Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations together with "Cautionary Note Regarding Forward-Looking Statements" and our condensed consolidated financial statements and related notes included under Item 1 of this Quarterly Report as well as our most recent Annual Report on Form 10-K for the year ended December 31, 2025, including Part 1, Item 1A "Risk Factors."

The forward-looking statements contained in this report reflect our views and assumptions as of the effective date of this report. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we assume no responsibility for updating any forward-looking statements to reflect events or circumstances that may arise after the date of this report, except as required by applicable law.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Overview

We are a clinical-stage, precision medicine pharmaceutical company focused on developing novel anti-cancer therapeutics for patients with high unmet medical need. We were founded on the innovation of our novel Drug Response Predictor (DRP®) platform. The DRP® technology is designed to define the gene expression signatures in cancer cells that predict the cancer cell's sensitivity to a specific cancer therapeutic. Once defined, the DRP® gene expression signature can then be assessed in cancer tissue biopsies from patients to identify those cancers that share this signature of drug sensitivity, and by extension, to identify those patients who may then be most likely to receive benefit from that specific anti-cancer therapeutic. We have developed and published DRP® signatures for dozens of anti-cancer therapeutics. Ideally, by using DRP to identify the patients most likely to benefit clinically from a given therapeutic, clinical development of that therapeutic can be focused on a smaller, more responsive patient population, which would allow for smaller, cheaper and quicker trials while also enhancing the probability of clinical and regulatory success for that therapeutic. Historically, we have generated DRP signatures for numerous anti-cancer therapeutics and had in-licensed numerous assets for DRP-guided development, including Liposomal CisPlatin (LiPlaCis), Irofulven and dovitinib as well as the novel PARP/tankyrase inhibitor, stenoparib.

Recent Developments

CLIA Lab Certification

On July 7, we announced the Clinical Laboratory Improvement Amendments (CLIA) certification for our in-house laboratory. With all equipment in place, our Horsholm, Denmark, laboratory is able to do all necessary testing in house to support the acceleration of stenoparib toward FDA registration. With the lab already in place, the certification allows us to integrate our processes to reduce cost and turnaround times for DRP analyses and improve communication with clinical trial sites.

Risks and Uncertainties

We are subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that we may identify and develop, the need to successfully commercialize and gain market acceptance of our product candidate, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Our product candidate currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if our research and development efforts are successful, it is uncertain when, if ever, we will realize significant revenue from product sales.

Recently Issued Accounting Pronouncements

See Note 2, "Summary of Significant Accounting Policies", to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.

Financial Operations Overview

Since our inception in September 2004, we have focused substantially all our resources on conducting research and development activities, including drug discovery and preclinical studies, establishing, and maintaining our intellectual property portfolio, the manufacturing of clinical and research material, hiring personnel, raising capital and providing general and administrative support for these operations. In recent years, we have recorded very limited revenue from collaboration activities, or any other sources. We have funded our operations to date primarily from convertible notes and the issuance and sale of our securities.

We have incurred net losses in each year since inception. Our net losses were $6.2 million and $5.0 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $136.4 million and cash and restricted cash of $26.9 million. Substantially all our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

	●	advance stenoparib through clinical trials;
	●	pursue regulatory approval of stenoparib;

	●	operate as a public company;
	●	continue our preclinical programs and clinical development efforts;
	●	continue research activities for stenoparib; and
	●	manufacture supplies for our preclinical studies and clinical trials.

Components of Operating Expenses

Research and Development Expenses

Research and development expenses include:

	●	expenses incurred under agreements with third-party contract organizations, and consultants;
	●	costs related to production of drug substance, including fees paid to contract manufacturers;
	●	laboratory and vendor expenses related to the execution of preclinical trials; and
	●	employee-related expenses, which include salaries, benefits, and stock-based compensation

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks and estimates of services performed using information and data provided to us by our vendors and third-party service providers. Non-refundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and accounted for as prepaid expenses. The prepayments are then expensed as the related goods are delivered and as services are performed. To date, most of these expenses have been incurred to advance our lead drug candidate stenoparib.

We expect our research and development expenses on stenoparib to increase substantially for the foreseeable future as we continue to invest to accelerate stenoparib in clinical trials designed to attain regulatory approval. We expect additional costs in research and development activities as we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our drug candidate is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of stenoparib.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, facilities costs, depreciation and amortization expenses and professional services expenses, including legal, human resources, audit, and accounting services. Personnel-related costs consist of salaries, benefits, travel, insurance and stock-based compensation. Facilities costs consist of rent and maintenance of facilities. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance stenoparib and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC, Nasdaq, additional insurance expenses, investor relations activities and other administrative and professional services.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2026 and 2025 (unaudited)

		Three Months Ended												Six Months Ended
		June 30,								Increase/				June 30,								Increase/
($ in thousands)		2026				2025				(Decrease)				2026				2025				(Decrease)
Revenue:
License Revenue		$	-			$	-			$	-			$	25			$	-			$	25
Total revenue			-				-				-				25				-				25
Operating expenses:
Research and development			1,345				2,321				(976	)			2,642				3,724				(1,082	)
General and administrative			1,326				1,812				(486	)			2,742				3,445				(703	)
Total operating expenses			2,671				4,133				(1,462	)			5,384				7,169				(1,785	)
Loss from operations			(2,671	)			(4,133	)			1,462				(5,359	)			(7,169	)			1,810
Other income (expense):
Interest income			217				237				(20	)			380				459				(79	)
Interest expense			(719	)			(12	)			(707	)			(948	)			(69	)			(879	)
Foreign exchange gains (losses)			(104	)			1,588				(1,692	)			(100	)			1,726				(1,826	)
Change in fair value of derivative and warrant liabilities			(128	)			-				(128	)			(128	)			1				(129	)
Total other income (expense), net			(734	)			1,813				(2,547	)			(796	)			2,117				(2,913	)
Net loss		$	(3,405	)		$	(2,320	)		$	(1,085	)		$	(6,155	)		$	(5,052	)		$	(1,103	)

Revenue

We generated no revenue for the three months ended June 30, 2026. We generated $0.025 million of service revenue for the six months ended June 30, 2026 from the license of DRP testing services. There was no revenue for the three and six months ended June 30, 2025.

Research and Development Expenses

For the three months ended June 30, 2026, compared to June 30, 2025

Research and development expenses decreased $1.0 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib. A significant amount of these fees occurred in 2025 and were recognized at the time of purchase.

For the six months ended June 30, 2026, compared to June 30, 2025

Research and development expenses decreased $1.1 million primarily due to reduced costs and supplies of the Phase II clinical trial of stenoparib. These expenses are recognized at the time of purchase.

General and Administrative Expenses

For the three months ended June 30, 2026 compared to June 30, 2025

General and administrative expenses decreased by $0.5 million for the three months ended June 30, 2026, compared to June 30, 2025. The decrease was primarily due to a reduction in legal fees.

For the six months ended June 30, 2026 compared to June 30, 2025

General and administrative expenses decreased by $0.7 million for the six months ended June 30, 2026, compared to June 30, 2025. The decrease was primarily due to a reduction in legal fees.

Other income (expense)

For the three months ended June 30, 2026, compared to June 30, 2025

For the three months ended June 30, 2026, net other income decreased $2.5 million from the comparable quarter. Interest income was substantially consistent. Foreign exchange gains decreased $1.7 million (moving from a $1.6 million gain in Q2 2025 to a $0.1 million loss in Q2 2026). Interest expense increased $0.7 million and change in fair value of derivative liability was $0.1 million, both primarily driven by the March 2026 issuance of the Streeterville promissory notes..

For the six months ended June 30, 2026, compared to June 30, 2025

For the six months ended June 30, 2026, net other income decreased $2.9 million from the comparable period. Foreign exchange decreased $1.8 million while interest expense and derivative liability increased $1 million with the March promissory note.

Liquidity, Capital Resources and Plan of Operation

Since our inception through June 30, 2026, our operations have been financed primarily by the sale of convertible promissory notes and the sale and issuance of our securities. As of June 30, 2026, we had $26.9 million in cash and restricted cash and an accumulated deficit of $136.4 million.

For the three months ended June 30, 2026, and 2025, there were no sales of equity or financing transactions.

For the six months ended June 30, 2026, we executed two financing transactions. On January 28, 2026, we entered into a Common Stock Purchase Agreement with Tumim Stone Capital LLC. Pursuant to the purchase agreement, we have the right, but not the obligation, to sell to Tumim up to $6.0 million of newly issued shares of our common stock under an equity line of credit arrangement. The purchase price per share for each sale is based on the volume-weighted average price ("VWAP") of our common stock during the applicable pricing period, at 95% of the lowest one-day VWAP or 97% of the lowest three-day VWAP, at our election, subject to volume-based and dollar-based limitations. The agreement includes customary limitations on Tumim's beneficial ownership and is subject to Nasdaq listing rules, including a 19.99% issuance limit. On March 2, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC, pursuant to which the Company issued and sold a $10.0 million unsecured and $10.0 million secured promissory note. Beginning six months after issuance, Streeterville may require monthly cash redemptions of up to $250,000 and also permits additional early redemptions upon the occurrence of specified stock-price based conditions.

Our primary use of cash is to fund operating activities, primarily research and development, regulatory activities, and clinical programs for stenoparib, as well as, to a lesser extent, general and administrative costs. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

We believe that our current cash balance is sufficient to fund operations through at least the next twelve months from the date of this Quarterly Report. We may need to seek additional capital through the sale of our securities or other sources to carry out all of our planned research and development and potential commercialization activities. There are no assurances, however, that we will be successful in raising additional working capital, or if we are able to raise additional working capital, we may be unable to do so on commercially favorable terms. Our failure to raise capital or enter into other such arrangements if and when needed would have a negative impact on our business, results of operations and financial condition and our ability to develop stenoparib.

We expect to incur substantial expenses in the foreseeable future for the development and potential commercialization of our drug candidate and ongoing internal research and development programs. At this time, we cannot reasonably estimate the nature, timing, or aggregate amount of costs for our development, potential commercialization, and internal research and development programs. However, to complete our current and future preclinical studies and clinical trials, and to complete the process of obtaining regulatory approval for stenoparib, as well as to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize stenoparib, if approved, we may require substantial additional funding in the future.

Contractual Obligations and Commitments

We enter into agreements in the normal course of business with vendors for preclinical studies, clinical trials, and other service providers for operating purposes. We have not included these payments in a table of contractual obligations since these contracts are generally cancellable at any time by us following a certain period after notice and therefore, we believe that our non-cancellable obligations under these agreements are not material.

Cash Flows

		Six Months Ended
		June 30,
($ in thousands)		2026				2025
Total cash, cash equivalents and restricted cash provided by (used in):
Operating activities, net		$	(7,057	)		$	(8,167	)
Investing activities, net			(64	)			-
Financing activities, net			19,740				8,578
Effect of foreign exchange rates on cash			(325	)			(2,143	)
Net increase (decrease) in cash, cash equivalents and restricted cash		$	12,294			$	(1,732	)

Operating Activities

Net cash used in operating activities was $7.1 million for the six months ended June 30, 2026, primarily derived from our $6.2 million net loss, a $1.3 million increase in prepaid expenses, and a $0.4 million increase in tax receivable. A $0.7 million and $0.2 million reduction of accrued expenses and accounts payable, respectively, was offset by an increase of $0.9 million for non-cash interest. The company used $8.2 million of net cash for operating activities for the six months ended June 30, 2025.

Investing Activities

Net cash used in investing activities totaled $0.1 million for the six months ended June 30, 2026. The Company has no investing activity spending for the six months ended June 30, 2025.

Financing Activities

Net cash and restricted cash provided by financing activities was $19.7 million for the six months ended June 30, 2026. The Company issued promissory notes with gross proceeds of $20.0 million, which was offset by $0.3 million used as part of a share repurchase program. Net cash provided by financing activities for the six months ended June 30, 2025 was $8.6 million. The Company raised $11.1 million using the ATM financing vehicle, which was offset by $2.5 million of the share repurchase program.

Operating Capital and Capital Expenditure Requirements

We believe that our existing cash and cash equivalents will be sufficient to fund our anticipated expenditures and commitments for the next twelve months. Our estimate as to how long we expect our cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Use of Estimates

Our management's discussion and analysis of financial condition and results of operations is based upon our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2026 and 2025, and our audited consolidated financial statements for the years ended December 31, 2025 and 2024, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2025 included in the Form 10-K, and there have been no significant changes to our significant accounting policies during the six months ended June 30, 2026. These unaudited condensed interim consolidated financial statements should be read in conjunction with our audited financial statements and accompanying notes.

Recently Issued Accounting Standards Not Yet Effective or Adopted

See Note 2, "Summary of Significant Accounting Policies", to our unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report for a discussion of recent accounting pronouncements.