Actinium Pharmaceuticals, Inc.

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements have been prepared by Actinium Pharmaceuticals, Inc., or the Company, and are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at June 30, 2026 and December 31, 2025, and the results of operations and cash flows for the three months and six months ended June 30, 2026 and 2025, respectively, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s audited financial statements for the year ended December 31, 2025 in the Company’s Annual Report on Form 10-K. The results of operations for the three months and six months ended June 30, 2026 are not necessarily indicative of the operating results for the full year.

Condensed Consolidated Balance Sheets

(amounts in thousands, except share and per share data)

Condensed Consolidated Statements of Operations

(amounts in thousands, except share and per share data)

Consolidated Statements of Comprehensive Income/(Loss)

(amounts in thousands)

Condensed Consolidated Statement of Changes in Stockholders’ Equity

For the Period from January 1, 2026 to June 30, 2026

(amounts in thousands, except share amounts)

Condensed Consolidated Statement of Changes in Stockholders’ Equity

For the Period from January 1, 2025 to June 30, 2025

(amounts in thousands, except share amounts)

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

Notes to Condensed Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Nature of Business - Actinium Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company pioneering the development of targeted radiotherapies to address significant unmet medical needs in oncology.

Basis of Presentation - Unaudited Interim Financial Information - The accompanying unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Principles of Consolidation - The basis of consolidation is unchanged from the disclosure in the Company’s Notes to the Consolidated Financial Statements section in its Annual Report on Form 10-K for the year ended December 31, 2025. The unaudited condensed consolidated financial statements include the Company’s accounts and those of the Company’s wholly owned subsidiaries.

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

Segment Information -The Company operates as a single operating and reportable segment for the purposes of assessing performance and allocating resources. The Company’s chief operating decision maker is its Chief Executive Officer, who reviews total assets in the consolidated balance sheets and net income/(loss) and its components in the consolidated statements of operations; research and development expenses, general and administrative expenses, and interest income, for the purposes of making operating decisions, assessing financial performance, and allocating resources. Virtually all of the Company’s assets are located in the United States, with an immaterial amount held by its wholly owned Australian subsidiary, Actinium Pharmaceuticals Australia Pty Ltd, which supports certain international clinical development activities.’

Cash, Cash Equivalents and Restricted Cash - The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. The Company holds most of its cash equivalents in a money market account comprised of US Treasury notes. Balances held by the Company are typically in excess of Federal Deposit Insurance Corporation insured limits.

The following is a summary of cash, cash equivalents and restricted cash at June 30, 2026 and December 31, 2025:

Restricted cash relates to a certificate of deposit held as collateral for a letter of credit issued in connection with the Company’s lease of corporate office space.

Leases– The Company has an operating lease for corporate office space, an operating lease for manufacturing space and a finance lease for office equipment located at the corporate office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term.

Fair Value Measurement -Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

Revenue Recognition- The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606,Revenue From Contracts With Customers(“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the promised goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified. In determining whether goods or services are distinct, the Company evaluates certain criteria, including whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (capable of being distinct) and (ii) the good or service is separately identifiable from other goods or services in the contract (distinct in the context of the contract).

The Company then determines the transaction price, which is the amount of consideration it expects to be entitled from a customer in exchange for the promised goods or services for each performance obligation and recognizes the associated revenue as each performance obligation is satisfied. The Company’s estimate of the transaction price for each contract includes all variable consideration to which it expects to be entitled. Variable consideration includes payments in the form of collaboration milestone payments. If an arrangement includes collaboration milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

ASC 606 requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the revenue standard as the price at which an entity would sell a promised good or service separately to a customer. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied, either at a point in time or over time, and if over time, recognition is based on the use of an output or input method.

Collaborative Arrangements- The Company follows the accounting guidance for collaboration agreements with third parties, which requires that certain transactions between the Company and collaborators be recorded in its consolidated statements of operations on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. The Company evaluates its collaboration agreements for proper classification in its consolidated statements of operations based on the nature of the underlying activity. When the Company has concluded that it has a customer relationship with one of its collaborators, the Company follows the guidance of ASC 606*.* There was no revenue from collaborative arrangements for the three months and six months ended June 30, 2026 and June 30, 2025, respectively.

Grant Revenue *–*The Company has a grant from a government-sponsored entity for research and development related activities that provides for payments for reimbursed costs, which included overhead and general and administrative costs as well as an administrative fee. The Company recognizes revenue from grants as it performed services under this arrangement. Associated expenses are recognized when incurred as research and development expense. Revenue and related expenses are presented gross in the consolidated statements of operations. There was no grant revenue for the three months and six months ended June 30, 2026 and June 30, 2025, respectively.

License Revenue*–*The Company entered into a product licensing agreement whereby the Company allowed a third party to commercialize a certain product in specified territories using the Company’s trademarks. The terms of this arrangement includes payment to the Company for a combination of one or more of the following: upfront license fees; development, regulatory and sales-based milestone payments; and royalties on net sales of licensed products. The Company uses its judgment to determine whether milestones or other variable consideration should be included in the transaction price.

Upfront license fees: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from upfront license fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company determines whether the combined performance obligation is satisfied over time or at a point in time.

Development, regulatory or commercial milestone payments: At the inception of each arrangement that includes payments based on the achievement of certain development, regulatory and sales-based or commercial events, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until regulatory approval is received. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis and recorded as part of license revenue during the period of adjustment.

Sales-based milestone payments and royalties: For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, the Company will determine whether the license is deemed to be the predominant item to which the royalties or sales-based milestones relate and if such is the case, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Upfront payments and fees may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements or when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with any variable consideration is subsequently resolved. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. License revenue for the three months and six months ended June 30, 2026 was $35.0 million, see Note 4. There was no license revenue for the six months ended June 30, 2025.

Research and Development Costs - Research and development costs are expensed as incurred. Research and development costs include clinical site operations, contract research organizations, manufacturing, isotope supply, investigational product logistics, regulatory support, pharmacovigilance and other development activities conducted in the United States and internationally. To the extent the Company becomes eligible for research and development tax incentives, including incentives available in Australia, such amounts will be recognized in accordance with applicable accounting guidance when realization is probable and the amount can be reasonably estimated.

Share-Based Payments -The Company estimates the fair value of each stock option award at the grant date by using the Black-Scholes option pricing model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. The Company accounts for forfeitures of stock options as they occur.

Net Income/(Loss) Per Common Share- Basic net income and net loss per common share are computed by dividing the net income or net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the reporting period. For periods with net income, diluted net income per common share is computed using the treasury stock method for stock options and warrants that are dilutive (i.e., where the exercise price is below the average market price of the Company’s common stock for the period). For periods with net loss, diluted net loss per share is calculated similarly to basic loss per share because the impact of all potential dilutive common shares is anti-dilutive. For the three months and six months ended June 30, 2026, the Company included 284 thousand and 279 thousand stock options, respectively, in the computation of diluted net income per share using the treasury stock method. For the three months and six months ended June 30, 2025, all potentially dilutive shares, including outstanding common stock options, restricted stock units, and warrants, were excluded from the computation of diluted net loss per share as the result would have been anti-dilutive.

Recently Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-07,Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which excludes from derivative accounting non-exchange-traded contracts with underlying terms that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40,Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The Company can apply the amendments in ASU 2025-07 either (1) prospectively to new contracts entered into on or after the date of adoption or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption. The amendments in ASU 2025-07 are effective January 1, 2027, for annual reporting periods, including interim periods within annual reporting periods. Early adoption is permitted. The Company is evaluating the impact of ASU 2025-07 on its financial statements.

In May 2025, FASB issued ASU 2025-04,Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer, which revises the Master Glossary definition of the term “performance condition” for share-based consideration payable to a customer to include conditions, such as vesting conditions, that are based on the volume or monetary amount of a customer’s purchases or potential purchases of goods or services from the grantor, including over a specified period of time. The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and non-employees in exchange for goods or services to be used or consumed in the grantor’s own operations. ASU 2025-04 eliminates the policy election permitting a grantor to account for forfeitures as they occur for share-based awards granted to a customer. Separate policy elections for forfeitures remain available for share-based payment awards with service conditions granted to employees and non-employees in exchange for goods or services to be used or consumed in the grantor’s own operations. ASU 2025-04 further clarifies that a grantor should not apply the guidance in Topic 606 on constraining estimates of variable consideration to share-based consideration payable to a customer. ASU 2025-04 permits a grantor to apply the new guidance on either a modified retrospective or a retrospective basis. The amendments in ASU 2025-04 are effective January 1, 2027 for annual reporting periods, including interim periods within annual reporting periods. The Company is evaluating the impact of ASU 2025-04 on its financial statements.

In November 2024, FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), to improve the disaggregation of expenses within the consolidated statement of operations. The amendments in ASU 2024-03 require disclosures in the notes to the consolidated financial statements and specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity disclose (a) employee compensation, (b) depreciation, and (c) intangible asset amortization included in each relevant expense caption; include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; and disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The amendments in ASU 2024-03 are effective January 1, 2027 and effective for interim periods beginning January 1, 2028, either on a prospective or retrospective basis. The Company is evaluating the impact of ASU 2024-03 on its financial statements.

In December 2025, the FASB issued ASU 2025-11,Interim Reporting (Topic 270): Narrow-Scope Improvements. This update clarifies interim disclosure requirements and centralizes such requirements within Topic 270. Among other changes, ASU 2025-11 introduces a disclosure principle requiring entities to provide information about significant events or changes since the end of the last annual reporting period that have a material impact, clarifies when duplicative annual disclosures may be omitted from interim reports, and aligns interim reporting requirements with applicable SEC guidance for registrants. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2025-11 should be applied prospectively. The Company is currently assessing the impact on its condensed consolidated financial statements and disclosures.

Note 2 - Commitments and Contingencies

On June 15, 2012, the Company entered into a license and sponsored research agreement with Fred Hutchinson Cancer Research Center (“FHCRC”) to build upon previous and ongoing clinical trials with apamistamab (licensed antibody). FHCRC has completed both a Phase 1 and Phase 2 clinical trial with apamistamab. The Company has been granted exclusive rights to the antibody and related master cell bank developed by FHCRC. A milestone payment of $1 million will be due to FHCRC upon FDA approval of the first drug utilizing the licensed antibody. Upon commercial sale of the drug, royalty payments of 2% of net sales will be due to FHCRC.

On June 25, 2024, the Company entered into an exclusive, worldwide license agreement with a third party for rights to develop and commercialize radiopharmaceutical products incorporating a licensed monoclonal antibody. Under the agreement, the Company made an upfront payment, which was recorded as research and development expense, and may be required to make future milestone and royalty payments upon the achievement of specified development, regulatory and commercial events and upon commercial sales.

On March 27, 2025, a putative class action complaint (the “Securities Complaint”) was filed by alleged stockholder Nitin Kohil against the Company and executives Sandesh Seth, Avinash Desai, Madhuri Vusirikala, and Sergio Giralt (the “Defendants”), styledKohil v. Actinium Pharmaceuticals, Inc., et al., Case No. 1:25-cv-02553 in the United States District Court for the Southern District of New York, (“the Court”). The Securities Complaint alleges that the Defendants made material misrepresentations and omissions concerning the Iomab-B Phase 3 Sierra Trial during a proposed class period of October 31, 2022 to August 2, 2024 and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiff sought unspecified damages. On June 24, 2025, the court in the securities action appointed lead plaintiffs pursuant to the Private Securities Litigation Reform Act of 1995 and re-captioned the case asIn re Actinium Pharmaceuticals, Inc. Securities Litigation. Lead Plaintiffs filed an amended complaint on August 25, 2025. On October 27, 2025, Defendants moved to dismiss the amended complaint; on December 19, 2025, Lead Plaintiffs filed their opposition; and on February 2, 2026, Defendants filed their reply in support. The parties are currently awaiting the Court’s decision on Defendants’ motion.

On May 5, 2025, a shareholder complaint captionedGeorges v. Seth et al., Case No. 1:25-cv-03738-JPO was filed against certain of the Company’s directors and officers, alleging derivative liability based on the same factual allegations made in the securities class action. On May 13, 2025, a second substantially identical derivative complaint captionedRobinson v. Seth et al., Case No. 1:25-cv-04012-JPO was filed. On June 24, 2025, the Court consolidated the derivative cases and, on July 29, 2025, the parties to the derivative cases filed a stipulation with the Court to stay those matters pending resolution of the motion that defendants will file in the securities class action. The Court so-ordered that stipulation on July 30, 2025, and re-captioned the case asIn re Actinium Pharmaceuticals, Inc. Derivative Litigation.

On June 17, 2025, a purported shareholder served Actinium with a demand for books and records pursuant to Section 220 of the Delaware General Corporation Law. In general, the demand seeks documents relating to the facts at issue in the above-described securities class action and derivative cases. The Company rejected the shareholder demand by letter dated July 8, 2025. The parties continue to discuss the demand. The shareholder has not followed up on his demand since October 2025.

The Company and other Defendants intend to defend vigorously against such claims, however, there can be no assurances as to the outcome.

As of June 30, 2026, the Company had contractual commitments of approximately $1.5 million related to the equipment purchase and construction of its newly leased manufacturing facility. Of this amount, approximately $0.6 million had been incurred through June 30, 2026, with the remaining $0.9 million anticipated to be incurred during the second half of 2026.

Note 3 - Leases

The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of a fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable. The Company made an accounting policy election to exclude from its balance sheet reporting those leases with initial terms of 12 months or less.

Right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate was not readily determinable in the Company’s leases, the incremental borrowing rate was used based on the information available at commencement date in determining the present value of lease payments.

The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the Company’s leases as the reasonably certain threshold is not met.

As of June 30, 2026, the Company has three leases which have been capitalized in accordance with ASC 842, one for corporate office space, one for manufacturing space and one for office equipment. The Company entered into a lease for corporate office space effective June 1, 2022. The lease has a term offive years and two months, with an expiration date of July 30, 2027 and current annual rent of $0.6 million. The Company is also responsible for certain other costs, such as insurance, utilities and maintenance. The Company entered into a lease for manufacturing space effective as of December 1, 2025. The lease has a term offive years andone month, with an expiration date of December 31, 2030 and current annual rent of $0.2 million. The Company is also responsible for certain other costs, such as insurance, utilities and maintenance.

The components of lease expense are as follows:

Supplemental cash flow information related to leases are as follows:

Cash flow information:

Weighted average remaining lease terms are as follows at June 30, 2026:

As the interest rate implicit in the leases was not readily determinable at the time that the leases were evaluated, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate was based on the term of the lease, the economic environment of the lease and reflects the rate the Company would have had to pay to borrow on a secured basis. Below is information on the weighted average discount rates used at the time that the leases were evaluated:

Maturities of lease liabilities are as follows:

Note 4 - Other revenue

The Company has a grant from a government-sponsored entity for research and development related activities that provides payments for reimbursed costs, which included overhead and general and administrative costs, as well as an administrative fee. The Company recognizes revenue from grants as it performs services under this arrangement. Associated expenses are recognized when incurred as research and development expense. There was no grant revenue recognized for the three months and six months ended June 30, 2026 and 2025, respectively.

On April 7, 2022, the Company entered into a license and supply agreement (the “License Agreement”) with Immedica Pharma AB (“Immedica”), pursuant to which Immedica licensed the exclusive product rights for commercialization of Iomab-B (I-131 apamistamab) in the European Economic Area, Middle East and North Africa (“EUMENA”), including Algeria, Andorra, Bahrain, Cyprus, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Monaco, Morocco, Oman, Palestine, Qatar, San Marino, Saudi Arabia, Switzerland, Syria, Tunisia, Turkey, the United Arab Emirates, the United Kingdom, the Vatican City and Yemen. Upon signing, the Company was entitled to an upfront, non-refundable payment of $35 million from Immedica, which was received in May 2022. Under the terms of the License Agreement, the Company was eligible to receive certain regulatory and commercial milestone payments and royalties on net sales of the product in the licensed territories. The Company continues to retain commercialization rights in the United States and the rest of the world. The $35 million upfront payment was initially recorded as Long-term license revenue - deferred due to uncertainty regarding Immedica’s ability to obtain regulatory approval of the product by the European Medicines Agency. Subsequently, Immedica notified the Company that it would not pursue regulatory approval of Iomab-B in the licensed territories. In the current period, based on the facts and circumstances, the Company concluded that Immedica’s right to asserting a claim related to the $35 million had expired. Accordingly, the condition previously constraining recognition of the $35 million upfront payment no longer existed and that the non-refundable payment was no longer subject to a significant reversal. Therefore, the Company recognized the previously deferred $35 million upfront payment as revenue in June 2026.

Note 5 - Equity

In August 2020, the Company entered into the Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC, “JonesTrading”, pursuant to which the Company may sell, from time to time, through or to JonesTrading, up to an aggregate of $200 million of its common stock. On June 28, 2022, the Company entered into an Amended and Restated Capital on Demand™ Sales Agreement (the “A&R Sales Agreement”) with JonesTrading and B. Riley Securities, Inc. (“B. Riley”). The A&R Sales Agreement modifies the original Capital on Demand™ Sales Agreement to include B. Riley Securities as an additional sales agent thereunder. Shares of common stock were offered pursuant to a shelf registration statement on Form S-3 (File No. 333-242322) filed with the SEC on August 7, 2020 (the “Prior Shelf Registration Statement”). On August 11, 2023, the Company filed a registration statement on Form S-3 (File No. 333-273911), which registration statement was amended on February 2, 2024, and declared effective on February 5, 2024, to replace the Prior Shelf Registration Statement, including a base prospectus which covers the offering, issuance and sale of up to $500 million of common stock, preferred stock, warrants, units and/or subscription rights; and a sales agreement prospectus covering the offering, issuance and sale of up to a maximum aggregate offering price of $200 million of common stock that may be issued and sold under the A&R Sales Agreement.

The Company did not sell any shares of common stock during the six months ended June 30, 2026 and 2025, respectively.

Stock Options

The following is a summary of stock option activity for the six months ended June 30, 2026:

During the six months ended June 30, 2026, the Company granted newly hired employees options to purchase 284 thousand shares of common stock with an exercise price ranging from $1.00 to $1.28 per share, a term of 10 years, and a vesting period of 4 years. The stock options had an aggregate fair value of $242 thousand that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 3.7% to 4.2%, (2) expected life of 6 years, (3) expected volatility range from 85.8% to 87.3%, and (4)zero expected dividends. During the six months ended June 30, 2025, the Company granted options to purchase 26 thousand shares.

On March 31, 2025, the Board of Directors approved of the cancellation of stock options to purchase an aggregate of 4.9 million shares of common stock held by certain current employees and directors that were initially granted under the Amended and Restated 2013 Stock Plan and the 2019 Stock Plan. Such cancellations were subject to the consent of the applicable holders of the stock options, which the Company received. The cancellation of these stock options resulted in the recording of $8.7 million in stock compensation expense for the six months ended June 30, 2025.

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at June 30, 2026 was $0.3 million related to unvested stock options, which is expected to be expensed over a weighted average of 3.6 years.

Warrants

Following is a summary of warrant activity for the six months ended June 30, 2026:

Note 6 – Income Taxes

The Company accounts for income taxes under ASC 740,Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

For interim periods, the Company estimates its annual effective income tax rate and applies that rate to year-to-date ordinary income or loss in determining the income tax provision or benefit for the period.

The Company’s estimated annual effective income tax rate for the year ending December 31, 2026 is 0%. Although the Company recorded income before income taxes of $27.9 million and $22.4 million for the three and six months ended June 30, 2026, respectively, driven by the recognition of $35.0 million of revenue previously deferred in connection with the commercialization agreement with Immedica, no income tax expense was recorded as the Company has sufficient net operating losses that are available to offset net taxable income. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily because the Company maintains a full valuation allowance against its net deferred tax assets. As a result, no income tax benefit or expense is recognized on pre-tax income or loss for financial reporting purposes.

Since its inception, the Company has generated net operating losses in substantially all periods and has accumulated significant federal and state net operating loss carryforwards. Based on the weight of all available evidence, including the Company’s history of cumulative losses and the uncertainty of future taxable income sufficient to realize its deferred tax assets, management has determined that it is more likely than not that the net deferred tax assets will not be realized. Accordingly, a full valuation allowance has been maintained against all net deferred tax assets. The recognition of the $35.0 million of deferred revenue as income for the three months and six months ended June 30, 2026 does not, in isolation, constitute sufficient positive evidence to conclude that realization of the Company’s deferred tax assets is more likely than not, and therefore the full valuation allowance has been maintained as of June 30, 2026.