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

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

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q (the "Report" or "Form 10-Q") and with the audited condensed consolidated financial statements and related notes thereto of Private Adaptin for the year ended December 31, 2024 included as part of our Current Report on Form 8-K/A filed with the Securities and Exchange Commission (the "SEC") on April 15, 2025.

Unless the context otherwise requires, all references in this Form 10-Q to "we," "us," or "our" refer to Private Adaptin prior to the consummation of the Merger and to public reporting company Adaptin Bio, Inc., formerly Unite Acquisition, following the consummation of the Merger.

Cautionary Note Regarding Forward-Looking Statements

This Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to, among others, our plans, objectives and expectations for our business, operations and financial performance and condition, and can be identified by terminology such as "may," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "will," "could," "project," "target," "potential," "continue" and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on management's belief and assumptions and on information currently available to management. Although we believe that the expectations reflected in forward-looking statements are reasonable, such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements.

Forward-looking statements include, but are not limited to, statements about:

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our ability to raise additional money to fund our operations for at least the next twelve months as a going concern;

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our ability to develop our current and any future product candidates;

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our ability to receive marketing approval from the U.S. Food and Drug Administration ("FDA") for our product candidates;

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our ability to maintain our license rights to our intellectual property and to adequately protect or enforce our intellectual property rights;

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our reliance on third parties to supply drug substance and drug product for our clinical trials and preclinical studies, and produce commercial supplies of product candidates;

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our ability to market and commercialize our products, if approved;

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our product candidates' ability to achieve market acceptance, if approved;

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developments and projections relating to our competitors and our industry;

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our ability to adequately control the costs associated with our operations;

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our dependence on third-party reimbursement for commercial viability;

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the impact of current and future laws and regulations, especially those related to drug development and drug pricing controls;

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potential cybersecurity risks to our operational systems, infrastructure, and integrated software by us or third-party vendors; and

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the development of a market for our Common Stock.

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, operating results, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled "Risk Factors" included in our Current Report on Form 8-K filed with the SEC on February 18, 2025.

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

As discussed elsewhere in this Report, on February 11, 2025, our wholly owned subsidiary, Adaptin Acquisition Co., merged with and into Private Adaptin. In connection with the Merger, Private Adaptin became a wholly owned subsidiary of the Company, and the Company changed its name to Adaptin Bio, Inc.

Because our historical financial statements as of period ends, and for periods ended, prior to the Merger have been replaced with the historical financial statements of Private Adaptin prior to the Merger, the following discussion and analysis for the three and nine months ended September 30, 2024 is exclusively attributable to the operations of Private Adaptin. The following discussion and analysis for the three and nine months ended September 30, 2025 is exclusively attributable to the operations of the Company, including the operations that occurred after the Merger. The entirety of this discussion and analysis should be read in conjunction with Private Adaptin's financial statements for the years ended December 31, 2024 and 2023 and the related notes thereto, which have been prepared in accordance with U.S. GAAP and previously filed with the SEC. The preparation of these condensed consolidated financial statements in conformity with U.S. 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 condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Overview of the Company

We were incorporated in the State of Delaware on March 10, 2022. From inception through the date of the Merger, the Company was engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination and focused its efforts to identify a possible business combination.

As of December 31, 2024, the Company was considered to be a "blank check" company. The SEC defines those companies as a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person, and that is issuing a penny stock, as defined in in Rule 3a51-1 under the Exchange Act. Many states have enacted statutes, rules and regulations limiting the sale of securities of "blank check" companies in their respective jurisdictions. As of December 31, 2024, the Company was also a "shell company," defined in Rule 12b-2 under the Exchange Act as a company with no or nominal assets (other than cash) and no or nominal operations. As a result of the Merger, we have ceased to be a shell company.

In addition, the Company is an "emerging growth company," as defined in the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act, and exemptions from the requirements of Sections 14A(a) and (b) of the Exchange Act to hold a nonbinding advisory vote of stockholders on executive compensation and any golden parachute payments not previously approved.

The Company has also elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We will remain an "emerging growth company" until the earliest of (1) the last day of the fiscal year during which our gross revenues exceed $1.235 billion, (2) the date on which we issue more than $1 billion in non-convertible debt in a three year period, (3) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement filed pursuant to the Securities Act, or (4) when the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. To the extent that we continue to qualify as a "smaller reporting company," as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years.

From inception through the date of the Merger, the Company did not conduct any active operations, except for its efforts to locate suitable acquisition candidates. No revenue has been generated by the Company since inception. Notwithstanding the Merger, we expect to continue to incur significant losses for the foreseeable future. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the necessary development activities required for applying for and obtaining regulatory approval for our product candidates and, subsequently, preparing for potential commercialization of our product candidates.

Business Overview

We are a biopharmaceutical company pioneering a transformational approach to enhancing the transfer of therapeutics into the brain, facilitating the treatment of brain cancers and other unmet medical conditions. Our precision medicine technology, originally developed by researchers in the Department of Neurosurgery at Duke University, harnesses the human immune system's ability to target, recognize, destroy or deliver therapeutics to specific cells, including cancer cells. Our mission is to be the global leader and pioneer of this new treatment paradigm, integrating recombinant technology, gene therapy and cell therapy to address the challenges of targeting and delivering effective therapies, including to the brain for cancer and other CNS indications.

We are working closely with the researchers at Duke University to translate preclinical proof of concept data of our proprietary platform technology, the BRiTE (Brain Bispecific T-cell Engager) Platform, into human clinical trials. BRiTE is a translatable method to specifically target malignant glioma using a tumor-specific, fully human bispecific antibody that redirects patients' own T cells to recognize and destroy tumor cells. Our first application of BRiTE is APTN-101, a proprietary EGFRvIII x CD3 bispecific T cell engager, that is able to eliminate malignant glioma tumors in a variety of aggressive preclinical orthotopic tumor models. We designed APTN-101 to specifically redirect T cells against tumors expressing a well-characterized, mutated form of EGFR (epidermal growth factor receptor) on a number of tumor types, including glioblastoma, breast and lung cancer. APTN-101 has been recently accepted under an investigator-led IND to begin first-in-human studies in brain cancer. Our goal is to complete preclinical studies on additional product candidates and file multiple INDs.

Duke University Exclusive Licensing Agreement

Effective January 11, 2023, we entered into a patent license agreement (the "Duke License") with Duke University, whereby Duke University granted us an exclusive license with a right to sublicense the precision medicine technology, which we intend to develop using our BRiTE Platform. As part of the consideration for the license, we issued Duke 75 shares of Private Adaptin common stock (that were then valued at $175.86 per share, or $13,189, representing 5% of Private Adaptin's then issued and outstanding common stock on a fully diluted basis). As a result of the Merger and recapitalization, Duke University now holds 161,961 shares of our common stock, or approximately 1% of the outstanding shares of the Company on a fully diluted basis. We also agreed to make milestone and royalty payments to Duke University, as well as to reimburse Duke University for prior patent expenses, as set forth in more detail below.

Bridge Financings

We raised bridge financing through the offer and sale (a) in 2023 of $500,000 principal amount of our 10% Secured Promissory Notes (the "2023 Bridge Notes"), including warrants to purchase up to 56,815 shares of our common stock at an exercise price of $4.40 per share and (b) in 2024 of $1,000,000 principal amount of its 10% Secured Subordinated Convertible Promissory Notes (the "2024 Bridge Notes"), which in each case were sold to a limited number of accredited investors pursuant to Regulation D under the Securities Act. In December 2024, the 2023 Bridge Notes were cancelled and exchanged for $500,000 principal amount of the 10% Secured Convertible Promissory Notes (the "Exchange Notes"). In connection with the note exchange, the holders of the 2023 Bridge Notes were also issued warrants to purchase up to 75,755 shares of our common stock at an exercise price of $3.30 per share. The Exchange Notes, collectively with the 2024 Bridge Notes, are referred to herein as the "Bridge Notes".

The Merger

On February 11, 2025, we and our wholly owned subsidiary, Merger Sub, entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with Private Adaptin. Pursuant to the Merger Agreement, Merger Sub merged with and into Private Adaptin, with Private Adaptin continuing as the surviving corporation and our wholly owned subsidiary. Pursuant to the Merger, all of the outstanding stock of Private Adaptin was converted into shares of our common stock. In addition, in connection with the Merger, all of Private Adaptin's Bridge Notes converted into shares of our common stock at $3.30 per share and all of Private Adaptin's outstanding warrants became exercisable for shares of our common stock. In connection with the Merger, Private Adaptin was renamed Adaptin Bio Operating Company and our name was changed to Adaptin Bio, Inc.

The Merger was accounted for as a "reverse merger" or "reverse acquisition," and Private Adaptin is deemed to be the acquirer in the reverse merger. As a result of the issuance of the shares of our common stock pursuant to the Merger, a change in control of Private Adaptin occurred as of the Closing Date of the Merger.

Since the commencement of Private Adaptin's operations, substantially all resources have been devoted to supporting product development efforts, raising capital to support and expand such activities, and providing general and administrative support for these operations. We operate our business using a significant outsourcing model. As such, our team is composed of a small group of employees who direct a significantly large number of team members, including vendors and consultants, to enable execution of our operational plans. We do not currently have any products approved for sale, and we will continue to incur significant research and development and general administrative expenses related to our operations.

The Offering

Concurrent with the closing of the Merger, we sold, in an initial closing (the "Initial Closing") of a private placement offering (the "Offering"), 1,080,814 units (the "Units") at a purchase price of $4.40 per Unit, for an aggregate purchase price of $4,755,582, with each Unit consisting of (i) one share of common stock, (ii) a one-year warrant to purchase one share of our common stock at an exercise price of $4.40 per share, and (iii) a five-year warrant to purchase one-half of a share of our common stock at an exercise price of $6.60 per share. On March 31, 2025, we sold, in the final closing of our Offering, 319,529 Units for an aggregate purchase price of $1,405,923.

Operations Overview

Since inception, we have incurred significant operating losses. For the three and nine months ended September 30, 2025, we recorded a net loss of $1,675,612 and $3,799,551, respectively. As of September 30, 2025, we had an accumulated deficit of $7,923,783. We expect to continue to incur significant losses for the foreseeable future. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the necessary development activities required for applying for and obtaining regulatory approval for our product candidates and, subsequently, preparing for potential commercialization of our product candidates. As of September 30, 2025 and December 31, 2024, we had $579,089 and $34,085 in cash and cash equivalents, respectively.

We expect to continue to incur significant expenses and operating losses for at least the next several years. Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on other research and development activities. We expect our expenses will increase substantially over time as we:

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continue our ongoing and planned development of APTN-101, including pre-clinical activity and our Phase 1 investigator-led trial for the treatment of glioblastoma multiforme ("GBM");

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build a portfolio of product candidates through development, or the acquisition or in-license of drugs, product candidates or technologies;

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initiate preclinical studies and clinical trials for APTN-101 for any additional indications we may pursue and for any additional product candidates that we may pursue in the future;

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hire clinical, regulatory and scientific personnel;

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add operational, financial and management information systems and personnel, including personnel to support our product development efforts; and

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incur additional legal, accounting, insurance and other expenses associated with operating as a public company.

The Macroeconomic Climate

The recent economic trends and political changes, including the rapidly changing U.S. tariff structure and disruptions, funding cuts and furloughs of personnel at the FDA, the SEC and other government and regulatory agencies and the ongoing federal government shutdown may materially adversely affect our business and corresponding financial position and cash flows. These changes and disruptions could hinder the ability of such government agencies to approve new or modified products for development in a timely manner or at all, or otherwise prevent those authorities from performing normal business functions on which the operation of our business may rely. Inflationary factors may impact our overhead costs and may adversely affect our operating results. Interest rates remain high and present a challenge impacting the global economy. The recent trends in the biotech capital markets toward fewer funding rounds, in part attributable to dampened investor sentiment as a result of market volatility and regulatory uncertainties, could present challenges in accessing additional capital, particularly for companies at similar stages of growth as us. Such factors could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Although we do not believe that these issues have materially impacted our financial position or results of operations to date, we may experience increases in the near future on our operating costs, including our labor, due to supply chain constraints, consequences associated with pandemics or public health situations, the Russia-Ukraine war, and other U.S. geopolitical issues, such as the tariff structure and regulatory agency disruptions, affecting other territories and employee availability and wage increases, all of which may result in additional stress on our working capital resources.

Components of Results of Operations

Research and Development Expenses

Research and development expenses consist primarily of fees paid to third-party service providers and, in 2025, personnel costs, other personnel-related compensation expenses and consulting fees. Research and development costs are expensed as incurred. We expense 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 using information and data provided to us by our vendors, collaborators and third-party service providers.

To date, substantially all our research and development expenses have been related to the licensing and preclinical development of APTN-101. As we progress, we expect our research and development costs to increase for additional preclinical and clinical development of APTN-101 in GBM.

The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and is subject to uncertainties and delays. As a result of the uncertainties discussed above, 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 our product candidates, if at all.

General and Administrative Expenses

General and administrative expenses include expenses for executive compensation and related costs, outside professional services and other general administrative expenses. Outside professional services consist of patent maintenance expenses, legal, accounting, insurance and audit services and other consulting fees.

We also expect to continue to incur expenses as a public company, including expenses related to compliance with SEC rules and regulations and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities, and other administrative and professional services.

Interest Expense

Interest expense primarily consists of contractual debt interest expense, the amortization of debt issuance costs and the amortization of discounts arising from bifurcated derivative liabilities.

Results of Operations

Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024

		For the Three Months Ended September 30,
		2025				2024				$ Change				% Change
Operating Expenses:
Research and development		$	778,664			$	682,546			$	96,118				14	%
General and administrative			896,948				312,203				584,745				187	%
Total Operating Expenses			1,675,612				994,749				680,863				68	%
Loss from Operations			(1,675,612	)			(994,749	)			(680,863	)			68	%
Other Expense:
Interest Expense			-				106,553				(106,553	)			-100	%
Loss on fair value of derivative liability			-				6,249				(6,249	)			100	%
Total Other Expenses			-				112,802
Net Loss		$	(1,675,612	)		$	(1,107,551	)		$	(568,061	)			51	%

Research and Development Expenses

Research and development expenses increased by $96,118, or 14%, for the three months ended September 30, 2025 compared to the corresponding period of 2024. During 2025, the increase in research and development expenses is primarily attributable to approximately $78,000 in stock-based compensation related to options granted during the period along with post-Merger compensation costs for research and development personnel of approximately $20,000. Costs incurred during the three months ended September 30, 2024 consist primarily of costs for the ongoing assay development and repeat-dose toxicology studies with our third-party service providers.

General and Administrative Expenses

General and administrative expenses increased by $584,745, or 187%, for the three months ended September, 2025 compared to the corresponding period of 2024. The increase was primarily related to increases in legal and accounting costs related to filings with the SEC of approximately $100,000, increases in post-Merger compensation costs for our executive officers of approximately $300,000 and increases in our directors fees, stock quotation fees, insurance costs, financial printing and transfer agent costs as a public company. Additionally, we recorded approximately $242,000 of costs related to the issuance of stock options granted during the period. Costs incurred during the three months ended September 30, 2024 consisted primarily of legal, accounting and consulting fees.

Other Expense

There was no interest expense for the three months ended September 30, 2025, a decrease of $106,553 compared to the corresponding period of 2024. The decrease in interest expense was related to the conversion of all outstanding debt in conjunction with the Merger and Offering in February 2025. For the three months ended September 30, 2024, we recorded interest expense, debt issuance costs amortization, discounts related to derivative liability amortization and loss on derivative liabilities for our then outstanding debt.

Nine Months Ended September 30, 2025 Compared With Nine Months Ended September 30, 2024

		For the Nine Months Ended September 30,
		2025				2024				$ Change				% Change
Operating Expenses:
Research and development		$	1,181,131			$	1,566,533			$	(385,402	)			-25	%
General and administrative			2,865,794				495,272				2,370,522				479	%
Total Operating Expenses			4,046,925				2,061,805				1,985,120				96	%
Loss from Operations			(4,046,925	)			(2,061,805	)			(1,985,120	)			96	%
Other Expense (Income):
Interest Expense			72,659				195,161				(122,502	)			-63	%
Loss on fair value of derivative liability			6,312				8,755				(2,443	)			-28	%
Gain on extinguishment of debt			(326,345	)			-				(326,345	)			100	%
Total Other Expenses			(247,374	)			203,916
Net Loss		$	(3,799,551	)		$	(2,265,721	)		$	(1,533,830	)			68	%

Research and Development Expenses

Research and development expenses decreased by $385,402, or 25%, for the nine months ended September 30, 2025 compared to the corresponding period of 2024. During 2025, the decrease in research and development expenses is primarily attributable to the completion of our repeat-dose toxicology study of APTN-101 that began in late 2023 along with costs related to our assay development program as it nears completion that resulted in a decrease of approximately $1.3 million. Offsetting those decreases were increased costs related to our development agreements with Duke University of approximately $489,000, an increase in clinical trial packaging costs of approximately $189,000, increases in post-Merger compensation costs for research and development personnel of approximately $54,000 and stock-based compensation for stock options granted during the period of approximately $78,000. Costs incurred during the nine months ended September 30, 2024 consist primarily of costs for the ongoing assay development and repeat-dose toxicology studies with our third-party service providers.

General and Administrative Expenses

General and administrative expenses increased by approximately $2.4 million, or 479%, for the nine months ended September 30, 2025 compared to the corresponding period of 2024. The increase was primarily related to increases in legal, accounting and consulting costs related to the Merger and filings with the SEC of approximately $500,000, increases in post-Merger compensation costs for our executive officers of approximately $700,000, stock-based compensation costs recorded in conjunction with options granted during the period of approximately $242,000 and increases in our directors fees, stock quotation fees, insurance costs, financial printing and transfer agent costs as a public company. Additionally, we recorded $250,000 of expense related to the issuance of stock to a third-party vendor. Costs incurred during the nine months ended September 30, 2024 consisted primarily of legal fees, accounting fees and consulting fees.

Interest Expense

Interest expense decreased $122,502, or 63%, for the nine months ended September 30, 2025 compared to the corresponding period of 2024. The decrease in interest expense was related to the conversion of the Bridge Notes in conjunction with the Merger and Offering in February 2025.

Other Income and Expense

As of September 30, 2024, we had recorded the accrued interest, debt issuance costs amortization, discounts related to derivative liability amortization and related costs of the 2024 Bridge Notes. Upon completion of the issuance of the 2024 Bridge Notes and based on the information then currently available, the recorded bifurcated derivative liability related to the embedded redemption feature of this debt was $333,333. In December 2024, we also recorded a bifurcated derivative liability related to the Exchange Notes executed by holders of the 2023 Bridge Notes of $194,537. At the date of the Merger, the carrying value of the derivative liability totaled $551,270, after giving effect to the change in fair value of $6,312 for the nine months ended September 30, 2025, compared to $8,755 for the nine months ended September 30, 2024. At the Initial Closing of the Offering, the $1,500,000 aggregate principal amount of Exchange Notes and 2024 Bridge Notes, plus accrued interest thereon, automatically converted into shares of our common stock. As a result of the conversion, we recorded a gain on debt extinguishment of $326,345.

Liquidity and Capital Resources

As set forth above, in 2023 and 2024, we raised bridge financing through the offer and sale of $1,500,000 of Bridge Notes. At the Initial Closing of the Offering, the $1,500,000 aggregate principal amount of outstanding Bridge Notes, plus accrued interest thereon, converted automatically into shares of our common stock at a conversion price of $3.30 per share, or 501,140 shares of common stock in the aggregate, and the holders of the 2023 Bridge Notes were issued, pursuant to existing agreements, warrants to purchase up to 132,570 shares of our common stock at an exercise price of $3.30 or $4.40 per share and with a term of five years. Further, as set forth above, we raised gross proceeds in our Offering of $6,161,505 through the issuance of Units.

Accordingly, as of September 30, 2025, we had cash and cash equivalents, working capital deficit and accumulated deficit of $579,089, $881,078 and $7,923,783, respectively. As of December 31, 2024, we had cash and cash equivalents, working capital deficit and accumulated deficit of $34,085, $4,293,992 and $4,124,232, respectively.

Our condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 were prepared on a going concern basis which contemplates we will be able to realize assets and discharge liabilities in the normal course of business. Based on our current operating plan, we anticipate that our existing cash balance will not be sufficient to fund our operating activities for the next twelve months and, as such, substantial doubt exists about our ability to support our operations and fund our obligations for next twelve months from the date of issuance of these condensed consolidated financial statements. We plan to continue to fund our losses from operations through cash on hand, as well as through future equity offerings and debt financings, or other third-party funding. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. Even if we raise additional capital, we may also be required to modify, delay or abandon some of our plans which could have a material adverse effect on our business, operating results and financial condition and our ability to achieve our intended business objectives. Any of these actions could materially harm our business, results of operations and future prospects.

The following is a summary of the Company's cash flows provided by (used in) operating and financing activities:

		For the Nine Months Ended September 30,
		2025				2024				$ Change				% Change
Net cash (used in) provided by:
Operating activities			(4,075,016	)			(761,936	)			(3,313,080	)			-435	%
Financing activities			4,620,020				872,490				3,747,530				430	%
Net increase in cash during the periods			545,004				110,554				434,450				393	%

Net Cash Used in Operating Activities

For the nine months ended September 30, 2025 and 2024, we used cash of $4,075,016 and $761,936, respectively, in operations. Our cash use for the nine months ended September 30, 2025 was primarily attributable to our net loss of $3,799,551, net non-cash expense of $303,815 and $579,280 of net cash used in changes in the levels of operating assets and liabilities including increases in prepaid assets and decreases in accrued expenses. Our cash use for the nine months ended September 30, 2024 was primarily attributable to our net loss of $2,265,721, adjusted for net non-cash expenses in the aggregate amount of $140,155 offset by $1,363,630 of cash provided by changes in the levels of operating assets and liabilities primarily attributable to increases in accounts payable and accrued expenses.

Net Cash Provided by Financing Activities

During the nine months ended September 30, 2025, cash provided by financing activities was $4,620,020, of which $6,161,505 was provided by offering proceeds related to the sale of Units in the Offering, offset by $1,266,485 of payments of equity issuance costs and $275,000 of repayment of notes payable to a related party. During the nine months ended September 30, 2024, cash provided by financing activities was $872,490 primarily related to the proceeds from the issuance of notes payable.

Funding Requirements

We use our cash primarily to fund research and development expenditures. We expect our research and development expenses to increase as we continue the development of APTN-101. As expected, we incurred an increase in general and administrative expenses in 2025 primarily related to supporting our increasing research and development activities and being a publicly held company with the resulting professional fees, personnel and regulatory compliance related costs. We expect to incur increasing operating losses for the foreseeable future as we continue the preclinical and clinical development of our product candidate. At this time, due to the inherently unpredictable nature of clinical development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval, and commercialize APTN-101 or any future product candidates, if at all. For the same reasons, we are also unable to predict when, if ever, we will generate revenue from product sales or whether, or when, if ever, we may achieve profitability. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations.

The timing and amount of our operating expenditures will depend largely on:

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the timing, progress and results of our ongoing and planned preclinical and clinical development activities for APTN-101 in GBM;

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the scope, progress, results and costs of preclinical development, testing and clinical trials of APTN-101 for any additional indications;

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the ability of our vendors and third-party service providers to accurately forecast expenses and deliver on expectations;

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the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and

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the extent to which we acquire or in-license other product candidates and technologies.

Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that restrict our operations or our ability to incur additional indebtedness, among other items. We may also consider entering into collaboration arrangements or selectively partnering for clinical development and commercialization. If we are not able to secure adequate additional funding in the near term, we may be forced to reduce spending, further extend payment terms with suppliers and vendors, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially and adversely affect our business, financial condition and results of operations.

Contractual Obligations and Commitments

Duke License

In January 2023, we entered into the Duke License for an exclusive, world-wide, sub-licensable license to precision medicine technology. As a component of the Duke License, we agreed to make payments based on clinical and commercial milestones and continuing royalty payments on any sales made after approval by regulatory authorities. These milestones include initiation of Phase II or Phase III clinical trials, submission of applications for market approval in multiple jurisdictions including the United States, European Union and Japan and the initiation of post-approval commercial sales in the same jurisdictions. Based on an assumption that all milestones related to the current development program are met during the course of the Duke License, these milestone payments would total approximately $11.7 million. As of September 30, 2025, we had not met any milestones as defined in the agreement and, accordingly, have recorded no expense or liability related to such payments.

We also agreed to pay royalties equal to low- to mid- single-digit percentages of annual net sales on a country-by-country and product-by-product basis subject to downward adjustment to low single-digit percentages of our net annual sales in the event there is no valid claim of a patent for the product, with minimum annual royalty levels established. We also must pay Duke percentages in the low tens, twenties and thirties of sublicensing fees after initiation of the first Phase III study, after initiation of the first Phase II study but prior to initiation of the first Phase III study, and prior to initiation of the first Phase II study, respectively, as set forth in the Duke License. We have not recorded and do not owe any royalties or sublicensing fees for the nine months ended September 30, 2025.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. We base our estimates on our limited historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

Significant estimates and assumptions reflected in the condensed consolidated financial statements relate to and include, but are not limited to, the fair value of derivative liabilities, the fair value of stock issued in exchange for services, accrued liabilities that are measured based on progress toward completion of research and development projects, and the grant date fair value of stock options granted to employees, consultants and directors, and the resulting share-based compensation expense, calculated using the Black-Scholes option-pricing model.

Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of these condensed consolidated financial statements change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes.