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

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes included in the final prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended. This discussion and analysis contains forward-looking statements that involve risks and uncertainties, including statements regarding our plans, objectives, expectations, intentions and projections. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described under "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of future results.

Overview

We are a clinical-stage life science and drug development company focused on the development of novel therapeutics for the treatment of serious diseases associated with dysfunctions in human metabolism and high unmet medical needs, including post-bariatric hypoglycemia ("PBH") and gastroparesis. Our company was founded in 2021 by experienced leaders that have an in-depth understanding of drug development in the metabolic disease space. Our primary objective is to advance our lead investigational product candidate, mizagliflozin, a selective sodium-dependent glucose transporter 1 ("SGLT1") inhibitor in development for disorders related to glucose absorption and postprandial dysregulation, through clinical development and towards regulatory approval.

Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, and conducting research and development activities, including nonclinical and clinical testing of mizagliflozin. We have no products approved for commercial sale and have not generated any revenue from product sales. We are advancing a pipeline of novel therapeutic product candidates with established endpoints for regulatory approval, significant unmet medical needs and large potential market opportunities.

Since our inception, we have devoted substantially all of our resources to the development of our mizagliflozin product candidate for PBH, gastroparesis, and GIP-dependent Cushing's Syndrome and VGX-2857 for weight maintenance, building our intellectual property portfolio, organizing and staffing our company, business planning, raising capital, and providing general and administrative support for these operations.

We have historically funded our operations primarily through the private sales of our Series A convertible preferred stock and convertible promissory notes, which generated approximately $11.5 million in aggregate gross proceeds, and more recently, through our initial public offering ("IPO"). In August 2026, we completed our IPO, generating aggregate net proceeds of approximately $84.4 million, after deducting underwriting discounts, commissions, and offering expenses payable by us.

We have incurred significant operating losses since inception and expect to continue to incur substantial losses for the foreseeable future. Our ability to generate revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were approximately $4.9 million and $284 thousand for the three months ended September 30, 2026 and 2025, respectively, and approximately $5.8 million and $936 thousand for the nine months ended September 30, 2026 and 2025, respectively. Our net losses were approximately $1.4 million and $2.2 million for the years ended December 31, 2025 and 2024, respectively. We had an accumulated deficit of approximately $16.6 million and $10.8 million as of September 30, 2026 and December 31, 2025, respectively.

We anticipate that our expenses and operating losses will increase substantially for the foreseeable future as we:

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advance our current research activities and further develop our pipeline;

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advance the development of our mizagliflozin product candidates for the treatment of PBH, gastroparesis, and GIP-dependent Cushing's Syndrome;

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advance the development of VGX-2857 for weight maintenance;

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discover and develop future product candidates we may identify;

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seek regulatory approval for any product candidates for which we successfully complete clinical trials;

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establish either internally or through contract manufacturing organizations manufacturing capacity capabilities to supply our clinical trials in our pipeline and eventually for commercialization;

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transition from a company with a research focus to a company capable of supporting commercial activities, including establishing sales, marketing, and distribution infrastructure;

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attract, hire and retain additional research and development, clinical, commercial, general and administrative personnel;

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develop, maintain, expand, protect and enforce our intellectual property portfolio;

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defend against any claims by third parties that we have infringed, misappropriated or otherwise violated any intellectual property of any such third party;

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acquire or in-license product candidates, intellectual property and technologies;

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confirm, maintain or obtain freedom to operate for any of our owned or licensed technologies and product candidates;

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establish and maintain collaborations;

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add operational, financial and management information systems and personnel; or

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incur additional legal, audit, accounting, compliance, insurance, investor relations and other expenses to operate as a public company that we did not incur as a private company.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more product candidates. If we obtain regulatory approval for any product candidate and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, manufacturing, marketing, and distribution. As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of our platform or delay our pursuit of potential in-licenses or acquisitions.

Components of our results of operations

Operating expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and development expenses

The largest component of our operating expenses since our inception has been research and development activities. Research and development expenses are expensed as incurred and consist, or may in the future consist, primarily of:

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external research and development expenses incurred under agreements with clinical sites, consultants and other third parties to conduct our clinical trials;

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costs related to chemistry, manufacturing and controls for our product candidates for preclinical studies and clinical trials;

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license fees, including any milestone-based payments;

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compensation and benefits, including stock-based compensation expense, for research and development personnel;

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the costs of acquiring research and development supplies and services;

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manufacturing process development costs;

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costs associated with regulatory activities;

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costs incurred in development, prosecution and maintenance of intellectual property; and

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other external services and consulting costs.

While we track our external research and development expenses on a program-specific basis, we do not allocate our internal costs associated with our discovery and development efforts because these costs are deployed across multiple programs and, as such, are not separately classified.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities to advance our programs and 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 product candidates is highly uncertain. As a result, expenses may vary significantly based on factors such as:

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the timing and progress of research and development, preclinical and clinical development activities;

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the number, scope and duration of clinical trials required for regulatory approval of our existing or future product candidates;

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the costs, timing, and outcome of regulatory review of any of our existing or future product candidates by the U.S. Food and Drug Administration ("FDA") and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more preclinical studies or clinical trials than those that we currently expect or for such authorities to change their requirements on studies that had previously been agreed to;

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the costs of manufacturing clinical and commercial supplies of our existing or future product candidates;

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our ability to maintain our existing licensing arrangements and establish new, strategic collaborations, licensing or other arrangements, and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

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our implementation of various computerized informational systems and efforts to enhance operational systems;

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expenses incurred to attract, hire and retain skilled research and development personnel;

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per subject clinical trial costs;

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the number of sites included in our clinical trials;

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the countries in which our clinical trials are conducted;

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the length of time required to enroll subjects and initiate our clinical trials;

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the number of subject screen failures in clinical trials;

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the number of subjects that participate in our clinical trials;

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the drop-out and discontinuation rate of subjects;

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potential additional safety monitoring requested by regulatory agencies;

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the duration of subject participation in our clinical trials and follow-up, including the duration of open label extensions;

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the timing of license agreement milestone payments related to development, regulatory and commercial events;

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delays or difficulties associated with sourcing raw materials for manufacturing;

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delays or difficulties associated with manufacturing active pharmaceutical ingredients, clinical trial material, or drug product;

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mitigation or responses to potential health authority questions and/or inspections;

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the degree to which we obtain, maintain, defend and enforce our intellectual property rights; and

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the extent to which we establish collaboration, licensing or similar arrangements and the performance of any related third parties.

A change in the outcome of any of these variables with respect to the development of any of our existing or future product candidates could significantly change the costs and timing associated with the development of that product candidate.

General and administrative expenses

General and administrative expenses consist primarily of compensation and benefits, including stock-based compensation expense, for general and administrative personnel; other expenses for outside professional services, including legal fees relating to corporate and other matters; professional fees for accounting, auditing, consulting and tax services; insurance costs; administrative travel expenses; website development costs; marketing and public relations costs; and facilities and information technology costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support continued growth of our research and development activities. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs as well as investor and public relations expenses associated with being a public company.

Other income (expense)

Expenses from convertible promissory notes and warrants

Other income (expense) consists primarily of changes in the fair value of our warrant liabilities and related party convertible promissory notes. Prior to the completion of our IPO in August 2026, these instruments were classified as liabilities and remeasured at fair value on a recurring basis, with changes in fair value recognized in earnings each reporting period. During the three and nine months ended September 30, 2026, the Company recognized significant non-cash losses associated with the remeasurement of these instruments, including a remeasurement immediately prior to their conversion and settlement in connection with the IPO.

In August 2026, upon the closing of the IPO, all outstanding related party convertible promissory notes automatically converted into shares of common stock, and all warrants were settled through a cashless exercise into common stock. Following these transactions, the related liabilities were reclassified to stockholders' equity and no warrant liabilities or convertible promissory note liabilities remained outstanding as of September 30, 2026. As a result, no further changes in fair value related to these instruments will be recognized in future periods.

Interest income

Interest income is comprised of interest income earned on our cash and cash equivalents as well as short-term marketable securities.

Results of operations

Comparison of the three months ended September 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended September 30, 2026, and 2025.

		Three Months Ended September 30,								Change
		2026				2025				$
Operating expenses:
Research and development		$	1,079,000				124,813				954,187
General and administrative			703,736				177,664				526,072
Total operating expenses			1,782,736				302,477				1,480,259
Other (expense) income
Change in fair value of warrant liability			(3,436,669	)			16,984				(3,453,653	)
Change in fair value of convertible promissory note payable, related party			(26,777	)			-				(26,777	)
Interest income			338,579				1,086				337,493
Total other (expense) income, net			(3,124,867	)			18,070				(3,142,937	)
Net loss		$	(4,907,603	)			(284,407	)			(4,623,196	)

Research and development expenses

The following table summarizes our research and development expenses for the periods indicated:

		Three Months Ended September 30, 2026				Three Months Ended September 30, 2025				Change $
Direct R&D Program Expenses (PBH)		$	714,422			$	-			$	714,422
Intellectual Property Legal Expenses		$	46,398			$	6,370			$	40,028
R&D Salaries		$	212,379			$	118,101			$	94,278
R&D Bonuses		$	90,000			$	-			$	90,000
Other R&D expense		$	15,801			$	342			$	15,459
Total		$	1,079,000			$	124,813			$	954,187

Research and development expenses rose by $954 thousand, from $125 thousand in the three months ended September 30, 2025, to $1.1 million in the three months ended September 30, 2026, as discussed below.

The increase in research and development expenses for the three months ended September 30, 2026 was primarily attributable to increased spending on our PBH development program. Direct research and development program expenses related to PBH increased by approximately $714 thousand, primarily due to the start up costs for the EMERGE Phase 2b study and an increase of $184 thousand in R&D personnel-related expenses due to an increase in our headcount in the R&D department following the IPO.

General and administrative expenses

General and administrative expenses increased by $526 thousand, from $178 thousand for the three months ended September 30, 2025, to $704 thousand for the three months ended September 30, 2026. The increase was primarily attributable to an increase of approximately $237 thousand in personnel-related expenses due to increased headcount in the G&A department following the IPO and an increase of $214 thousand in increased costs as a public company such as insurance, directors' fees, legal and listing fees.

Other income (expense)

Change in fair value of warrant liability

The warrant liability was remeasured to approximately $3.4 million using a market approach based on the fair value of the Company's common stock immediately prior to the cashless exercise. Management determined the fair value of the Company's common stock to be $13.00 per share, based on the closing market price on the trading day immediately preceding the exercise date. The resulting increase in fair value was recognized as a non-cash loss in the Condensed Statements of Operations.

Immediately prior to the closing of the IPO, all outstanding liability-classified warrants were cashlessly exercised for 264,904 shares of common stock. Upon exercise, the warrant liability was settled in full and reclassified to stockholders' equity. As a result, the warrant liability balance was $0 as of September 30, 2026, and no future changes in fair value associated with these warrants will be recognized.

The change in the fair value of our warrant liability for the three months ended September 30, 2025 was a decrease of approximately $17 thousand. This change resulted from the periodic mark-to-market remeasurement of the warrant liability using Level 3 unobservable inputs.

Additional information regarding the valuation methodology, assumptions and fair value measurements related to the warrant liability is included in Note 2, Fair Value Measurements.

Change in fair value of convertible promissory notes payable, related party

For the three months ended September 30, 2026, we recognized a loss related to the final fair value remeasurement of our related party convertible promissory notes immediately prior to their conversion in connection with the IPO.

Immediately prior to the closing of our IPO, the convertible promissory notes were remeasured to an aggregate fair value of approximately $894 thousand. The increase in fair value from the June 30, 2026 carrying amount was recognized in the Condensed Statements of Operations as change in fair value of convertible promissory notes.

In August 2026, in connection with the closing of our IPO, all outstanding principal under the related party convertible promissory notes automatically converted into 64,102 shares of common stock at a conversion price of $11.70 per share, which represented 90% of the public offering price of $13.00 per share. Accrued interest of approximately $61 thousand was paid in cash.

Upon conversion, the carrying value of the convertible promissory notes was reclassified to stockholders' equity. Following the conversion of the principal balance and settlement of accrued interest, the carrying amount of the related party convertible promissory notes was reduced to $0 as of August 13, 2026. Accordingly, no further changes in fair value associated with these notes will be recognized in future periods.

Additional information regarding the valuation methodology and fair value measurements of the convertible promissory notes is included in Note 5 to our unaudited condensed financial statements.

Interest income

Interest income, which includes interest income on our cash and cash equivalents and short term marketable securities, increased by $338 thousand, from $1 thousand for the three months ended September 30, 2025, to $339 thousand for the three months ended September 30, 2026, due to increases in our available cash and cash equivalents and short term marketable securities from the net proceeds of the IPO. We did not have any material interest expense during the three months ended September 30, 2025, or 2026.

Comparison of the nine months ended September 30, 2026 and 2025

The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025:

		Nine Months Ended September 30,								Change
		2026				2025				$
Operating expenses:
Research and development		$	1,473,697				430,517				1,043,180
General and administrative			1,127,576				554,818				572,758
Total operating expenses			2,601,273				985,335				1,615,938
Other income (expense)
Change in fair value of warrant liability			(3,426,761	)			43,876				(3,470,637	)
Change in fair value of convertible promissory notes payable, related party			(78,177	)			-				(78,177	)
Interest income			338,726				5,636				333,090
Total other income (expense), net			(3,166,212	)			49,512				(3,215,724	)
Net loss		$	(5,767,485	)			(935,823	)			(4,831,662	)

Research and development expenses

The following table summarizes our research and development expenses for the periods indicated:

		Nine Months Ended September 30, 2026				Nine Months Ended September 30, 2025				Change $
Direct R&D Program Expenses (PBH)		$	790,354			$	-			$	790,354
Intellectual Property Legal Expenses		$	126,293			$	26,791			$	99,502
R&D Salaries		$	445,105			$	374,885			$	70,220
R&D Bonuses		$	90,000			$	-			$	90,000
Other R&D expense		$	21,945			$	28,841			$	(6,896	)
Total		$	1,473,697			$	430,517			$	1,043,180

Research and development expenses rose by $1.0 million, from $431 thousand in the nine months ended September 30, 2025, to $1.5 million in the nine months ended September 30, 2026, as discussed below.

The increase in research and development expenses for the nine months ended September 30, 2026 was primarily attributable to increased spending on our PBH development program. Direct research and development program expenses related to PBH increased by approximately $790 thousand, primarily due to startup costs and clinical trial materials for the EMERGE Phase 2b study. Personnel-related costs increased by approximately $160 thousand from $375 thousand for the nine months ended September 30, 2025 to $535 thousand for the nine months ended September 30, 2026 due to an increase in headcount following the IPO in August 2026.

Additionally, intellectual property legal expenses increased by approximately $100 thousand.

General and administrative expenses

General and administrative expenses increased by $573 thousand to $1.1 million for the nine months ended September 30, 2026, from $555 thousand for the nine months ended September 30, 2025. The increase was primarily attributable to personnel-related costs of $228 thousand due to an increase in headcount, an increase of approximately $122 thousand in professional fees for accounting, tax, audit, and valuation services, and an increase of $97 thousand in directors' and officers' (D&O) insurance expenses following the completion of our IPO in August 2026.

Other income (expense)

Change in fair value of warrant liability

The change in fair value of our warrant liability was an expense of approximately $3.4 million for the nine months ended September 30, 2026. This expense resulted from the final remeasurement of the liability-classified warrants immediately prior to their automatic cashless exercise in connection with the closing of our IPO in August 2026. The warrant liability was remeasured to a fair value of approximately $3.4 million using a market approach based on the $13.00 per share closing market price of the Company's common stock on the trading day immediately preceding the exercise date.

In August 2026, immediately prior to the closing of our IPO, all outstanding liability-classified warrants were cashlessly exercised for 264,904 shares of common stock. Upon exercise, the warrant liability was settled in full and reclassified to stockholders' equity, resulting in a carrying balance of $0 as of September 30, 2026.

The change in fair value of our warrant liability was a decrease of approximately $44 thousand for the nine months ended September 30, 2025. The change resulted from the periodic mark-to-market remeasurement of the warrant liability using Level 3 unobservable inputs.

Additional information regarding the valuation methodology, significant assumptions and fair value measurements related to the warrant liability is included in Note 2 to our unaudited condensed financial statements.

Change in fair value of convertible promissory notes payable, related party

For the nine months ended September 30, 2026, the carrying value of our related party convertible promissory notes was remeasured to fair value at each reporting period through the date of settlement, with changes in fair value recognized in earnings. Immediately prior to the closing of our IPO in August 2026, the aggregate fair value of the convertible promissory notes was approximately $894 thousand.

In August 2026, immediately prior to the closing of our IPO, the outstanding principal amount of the related party convertible promissory notes automatically converted into 64,102 shares of common stock at a conversion price of $11.70 per share, which represented 90% of the public offering price of $13.00 per share. Accrued interest of approximately $61 thousand was paid in cash upon settlement.

The increase in the fair value of the convertible promissory notes immediately prior to settlement was recognized in the Condensed Statements of Operations as a change in fair value of convertible promissory notes. Upon conversion, the carrying value of the notes was reclassified to stockholders' equity. Following the conversion of principal and settlement of accrued interest, the carrying amount of the related party convertible promissory notes was reduced to $0 as of August 13, 2026.

There was no change in the fair value of related party convertible promissory notes for the nine months ended September 30, 2025, as the notes were issued in December 2025.

Additional information regarding the valuation methodology, significant assumptions and fair value measurements related to the convertible promissory notes is included in Note 5 to our unaudited condensed financial statements.

Interest income

Interest income, which includes interest income on our cash and cash equivalents and marketable securities, increased by $333 thousand, from $6 thousand for the nine months ended September 30, 2025, to $339 thousand for the nine months ended September 30, 2026, due to increases in our available cash, cash equivalents and marketable securities from the net proceeds of the IPO. We did not have any material interest expense during the nine months ended September 30, 2026, or 2025.

Liquidity and capital resources

Sources of liquidity

Since our inception, we have incurred significant operating losses and negative cash flows from operations, and we expect to continue to incur significant operating losses and negative cash flows from operations for the foreseeable future. Prior to our IPO, we funded our operations primarily through the private sales of our Series A convertible preferred stock and convertible promissory notes, which generated approximately $11.5 million in aggregate gross proceeds.

In August 2026, we completed our IPO, in which we issued and sold an aggregate of 7,187,500 shares of our common stock (including 937,500 shares issued pursuant to the full exercise of the underwriter's over-allotment option) at a public offering price of $13.00 per share. The IPO generated approximately $84.4 million in net proceeds to us, after deducting underwriting discounts, commissions, and offering expenses payable by us.

As of September 30, 2026, and December 31, 2025, we had approximately $82.1 million and $601 thousand, respectively, of cash, cash equivalents, and marketable securities. We have not generated any revenue from product sales to date and do not expect to generate revenue from product sales in the foreseeable future, if at all, as our product candidates remain in clinical and preclinical development.

Future funding requirements

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the development of our product candidates and operate as a public company. The timing and amount of our operating expenditures will depend largely on:

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the timing and progress of research and development, preclinical and clinical development activities;

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the number, scope and duration of clinical trials required for regulatory approval of our existing or future product candidates;

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the costs, timing, and outcome of regulatory review of any of our existing or future product candidates by the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more preclinical studies or clinical trials than those that we currently expect or for such authorities to change their requirements on studies that had previously been agreed to;

•

the costs of manufacturing clinical and commercial supplies of our existing or future product candidates;

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the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our existing or future product candidates for which we receive regulatory approval;

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the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights;

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our ability to enter into strategic collaborations, licensing or other arrangements, and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement;

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any product liability or other lawsuits related to our existing or future product candidates;

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our implementation of various computerized informational systems and efforts to enhance operational systems;

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expenses incurred to attract, hire and retain skilled personnel;

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the costs of operating as a public company;

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our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payers;

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the extent to which we acquire or invest in businesses, products, and technologies;

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the effect of competing technological and market developments; and

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the impact of other factors, including inflation, economic uncertainty and geopolitical tensions, which may exacerbate the magnitude of the factors discussed above.

We had $82.1 million and $601 thousand of cash, cash equivalents, and marketable securities as of September 30, 2026 and December 31, 2025, respectively.

Based on our current operating plan, we estimate that our existing cash and cash equivalents and marketable securities will be sufficient to fund our projected operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interest for existing investors may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect existing investors' rights as a stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Cash flows

The following table summarizes our sources and uses of cash for the periods presented (in thousands):

		Nine Months ended September 30,
		2026				2025
Net cash used in operating activities		$	(2,915	)			(729	)
Net cash used in investing activities			(76,989	)			-
Net cash provided by financing activities			84,430				-
Net increase (decrease) in cash and cash equivalents		$	4,526				(729	)

Cash flows from operating activities

Net cash used in operating activities for the nine months ended September 30, 2026 was approximately $2.9 million. This was primarily driven by our net loss of approximately $5.8 million, non-cash adjustments of approximately $3.3 million, and a net use of cash from changes in operating assets and liabilities of approximately $429 thousand. Non-cash adjustments primarily consisted of a change in the fair value of warrant liabilities of $3.4 million, a change in the fair value of the convertible promissory note of $78 thousand, and stock-based compensation expense of $5 thousand, partially offset by accretion of discount on marketable securities of $228 thousand. The net use of cash from changes in operating assets and liabilities was primarily due to an increase in prepaid expenses and other current assets of $483 thousand, a decrease in accrued expenses of $391 thousand, and interest paid on the convertible note payable of $61 thousand partially offset by an increase in accounts payable of $506 thousand.

Net cash used in operating activities for the nine months ended September 30, 2025 was approximately $729 thousand. This was primarily due to our net loss of approximately $936 thousand, adjusted for net non-cash adjustments of approximately $36 thousand and changes in operating assets and liabilities of approximately $243 thousand. Non-cash adjustments primarily consisted of a decrease in the fair value of our warrant liability of approximately $44 thousand, partially offset by stock-based compensation expense of approximately $8 thousand.

Cash flows from investing activities

Net cash used in investing activities was approximately $77 million for the nine months ended September 30, 2026, which consisted entirely of purchases of marketable securities following the completion of our IPO. There were no cash flows from investing activities for the nine months ended September 30, 2025.

Cash flows from financing activities

Net cash provided by financing activities for the nine months ended September 30, 2026 was approximately $84.4 million, which consisted of net proceeds from our August 2026 IPO, after deducting underwriting discounts, commissions, and offering costs paid during the period. There were no cash flows from financing activities for the nine months ended September 30, 2025.

Contractual obligations and commitments

Leases

We have no lease obligations.

Kissei License Agreement and other agreements

In December 2021, we and Kissei Pharmaceutical Co., Ltd. ("Kissei") entered into an exclusive license agreement (the "Kissei License Agreement") pursuant to which we have payment obligations that are contingent upon future events, such as the achievement of specified development and regulatory milestones, and in some cases, we are required to make royalty payments in connection with the sales of products developed under the agreement. Although we could be required to make milestone payments under the Kissei License Agreement, we are unable to estimate the timing or likelihood of achieving the milestones or realizing sales from products. For additional details regarding the Kissei License Agreement, see the section titled "Business-Kissei License Agreement" in our Prospectus that forms a part of our Registration Statement, which was filed with the SEC on August 12, 2026 pursuant to Rule 424(b)(4) (the "IPO Prospectus").

We enter into contracts in the normal course of business with clinical trial sites and clinical supply manufacturers and with vendors for preclinical studies and clinical trials, research supplies and other services and drugs for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancellable contracts. In addition, certain of our supply agreements contain minimum purchase commitments in certain situations, the timing and likelihood of which we cannot estimate at this time.

Off-balance sheet arrangements

During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the Securities and Exchange Commission (the "SEC").

Recently issued accounting pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Critical accounting estimates

Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" in our IPO Prospectus. We have reviewed and determined that those critical accounting estimates remain the Company's critical accounting estimates as of and for the three and nine months ended September 30, 2026.