Quarterly Report for Quarter Ending September 30, 2025 (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 in conjunction with the financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Security and Exchange Commission ("SEC") on March 31, 2025 (the "2024 Annual Report on Form 10K"), under "Risk Factors", available on the SEC EDGAR website at www.sec.gov, Part II, and Item 1A of the report, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those risks noted above.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements", within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "objective," "ongoing," "plan," "predict," "project," "potential," "should," "will," or "would," and or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, including the risks set forth in the 2024 Annual Report on Form 10-K. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.

The forward-looking statements contained in this Quarterly Report on Form 10-Q include, among other things, statements about:

Overview

We are a pre-revenue, development-stage biopharmaceutical company focused on developing new medicines to treat pain and peripheral neuropathy associated with cancer, with the ability to expand into other pain states with continued clinical success. Pain and neuropathy affect the majority of patients undergoing chemotherapy treatment with deleterious effects on patient quality of life and function and can result in patients lowering their dose or stopping their chemotherapy resulting from progression to moderate or severe forms of the illness. There are no FDA approved treatments for patients suffering from chemotherapy induced pain or neuropathy.

Our priority pipeline drug candidates includes:

Additionally, our pipeline includes IMC-1, a novel, proprietary, fixed dose combination of a nucleoside analog and the anti-inflammatory agent celecoxib for the treatment of fibromyalgia. Given the size and scope of the IMC-1 fibromyalgia Phase 3 development program agreed upon by the FDA, its forward development is dependent upon us finding a suitable partner. We intend to disclose progress on any potential partnership in a timely manner.

Na_v1.7 Non-Opioid Analgesic Program

Halneuron^® is in Phase 2b clinical development ("HALT-CINP-203") for the treatment of CINP. The active pharmaceutical ingredient is highly purified Tetrodotoxin ("TTX"), a potent sodium channel modulator found in puffer fish and several other marine animals. Halneuron^® works as an analgesic by modulating the activity of Na_v1.7, a key sodium channel located in the peripheral nervous system that is directly involved in pain signal transmission. By reducing the activity of the Na_v1.7 channel, Halneuron^® has the potential to reduce pain associated with conditions involving neuropathic pain, chronic pain and acute forms of pain.

In the first quarter of 2025, we commenced dosing of patients in the HALT-CINP-203 clinical trial in the United States. HALT-CINP-203 is a Phase 2b, double-blind, placebo controlled clinical trial intended to assess the efficacy and safety of Halneuron^® in approximately 200 patients with moderate to severe neuropathic pain

caused by previous platinum and/or taxane based cancer chemotherapy. The primary efficacy endpoint is the change from baseline to week 4 in the weekly average of daily 24-hour recall pain intensity scores captured on an electronic diary, comparing Halneuron^® to placebo. The secondary endpoints include patient global impression of change, PROMIS fatigue, PROMIS sleep, PROMIS-29, pain interference, hospital anxiety and depression scale and the neuropathic pain symptom inventory. We expect to release an interim analysis of data from approximately 40-50% of the patients enrolled in HALT-CINP-203 in the fourth quarter of 2025. The planned interim analysis is designed to explore one of four possible outcomes, (i) early stopping due to achievement of statistically significant pain reduction with the smaller sample size, (ii) a futility determination, (iii) a recommendation to continue the study to the planned sample size of 200 total patients, or (iv) a recommendation to increase the HALT-CINP patients sample size based on the Halneuron^® observed treatment effect size versus placebo at the interim analysis. Top-line data from the trial are presently expected in the second-half of 2026.

SP16 Chemotherapy Induced Peripheral Neuropathy Program (CIPN)

We recently licensed the rights to the IV formulation of SP16 for the treatment of CIPN. SP16 is a 17 amino acid peptide drug that has been designed to mimic the anti-inflammatory and immunomodulatory properties of Alpha-1 Antitrypsin, without the limitations seen with the much larger Alpha-1 Antitrypsin protein. The initial Phase 1 evaluation of SP16's safety when used to treat CIPN will be conducted by the University of Virginia Cancer Center under a National Cancer Institute ("NCI") grant. Patient recruitment for this initial evaluation is expected to start in the first half of 2026. We will be providing our clinical development expertise, but with the NCI funding the trial, we will incur no other expenses in connection with this initial evaluation of the safety of SP16 in cancer patients.

Exchange and Cancellation Agreement

On October 7, 2024, the Company entered into a Loan Agreement (the "Loan Agreement") with Conjoint Inc., a Delaware corporation ("Lender"). Pursuant to the Loan Agreement, Lender agreed to make a loan to the Company in the aggregate principal amount of $19,500,000, of which (i) $16,500,000 was disbursed on October 7, 2024 and (ii) $3,000,000 was disbursed on February 18, 2025. Prior to the Debt Exchange and Cancellation Transaction described below, the Loan Agreement bore interest at the Secured Overnight Financing Rate ("SOFR") plus 2.00%. The Loan Agreement was payable in full with principal and accrued interest on October 7, 2027.

On March 12, 2025, we entered into a Debt Exchange and Cancellation Agreement (the "Exchange and Cancellation Agreement") with Lender. Pursuant to the Exchange and Cancellation Agreement, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through March 12, 2025, was deemed repaid and all of the Company's obligations satisfied in full and cancelled in exchange for 284.2638 shares of the Company's Series A-1 Non-Voting Convertible Preferred Stock, par value $0.0001 ("Series A-1 Preferred Stock" and such transaction, the "Debt Exchange and Cancellation Transaction"). Following the stockholder approval of the conversion of Series A-1 Preferred Stock into shares of Common Stock in accordance with the listing rules of the Nasdaq Stock Market, each share of Series A-1 Preferred Stock will automatically convert into 10,000 shares of Common Stock.

Registered Direct Offering

On March 12, 2025, we entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a registered direct offering of 578,950 shares of our Common Stock at a price of $8.26 per share (the "March 2025 Offering"), pursuant to an effective shelf registration statement on Form S-3 (File No. 333-263700). The March 2025 Offering closed on March 14, 2025, and the gross proceeds from the March 2025 Offering were approximately $4.78 million. The net proceeds of the March 2025 Offering were approximately $4.25 million after deducting placement agent fees and offering expenses payable by the Company.

Licensing Agreement

On September 29, 2025, we entered into an Exclusive Licensing Agreement (the "Licensing Agreement") with Serpin Pharma Inc. ("Serpin Pharma") and Rejuvenation Labs, Inc. ("Rejuvenation" and, together with Serpin Pharma, "Serpin"), pursuant to which Serpin granted the Company a royalty-free, sublicensable global license to develop Serpin Pharma's intravenous formulation of SP16. SP16 is a first-in-class low density lipoprotein receptor-related protein-1 (LRP1) agonist which has demonstrated both anti-inflammatory, immunomodulatory and neural repair activity that has the potential to treat chemotherapy-induced peripheral neuropathy. In consideration of the Licensing Agreement, we issued 191,017 shares of common stock, par value $0.0001 per share ("Common Stock") and 89.5939 shares of Series A-2 Non-Voting Convertible Preferred Stock, par value $0.0001 per share ("Series A-2 Preferred Stock") to Serpin Pharma and (ii) 191,017 shares of Common Stock and 89.5939 shares of Series A-2 Preferred Stock to Rejuvenation, as further described under "Serpin Equity Issuance and Registration Rights Agreement" below.

Tungsten Advisors (through its Broker-Dealer, Finalis Securities LLC) (together with its affiliates, "Tungsten") acted as the financial advisor to the Company in connection with the Licensing Agreement. As compensation for services rendered by Tungsten, the Company issued to Tungsten and its affiliates and designees an aggregate of 10.8694 shares of Series A-2 Preferred Stock.

Serpin Equity Issuance and Registration Rights Agreement

On September 29, 2025, in connection with the Licensing Agreement, we also entered into an Equity Issuance and Registration Rights Agreement (the "Serpin Registration Rights Agreement") with Serpin,

Pursuant to the Serpin Registration Rights Agreement, we filed a Form S-3 registration statement registering the shares issued under the Serpin Registration Rights Agreement and to use commercially reasonable efforts to cause such registration statement to be declared effective by the Securities and Exchange Commission as soon as practicable after such registration statement is filed. We also granted Serpin customary demand registration and indemnification rights and entered into customary issuer covenants.

Results of Operations

Below is a summary of the results of operations:

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Three and Nine Months Ended September 30, 2025 and 2024

Research and Development Expenses

Research and development expenses increased by $14.0 million and $18.3 million for the three and nine months ended September 30, 2025, respectively, compared to prior periods. The increase of $14.0 million for the three months ended September 30, 2025 was primarily due to $12.0 million of acquired In-Process Research and Development ("IPR&D") related to the Licensing Agreement with Serpin discussed above and the impact of the Combination including increases in expenses related to the ongoing HALT-CINP-203 clinical trial of $1.9 million, drug development and manufacturing costs of $0.3 million, and salaries and related personnel costs of $0.1 million offset by a decrease in research and preclinical costs of $0.3 million. The increase in expenses of $18.3 million for the nine months ended September 30, 2025 compared to the prior

year period was also primarily due to $12.0 million of acquired In-Process Research and Development ("IPR&D") related to the Licensing Agreement with Serpin and the impact of the Combination including increases in expenses for clinical trials of $5.3 million related to the HALT-CINP-203 study, drug development and manufacturing costs of $0.9 million and salaries and related personnel costs of $0.5 million offset by a decrease in research and preclinical costs of $0.4 million.

General and Administrative Expenses

General and administrative expenses decreased by $0.5 million and increased by $1.2 million for the three and nine months ended September 30, 2025, respectively, compared to prior periods. The decrease of $0.5 million for the three months ended September 30, 2025 was primarily due to decreases in expenses for legal and professional fees of $0.5 million and in expenses associated with being a public company of $0.2 million offset by an increase in salaries and related personnel costs of $0.2 million. The increase in expenses of $1.2 million for the nine months ended September 30, 2025 compared to the prior year period was primarily due to increases in expenses for legal and professional fees of $0.3 million related to the Combination, franchise tax fees of $0.2 million, salaries and related personnel costs of $0.7 million and other general and administrative costs of $0.2 million offset by a decrease in expenses associated with being a public company of $0.2 million.

Liquidity and Capital Resources

Since our inception, we have financed our operations through public offerings of common stock and proceeds from private placements of membership interests and convertible promissory notes. To date, we have not generated any revenue from the sale of products and we do not anticipate generating any revenue from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of September 30, 2025, our principal source of liquidity was our cash, which totaled $10.1 million.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. For example, the ongoing conflicts between Israel-Hamas and Ukraine-Russia, the effect of these wars and the resulting sanctions by the U.S. and European governments, has created extreme volatility in the global capital markets and is expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. Any such volatility and disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, if at all.

Equity Financings

On March 14, 2025, we closed a registered direct offering of 578,950 shares of our Common Stock, raising gross proceeds of approximately $4.78 million and net proceeds of approximately $4.25 million, after deducting placement agent fees and offering expenses.

Debt Financings

On February 18, 2025, we received $3,000,000 in loan proceeds pursuant the Loan Agreement dated October 7, 2024 with the Lender. There were no debt financings during the three and nine months ended September 30, 2024. There was no debt outstanding at September 30, 2025 due to the Debt Exchange and Cancellation Transaction discussed above. At December 31, 2024, the debt with related party, net of issuance costs was $15,381,077.

Future Capital Requirements

We anticipate our cash on hand at September 30, 2025 of approximately $10.1 million will fund operations through the first quarter of 2026. The Company will need to secure additional financing to fund its ongoing clinical trials and operations beyond the first quarter of 2026 to continue to execute its strategy. We will need to finance our cash needs through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. To the extent that we raise additional funds by issuing equity or equity-linked securities, our shareholders will experience dilution. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. As a result, substantial doubt exists regarding our ability to continue as a going concern 12 months from the issuance of this Quarterly Report on Form 10-Q. Failure to secure the necessary financing in a timely manner and on favorable terms could have a material adverse effect on the Company's strategy and value and could require the delay of product development and clinical trial plans.

Summary of Cash Flows

The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024, respectively:

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Cash Flows for the Nine Months Ended September 30, 2025 and 2024

Operating Activities

For the nine months ended September 30, 2025, net cash used in operations was $12.0 million and consisted of a net loss of $30.5 million and a net change in operating assets and liabilities of $0.2 million attributable to a decrease in accounts payable of $0.7 million offset by an increase in accrued liabilities of $0.3 million and a decrease in prepaid expenses and other current assets of $0.2 million further offset by non-cash items of $18.7 million attributable to the acquisition of a license of $12.0 million, loss on conversion of debt with related party of $6.1 million, deferred tax expense of $0.2 million and share-based compensation, depreciation and amortization of $0.4 million.

For the nine months ended September 30, 2024, net cash used in operations was $2.6 million and consisted of a net loss of $4.6 million offset by a net change in operating assets and liabilities of $1.6 million attributable to an increase in accounts payable and accrued liabilities of $1.0 million and a decrease in prepaid expenses and other current assets of $0.6 million and non-cash items of $0.4 million attributable to share-based compensation.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2025 was $7.3 million and was attributable to cash proceeds from the Loan Agreement of $3.0 million and gross proceeds from our registered direct offering in March 2025 of $4.8 million, net of placement agent fees and offering costs paid by us during the nine months ended September 30, 2025 of $0.5 million.

Net cash provided by financing activities during the nine months ended September 30, 2024 was $1.4 million and was attributable to gross cash proceeds from our public offering in May 2024 of $1.7 million, net of placement agent fees and offering costs paid by us during the nine months ended September 30, 2024 of $0.3 million.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Discussion of Critical Accounting Policies and Significant Judgements and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. During the nine months ended September 30, 2025, holders of certain Series A Preferred Stock irrevocably waived the cash settlement and related repurchase rights for 166 shares of Series A Preferred Stock. As such, the Company reclassified approximately $5.5 million and 166 shares from temporary equity to permanent equity as the shares no longer qualified for temporary equity classification under ASC 480-10-S99-3A. In addition, the Company considered under ASC 470, Debt, whether or not the Series A Preferred Stock underlying the waivers should be treated as a modification or as an extinguishment for financial reporting purposes. The Company used the fair value method and determined that the fair value of the Series A Preferred Stock before the waiver was not significantly different (e.g. less than 10%) than the fair value of the Series A Preferred Stock immediately after the waiver and thus the waiver was considered a modification. Accordingly, there was no impact to net income or earnings per share, and any directly related fees were expensed as incurred.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012, or JOBS Act, was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an "emerging growth company." As an "emerging growth company," we are electing to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards.

Subject to certain conditions set forth in the JOBS Act, as an "emerging growth company," we are not required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply until December 31, 2025, which is the last day of the fiscal year following the fifth anniversary of the completion of our IPO, or until we no longer meet the requirements for being an "emerging growth company," whichever occurs first.

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