Acurx Pharmaceuticals, Inc.

NOTE 1 – NATURE OF OPERATIONS

Business

Acurx Pharmaceuticals, Inc., a Delaware corporation, formerly Acurx Pharmaceuticals, LLC (the “Company”) is a clinical stage biopharmaceutical company formed in July 2017, with operations commencing in February 2018. The Company is focused on developing a novel class of antibiotics that address serious or life-threatening bacterial infections.

In March 2020, the World Health Organization declared the outbreak of COVID-19, a novel strain of coronavirus, a global pandemic. This outbreak caused major disruptions to businesses and markets worldwide as the virus continued to spread. The Company’s clinical trial operations were directly and indirectly adversely impacted. While the acute global emergency phase has passed, the risk of “COVID-19-like” events causing material business interruption remains both credible and ongoing. While the severity of any future event is uncertain, the probability of a recurrence is meaningful, and the potential for business interruption remains significant. Actual or potential pandemics, epidemics, or outbreaks of infectious diseases or other emerging pathogens, may adversely affect our business, financial condition, and results of operations. The extent of these disruptions may include, but are not limited to, interruptions in clinical trial initiation, enrollment, and continuity; delays in regulatory review and approvals; reduced access to healthcare providers and patients; and constraints on manufacturing, supply chain logistics, and distribution channels. The unaudited condensed interim financial statements do not reflect any adjustments because of the pandemic.

In February 2018, the Company purchased the active pharmaceutical ingredient, the intellectual property and other rights to an antibiotic product candidate known as GLS362E (renamed ACX-362E and now approved for non-proprietary name, ibezapolstat) (the “Asset”) from GLSynthesis, Inc. The Company paid $110,174 in cash, along with granting 100,000 Class B Membership Interests, profits interests as defined in the operating agreement, with an exercise price of $0.10 per share. The Company was also required to make certain milestone payments totaling $700,000 in aggregate if certain milestones are achieved, $200,000 of which has already been paid by the Company and royalty payments equal to 4% of net sales for a period of time equal to the last to expire of any applicable patents, as defined in the asset purchase agreement. The purchase of the Asset has resulted in our lead antibiotic product candidate, ibezapolstat, which targets the treatment ofC. difficile infections (“CDI”).

The Company’s primary activities since inception aside from organizational activities have included performing research and development activities relating to the development of its two antibiotic candidates and raising funds through equity offerings including its initial public offering (“IPO”) consummated in June 2021. The Company has not generated any revenues since inception.

The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company has needed to raise capital from sales of its securities to sustain operations. On June 29, 2021, the Company completed the IPO, issuing 143,750 shares of common stock at a price of $120.00 per share, with gross proceeds of approximately $17.3 million. On July 27, 2022, the Company completed a registered direct offering and a concurrent private placement, issuing 57,961 shares of common stock and 6,538 pre-funded warrants and Series A Warrants to purchase 64,499 shares of common stock and Series B Warrants to purchase 64,499 shares of common stock for gross proceeds of approximately $4.2 million. On May 18, 2023, the Company completed a registered direct offering and a concurrent private placement, issuing 30,093 shares of common stock,36,574 pre-funded warrants, Series C Warrants to purchase 66,667 shares of common stock and Series D Warrants to purchase 66,667 shares of common stock for gross proceeds of approximately $4.0 million. On November 15, 2023, the Company entered into a Sales Agreement and established an “At-the-Market” offering (the “ATM Program”), pursuant to which the Company may offer and sell, from time to time through A.G.P/Alliance Global Partners, as sales agent, shares of its common stock having an aggregate offering price of up to $17.0 million. Under the ATM Program, the Company sold a total of 141,516 shares of common stock for gross proceeds of approximately $9.2 million. As of January 6, 2025, the Company suspended the ATM program. In January 2025, the Company completed a registered direct offering and concurrent private placement, issuing 123,153 shares of common stock for gross proceeds of $2.5 million. In March 2025, the Company completed a registered direct offering and concurrent private placement, issuing 107,500 shares of common stock for gross proceeds of $1.1 million. On May 8, 2025, the Company entered into an equity line of credit purchase agreement (the “ELOC”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $12.0 million in shares of our common stock, $0.001 par value per share. Under the ELOC, the Company sold 2,239,218 shares of common stock for gross proceeds of approximately $7.9 million as of June 30, 2026. On June 17, 2025, the Company entered into a warrant inducement agreement with a certain holder of existing warrants, receiving

gross proceeds of approximately$2.7 million. In April 2026, the Company completed a registered direct offering and concurrent private placement, issuing 816,068 shares of common stock and 9,017 pre-funded warrants for gross proceeds of approximately $2.5 million. As of June 30, 2026, the Company had a cash balance of approximately $10.7 million, which based on current estimates will not be sufficient to meet its anticipated cash requirements for at least 12 months from the issuance of the condensed interim financial statements for the six months ended June 30, 2026. Management believes that the Company will continue to incur losses for the foreseeable future and will need additional resources to sustain its operations until it can achieve profitability and positive cash flows, if ever. Management plans to seek additional equity financing and grant funding, but cannot assure that such financing and funding will be available at acceptable terms, or at all. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed interim financial statements do not include any adjustments that might result from the outcome of this uncertainty. There can be no assurance that the Company’s research and development will be successfully completed or that any Company product candidate will be approved by the Food and Drug Administration (“FDA”) or any other worldwide regulatory authority or become commercially viable. The Company is subject to risks common to companies in the biopharmaceutical industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with FDA and other governmental regulations and approval requirements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission for interim reporting. In the opinion of management, these unaudited interim financial statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair statement of the Company’s financial position, results of operations, and cash flows. The unaudited interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The year-end condensed interim balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Management believes that the disclosures provided herein are adequate when these unaudited condensed interim financial statements are read in conjunction with the audited financial statements and notes thereto as of December 31, 2025 filed in the Annual Report on Form 10-K.

Reverse Stock Split

On August 4, 2025, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common stock. The Company accounted for the reverse stock split on a retrospective basis pursuant to ASC 260,Earnings Per Share. All issued and outstanding common stock, common stock warrants, stock option awards, exercise prices and per share data have been adjusted in these condensed interim financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented. Authorized common stock was not adjusted as result of the reverse stock split.

Authorized shares of common stock

At the special meeting of stockholders of the Company held on September 16, 2025, the Company’s stockholders approved an amendment (the “Amendment”) to the Company’s Certificate of Incorporation to increase the total number of authorized shares of the Company’s common stock from 200,000,000 to 250,000,000. On September 22, 2025, the Company filed the Amendment with the Secretary of State of the State of Delaware with immediate effect.

Use of Estimates

The preparation of condensed interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed interim financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Income Taxes

The Company estimates an annual effective tax rate of 0% as the Company incurred net losses for the six months ended June 30, 2026, resulting in an estimated net loss for both financial statement and tax purposes. Therefore, no current federal or state income tax expense has been recorded in the unaudited condensed interim financial statements.

Based on the Company’s history of generating operating losses and its anticipation of operating losses for the foreseeable future, the Company has determined that it is more likely than not that the tax benefits from those net operating losses would not be realized and a full valuation allowance against all deferred tax assets has been recorded. Should the Company’s assessment change, tax benefits associated with the historic net operating loss carryforwards could be limited due to future ownership changes.

The Company applied for a qualified small business payroll tax credit for increasing research activities, resulting in “other receivable” on the condensed interim balance sheets in the amount of $50,336 and $48,417 as of June 30, 2026 and December 31, 2025, respectively.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024. As an emerging growth company, the Company has elected to use the extended transition period for complying with new or revised accounting standards, and accordingly, the guidance is effective for the Company for fiscal years beginning after December 15, 2025. The Company adopted the guidance on January 1, 2026 and the adoption did not have a material impact on its condensed interim financial statements.

In November 2024, the FASB issued ASU 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to improve transparency in financial reporting by requiring entities to present more detailed information about the nature of expenses included within the Income Statement. The guidance will first be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company currently believes that it will not have a material impact on its disclosures.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”) in deciding how to allocate resources in assessing performance. The Company views its operations and manages its business inone segment and the Company’s CODM is the President/Chief Executive Officer.

The Company’s segment consists of the development of clinical and preclinical product candidates for the development of the Company’s proprietary new therapies. The CODM assesses performance of the segment based on net loss, which is reported on the condensed interim statements of operations, assets as reported on the condensed interim balance sheets, and cash utilization forecasts in deciding how to invest in the Company’s development and assesses the entity-wide operating results and performance.

To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and ultimately, seeks regulatory approval.

Cash and Concentration of Credit Risk

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents.

The Company maintains the majority of its cash balance in one financial institution. The balance is insured up to the maximum allowable by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant risk of loss on cash. At times, the cash balance may exceed the maximum insured limit of the FDIC. As of June 30, 2026, the Company had cash of approximately $10.7 million in U.S. bank accounts which was not fully insured by the FDIC.

Research and Development

The Company expenses research and development costs when incurred. At times, the Company may make cash advances for future research and development services. These amounts are deferred and expensed in the period the service is provided. The Company incurred research and development expenses in the amount of $1,071,536 and $524,210 for the three months ended June 30, 2026 and 2025, respectively, and $1,413,004 and $1,123,009 for the six months ended June 30, 2026 and 2025, respectively.

Costs for certain research and development activities, such as the provision of services for clinical trial activity, are estimated based on an evaluation of the progress to completion of specific tasks which may use data such as subject enrollment, clinical site activations or information provided to the Company by its vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the unaudited condensed interim financial statements as prepaid or accrued research and development expense, as applicable. The estimates are adjusted to reflect the best information available at the time of the financial statement issuance. The Company’s estimate of the status and timing of services performed could differ from the actual status and timing of services performed.

Share-Based Compensation

The Company accounts for the cost of services performed by employees, directors and consultants received in exchange for an award of the Company’s common stock or stock options, based on the grant-date fair value of the award. The Company recognizes compensation expense based on the requisite service period.

Compensation expense associated with stock option awards is recognized over the requisite service period based on the fair value of the option at the grant date determined based on the Black-Scholes option pricing model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities.

Share-Based Payments to Vendors

The Company accounts for the cost of services performed by vendors in exchange for an award of common stock, stock options, or warrants based on the grant-date fair value of the award or the fair value of the services rendered, whichever is more readily determinable. The Company recognizes the expense in the same period and in the same manner as if the Company had paid cash for the services.

Major Vendor

The Company had three major vendors that accounted for approximately 34%,17% and 13% of the research and development expenditures for the three months ended June 30, 2026 andtwo major vendors that accounted for approximately 31% and 11% for three months ended June 30, 2025. The Company hadthree major vendors that accounted for approximately 26% ,13% and 12% of the research and development expenditures for the six months ended June 30, 2026 andthree major vendors that accounted for approximately 21%,17% and 10% for the six months ended June 30, 2025.

These vendors also accounted for approximately 14% and 6% of the total accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025, respectively. The Company continues to maintain these vendor relationships.

NOTE 3 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025 were as follows:

NOTE 4 – ISSUANCE OF EQUITY INTERESTS

On August, 4, 2025, the Company effected a 1-for-20 reverse stock split of its issued and outstanding shares of common stock. The Company accounted for the reverse stock split on a retrospective basis pursuant to ASC 260,Earnings Per Share. All issued and outstanding common stock, common stock warrants, stock option awards, exercise prices and per share data have been adjusted in these condensed interim financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented. Authorized common stock was not adjusted as a result of the reverse stock split.

On January 6, 2025, the Company entered into a Securities Purchase Agreement with certain institutional investors and Affiliate Investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “January 2025 Registered Offering”) by the Company, directly to the certain investors and to certain Affiliate Investors, an aggregate of 123,153 shares of common stock (consisting of an aggregate of 114,779 shares of common stock purchased by the investors and an aggregate of 8,374 shares of common stock purchased by certain Affiliate Investors), at an offering price of $20.30 per share, for aggregate gross proceeds from the offering of approximately $2.5 million. The net proceeds after deducting the placement agent’s fees and other offering expenses payable by the Company were approximately $2.1 million. The Company intends to use the net proceeds from the January 2025 Registered Offering for working capital and other general corporate purposes.

In a concurrent private placement (the “January 2025 Private Placement” and, together with the January 2025 Registered Offering, the “January 2025 Offering”), the Company agreed to issue to the investors and to certain Affiliate Investors Series E common warrants (the “Series E Warrants”) to purchase up to an aggregate of 123,153 shares of common stock (consisting of Series E Warrants to purchase up to 114,779 shares of common stock issued to the Investors and Series E Warrants to purchase up to 8,374 shares of common stock issued to certain Affiliate Investors) at an exercise price of $18.00 per share. Each Series E Warrant was immediately exercisable upon the issuance date and will expire five years from the issuance date. The Series E Warrants and the shares of common stock issuable upon the exercise of the Series E Warrants were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.

In connection with the January 2025 Offering, the Company issued 7,389 warrants to the placement agent. Such warrants have an exercise price of $25.38 per share and will expire on January 6, 2030. The Company used the Black-Scholes model to calculate the estimated fair value of the warrants of$85,419. The inputs utilized in the calculation were as follows: five-year term,4.46% risk-free rate, stock price at grant date of $16.20 and 102% volatility utilizing comparable companies. This amount was recorded as both an increase to additional paid-in capital and as a non-cash issuance cost of the offering.

The January 2025 Offering closed on January 7, 2025.

On March 6, 2025, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering (the “March 2025 Registered Offering”) by the Company directly to the investor (i)107,500 shares of common stock at a purchase price of $8.00 per share and (ii) pre-funded common stock purchase warrants (the “March 2025 Pre-Funded Warrants”) to purchase up to 29,750 shares of common stock at a purchase price of $7.998 per March 2025 Pre-Funded Warrant for aggregate gross proceeds of approximately $1.1 million, before deducting the placement agent’s fees and related offering expenses. The net proceeds after deducting the placement agent’s fees and other offering expenses payable by the Company were approximately $0.9 million. The Company intends to use the net proceeds from the March 2025 Registered Offering for working capital and other general corporate purposes. As of June 30, 2026, all of the March 2025 Pre-Funded Warrants were exercised.

In a concurrent private placement (the “March 2025 Private Placement” and together with the March 2025 Registered Offering, the “March 2025 Offering”), the Company agreed to issue to the investor series F common warrants (the “Series F Warrants”) to purchase up to an aggregate of 411,750 shares of common stock. The Series F Warrants have an exercise price of $8.00 per share and were exercisable commencing on July 17, 2025 and will expireon July 19, 2027. The Series F Warrants and the shares of common stock issuable upon the exercise of the Series F Warrants were not registered under the Securities Act and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.

In connection with the March 2025 Offering, the Company issued 8,235 warrants to the placement agent. Such warrants have an exercise price of $10.00 per share and will expire on July 19, 2027. The Company used the Black-Scholes model to calculate the estimated fair value of the warrants of$56,163. The inputs utilized in the calculation were as follows: five-year term,3.98% risk-free rate, stock price at grant date of $9.00 and a 102% volatility utilizing comparable companies. This amount was recorded as both an increase to additional paid-in capital and as a non-cash issuance cost of the offering.

The March 2025 Offering closed on March 10, 2025.

On May 8, 2025, the Company entered into an equity line of credit purchase agreement (the “ELOC”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $12.0 million of shares of our common stock. The Company expects that any proceeds it receives from such sales will be used for working capital and general corporate purposes.

In connection with the ELOC, the Company issued 44,963 shares of common stock to Lincoln Park in consideration for its commitment to purchase shares under the ELOC and recorded $360,000 as both an increase to additional paid-in capital and as a non-cash issuance cost of the ELOC.

The Company sold 72,000 shares of its common stock under the ELOC at a weighted-average price of $9.95 per share, raising $709,140 of gross proceeds and net proceeds of $610,262 after deducting related fees and expenses for the six months ended June 30, 2025.

The Company sold 1,487,821 shares of its common stock under the ELOC at a weighted-average price of $2.68 per share, raising $3,989,952 of gross proceeds for the six months ended June 30, 2026.

The Company recorded a receivable of $44,971 for 29,901 shares sold under the ELOC yet to be issued by the transfer agent as of June 30, 2026. The receivable for the unsettled shares as of June 30, 2026 is included in the “Other Receivable” balance in the accompanying balance sheets. The payment of this receivable was received and 29,901 shares were issued and recorded on July 1, 2026.

On June 17, 2025, the Company entered into a warrant inducement agreement (the “Letter Agreement”) with certain of its existing warrant holders for the exercise of warrants to purchase an aggregate of 222,272 shares of its common stock having a current exercise price of (i) Series A warrants to purchase 61,538 shares of common stock at $65.00 per share, (ii) Series B warrants to purchase 27,400 shares of common stock at $65.00 per share, (iii) Series C warrants to purchase 66,667 shares of common stock at $65.20 per share and (iv) Series D warrants to purchase 66,667 shares of common stock at $65.20 per share, originally issued in July 2022 and May 2023, (collectively, the “Existing Warrants”) at a reduced exercise price of $12.00 per share, in consideration for the issuance of (i) Series G-1 warrants to purchase up to an aggregate of 311,180 shares of common stock with a term offive years and (ii) Series G-2 warrants to purchase up to an aggregate of 133,363 shares of common stock with a term offive years from September 16, 2025, each at an exercise price of $8.50 per share (collectively, the “Series G Warrants”). The Company received gross proceeds from the exercise of the Existing Warrants of approximately $2.7 million and net proceeds of $2.5 million after deducting fees and transaction expenses payable by the Company. The reduction of the exercise price represented a modification to the Existing Warrants. This modification of Existing Warrants, together with the issuance of the Series G-1 and G-2 warrants, resulted in a total non-cash equity issuance cost of$4,527,245. This amount was recorded as both an increase to additional paid-in capital and as a non-cash issuance cost of the financing. The warrant inducement transaction closed on June 20, 2025. The Company expects to use the net proceeds of these transactions for general corporate and working capital purposes.

Pursuant to the engagement letter entered into with H.C. Wainwright & Co., LLC (“Wainwright”) in connection with prior financings by the Company and as previously disclosed in the Company’s prior filings with the U.S. Securities and Exchange Commission, the Company paid a fee to Wainwright equal to 7.0% of the gross proceeds from the transactions contemplated by the Letter Agreement and issued to Wainwright and its designees warrants to purchase up to an aggregate of 13,336 shares of common stock, which have the

same terms as the Series G Warrants, except that they have an exercise price of $15.00 per share. The Company used Black-Scholes model to calculate the estimated fair value of the warrants of$109,624. The inputs utilized in the calculation were as follows; five-year term,3.96% risk-free rate, stock price at grant date of $11.00 and a 105% volatility utilizing comparable companies. This amount was recorded as both an increase to additional paid-in capital and as a non-cash issuance cost of the offering.

On April 15, 2026, the Company, in a registered direct offering (the “April 2026 Registered Offering”) sold (i)816,068 shares of common stock, par value $0.001 per share, of the Company at a purchase price of $3.03 per share and (ii) pre-funded common stock purchase warrants to purchase up to 9,017 shares of Common Stock at a purchase price of $3.029 per share for aggregate gross proceeds of approximately $2.5 million, before deducting the placement agent fees and related offering expenses. The Company intends to use the net proceeds from the April 2026 Registered Offering for working capital and other general corporate purposes.

In a concurrent private placement (the “April 2026 Private Placement”), the Company issued unregistered 24-month term warrants to purchase up to 1,650,170 shares of common stock. These warrants have an exercise price of$2.78 per share, were immediately exercisable upon issuance and will expire on May 11, 2028.

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company as of June 30, 2026:

The weighted average contractual life of the outstanding warrants is 2.26 years.

NOTE 5 – SHARE-BASED COMPENSATION

The Company’s 2021 Equity Incentive Plan (the “Plan”) currently reserves an aggregate of 425,732 shares of common stock, subject to adjustments as provided in the Plan, of which 106,947 are currently still available for issuance as of June 30, 2026. The purpose of the Plan is to attract, retain and incentivize directors, officers, employees, and consultants.

In January 2025, the Company granted stock options to purchase a total of 1,500 shares of common stock to one of its employees pursuant to the Plan. The options were issued at an exercise price of$15.54, which was the grant date fair value of the common stock, with the options vesting monthly over 36 months.

In February 2025, the Company granted stock options to purchase a total of 32,275 shares of common stock to its three employees to settle the 2024 executive bonus of $413,120 in lieu of cash payment. The options were issued at an exercise price of $15.96, which was the grant date fair value of the common stock, with the options vesting immediately.

In April 2026, the Company granted stock options to purchase a total of 120,850 to itsfour employees, five independent board of directors and a number of consultants pursuant to the Plan. The options were issued at an exercise price of $2.36, which was the grant date fair value of the common stock, with the employees’ and consultants’ options vesting monthly over 36 months, and independent board of directors’ options vesting on theone-year anniversary of the grant date.

A summary of the Company’s stock option issuances and associated general and administrative expenses is as follows:

Compensation expense associated with these awards is recognized over the vesting period based on the fair value of the option at the grant date determined based on the Black-Scholes model. Option valuation models require the input of highly subjective assumptions including the expected price volatility. The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model. Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield. The risk-free rate of return was derived from U.S. Treasury notes with comparable maturities.

The Company determined the fair value of the option awards using the Black-Scholes option pricing model using the following weighted average assumptions:

A summary of the Company’s stock option activity is as follows:

The total non-cash compensation expense for these options not yet recognized as of June 30, 2026 was $719,063. The weighted average vesting period for the unvested options is 2.31 years. The weighted average grant date fair value of all options granted as of June 30, 2026 is $45.61. The Company records the impact of any forfeitures of options as they occur.

NOTE 6 – SHARE-BASED PAYMENTS TO VENDORS

In the fourth quarter of 2024, the Company entered into a 12-month agreement with a vendor pursuant to which the Company made quarterly grants of 500 shares of common stock. The equity payments were expensed consistently over the contractual vesting period. Pursuant to the agreement, the Company issued 1,000 shares of common stock with grant date fair values of $16.80 and $8.00, and recorded general and administrative expenses of $4,100 and $12,500 for the three and six months ended June 30, 2025, respectively and $0 for the each of three and six months ended June 30, 2026.

In addition, in the fourth quarter of 2024, the Company entered into a 12-month agreement with a vendor pursuant to which the Company made quarterly grants equal to $21,000 worth of common stock and certain cash payments. The cash payments were expensed over the service period and the equity components were expensed consistently over the contractual vesting period. Pursuant to the agreement, the Company issued 3,880 shares of common stock with grant date fair value of $14.60 and $8.60 and recorded general and administrative expenses of $21,000 and $42,000 for the three and six months ended June 30, 2025, respectively. This agreement was renewed in the fourth quarter of 2025 foran additional 12-month term and pursuant to the agreement, the Company issued 18,546 shares of common stock with a grant date fair value of $2.38 and $2.16 and recorded general and administrative expenses of $21,000 and $41,999 for the three and six months ended June 30, 2026, respectively.

In the first quarter of 2025, the Company entered into an agreement with a vendor to provide investor relation services for asix-month term. Pursuant to the agreement, the Company issued a total of 12,000 shares of common stock and made a certain cash payment. The cash payment and the equity components were expensed consistently over the contractual vesting period. The Company issued 12,000 shares of common stock with grant date fair values ranging from $6.80 to $16.16, and recorded general and administrative expenses of $0 and $43,600 for the three months ended June 30, 2026 and 2025, respectively and $0 and $124,280 for the six months ended June 30, 2026 and 2025 respectively.

In the second quarter of 2025, the Company entered into an agreement with a vendor to provide investor relation services for asix-month term. Pursuant to the agreement, the Company issued 2,300 shares of common stock with a grant date fair value of $7.60 and recorded general and administrative expense of $17,480 for the three and six months ended June 30, 2025. This agreement was amended in the third quarter of 2025 and in the second quarter of 2026 for additionalsix-month terms each. Pursuant to the amended agreements, the Company made monthly grants equal to$20,000 worth of common stock and certain cash payments. The cash payments and the equity components were expensed consistently over the contractual vesting period. The Company issued 42,606 shares of common stock with grant date fair values ranging from $1.79 to $3.43 and recorded general and administrative expenses of $60,000 and $100,000 for the three and six months ended June 30, 2026, respectively.

NOTE 7 – NET LOSS PER SHARE

Basic and diluted net loss per share of common stock for the three and six months ended June 30, 2026 and 2025 were determined by dividing net loss by the weighted average shares of common stock outstanding during the period. The Company’s potentially dilutive shares, consisting of 2,574,566 warrants and 348,625 stock options, have not been included in the computation of diluted net loss per share for all periods as the result would be antidilutive.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

In conjunction with the Asset purchase in February 2018, the Company is required to make certain milestone payments related to the ongoing development of ACX-362E (Ibezapolstat) totaling $700,000 in the aggregate if certain milestones are achieved, which includes a $50,000 payment made in February 2018 following the acquisition and a $150,000 payment made in October 2024 for achieving the Phase 2 clinical trial milestone. The Company is also obligated to make royalty payments equal to 4% of net sales of ACX-362E for a period of time equal to the last to expire of any applicable patents, as defined in the purchase agreement.

NOTE 9 – SUBSEQUENT EVENTS

Under the ELOC, the Company sold an additional 515,141 shares of common stock for approximately $0.7 million, bringing the cumulative total to 2,754,359 shares of common stock, with gross proceeds of approximately $8.7 million through August 12, 2026.

On July 22, 2026, the Securities and Exchange Commission (“SEC”) issued an order approving Nasdaq’s new rules requiring listed companies to maintain a Market Value of Listed Securities (“MVLS”) of at least $5 million. Under the new rules, every company listed on the Nasdaq Global Select Market, Nasdaq Global Market, or Nasdaq Capital Market must now maintain an MVLS of at least $5 million as an ongoing condition of listing. This requirement applies across all three Nasdaq tiers. If a company’s MVLS falls below $5 million for 30 consecutive business days, Nasdaq staff will issue a staff delisting determination, the company’s securities will be immediately suspended from trading and delisting proceedings will commence. Shares will then generally begin trading on the over-the-counter market. Unlike certain other continued listing deficiencies (which afford companies an opportunity to submit a compliance plan or benefit from a cure period), the MVLS requirement provides no such relief. A timely request for a hearing before the Nasdaq Hearings Panel will not automatically stay the suspension of trading. The Hearings Panel may, in its discretion: (a) reverse the delisting determination only if it was made in error, or (b) grant an exception of up to 180 days for the company to demonstrate compliance with Nasdaq’s initial listing standards (which are generally higher than continued listing standards). An adverse decision may be further appealed to the Nasdaq Listing and Hearing Review Council.