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

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

Overview

We are a late-stage clinical biopharmaceutical company focused on the discovery and development of drugs for the treatment of cancer. Our core objective is to leverage our proprietary phospholipid ether drug conjugate™ (PDC™) delivery platform to develop PDCs that are designed to specifically target cancer cells and deliver improved efficacy and better safety as a result of fewer off-target effects. We believe that our PDC platform possesses the potential for the discovery and development of the next generation of cancer-targeting treatments, and we plan to develop PDCs both independently and through research and development collaborations. On April 30, 2025, we announced that we will explore a full range of strategic alternatives to advance our platform and radiopharmaceutical drug development pipeline. Strategic alternatives under consideration may include, but are not limited to mergers, acquisitions, partnerships, joint ventures, licensing arrangements or other strategic transactions.

The Company is primarily focused on the development of its radioconjugate PDC programs, also known as phospholipid radioconjugates or PRCs, designed to provide targeted delivery of a radioisotope directly to cancer cells, while limiting exposure to healthy cells. We believe this profile differentiates our PRCs from many traditional on-market treatments and radiotherapeutics. Our three lead programs are: CLR 121125 (CLR 125), an iodine-125 Auger-emitting program, prepared to enter a clinical trial in 2025; CLR 121225 (CLR 225), an actinium-225 based program; and iopofosine I 131 (iopofosine I 131, or simply iopofosine), a beta-emitting iodine-131 based program which has been studied extensively, as described below. On June 4, 2025, the Company announced that the U.S Food and Drug Administration (the "FDA") granted Breakthrough Therapy Designation for iopofosine I 131, as a radioconjugate monotherapy for the treatment of relapsed/refractory Waldenstrom macroglobulinemia (r/r WM). On October 6, 2025, the Company announced that after a scientific advice procedure, the Scientific Advice Working Party (SAWP) of the European Medicines Agency (EMA) advised that filing for a Conditional Marketing Authorization (CMA) for iopofosine I 131 as a treatment for post - Bruton Tyrosine Kinase inhibitor (BTKi) refractory patients with Waldenstrom macroglobulinemia (WM) could be acceptable. However, there can be no guarantee that the EMA will grant a CMA, in particular that we continue to meet the unmet needs condition. Even if we are granted a CMA in the EU, we will be required to undergo annual renewal assessments to determine whether the risk-benefit balance remains positive. During or in between such assessments, it may be determined that we do not meet the conditions, which would mean that the CMA is revoked, or that there is a need for additional or modified conditions and/or specific obligations.

Results of Operations

Research and development.Research and development expenses consist of costs incurred in identifying, developing and testing, and manufacturing product candidates, which primarily include salaries and related expenses for personnel, cost of manufacturing materials and contract manufacturing fees paid to contract manufacturers and contract research organizations, and fees paid to medical institutions for clinical studies. We analyze our research and development expenses based on four categories as follows: clinical project costs, preclinical project costs, manufacturing and related costs, and general research and development costs that are not allocated to the functional project costs, including personnel costs, facility costs, and related overhead costs.

General and administrative. General and administrative expenses consist primarily of salaries and other related costs for personnel in executive, finance, and administrative functions. Other costs include insurance, costs for public company activities, investor relations, directors' fees, and professional fees for legal and accounting services.

Other income (expense), net. Other income (expense), net, consists primarily of the impacts related to issuing and revaluing equity securities, and interest income.

Twelve Months Ended December 31, 2025 and 2024

Research and Development. Research and development expenses for the year ended December 31, 2025, were approximately $11,499,000, compared to approximately $26,136,000 for the year ended December 31, 2024.

The following table provides a summary of research and development costs by category for the years ended December 31, 2025 and 2024:

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The overall decrease in research and development expenses of approximately $14,637,000, or 56%, was primarily a result of a reduction in clinical project costs of approximately $6,876,000 and a decrease in manufacturing and related costs of approximately $6,362,000, driven by the conclusion of patient enrollment and declining patient follow-up for our WM clinical study, partially offset by increased activity in our pre-clinical development project costs.

General and administrative.General and administrative expenses for the year ended December 31, 2025, were approximately $11,481,000, compared to approximately $25,641,000 in 2024. The decrease of $14,160,000, or 55% in general and administrative costs was primarily driven by de-emphasizing pre-commercialization efforts and related personnel cost reductions.

Other income (expense), net. Other income (expense), net, for the year ended December 31, 2025, was approximately $1,189,000 of income, as compared to approximately $7,262,000 of income for the year ended December 31, 2024. A significant portion of this non-cash impact comes from changes in the valuation of the Company's outstanding warrants. Warrant valuation consists of several aspects, but the most significant driver is the price of the Company's common stock at the end of each reporting period. Interest income decreased to approximately $435,000 in 2025, compared to approximately $1,211,000 in 2024, as a result of lower invested balances and reductions in the related interest rates.

Liquidity and Capital Resources

Year ended December 31, 2025, Compared to Year Ended December 31, 2024

As of December 31, 2025, we had cash and cash equivalents of $13.2 million, compared to $23.3 million as of December 31, 2024, a decrease of $10.1 million. Net cash proceeds from the issuance of common stock and warrants during 2025 were approximately $13 million. The cash used in operating activities during the twelve months ended December 31, 2025, was approximately $23.1 million.

Investing activities consist exclusively of fixed asset purchases, which declined in 2025 as compared to 2024 as a result of our completing the establishment of redundancy in each aspect of our product manufacturing supply chain.

Our cash requirements have historically been for our research and development activities, finance and administrative costs, capital expenditures and overall working capital. We have experienced negative operating cash flows since inception and have funded our operations primarily from sales of equity-based securities. As of December 31, 2025, we had an accumulated deficit of approximately $269 million.

Liquidity Outlook

We have incurred losses since inception in devoting substantially all of our efforts toward research and development. During the year ended December 31, 2025, we generated a net loss of approximately $21.8 million and used approximately $23.1 million in cash for operations. We expect that we will continue to generate operating losses for the foreseeable future. As of December 31, 2025, our consolidated cash balance was approximately $13.2 million. As of the date the accompanying consolidated financial statements were issued (the "issuance date"), the Company's available liquidity to fund the Company's operations over the next twelve months beyond the issuance date was limited to approximately $9.7 million of unrestricted cash and cash equivalents. Absent further action taken by management to increase its liquidity, the Company may be unable to fund its operations under normal course beyond the third quarter of 2026. To improve the Company's liquidity, management plans to secure additional outside capital via the sale of equity and/or debt securities or execute a strategic transaction. Management also plans to preserve liquidity, as needed, by implementing cost saving measures. While management believes their plans will be successful, no assurance can be provided such plans will be effectively implemented over the next twelve months beyond the issuance date. In the event management's plans are not effectively implemented, the Company will be required to seek other alternatives which may include, among others, the sale of assets, discontinuance of certain operations, a wind-down of operations and/or filing for bankruptcy protection.

These uncertainties raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates it will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the U.S., or GAAP, requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Management bases its estimates and judgments on historical experience, knowledge of current conditions and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. We review these estimates and assumptions periodically and reflect the effects of revisions in the period that they are determined to be necessary.

We believe that the following accounting policies reflect our more significant judgments and estimates used in the preparation of our financial statements.

Accrued Liabilities. As part of the process of preparing financial statements, we are required to estimate accrued liabilities. This process involves identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for such service as of each balance sheet date in our financial statements. Examples of estimated expenses for which we accrue include contract service fees, such as amounts paid to clinical research organizations and investigators in conjunction with clinical studies, fees paid to vendors in conjunction with the manufacturing of clinical materials, and professional service fees, such as for lawyers and accountants. In connection with such service fees, our estimates are most affected by our understanding of the status and timing of services provided relative to the actual levels of services incurred by such service providers. The majority of our service providers invoice us monthly in arrears for services performed. In the event that we do not identify certain costs that have begun to be incurred, or we over- or underestimate the level of services performed or the costs of such services, our reported expenses for such period would be too high or too low. The date on which certain services commence, the level of services performed on or before a given date and the cost of such services are often determined based on subjective judgments. We make these judgments based on the facts and circumstances known to us, in accordance with GAAP.

Fair value measurements. We account for certain financial assets at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in the principal, most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that is determined based on assumptions that a market participant would use in pricing an asset or liability. We recorded the preferred stock and warrants separately based on their estimated fair values. Subsequent to issuance, to the extent that such securities are liability classified, they are marked to market, with the change in value reflected in the statement of operations at each reporting date. If management made different assumptions or judgments, material differences in measurements of fair value could occur.

Warrants. We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. If these instruments are initially classified as either liabilities or equity and a subsequent assessment determines that the classification has changed, we reflect that change in the financial statements.

Preferred Stock. We account for preferred stock based upon their specific terms and the authoritative guidance in ASC 480 and ASC 815, including whether they are freestanding instruments, whether any redemption or conversion aspects exist and how they are required to be settled (particularly if there is a cash settlement aspect), whether they contain characteristics that are predominantly debt-like or equity-like, whether they have embedded derivatives, and if they have redemption features. Based upon analysis of these criteria, the preferred stock will be classified as either debt, temporary (or "mezzanine") equity, or permanent equity. The resultant classification is then evaluated quarterly to determine whether any change to the classification is required.