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

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 together with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this document, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Overview

We are a New York City based clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare diseases. We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established mechanisms in order to create new development opportunities. We prioritize creativity, integrity and tenacity to expedite our goal of bringing life-changing therapies to people with limited treatment options.

Our portfolio includes two development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent. This cell therapy is currently approved in Japan and Taiwan for LMs and multiple oncologic indications. We have secured worldwide rights to the asset excluding Japan and Taiwan and are exploring its use in oncology and rare disease indications. TARA-002 was developed from the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil® in Japan by Chugai Pharmaceutical). We are currently developing TARA-002 in NMIBC and in LMs.

We are also pursuing IV Choline Chloride, an investigational phospholipid substrate replacement therapy, for patients receiving PS which includes both nutrition and fluids. Choline is a known important substrate for phospholipids that are critical for healthy liver function and also plays an important role in modulating gene expression, cell membrane signaling, brain development, neurotransmission, muscle function and bone health. PS patients are unable to synthesize choline from enteral nutrition sources, and there are currently no available PS formulations containing choline. See "Item 1. Business" for additional information regarding our various clinical trial programs.

We have devoted substantial efforts to the development of our programs and do not have any approved products and, to date, have not generated any revenues from product sales. Neither TARA-002 nor IV Choline Chloride have been approved by the FDA or other comparable regulatory authorities for use for any indications. We do not expect to generate revenues in the near-term, and it is possible we may never generate revenues in the future. To finance our current strategic plans, including the conduct of ongoing and future clinical trials and further research and development costs, we will need to raise additional capital. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources" for additional information about our liquidity and capital resource needs.

Since inception, we have incurred significant operating losses. As of December 31, 2025, we had an accumulated deficit of approximately $302.4 million. We expect to continue to incur significant expenses and increasing operating losses for at least the next few years as we continue our development of, and seek marketing approvals for, our product candidates, prepare for and begin the commercialization of any approved products and add infrastructure and personnel to support our product development efforts and operations as a public company in the U.S.

As a clinical-stage company, our expenses and results of operations are likely to fluctuate significantly from quarter-to-quarter and year-to-year. We believe that our period-to-period comparisons of our results of operations should not be relied upon as indicative of our future performance.

As of December 31, 2025, we had approximately $197.9 million in unrestricted cash and cash equivalents, and marketable debt securities.

Financial Overview

Research and Development

Research and development expenses consist primarily of costs incurred for the development of our current and potential future product candidates, which include personnel-related expenses, including salaries, benefits, travel and stock-based compensation expense, external expenses incurred under agreements with CROs or CDMOs, the cost of acquiring, developing and manufacturing clinical trial materials, clinical and non-clinical related costs and costs associated with regulatory operations and facilities, which includes depreciation and other expenses such as rent, maintenance and other supplies.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, travel expenses and stock-based compensation, for executive management and other administrative personnel. General and administrative expenses also include professional fees for legal, investor relations, consulting, auditing and accounting services, business and market development activities, as well as costs related to human resources, information technology and facilities. In addition, these expenses include costs associated with operating as a public company, such as expenses related to our Nasdaq listing and SEC compliance and director and officer liability insurance premiums.

Other Income (Expense), net

Other income (expense), net consists of interest and investment income (expense) and other income (expense). Interest and investment income (expense) consists of interest and dividend income on our cash and cash equivalents and marketable debt securities and amortization of premiums and/or accretion of discounts. Other income (expense) may also include non-operating items, such as refundable tax credits and other miscellaneous income not related to our core operating activities.

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from those estimates or assumptions.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements and related notes appearing elsewhere in this Annual Report on this Form 10-K, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Our critical accounting policy is the accounting for research and development prepaid and accrued expenses.

Research and Development Prepaid and Accrued Expenses

We record accruals for estimated costs of research, preclinical, non-clinical, clinical and manufacturing development within accrued expenses which are significant components of research and development expenses. A substantial portion of our ongoing research and development activities are conducted by third-party service providers. We accrue costs incurred under these third-party arrangements based on estimates of actual work completed in accordance with the respective agreements. We determine the estimated costs to accrue through discussions with internal personnel and our external service providers as to the percentage of completion of the services and the agreed-upon fees to be paid for such services. Payments made to third parties under these arrangements in advance of performance of the related services are recorded as prepaid expenses until the services are rendered.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations (in thousands):

		For the Years Ended December 31,								Period -to- Period
		2025				2024				Change
Operating expenses:
Research and development		$	42,633			$	31,704			$	10,929
General and administrative			21,916				17,450				4,466
Total operating expenses			64,549				49,154				15,395
Income (Loss) from operations			(64,549	)			(49,154	)			(15,395	)
Other income (expense), net:
Interest and investment income (expense)			6,380				4,171				2,209
Other income (expense)			730				387				343
Other income (expense), net			7,110				4,558				2,552
Net income (loss)		$	(57,439	)		$	(44,596	)		$	(12,843	)

Research and development expenses

The following table summarizes our research and development expenses (in thousands):

		For the Years Ended December 31,								Period -to- Period
		2025				2024				Change
Direct expenses by product candidate:
TARA-002 in NMIBC		$	18,377			$	12,306			$	6,071
TARA-002 in LMs			2,606				2,558				48
IV Choline Chloride			8,501				4,555				3,946
Total direct expenses by product candidate			29,484				19,419				10,065
Indirect research and development expenses			13,149				12,285				864
Total		$	42,633			$	31,704			$	10,929

Research and development expenses were $42.6 million for the year ended December 31, 2025, which represented an increase of approximately $10.9 million as compared to the year ended December 31, 2024. This increase was primarily due to a $10.1 million increase in direct expenses for our product candidates and a $0.9 million increase in indirect expenses. The increase in direct expenses was primarily due to site expansion and enrollment efforts for the ADVANCED-2 trial for NMIBC, start-up costs related to the ADVANCED-3 trial for NMIBC, as well as start-up and enrollment costs related to the THRIVE-3 trial for IV Choline Chloride. The increase in indirect expenses was primarily due to a $2.0 million increase in personnel-related expenses offset by a decrease of $1.1 million in research and development expenses not directly attributable to one specific product candidate.

General and administrative expenses

The following table summarizes our general and administrative expenses (in thousands):

		For the Years Ended December 31,								Period -to- Period
		2025				2024				Change
Personnel-related expenses, including stock-based compensation		$	11,207			$	8,867			$	2,340
Other general and administrative expenses			10,709				8,583				2,126
Total		$	21,916			$	17,450			$	4,466

General and administrative expenses were $21.9 million for the year ended December 31, 2025, which represented an increase of approximately $4.5 million as compared to the year ended December 31, 2024. This increase was primarily due to an increase of $2.3 million in personnel-related expenses, as well as an increase of $2.1 million in other general and administrative expenses primarily related to professional and consulting services.

Other income (expense), net

Other income (expense), net was $7.1 million for the year ended December 31, 2025, which represented an increase of approximately $2.6 million as compared to the year ended December 31, 2024. The $2.2 million increase in interest and investment income (expense) is due primarily to investment returns on a higher invested balance. The $0.3 million increase in other income (expense) is due to an increase in refundable tax credits received in the year ended December 31, 2025.

Liquidity and Capital Resources

Overview

As of December 31, 2025 and 2024, our unrestricted cash and cash equivalents, and marketable debt securities were $197.9 million and $170.3 million, respectively. We have not generated revenues since our inception and have incurred net losses of approximately $57.4 million and $44.6 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had working capital of approximately $148.6 million and stockholder's equity of approximately $196.4 million. During the year ended December 31, 2025, cash flows used in operating activities were approximately $56.4 million, consisting primarily of a net loss of approximately $57.4 million, which includes non-cash activities of approximately $4.0 million, inclusive of $3.8 million in stock-based compensation expense, as well as cash used for changes in operating assets and liabilities of $2.9 million. Since inception, we have met our liquidity requirements principally through the sale of our common stock, preferred stock and pre-funded warrants in private placements of securities and public offerings of securities. In addition, we may receive proceeds upon the exercise of the common warrants issued in the April 2024 private placement described below.

Liquidity

On November 3, 2023, we filed a shelf registration statement on Form S-3, or the Shelf Registration Statement, which became effective in November 2023. The Shelf Registration Statement permits the offering, issuance and sale by us of up to a maximum aggregate offering price of $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination. In December 2024, we sold and issued approximately $102.8 million in gross proceeds of common stock and pre-funded warrants in a public offering, or the December 2024 Public Offering, under the Shelf Registration Statement. The net proceeds were approximately $95.9 million. In December 2025, we sold and issued approximately $86.3 million in gross proceeds of common stock in a public offering, or the December 2025 Public Offering, under the Shelf Registration Statement. The net proceeds were approximately $80.4 million.

In April 2024, the Company entered into a private placement transaction, or the April 2024 Private Placement, whereby the Company sold and issued common stock, warrants and in, in some circumstances, pre-funded warrants to certain purchasers. At the close of the April 2024 Private Placement, the Company received approximately $45.0 million in gross proceeds. The net proceeds were approximately $42.0 million. Additionally, as part of the April 2024 Private Placement, purchasers were offered common warrants. Common warrants exercised as of December 31, 2025 have resulted in $3.8 million in proceeds and, if exercised, proceeds from the remaining common warrants as of December 31, 2025 could result in an additional $53.1 million.

We are in the business of developing biopharmaceuticals and have no current or near-term revenues. We have incurred substantial clinical and other costs in our drug development efforts. We will need to raise additional capital in order to fully realize management's plans.

We believe that our current financial resources are sufficient to satisfy our estimated liquidity needs for at least 12 months from the date of issuance of our consolidated financial statements included elsewhere in this Annual Report on this Form 10-K.

As a result of volatility in the capital markets, economic conditions, general global economic uncertainty, political change, global pandemics and other factors, we do not know whether additional capital will be available when needed, or that, if available, we will be able to obtain additional capital on reasonable terms. If we are unable to raise additional capital due to volatile global financial markets, general economic uncertainty or other factors, we may need to curtail planned development activities. Despite recent moderation, the sustained elevated interest rates in recent years have had, and may continue to have, a negative effect on market prices for common stock of public companies, especially those in the biotech industry and those that have no current or near-term revenue. Further, a recession or market correction, supply chain disruptions and/or inflation could materially affect our business and the value of our common stock.

Cash Flows

The following table summarizes our sources and uses of cash (in thousands):

		For the Years Ended December 31,								Period -to- Period
		2025				2024				Change
Net cash provided by (used in) operating activities		$	(56,365	)		$	(35,808	)		$	(20,557	)
Net cash provided by (used in) investing activities			(139,491	)			19,155				(158,646	)
Net cash provided by (used in) financing activities			82,715				139,865				(57,150	)
Net increase (decrease) in cash and cash equivalents, and restricted cash		$	(113,141	)		$	123,212				(236,353	)

Comparison of the Years Ended December 31, 2025 and 2024

Net cash provided by (used in) operating activities was approximately $(56.4) million for the year ended December 31, 2025 compared to approximately $(35.8) million for the year ended December 31, 2024. The increase of approximately $20.6 million in cash used in operating activities was primarily driven by an increase in net loss of $12.8 million, an increase in cash used for operating assets and liabilities, primarily related to changes in prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities, resulting from the timing of payments to our service providers of $6.9 million, and by a decrease in non-cash items, consisting principally of accretion of discount on marketable debt securities and stock-based compensation expense of $0.8 million.

Net cash provided by (used in) investing activities was approximately $(139.5) million for the year ended December 31, 2025 compared to approximately $19.2 million for the year ended December 31, 2024. The increase in cash used of $158.7 million resulted primarily from an increase in purchases of marketable debt securities of $175.2 million offset slightly by an increase in proceeds from marketable debt securities matured and redeemed of $16.6 million.

Net cash provided by (used in) financing activities was $82.7 million for the year ended December 31, 2025 compared to $139.9 million for the year ended December 31, 2024. The decrease of approximately $57.2 million resulted primarily from less capital being raised from public and private offerings in the year ended December 31, 2025 as compared to the year ended December 31, 2024 of $53.1 million. During the year ended December 31, 2025, cash provided by financing activities related to public offerings was $82.9 million as compared to December 31, 2024 where cash provided by financing activities related to private and public offerings was $136.0 million. Additionally, during the year ended December 31, 2024 cash provided by financing activities related to the exercise of common warrants was $3.8 million.

Contractual and Other Obligations

Operating lease obligations

Our operating lease obligations primarily consist of lease payments on our corporate headquarters in New York, New York, as well as lease payments for our development laboratory, a manufacturing facility and an additional manufacturing space, all located in North America which are described in further detail in Note 9 of our consolidated financial statements included in this Annual Report on Form 10-K. Future contractual payments on operating lease obligations due within one year of December 31, 2025 are $1.4 million, and future contractual payments on operating lease obligations due greater than one year from December 31, 2025 are $2.2 million.

Other obligations

From time to time, we enter into certain types of contracts that contingently require us to indemnify parties against third-party claims, supply agreements, and agreements with directors and officers. The terms of such obligations vary by contract and in most instances a maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted, thus no liabilities have been recorded for these obligations on our consolidated balance sheet for the periods presented.

We enter into contracts in the normal course of business with CROs and clinical sites for the conduct of clinical trials, non-clinical research studies, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts generally provide for termination on notice, and therefore are cancelable contracts.

Certain of these agreements require us to pay milestones to such third parties upon achievement of certain development, regulatory or commercial milestones as further described in Note 10 of our consolidated financial statements included in this Annual Report on Form 10-K. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones, which may not be achieved.

We also have obligations to make future payments to third parties that become due and payable on the achievement of certain milestones, including future payments to third parties with whom we have entered into research, development and commercialization agreements. We have not included these commitments on our consolidated balance sheet for the periods presented because the achievement and timing of these milestones is not fixed and determinable.