will fund operations through the first quarter of 2026. The Company will need to secure additional financing to fund its ongoing clinical trials and operations beyond the first quarter of 2026 to continue to execute its strategy. We will need to finance our cash needs through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. To the extent that we raise additional funds by issuing equity or equity-linked securities, our shareholders will experience dilution. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. As a result, substantial doubt exists regarding our ability to continue as a going concern 12 months from the issuance of this Quarterly Report on Form 10-Q. Failure to secure the necessary financing in a timely manner and on favorable terms could have a material adverse effect on the Company's strategy and value and could require the delay of product development and clinical trial plans.

Summary of Cash Flows

The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024, respectively:

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Cash Flows for the Six Months Ended June 30, 2025 and 2024

Operating Activities

For the six months ended June 30, 2025, net cash used in operations was $8.7 million and consisted of a net loss of $14.7 million and a net change in operating assets and liabilities of $0.5 million attributable to a decrease in accounts payable and accrued liabilities of $0.9 million offset by a decrease in prepaid expenses and other current assets of $0.4 million further offset by non-cash items of $6.5 million attributable to loss on conversion of debt with related party of $6.1 million, deferred tax expense of $0.2 million and share-based compensation, depreciation and amortization of $0.2 million.

For the six months ended June 30, 2024, net cash used in operations was $1.7 million and consisted of a net loss of $2.3 million offset by a net change in operating assets and liabilities of $0.3 million attributable to an increase in accounts payable and accrued liabilities of $0.1 million and a decrease in prepaid expenses and other current assets of $0.2 million and non-cash items of $0.3 million attributable to share-based compensation.

Financing Activities

Net cash provided by financing activities during the six months ended June 30, 2025 was $7.3 million and was attributable to cash proceeds from the Loan Agreement of $3.0 million and gross proceeds from our registered direct offering in March 2025 of $4.8 million, net of placement agent fees and offering costs paid by us during the six months ended June 2025 of $0.5 million.

Net cash provided by financing activities during the six months ended June 30, 2024 was $1.4 million and was attributable to cash proceeds from our public offering in May 2024, net of placement agent fees and offering costs paid by us during the six months ended June 2024 of $0.3 million.

Off-Balance Sheet Arrangements

As of June 30, 2025, we did not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Discussion of Critical Accounting Policies and Significant Judgements and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. During the six months ended June 30, 2025, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the year ended December 31, 2024, which we included in our 2024 Annual Report on Form 10-K.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an "emerging growth company." As an "emerging growth company," we are electing to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards.

Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," we are not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls

over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply until December 31, 2025, which is the last day of the fiscal year following the fifth anniversary of the completion of our IPO, or until we no longer meet the requirements for being an "emerging growth company," whichever occurs first.

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