Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except for the historical information contained herein, the matters discussed in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements that involve risks and uncertainties. In some cases, these statements may be identified by terminology such as "may," "will," "should," "expects," "could," "intends," "might," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of such terms and other comparable terminology. These statements involve known and unknown risks and uncertainties that may cause our results, level of activity, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, among others, those discussed in the "Risk Factors" section included in Item 1A of our most recent Annual Report on Form 10-K. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this report.

Overview

On August 15, 2025, ReShape Lifesciences Inc. (now known as Vyome Holdings, Inc.) (the "Company") completed the merger pursuant to the Agreement and Plan of Merger, dated as of July 8, 2024, as amended (the "Merger Agreement"), by and among the Company, Raider Lifesciences Inc., a wholly owned subsidiary of the Company ("Merger Sub"), and Vyome Therapeutics, Inc. ("Vyome"). Pursuant to the Merger Agreement, Merger Sub merged with and into Vyome, with Vyome surviving the merger as a subsidiary of the Company (the "Merger"). As a result of the Merger, the Company was renamed "Vyome Holdings, Inc." and Vyome continued under its name as Vyome Therapeutics, Inc., in each case effective before the open of trading on August 15, 2025.

The Company is a Cambridge, MA/Princeton, NJ/ New Delhi, India-based clinical-stage specialty pharmaceutical company working to treat immune-inflammatory and rare diseases of unmet need with next-generation therapeutic solutions, with a business advantage of the US-India innovation corridor. The lead program, VT-1953, is a topical gel that is being developed to treat signs and symptoms of malignant fungating wounds, a potentially orphan drug designation program. The Company is planning to have discussions with the Food & Drug Administration (FDA) on a pivotal trial protocol in the first half of 2026. The Company also has a Pre-Investigational New Drug application stage ophthalmic drops program, a potentially orphan drug program, VT-1908, a repurposed immune modulator to treat steroid-sparing anterior uveitis. Another late clinical-stage program, VB-1953, for moderate to severe acne, has completed its Phase II clinical trial, and this program is Phase 3-ready.

The Company may experience delays in the conduct of clinical trials of its candidates. Clinical trials can be delayed for a variety of reasons, including delays in obtaining regulatory approval to commence a clinical trial, in securing clinical trial agreements with prospective sites with acceptable terms, in obtaining institutional review board approval to conduct a clinical trial at a prospective site, in recruiting patients to participate in a clinical trial or in obtaining sufficient supplies of clinical trial materials. Any delays in completing the Company's clinical trials will increase its costs, slow down its product development, timeliness, and approval process, and delay its ability to generate revenue.

The Company has commercialized a novel reformulated topical anti-fungal shampoo based on the technology platform of Molecular Replacement Therapeutics ("MRT") in India. The Company has entered into a licensing and marketing agreement with Sun Pharma to sell such topical anti-fungal product in India, whereby the Company will receive a net service fee payment for sales of such products made by Sun Pharma. This agreement terminated in 2024. The Company had also entered into an agreement with Sun Pharma for the development and licensing of MRT technology-based Luliconazole topical cream for skin fungal diseases for the Indian market. This product was commercialized by Sun Pharma in 2023.

The Company operates in two segments, biotechnology and pharmaceutical products. Our biotechnology segment comprises our operations around our VT-1953, VT-1908, and VB-1953 programs that are in development, and our pharmaceutical segment comprises our antifungal products.

Since inception, our operations have focused on organizing and staffing our biotechnology segment, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates, undertaking preclinical and clinical studies, and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales from the biotechnology segment. Our pharmaceutical segment represents the operations of a legacy business and various licensing agreements with Sun Pharma.

Recent Developments

Closing of the Merger

On August 15, 2025, the Company completed the merger pursuant to the Agreement and Plan of Merger, dated as of July 8, 2024, as amended (the "Merger Agreement"), by and among the Company, Raider Lifesciences Inc., a wholly owned subsidiary of the Company ("Merger Sub"), and Vyome Therapeutics, Inc. ("Vyome"). Pursuant to the Merger Agreement, Merger Sub merged with and into Vyome, with Vyome surviving the merger as a subsidiary of the Company (the "Merger"). As a result of the Merger, the Company was renamed "Vyome Holdings, Inc." and Vyome continued under its name as Vyome Therapeutics, Inc., in each case effective before the open of trading on August 15, 2025.

At the effective time of the Merger (the "Effective Time"), each share of common stock, par value $0.001 per share, of Vyome, and each share of preferred stock, par value $0.001 per share, of Vyome issued and outstanding immediately prior to the Effective Time (other than the shares that were owned by the Company, Vyome, or Merger Sub and shares that will be subject to put-call option agreements with certain stockholders of Vyome and Vyome's subsidiary Vyome Therapeutics Limited ("Vyome Limited") who are located in India) were converted into the right to receive a number of fully-paid and non-assessable shares of common stock of the Company, $0.001 par value per share according to a predetermined ratio; provided that the shares to be received by certain stockholders of Vyome and Vyome Limited located in India shall be subject to the put-call option agreements with the Company which entitles such holders to receive shares of Common Stock of the Company upon certain occurrences. In addition, each outstanding warrant, stock option, restricted stock award, stock grant or other equity award to purchase capital stock of Vyome were converted into right, warrants or equity awards to purchase a number of the Company's shares of common stock equal to the number of shares of Vyome common stock issuable upon exercise of such Vyome right, warrant or equity award multiplied by the predetermined ratio, with an exercise price, in the case of warrants and stock options, equal to the exercise price of such Vyome warrant or option divided by the predetermined ratio.

Immediately prior to the consummation of the Merger, the Company filed an Amended and Restated Certificate of Designation to Series C Convertible Preferred Stock (the "Series C Amendment").

The issuance of Common Stock in connection with the Merger was registered under the Securities Act of 1933, as amended, pursuant to the Company's registration statement on Form S-4 (File No. 333-282459) filed with the United States Securities and Exchange Commission (the "SEC") on October 1, 2024, as amended on December 6, 2024, January 15, 2025, April 29, 2025, May 9, 2025 and May 14, 2025 and declared effective on May 14, 2025.

As set forth in the Merger Agreement, it was a condition to the closing of the Merger that The Nasdaq Stock Market ("Nasdaq") approve the initial listing application of the combined company so that the listing on The Nasdaq Capital Market will continue after the Merger. Nasdaq approved the initial listing application on August 6, 2025.

Prior to the Effective Time of the Merger, VTI had the following activities as discussed in more detail in the financial statements:

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Authorized a 1 for 5,000 reverse stock split of issued and outstanding shares of common and preferred stock

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Amended the Certificate of Incorporation of the Company to authorize three new classes of preferred stock, with similar rights as the previous shares of preferred stock:

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Series D-1 - 23,658 shares authorized with an "original issuance price" of $8.874 per share

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Series D-2 - 315,256 shares authorized with an "original issuance price" of $5.886 per share

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Series Seed-1 - 900,000 shares authorized with an "original issuance price" of $0.936 per share

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Adopted the 2025 Equity Incentive Plan providing for the issuance of up to 2,800,000 shares of common stock to employees, officers, directors, and non-employees in the form of non-qualified and incentive stock options, restricted stock awards, and other stock-based awards.

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Issued, under the 2025 Plan, stock options to employees, consultants, board members and others to purchase 2,705,779 shares of common stock at an exercise price of $0.41 per share which vest immediately and 57,122 shares of common stock at an exercise price of $0.41 per share which vest over a one-year period from the date of grant to employees.

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Reclassified certain shares held by shareholders as follows:

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11 shares of Series D preferred stock into 23,658 shares of Series D1 preferred stock

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96 shares of Series D preferred stock into 315,256 shares of Series D2 preferred stock

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203 shares of Series D preferred stock into 900,000 shares of Seed Series-1 preferred stock

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Terminated the Amended and Restated Investors' Rights Agreement, the Amended and Restate Right of First Refusal and Co-Sale Agreement), and the Amended and Restated Voting Agreement, as amended September 5, 2019, between the Company and its shareholders

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All convertible notes plus accrued interest outstanding at the Merger date were converted into 534,850 shares of common stock

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Warrants to purchase 6,008,589 shares of common stock at $0.01 per share were issued to investors. The Company received $6,009 from the exercise of such warrants at the Merger date.

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Issued 376,256 common shares to consultants, advisors and for terminating a share subscription agreement.

Changes in Officers and Directors

On August 13, 2025, in connection with the consummation of the Merger and, as required pursuant to the Merger Agreement, Paul Hickey, Dan W. Gladney, Arda M. Minocherhomjee and Lori C. McDougal and Gary D. Blackford resigned from and ceased serving on the Board and any and all committees thereof, which resignations were effective upon the consummation of the Merger. In addition, effective upon the consummation of the Merger, Paul Hickey resigned as the President and Chief Executive Officer of the Company, and Tom Stankovich resigned as the Chief Financial Officer of the Company.

In connection with the consummation of the Merger and pursuant to the Merger Agreement, on August 15, 2025, the Board elected and designated Krishna Gupta, Stash Pomichter, Shiladitya Sengupta, Venkateswarlu Nelabhotla, John Tincoff, and Mohanjit Jolly, to serve on the Board effective immediately after the consummation of the Merger. Pursuant to the Merger Agreement and as previously disclosed, Krishna Gupta has been serving as the Board's Chairperson of the Combined Company effective as of the consummation of the Merger.

Also on August 15, 2025, in connection with the consummation of the Merger, Venkateswarlu Nelabhotla was appointed as Chief Executive Officer of the Company and Robert Dickey was appointed as Interim Chief Financial Officer of the Company.

The Company entered into an agreement with Foresite Advisors, LLC (the "CFO Agreement") governing the terms of Mr. Dickey's employment with the Company as its Interim Full-time Chief Financial Officer. The CFO Agreement provides for a one-year term, which may be extended by mutual written consent. The CFO Agreement may be terminated by either party with Cause, as defined in the agreement, upon 15 days' notice or without cause, upon 30 days' prior written notice to the other party. The CFO Agreement provides for compensation of $15,000 per calendar month.

Closing of the Reshape Asset Sale

On July 8, 2025, the Company completed the transactions contemplated under the Asset Purchase Agreement dated July 8, 2024, which was amended on April 25, 2025 (the "Asset Purchase Agreement"), with Ninjour Health International Limited, a company incorporated under the laws of the United Kingdom, which is an affiliate of Biorad Medisys Pvt. Ltd. (together, "Biorad"). Pursuant to the Asset Purchase Agreement, the Company sold its assets (excluding cash) to Biorad, and Biorad assumed substantially all of the Company's liabilities, for an agreed upon purchase price of $2.25 million in cash, subject to adjustment based on the Company's actual accounts receivable and accounts payable at the closing, compared to such amounts as of March 31, 2026.

Private Placement

Immediately after the Effective Time, the Company closed on the sale of an aggregate of 520,514 shares of the Company's Common Stock (the "Offered Shares") at a price of $11.02 per share for gross proceeds of approximately $5,735,000 pursuant to those certain subscription agreements entered into among the Company, Vyome, and the investors signatory thereto. Vyome, through its subsidiary Vyome Therapeutics Limited, also closed on the sale of 999 shares of Vyome Therapeutics Limited at a price per share of $937.14 for gross proceeds of approximately $936,000, which shares are subject to a put-call option agreement with the Company. Simultaneously with entry into the subscription agreements, the Company, Vyome and the investors entered into registration rights agreements, which provide for certain registration rights to the investors, including the filing of a registration statement that includes the shares of common stock purchased by the investors, within 45 days of the closing of the Merger. Simultaneously with the execution of the subscription agreements, Vyome entered into a securities purchase agreement with each investor pursuant to which Vyome issued to each investor a convertible promissory note in the principal amount equal to 5% or more of such investor's total agreed upon investment amount, which convertible notes provided for interest at 8% per annum and conversion immediately before completion of the Merger into a number of shares of common stock of Vyome equal to 100% of the outstanding principal and interest of the convertible promissory notes divided by $11.02, the price per share of common stock sold in the private placement offering.

Reverse Stock Split

On August 15, 2025, the Company effected a 1-for-4 reverse stock split of its Common Stock (the "Reverse Stock Split"). On July 24, 2025, the stockholders of the Company approved the proposal to authorize the Board of Directors of the Company (the "Board"), in its discretion, to amend the Company's Certificate of Incorporation, as amended, to effect a reverse stock split of the Company's Common Stock, at a ratio in the range of 1-for-2 to 1-for-5, such ratio to be determined by the Board and included in a public announcement. The Board subsequently approved the Reverse Stock Split at a ratio of 1-for-4, and on August 15, 2025, the Company filed a Certificate of Eighth Amendment (the "Certificate of Eighth Amendment") with the Secretary of State of the State of Delaware to amend the Company's Restated Certificate of Incorporation, as amended, and effected the Reverse Stock Split on August 15, 2025.

As a result of the Reverse Stock Split, every four shares of Common Stock issued or outstanding or held by the Company as treasury stock were automatically reclassified into one new share of Common Stock without any action on the part of the holders. Any fractional shares of Common Stock resulting from the Reverse Stock Split were rounded up to the nearest whole share, and no stockholders received cash in lieu of fractional shares.

The Reverse Stock Split was primarily intended to bring the Company into compliance with the minimum bid price requirements for maintaining its listing on The Nasdaq Capital Market in connection with the Merger. Trading of the Company's Common Stock on The Nasdaq Capital Market continued on a split-adjusted basis when the markets opened on August 15, 2025, under the name Vyome Holdings, Inc. and trading symbol "HIND."

Amendments to Articles of Incorporation

On August 15, 2025, the Company filed (a) the Certificate of Eighth Amendment with the Secretary of State of the State of Delaware to effect the Reverse Stock Split after the close of trading on August 14, 2025, (b) Series C Amendment, and (c) a Certificate of Ninth Amendment (the "Certificate of Ninth Amendment") with the Secretary of State of the State of Delaware to amend the Company's Restated Certificate of Incorporation, as amended, to change its corporate name to Vyome Holdings, Inc.

On April 24, 2026, the Company filed the Certificate of Tenth Amendment with the Secretary of State of the State of Delaware to effectuate a decrease in the number of shares of the Company's common stock authorized for issuance from 300,000,000 to 50,000,000 shares. The stockholders of the Company approved the amendment on April 24, 2026, at the 2026 Annual Meeting of Stockholders.

ATM Offering

On August 20, 2025, the Company entered into Amendment No. 1 (the "Amendment") to that certain Equity Distribution Agreement dated May 30, 2025 with Maxim Group LLC to act as the Company's exclusive sales agent with respect to the issuance and sale of up to $12,000,000 of the Company's shares of common stock, par value $0.001 per share, from time to time, in an at-the-market public offering (the "ATM Offering"). The Amendment increased the amount that may be offered and sold in the Offering from $3,420,926 to $12,000,000. In February 2026, the Company sold 1,089,545 shares of common stock at prices between $3.09 and $4.86 per share under the Equity Distribution Agreement, resulting in net proceeds of $5,291,868.

Components of Results of Operations

Although we operate in two segments, all of our revenue relates to the pharmaceutical segment, and substantially all of our costs relate to the biotechnology segment. See the "Segments" footnote in our Financial Statements.

Revenue

We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from where we get revenues from milestone payments, royalties and the sale of a proprietary ingredient. These payments are recorded as service fee revenue in the period earned. We have occasionally received payments for milestones specified under the license of our products to Sun Pharma, but do not expect to receive any significant further milestone payments. We expect to continue to receive a minor amount of royalties under such licenses. Such revenues are part of our pharmaceutical segment.

Operating Expenses

Our operating expenses consist of (i) research and development expenses, (ii) cost of goods sold, and (iii) general and administrative expenses.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts and preclinical and clinical studies under our research programs, which include:

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employee-related expenses, including salaries, benefits, and stock-based compensation expense for our research and development personnel;

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costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;

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costs of manufacturing drug product and drug supply related to our current or future product candidates;

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costs of conducting preclinical studies and clinical trials of our product candidates;

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consulting and professional fees related to research and development activities, including equity- based compensation to non-employees;

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costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;

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costs related to compliance with clinical regulatory requirements; and

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facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies.

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed.

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

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the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

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establishing an appropriate safety profile;

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successful enrollment in and completion of clinical trials;

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whether our product candidates show safety and efficacy in our clinical trials;

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receipt of marketing approvals from applicable regulatory authorities;

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establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

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obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

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commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

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continued acceptable safety profile of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as we commence clinical trials and continue the development of our current and future product candidates. However, we do not believe that it is possible, at this time, to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

Cost of Goods Sold

Cost of goods sold represents the costs to obtain products from the third-party manufacturer of our pharmaceutical products and proprietary ingredients sold to Sun Pharma.

General and Administrative Expenses

General and administrative expenses include salaries and other compensation-related costs, including stock-based compensation, for personnel in executive, finance and accounting, business development, operations and administrative roles. Other significant costs include insurance costs, professional fees, travel costs, facility and office-related costs, not included in research and development expenses.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside service providers, among other expenses. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

We also anticipate increased expenses associated with being a public company including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the SEC, and listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums, and investor relations costs.

Interest Expense

Interest expense results from the stated interest rates under our convertible notes. Borrowings under the notes carried an 8% coupon interest rate. All of the notes were converted into equity instruments in connection with the Merger.

Fair value adjustment

We record our convertible notes at fair value. Changes in the fair value of the convertible notes are recognized as a component of other income. All of the notes were converted into equity instruments in connection with the Merger.

Comparison of the three months ended March 31, 2026 and 2025

Results of Operations

The following table summarizes our results of operations for the periods presented:

For the three months ended March 31,

		2026				2025				Change
Revenues
Revenue		$	31,591			$	198,581			$	(166,990	)
Cost of goods sold			(14,946	)			(44,162	)			29,216
Gross profit			16,645				154,419				(137,774	)
Operating expenses:											-
Research and development			666,405				90,268				576,137
Depreciation and amortization			2,605				3,523				(918	)
Selling, general and administrative			477,575				259,626				217,949
Total operating expenses			1,146,585				353,417				793,168
Loss from operations			(1,129,940	)			(198,998	)			(930,942	)
Other income (expense):											-
Fair value adjustment			-				(36,008	)			36,008
Interest income and other			147,264				(4,014	)			151,278
Interest expense			(2,845	)			(54,954	)			52,109
Net loss		$	(985,521	)		$	(293,974	)		$	(691,547	)

Revenues

The Company derives revenues from the sale of products, including royalties related to sales of such products, and from the license of our technology. Substantially all revenues for the three months ended March 31, 2026, and 2025 were derived from one customer, Sun Pharma, based in India. During 2023, the Company amended its arrangement with Sun Pharma such that the Company will no longer be responsible for purchasing and selling inventory of the dandruff lotion and shampoo but instead will receive a net service fee payment for sales of such products made by Sun Pharma. This arrangement was terminated in 2024. We have a development and licensing agreement for MRT technology-based Luliconazole topical cream product for skin fungal diseases, from which we get revenues from milestone payments, royalties, and the sale of a proprietary ingredient.

Revenues for the three months ended March 31, 2026 and 2025 are summarized as follows:

		2026				2025
Licensing & milestone fees - Luliconazole			-				116,900
Royalty income related to above product sales			6,126				4,954
Sale of products			25,465				76,727
		$	31,591			$	198,581

Research and Development Expenses

Research and development expenses were $666,405 and $90,268 for the three months ended March 31, 2026 and 2025, respectively. The increase in research and development costs was primarily due to the focusing of the Company's resources on scaling up the regulatory consulting and CMC preparation work of the VT-1953 project.

General and Administrative Expenses

General and administrative expenses were $477,575 and $259,626 for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to an increase in legal, accounting, auditing, and related professional fees associated with preparing for the Merger, and the stock-based compensation for stock options of $5,696 in the three months ended March 31, 2026.

Interest income

Interest income and other were $147,264 and ($4,014) for the three months ended March 31, 2026, and 2025, respectively. The increase was driven by funds held in our bank accounts after merger-related proceeds and draws on the ATM.

Fair value adjustment

The fair value adjustment related to the fair value of the Company's outstanding convertible notes was favorable/(unfavorable) Nil and ($36,008) for the three months ended March 31, 2026, and 2025, respectively, reflecting the probability and timing of the Merger completion and resultant valuation considerations.

Cash Flows

The following table summarizes our cash flows for the three months ended March 31, 2026, and 2025 indicated:

For the three months ended March 31,

Net cash provided by (used in):		2026				2025				Change
Operating activities		$	(1,435,966	)		$	(203,535	)		$	(1,232,429	)
Investing activities			-				-				-
Financing activities			5,288,868				160,000				5,128,868
Other			(39,454	)			1				(39,455	)
Net (decrease) increase in cash		$	3,813,448			$	(43,534	)		$	3,856,983

During the three months ended March 31, 2026, net cash used in operating activities was $1,435,966, consisting primarily of net losses of $985,521 less stock compensation expenses of $5,696, a decrease of $278,628 of post-employment benefits and a decrease of accounts payable and accrued expenses of $184,697 partially offset by a decrease in prepaid expenses of $89,189. The Company continues to operate under cost-efficient operations for capital efficiency.

During the three months ended March 31, 2025, net cash used in operating activities was $203,535, consisting primarily of net losses of $293,974 less the non-cash charge for interest expense of $50,939 and an increase in accrued compensation and post-employment benefits of $68,021, offset by the loss on fair value adjustment of convertible debt of $36,008 and a decrease in accounts payable and accrued expenses of $73,168.

During 2025 prior to the Merger, we have primarily used the proceeds of the sale of our convertible notes to incrementally develop our biotechnology products and prepare the Company for an offering of its securities and activities related thereto. We had been operated under an austerity program for several years, delaying projects and payments until sufficient funds could be raised. As a result of the Merger, we were able to close on the funding from the Concurrent Financing (approximately $6.6 million) and subsequently from the ATM facility (approximately $6,500,000). The Company had $8,795,783 of cash at March 31, 2026.

Financing Activities

During the three months ended March 31, 2026, cash provided by financing activities was $5,288,868, principally from the net proceeds from the sale of common stock pursuant to the ATM. During the three months ended March 31, 2025, cash provided by financing was $160,000, consisting primarily of $160,000 from the sale of convertible notes.

Liquidity and Capital Resources

Since inception, we have incurred significant operating losses. As of March 31, 2026, we had a cash balance of $8,795,783 and have operated under an austerity plan for several years. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacturing of our drug product and drug supply, regulatory approval for our current and future product candidates, maintenance and expansion of our intellectual property portfolio, hiring of additional research, development and business personnel and operations as a public company. In addition, if we obtain marketing approval for any of our current or future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties.

We will not generate revenue from product sales for our biotechnology segment unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing, and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances, and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all.

On March 27, 2026, the Company received an order from the GST authorities in India relating to the refund of Integrated Goods and Services Tax (IGST) of approximately ₹3.57 crore (~$400K) previously claimed on certain R&D services provided to its U.S. affiliate. The matter pertains to the determination of the place of supply under the IGST Act, 2017, for services rendered before October 1, 2019. The GST authorities have taken the position that such services do not qualify as "export of services" and have proposed recovery of the refund along with applicable interest and penalties under relevant provisions of the Central Goods & Services Tax Act. The Company believes that its position is supported by applicable law, judicial precedents, and clarificatory guidance, including the nature of services being provided on a principal-to-principal basis and not constituting services in respect of goods physically made available. Accordingly, the Company intends to contest the order through appropriate legal remedies. Based on its assessment and advice from legal and tax counsel, management believes that it has a strong case on the merits and does not expect a material adverse impact on its financial position; accordingly, no provision has been recorded as of March 31, 2026.

The Company received a civil court notice with respect to deferred unpaid salary of approximately $95,000 to a past employee. Thies liability is already accrued in the balance sheet.

We believe that our existing cash, together with the proceeds from the private placement offering, and proceeds from our ATM facility to date, will enable us to fund our operating expenses and capital expenditure requirements for at least 15 months, including the initiation of the pivotal trial of our lead candidate, VT-1953, but will not be sufficient to complete the trial and or work on the other indications or the development of any other product candidate. We have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Our failure to raise capital or enter into such agreements as, and when needed, could have a material adverse effect on our business, results of operations, and financial condition.

Our future capital requirements will depend on a number of factors, including:

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the costs of conducting preclinical studies and clinical trials;

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the costs of manufacturing;

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the scope, progress, results and costs of discovery, preclinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;

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the costs, timing, and outcome of regulatory review of our product candidates;

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our ability to establish and maintain collaborations on favorable terms, if at all;

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the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

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

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the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

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

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our headcount growth and associated costs as we expand our business operations and research and development activities; and

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the costs of operating as a public company.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances, and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the interests of our stakeholders may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of our stockholders. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, that could adversely impact our ability to conduct our business.

If we raise funds through potential collaborations, strategic alliances 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 when needed, we may be required to delay, limit, reduce or terminate 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.

Contractual Obligations and Commitments

We enter into agreements in the normal course of business for sponsored research, preclinical studies, contract manufacturing, and other services and products for operating purposes, which are generally cancellable upon written notice.

Licenses, employment agreements, or other commitments

The Company leases offices and laboratory space in India, which were extended for a one-year period ending December 2026, with an automatic renewal for two years with monthly payments ranging from $2,500 to $2,900 per month. The Company has an intention to renew the leases for the two additional years allowed under the lease agreement. We also have offices in Princeton, NJ, and Cambridge, MA, under short-term rentals.

We may enter into contracts in the normal course of business with clinical research organizations for clinical trials and clinical supply manufacturing and with vendors for pre-clinical research studies, research supplies, and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore, we believe that our non-cancelable obligations under these agreements will not be material.

We also have employment agreements with certain employees and consulting agreements that require the funding of a specific level of payments if certain events, such as a change in control, termination without cause, or retirement, occur. We also have an agreement on Resignation and Separation Letter dated January 11, 2021, Craig Tooman, a past employee, to pay a certain amount on change of control.

Critical Accounting Policies and Significant Judgments and Estimates

The following summarizes the most significant estimates impacting the financial statements. Refer to Note 2 for further information.

Stock options

Our company accounted for the issuance of stock options in accordance with ASC 718, Compensation-Stock Compensation. We estimate the fair value of stock option awards granted using the Black-Scholes option-pricing model, which uses as inputs the fair value of our common stock and subjective assumptions we make, including expected stock price volatility, the expected term of the award, the risk-free interest rate, and expected dividends.

Inflation

Inflation generally affects us by increasing the cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2026 or 2025.