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| PART I – FINANCIAL INFORMATION | | 5 | |
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| Item 1. | Financial Statements (Unaudited) | | 5 |
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| | Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | | 5 |
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| | Condensed Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025 | | 6 |
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| | Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2026 and 2025 | | 7 |
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| | Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 | | 8 |
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| | Notes to Condensed Consolidated Financial Statements | | 9 |
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 21 |
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | 29 |
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| Item 4. | Controls and Procedures | | 29 |
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| PART II – OTHER INFORMATION | | 29 | |
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| Item 1. | Legal Proceedings | | 29 |
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| Item 1A. | Risk Factors | | 29 |
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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | | 30 |
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| Item 3. | Defaults Upon Senior Securities | | 30 |
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| Item 4. | Mine Safety Disclosures | | 30 |
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| Item 5. | Other Information | | 30 |
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| Item 6. | Exhibits | | 31 |
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| SIGNATURES | | 33 | |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:
| ● | our plans and expectations regarding our pursuit of strategic options; |
| ● | our ability to obtain additional financing; |
| ● | our ability to monetize our assets; |
| ● | our ability to continue as a going concern; |
| ● | our ability to regain and maintain compliance with the Nasdaq listing standards; |
| ● | our ability to retain our remaining employees, consultants, advisors; |
| ● | our ability to resume research and development activities for our MSC-S platform if we were to execute a strategic transaction or obtain significant additional funding, and our ability to develop and commercialize the Researgency agentic AI research platform; |
| ● | if we were to resume research and development activities, development efforts for KPI-012 and KPI-014 for potential ocular diseases; |
| ● | our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives; |
| ● | our plans and goals with respect to the AI platform business and the deployment of the Researgency agentic AI research platform, including the development of commercial arrangements with customers in the biotechnology and pharmaceutical industries; |
| ● | if we were to resume research and development activities, the rate and degree of market acceptance and clinical utility of our product candidates and our estimates regarding the market opportunity for our product candidates, if approved; |
| ● | our expectations regarding our ability to fund our operating expenses, lease and capital expenditure requirements with our cash on hand; |
| ● | our intellectual property position; |
| ● | our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing; |
| ● | the impact of government laws and regulations; |
| ● | our competitive position; |
| ● | developments relating to our competitors and our industry; |
| ● | our business and business relationships; and |
| ● | the potential impact of global economic and geopolitical developments on our business, operations, strategy and goals. |
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 2025 (as filed with the Securities and Exchange Commission (“SEC”) on April 15, 2026) entitled “Risk Factors” as well as in our other public filings. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
This Quarterly Report on Form 10-Q may include statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by us and third parties as well as our estimates of potential market opportunities. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunity for the Researgency agentic AI research platform and KPI-012 include several key assumptions based on our industry knowledge, industry publications, third-party research and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
