Lite Strategy, Inc.

Previous wording

Lite Strategy, Inc. (Nasdaq: LITS) is a pharmaceutical company that has historically developed novel and differentiated cancer therapies and is currently assessing pre-clinical development programs in nononcology disease indications. We also hold Litecoin (LTC) tokens as a primary reserve asset as part of our broader institutional treasury initiative. We initially built our pipeline by acquiring promising cancer agents and creating value in programs through clinical development, strategic partnerships, and out-licensing or commercialization, as appropriate. Our approach to drug development is to evaluate our drug candidates either as stand-alone or in combination with standard-of-care therapies to overcome known resistance mechanisms and address medical needs to provide improved patient benefit. Our drug candidate pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (CDK9) inhibitor, zandelisib, an oral, once-daily, selective P3K3 inhibitor and, prior to its sale in October 2024 to Aardvark Therapeutics, Inc., ME-344, an intravenous small molecule mitochondrial inhibitor targeting the oxidative phosphorylation pathway in the mitochondria.

Current wording

Lite Strategy, Inc. (Nasdaq: LITS) is a pharmaceutical company that has historically developed novel and differentiated cancer therapies and is currently assessing pre-clinical development programs in nononcologic disease indications. We also hold Litecoin (LTC) tokens as a primary reserve asset as part of our broader institutional treasury initiative. We initially built our pipeline by acquiring promising cancer agents and creating value in programs through clinical development, strategic partnerships, and out-licensing or commercialization, as appropriate. Our approach to pre-clinical drug development is to evaluate our drug candidates either as stand-alone or in combination with standard-of-care therapies to overcome known resistance mechanisms and address clear medical needs to provide improved patient benefit. Our drug candidate pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (CDK9) inhibitor, zandelisib, an oral, once-daily, selective PI3Kδ inhibitor.

Previous wording

On August 5, 2025, we announced the commencement of our primary reserve asset and implementation strategy built on a digital asset infrastructure and long-term capital innovation (the Litecoin Treasury Strategy) through our acquisition of LTC tokens, reflecting the full deployment of the net proceeds of the PIPE (as defined below). LTC is an open source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. LTC features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. We believe this strategy will allow us to diversify reserves, enhance capital efficiency and align with emerging financial technologies.

Current wording

On August 5, 2025, we announced the commencement of our primary reserve asset and implementation strategy built on a digital asset infrastructure and long-term capital innovation (the Litecoin Treasury Strategy) through our acquisition of LTC tokens, reflecting the full deployment of the net proceeds of the PIPE (as defined in Note 11. Stockholders' Equity). LTC is an open source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. LTC features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. We believe this strategy will allow us to diversify reserves, enhance capital efficiency and align with emerging financial technologies with an emphasis on privacy and payment processing.

Previous wording

Changes in fair value of our Covered Call Options and/or realized gains on Covered Call Options which expire unexercised are recognized upon settlement (expiration) of the related Covered Call Option contract within gain on derivative liabilities, a component of other (expense) income, net, in the condensed consolidated statements of operations.

Current wording

Changes in fair value of our Covered Call Options and/or realized gains or losses on Covered Call Options recognized upon settlement (expiration) of the related Covered Call Option contract are recognized within loss on derivative liabilities, net, a component of other income (expense), in the condensed consolidated statements of operations.

Previous wording

Change in fair value of digital assets represents unrealized losses from the remeasurement of our LTC investments to their fair value, realized losses recognized upon derecognition of LTC digital assets when placing them as collateral with GSR Markets upon writing of Covered Call Options and realized losses on the sale of LTC digital assets. We had no such investments in the comparable prior year period.

Current wording

Changes in fair value of digital assets represents unrealized gains and losses from the remeasurement of our LTC investments to their fair value, realized losses recognized upon derecognition of LTC digital assets when placing them as collateral with GSR Markets upon writing of Covered Call Options and realized losses on the sale of LTC digital assets.

Previous wording

In the Digital Asset Interpretation, the SEC classified crypto assets into five categories based on their characteristics, uses, and functions. “Digital commodities,” “digital collectibles” including “meme coins,” and “digital tools” are not themselves securities according to the SEC. A “digital commodity” is a crypto asset intrinsically linked to, and deriving its value from, the programmatic operation of a “functional” crypto system and supply and demand dynamics, rather than from the expectation of profits based on the essential managerial efforts of others. A digital commodity is not a security. The Digital Asset Interpretation identifies a number of specific crypto assets as digital commodities, including LTC.

Current wording

In the Digital Asset Interpretation, the SEC classified crypto assets into five categories based on their characteristics, uses, and functions. “Digital commodities,” “digital collectibles” including “meme coins,” and “digital tools” are not themselves securities according to the SEC. A “digital commodity” is a crypto asset intrinsically linked to, and deriving its value from, the programmatic operation of a “functional” crypto system and supply and demand dynamics, rather than from the expectation of profits based on the essential managerial efforts of others. The Digital Asset Interpretation stated that a digital commodity is not a security and identifies a number of specific crypto assets as digital commodities, including LTC.

Previous wording

In addition, if LTC is in fact a security, we could be considered an unregistered “investment company” under the Investment Company Act of 1940, which could necessitate our liquidation or delisting from the exchange on which our stock is traded. In such case, we may be deemed to have participated in an illegal offering of investment company securities and there is no guarantee that the we will be able to register under the Investment Company Act of 1940 at such time, or take such other actions as may be necessary to ensure our activities comply with applicable law, which could force us to liquidate our LTC holdings.

Current wording

In addition, if LTC is in fact a security, we could be considered an unregistered “investment company” under the Investment Company Act of 1940, which could necessitate our liquidation or delisting from the exchange on which our stock is traded. In such case, we may be deemed to have participated in an illegal offering of investment company securities and there is no guarantee we will be able to register under the Investment Company Act of 1940 at such time, or take such other actions as may be necessary to ensure our activities comply with applicable law, which could force us to liquidate our LTC holdings.

Previous wording

Our drug candidate pipeline includes voruciclib, an oral CDK9 inhibitor and zandelisib, an oral, once-daily, selective PI3Kδ inhibitor. In October 2024, we sold ME-344, a small molecule mitochondrial inhibitor targeting the oxidative phosphorylation pathway, to Aardvark Therapeutics, Inc. for development in obesity and metabolic diseases, with potential for future milestone payments of $62.0 million upon reaching prespecified development and commercialization targets, as well as royalties.

Current wording

Our drug candidate pipeline includes voruciclib, an oral CDK9 inhibitor and zandelisib, an oral, selective PI3Kδ inhibitor.

Previous wording

CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (Mcl-1), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death and result in poor prognosis in cancer. Inhibition of CDK9 blocks the production of Mcl-1, which is also an established resistance mechanism to the BCL-2 inhibitor venetoclax. Inhibition of Mcl-1 also leads to apoptosis or alteration of differentiation of T lymphocytes and macrophages, which is relevant for the treatment of autoimmune diseases.

Current wording

CDK9 has important functions in cell cycle regulation, and its modulation has potential applicability in cancer and autoimmune diseases. CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (Mcl-1), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death and result in poor prognosis in cancer. Inhibition of CDK9 blocks the production of Mcl-1, which is also an established resistance mechanism to the BCL-2 inhibitor venetoclax. Inhibition of Mcl-1 also leads to apoptosis or alteration of differentiation of T lymphocytes and macrophages, which is relevant for the treatment of nononcologic diseases.

Previous wording

Voruciclib, a selective orally administered CDK9 inhibitor, was studied in a Phase 1 trial, which evaluated voruciclib dose and schedule as a single agent in patients with acute myeloid leukemia (AML) and B-cell malignancies, and in combination with the B-cell lymphoma 2 (BCL-2) inhibitor venetoclax (marketed as Venclexta®) in patients with AML. All voruciclib clinical trial activities were ceased in September 2024. Previously, voruciclib had been evaluated by Piramal Enterprises Limited in three clinical studies conducted in patients with solid tumors and we conducted pre-clinical studies to explore potential activity in various solid tumors including in combination with therapies that target the RAS signaling pathway, such as KRAS inhibitors. We are currently assessing a pre-clinical development program in nononcology disease indications and have commenced these activities in the second quarter of fiscal year 2026.

Current wording

Voruciclib, a selective oral CDK9 inhibitor, was studied in a Phase 1 trial as a single agent in patients with acute myeloid leukemia (AML) and B-cell malignancies and in combination with the B-cell lymphoma 2 (BCL-2) inhibitor venetoclax (marketed as Venclexta®) in patients with AML. These studies showed the anticipated decreases in Mcl-1 protein as reported by Davids et al (Blood Advances. 2025;9(4):820-832) and Alvarado-Valero et al (Blood Neoplasia. 2025;2(3):100108). Previously, voruciclib had been evaluated by Piramal Enterprises Limited in three clinical studies in patients with solid tumors. All voruciclib clinical trial activities were ceased in September 2024.

Previous wording

Zandelisib is an oral, once-daily, selective PI3Kδ inhibitor that was being development for the treatment of indolent B-cell lymphomas. In November 2022 we announced the discontinuation of zandelisib development after a meeting with the U.S. Food and Drug Administration (the FDA), in which the FDA recommended modifications to the phase 3 registration study that we deemed not feasible to complete in a time frame that would support further investments. Currently, we are not conducting any clinical trial for zandelisib and are assessing potential out-licensing or sale related opportunities.

Current wording

Zandelisib is an oral, once-daily, selective PI3Kδ inhibitor that was being developed for the treatment of indolent B-cell lymphomas. In November 2022 we announced the discontinuation of zandelisib development after a meeting with the U.S. Food and Drug Administration (the FDA), in which the FDA recommended modifications to the phase 3 registration study that we deemed not feasible to complete in a time frame that would support further investments. Currently, we are not conducting any clinical trial activities for zandelisib and are assessing potential out-licensing or sale related opportunities.

Previous wording

Comparison of Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of Fiscal Three Months Ended September 30, 2026 and 2025

Previous wording

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. We have accumulated losses of $462.3 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2026, we had $7.5 million in cash and cash equivalents and $40.3 million in unrestricted digital assets. Although we intend to retain and hold our digital assets, we could liquidate these assets, or a portion thereof, if needed to fund our operating activities. In connection with our July 2024 announcement regarding the evaluation of our strategic alternatives, we discontinued the clinical development of voruciclib in oncology, while certain related nonclinical research and development activities continued through the end of fiscal year 2025. As part of our continued assessment of future pre-clinical development with our drug candidate pipeline, in the second quarter of fiscal year 2026 we commenced additional investigational research and development activities in nononcology disease indications. We believe that our cash balance, including our digital assets, will be sufficient to meet our obligations and fund operations for at least the next 12 months from the issuance of these condensed consolidated financial statements.

Current wording

To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. We have accumulated losses of $459.3 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of September 30, 2026, we had $4.3 million in cash and cash equivalents and $46.2 million in unrestricted digital assets. Although we intend to retain and hold our digital assets, we could liquidate these assets, or a portion thereof, if needed to fund our operating activities. In connection with our July 2024 announcement regarding the evaluation of our strategic alternatives, we discontinued the clinical development of voruciclib in oncology, while certain related nonclinical research and development activities continued through the end of fiscal year 2025. As part of our continued assessment of future pre-clinical development with our drug candidate pipeline, in the second quarter of fiscal year 2026 we commenced additional investigational research and development activities in nononcologic disease indications. We believe that our cash balance, including our digital assets, will be sufficient to meet our obligations and fund operations for at least the next 12 months.

Previous wording

In December 2025, we commenced utilization of our Share Repurchase Program utilizing proceeds from our Covered Call Options to repurchase Shares of our Common Stock. During the nine months ended March 31, 2026, we received proceeds of $0.7 million from our Covered Call Options which were recognized as gains in our statements of operations. These proceeds and proceeds from the sale of our digital assets were used to repurchase 1,629,136 shares of our Common Stock.

Current wording

In December 2025, we initiated our Share Repurchase Program utilizing proceeds from our Covered Call Options to repurchase shares of our common stock. During the three months ended September 30, 2026, we used proceeds of $1.4 million from our Covered Call Options and $1.0 million of proceeds from the sale of our digital assets to repurchase 2,214,503 shares of our common stock.

Previous wording

Net cash used in operating activities for the nine months ended March 31, 2026, of $8.0 million consisted of our net loss of $58.1 million and $1.6 million in changes in our operating assets and liabilities used in operations, offset by $51.7 million for noncash items. Net cash used in operating activities for the nine months ended March 31, 2025, of $18.4 million consisted of our net loss of $13.3 million, $5.0 million in our operating assets and liabilities used in operations and $0.1 million in noncash items.

Current wording

Net cash used in operating activities for the three months ended September 30, 2026, of $2.2 million consisted of our net income of $16.0 million, offset by $17.7 million in net gains for noncash items and $0.5 million in changes in our operating assets and liabilities used in operations. Net cash used in operating activities for the three months ended September 30, 2025 of $4.5 million consisted of our net loss of $3.6 million and $2.1 million in changes in our operating assets and liabilities used in operations, partially offset by $1.2 million in noncash items.

Previous wording

Net cash used in investing activities for the nine months ended March 31, 2026, of $97.3 million consisted of our acquisition of digital assets upon deployment of our Litecoin Treasury Strategy in August 2025, proceeds from sales of our digital assets and written call options on our LTC. Net cash provided by financing activities for the nine months ended March 31, 2025, of $35.2 million consisted of maturities of our short-term investments and proceeds recognized on the disposition of a nonfinancial asset.

Current wording

Net cash provided by investing activities for the three months ended September 30, 2026, of $3.1 million consisted of $10.1 million in net proceeds on Covered Call Options primarily reflecting the exercise of our Covered Call Options during our fiscal quarter ended September 30, 2026, and $1.0 million in proceeds from sales of our digital assets partially offset by $7.9 million in purchases of LTC. Net cash used in investing activities for the three months ended September 30, 2025, of $100.0 million consisted of our acquisition of LTC upon deployment of our Litecoin Treasury Strategy in August 2025.

Previous wording

Net cash provided by financing activities for the nine months ended March 31, 2026, was $94.8 million associated with the issuance and sale of 23,216,898 shares of Common Stock and Pre-Funded Warrants for the purchase of up to 6,022,869 shares of Common Stock in our PIPE and the issuance, sale of 882,924 shares of Common Stock under our ATM Program. These proceeds were partially offset by cash used to repurchase 1,629,136 shares of our Common Stock at an average cost per share of $1.22. We had no financing activities during the nine months ended March 31, 2025.

Current wording

Net cash used in financing activities for the three months ended September 30, 2026 was $2.4 million to repurchase 2,214,503 shares of our common stock at an average cost per share of $1.08 (excluding excise taxes). Net cash provided by financing activities for the three months ended September 30, 2025, was $96.6 million associated with the issuance and sale of 23,216,898 shares of common stock and Pre-Funded Warrants for the purchase of up to 6,022,869 shares of common stock in our PIPE and the issuance and sale of 882,924 shares of common stock under our ATM Program.

Previous wording

Under our remaining license agreements, we have payment obligations, which are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sales of products developed under those agreements. For additional details regarding these agreements, see the section titled Note 9. Commitments and Contingencies and Note 10. License Agreements elsewhere in this Quarterly Report;

Current wording

Under our remaining license agreements, we have payment obligations, which are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sales of products developed under those agreements. For additional details regarding these agreements, see the section titled Note 10. License Agreements and Note 9. Commitments and Contingencies to our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report;

Previous wording

We describe our significant accounting policies in Note 2. Summary of Significant Accounting Policiesof the notes to the financial statements included in our 2025 Annual Report. We discuss our critical accounting estimates in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report. Except as disclosed in Note 2. Summary of Significant Accounting Policies, as it relates to Digital Assets, Digital Assets Receivable, Net, Derivatives - Covered Call Options and Warrants, and the addition of our critical accounting estimate as it relates to Valuation of Equity Instruments Issued for Exchange for Services and Valuation of Covered Call Options(described below), there have been no changes in our significant accounting policies or critical accounting estimates since June 30, 2025.

Current wording

We describe our significant accounting policies in Note 2. Summary of Significant Accounting Policiesof the notes to the financial statements included in our 2026 Annual Report. We discuss our critical accounting estimates in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2026 Annual Report. There have been no changes in our significant accounting policies or critical accounting estimates since June 30, 2026.

Previous wording

Equity instruments issued in exchange for services rendered or to be rendered to us are accounted for in accordance with ASC 718, Stock Compensation. Such instruments are evaluated to determine if they should be classified as liability or equity awards. For these awards, we estimate the fair value of the services rendered/to be rendered (i.e., the compensation cost to be recognized) based upon either (i) the grant date fair value of the equity instruments issued as determined using an option pricing model such as the BSM Model or (ii) the fair value of the liabilities incurred/settled. For the Advisory Warrants issued in the PIPE, we estimated the grant date fair value using the valuation inputs as of the grant date. For the GSR Pre-Funded Warrant and the GD Advisory Warrant issued in settlement of the Asset-based Fee and the Annual Advisory Fee, respectively, we determined the grant date fair value represented the amount of the liabilities settled. We recognize the expense immediately in our condensed consolidated financial statements for services rendered at the time of issuance and for services not yet rendered, we recognize an asset and amortize the fair value of the services being rendered over the requisite service period.

Current wording

Equity instruments issued in exchange for services rendered or to be rendered to us are accounted for in accordance with ASC 718, Stock Compensation. Such instruments are evaluated to determine if they should be classified as liability or equity awards. For these awards, we estimate the fair value of the services rendered/to be rendered (i.e., the compensation cost to be recognized) based upon either (i) the grant date fair value of the equity instruments issued as determined using an option pricing model such as the BSM Model or (ii) the fair value of the liabilities incurred/settled. For the GSR Pre-Funded Warrant and the GD Advisory Warrant issued in settlement of the Asset-based Fee and the Annual Advisory Fee, respectively, we determined the grant date fair value represented the amount of the liabilities settled. For services rendered at the time of issuance, we recognize the expense immediately in our condensed consolidated financial statements. For services not yet rendered, we recognize an asset and amortize the fair value of the services being rendered over the requisite service period.

Previous wording

A 10% increase (decrease) in our assets under management as of the Fee Reference Date would have resulted in a $0.2 million increase (decrease) in the fair value of the liabilities settled through issuance of the GSR Pre-Funded Warrants.

Current wording

A 10% increase (decrease) in our assets under management and or our time weighted-average price as of the Fee Reference Date would have resulted in a $0.1 million increase (decrease) in the fair value of the liabilities settled through issuance of each the Pre-Funded Warrants issued in lieu of cash fees and the GD Advisory Fee Warrants issued in lieu of cash fees during the three months ended September 30, 2026.

Previous wording

A 10% increase (decrease) in the historical volatility of LTC utilized to estimate the fair value of the derivative liabilities - covered call options would have resulted in ade minimis increase (decrease) in the gain on derivative liabilities as of March 31, 2026.

Current wording

A 10% increase (decrease) in the historical volatility of LTC utilized to estimate the fair value of the derivative liabilities - covered call options would have resulted in ade minimis increase (decrease) in the loss on derivative liabilities, net, a component of other income expense, as of September 30, 2026.

Previous wording

A 10% increase (decrease) in the forward price as of March 31, 2026, would have resulted in ade minimis increase (decrease) in the gain on derivative liabilities.

Current wording

A 10% increase (decrease) in the forward price as of September 30, 2026, would have resulted in a $0.4 million increase ($0.3 million decrease) in the loss on derivative liabilities, net, a component of other income (expense).