Phio Pharmaceuticals Corp.

1. Organization and Significant Accounting Policies

Nature of Operations

Phio Pharmaceuticals Corp. (“Phio” or the “Company”) is a clinical stage biopharmaceutical company whose proprietary INTASYL® self-delivering small interfering RNAi(siRNA) technology is designed to make immune cells more effective in killing tumor cells. The Company is developing therapeutics that are designed to leverage INTASYL to precisely target specific proteins that reduce the body’s ability to fight cancer, without the need for specialized formulations or drug delivery systems. The Company is committed to discovering and developing innovative cancer treatments for patients by creating new pathways toward a cancer-free future.

Phio was incorporated in the state of Delaware in2011 as RXi Pharmaceuticals Corporation. On* November 19, 2018,the Company changed its name to Phio Pharmaceuticals Corp., to reflect its transition from a platform company toone* that is fully committed to developing groundbreaking immuno-oncology therapeutics.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain information and footnote disclosures that are included in the Company’s annual consolidated financial statements, but that arenot required for interim reporting purposes, have been condensed or omitted. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of results for the periods presented.

These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form10-K for the year ended* December 31, 2024*, as filed with the Securities and Exchange Commission (the “SEC”) on* March 31, 2025 (the “2024 Form10-K*”). Interim results arenot necessarily indicative of results for a full year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, MirImmune, LLC. All material intercompany accounts have been eliminated in consolidation.

Segments

The Company operates asone operating segment and all assets are located in the United States.

Reverse Stock Split

Effective* July 5, 2024,the Company completed a1*-for-9 reverse stock split of the Company’s outstanding common stock, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. The reverse stock split didnot reduce the number of authorized shares of the Company’s common or preferred stock. All share and per share amounts have been adjusted to give effect to the reverse stock split.

Use of Estimates

The preparation of financial statements in accordance 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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas subject to significant estimates and judgment include, among others, those related to the fair value of equity awards, accruals for research and development expenses, useful lives of property and equipment, and the valuation allowance on the Company’s deferred tax assets. On an ongoing basis the Company evaluates its estimates and bases its estimates on historical experience and other relevant assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from these estimates.

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Liquidity

The Company has reported recurring losses from operations since its inception and expects to continue to have negative cash flows from operations for the foreseeable future. Historically, the Company’s primary source of funding has been from sales of its securities. The Company’s ability to continue to fund its operations is dependent on obtaining funding fromthird parties, such as proceeds from the issuance of debt, sale of equity, or strategic opportunities, in order to maintain its operations. This is dependent on a number of factors, including the market demand or liquidity of the Company’s common stock. There isno guarantee that debt, additional equity or other funding will be available to the Company on acceptable terms, or at all. If the Company fails to obtain additional funding when needed, the Company would be forced to scale back or terminate its operations or seek to merge with or to be acquired by another company.

Based on current cash flow projections, the Company believes it has sufficient cash and cash equivalents, including net proceeds from its* November 2025Financing (as defined below), to meet its current planned obligations for at least12* months from the date these financial statements are issued. The Company has limited cash resources, has incurred recurring operating losses and negative cash flows from its operations since its inception and hasnot yet recognized any product revenues. These factors have previously raised doubt about the Company’s ability to continue as a going concern. With the net proceeds from the* November 2025Financing, the Company was able to alleviate such doubt as of the date of the filing of this Quarterly Report on Form10*-Q.

Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include unrestricted cash accounts, money market investments and highly liquid investment instruments with original maturity ofthree months or less at the date of purchase.

Other than as set forth above, there have beenno material changes to the significant accounting policies disclosed in the Company’s2024 Form10-K.

Recent Accounting Pronouncements

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09, “Income Taxes (Topic740*): Improvements to Income Tax Disclosures,” which requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. In addition to new disclosures associated with the rate reconciliation, the ASU requires information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The ASU also describes items that need to be disaggregated based on their nature, which is determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling item is associated. The ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the12 months following the reporting date. This ASU is effective for annual periods beginning after* December 15, 2024.Early adoption is permitted for annual financial statements that havenot* yet been issued or made available for issuance. This ASU should be applied on a prospective basis; however, retrospective application is permitted. The Company is currently evaluating the impact that ASU2023-09 will have on its consolidated financial statements.

In* November 2024,the FASB issued ASU2024*-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure about the specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU donot change or remove current expense disclosure requirements but affect where this information appears in the notes to financial statements. This ASU is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027,with early adoption permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact that ASU2024*-03 will have on its consolidated financial statements.

Recent Tax Legislation

On* July 4, 2025,the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions and allows immediate expensing of certain domestic research and experimental expenditures under new Section174A* of the Internal Revenue Code. The Company doesnot expect the impact of the OBBBA to be material to its consolidated financial statements.

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2. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities are comprised of the following:

3. Collaboration Agreement

AgonOx, Inc. (“AgonOx”)

In* February 2021,the Company entered into a clinical co-development collaboration agreement (the “Clinical Co-Development Agreement”) with AgonOx, a private company developing a pipeline of novel immunotherapy drugs targeting key regulators of the immune response to cancer. Under the Clinical Co-Development Agreement, Phio and AgonOx were working to develop a T cell-based therapy using the Company’s lead product candidate, PH-762, and AgonOx’s “double positive” tumor infiltrating lymphocytes (“DP TIL”) technology. Per the terms of the Clinical Co-Development Agreement, the Company agreed to reimburse AgonOx up to $4,000,000 in expenses incurred to conduct a Phase1* clinical trial of PH-762 treated DP TIL in patients with advanced melanoma and other advanced solid tumors.

In* May 2024,the Company terminated the Clinical Co-Development Agreement with AgonOx, effective immediately. Effective as of the date of termination, the Clinical Co-Development Agreement and the continuing obligations of the Company and AgonOx thereunder were terminated in their entirety. The Company isno* longer required to provide financial support for the development costs incurred in the Clinical Co-Development Agreement and the Company isno longer entitled to future development milestones or royalty payments from AgonOx’s licensing of its DP TIL technology.

The Company paid AgonOx all payment obligations that accrued prior to the termination of the Clinical Co-Development Agreement. Pursuant to the terms of the Clinical Co-Development Agreement, each of the Company and AgonOx were responsible for its own costs and expenses incurred in connection with the wind-down of the Phase1 clinical trial. The Company made the remaining payment of $34,320, which primarily related to accrued obligations for patient fees and other miscellaneous costs as of the date of termination, to AgonOx on* March 21, 2025.*This settled all future obligations to AgonOx.

The Company didnot recognize expense with respect to the Clinical Co-Development Agreement during thethree andnine months ended* September 30, 2025*. During thethree andnine months ended* September 30, 2024*, the Company recognized approximately $308,000 and $414,000, respectively, of expense with respect to the Clinical Co-Development Agreement.

4. Leases

The Company leases space for various corporate and research purposes. It is the Company’s policy to apply the provisions of ASC842 when accounting for arrangements that meet the criteria to be a lease. The Company calculates the lease liability as the present value of the lease’s cash flows using the interest rate implicit in the lease, if determinable. If the rate implicit in the lease isnot determinable, the Company uses its incremental borrowing rate. The incremental borrowing rate is defined as the rate the Company would have to pay to borrow on a collateralized basis over the lease term. The Company has elected the accounting policy election available under ASC842 tonot record a lease liability for leases with a term of less thanone year.

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From* April 2014to March 2024,the Company leased space that was utilized as its corporate headquarters and primary laboratory. The lease expired on March 31, 2024.On March 1, 2024,the Company commenced a lease for a laboratory facility located at17* Briden Street, Worcester, Massachusetts. The lease had an original expiration date of* August 31, 2024and was subsequently extended through February 28, 2025.The Company continues to lease the space on a month-to-month basis. Monthly rent is approximately $2,600. In March 2025,the Company contracted with LifeSciences PA located at411* Swedeland Road, King of Prussia, PA19406 for access to full working space for normal hours of operations at a fee of $300 per month, which can be cancelled at any time.

Operating lease costs included in operating expense were approximately $9,000 and $8,000 for thethree months ended* September 30, 2025and2024*, respectively. Operating lease costs included in operating expense were approximately $22,000 and $19,000 for thenine months ended* September 30, 2025and2024*, respectively.

There wasno cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated balance sheets and included within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements of cash flows for the Company’s former corporate headquarters for thethree months ended* September 30, 2025and2024*. Cash paid for the amounts included in the measurement of the operating lease liability on the Company’s condensed consolidated balance sheets and included within changes in the lease liability in the operating activities of the Company’s condensed consolidated statements of cash flows was $0 and $35,000 for thenine months ended* September 30, 2025and2024*, respectively.

5. Stockholders’** Equity**

Financings

** May 2024Financing

On* May 16, 2024,the Company entered into a purchase agreement (the “Purchase Agreement”) with Triton Funds LP (“Triton”), pursuant to which the Company agreed to sell, and Triton agreed to purchase, upon the Company’s request inone* or more transactions, up to 95,833 shares of Common Stock at a purchase price of $6.48 per share (the “Purchase Price”), for aggregate gross proceeds of up to $621,000. The Company recorded expense of approximately $100,000, primarily related to legal fees, in connection with the execution of the Purchase Agreement with Triton. On* July 3, 2024,*the Company terminated the Purchase Agreement with Triton effective immediately. No shares of Common Stock were sold by the Company pursuant to the Purchase Agreement prior to termination.

** July 2024Financing

On* July 11, 2024,the Company entered into inducement letter agreements (the “** July 2024Inducement Letter Agreements**”) with certain holders of certain of the Company’s existing warrants to purchase up to an aggregate of 545,286 shares of Common Stock. The existing warrants were originally issued in February 2020through December 2023,having exercise prices between $324.00 and $9.72 per share. Pursuant to the July 2024Inducement Letter Agreements, these warrants were exercised for cash at a reduced exercise of $5.45 per share in consideration of the Company’s agreement to issue new unregistered five andone*-half year term Series C warrants to purchase up to 583,098 shares of Common Stock at an exercise price of $5.45 and new unregistered eighteen month term Series D warrants to purchase up to 507,474 shares of Common Stock at an exercise price of $5.45, both issued and sold at a price of $0.125 per warrant share (the “*** July 2024Financing**”). In addition, the Company issued warrants to H.C. Wainwright & Co., LLC (the “Placement Agent”) to purchase a total of 40,896 shares of Common Stock at an exercise price of $6.8125 per share. The net proceeds to the Company from the July 2024*Financing were approximately $2,646,000, after deducting placement agent fees and offering expenses. The Company incurred non-cash equity issuance costs of approximately $2.4 million for the incremental fair value of the outstanding equity classified warrants and approximately $0.2 million for placement agent warrants.

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Pursuant to the terms of the* July 2024Inducement Letter Agreements, in the event that the exercise of the existing warrants in the July 2024Financing would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that wouldnot* cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of Common Stock in abeyance. Accordingly, an aggregate of 328,758 shares of Common Stock were held in abeyance (the “*** July 2024Abeyance Shares**”) with such July 2024Abeyance Shares evidenced through the holder’s existing warrants and which are deemed to be prepaid. The July 2024Abeyance Shares were held until notice was received by the holder that the balance of the shares of Common Stock could be issued in compliance with such beneficial ownership limitations and were exercised pursuant to a notice of exercise from the holder. Until such time, the Abeyance Shares were evidenced through the holder’s existing warrants and have been included in the Company’s table of outstanding warrants below. During the year ended December 31, 2024,all of the July 2024*Abeyance Shares were released.

** December 19, 2024Concurrent Registered Direct Offering and Private Placement

On* December 19, 2024,the Company entered into a securities purchase agreement (the “** December 19, 2024Securities Purchase Agreement**”) with certain institutional and accredited investors in connection with a registered direct offering (the “** December 19, 2024Registered Direct Offering**”) and concurrent private placement (the “** December 19, 2024Private Placement**” and, together with the December 19, 2024Registered Direct Offering, the “** December 19, 2024Offerings**”). The December 19, 2024Offerings closed on December 20, 2024.The net proceeds to the Company from the December 19, 2024*Offerings were approximately $900,000, after deducting placement agent fees and offering expenses.

Pursuant to the* December 19, 2024Securities Purchase Agreement, the Company offered and sold in the December 19, 2024Registered Direct Offering 437,192 shares of Common Stock at a purchase price of $2.635 per share. In the December 19, 2024Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 437,192 shares of Common Stock (the “Series E Warrants”). Under the terms of the December 19, 2024Securities Purchase Agreement, for each share of Common Stock issued in the December 19, 2024Registered Direct Offering, an accompanying Series E Warrant was issued to the purchaser thereof. Each Series E Warrant is exercisable forone share of Common Stock at an exercise price of $2.51 per share and will expire on December 20, 2029.The Series E Warrants were offered and sold at a purchase price of $0.125 per Series E Warrant, which purchase price is included in the offering price per share of Common Stock issued in the December 19, 2024*Registered Direct Offering.

** December 23, 2024Concurrent Registered Direct Offering and Private Placement

On* December 23, 2024,the Company entered into a securities purchase agreement (the “** December 23, 2024Securities Purchase Agreement**”) with certain institutional and accredited investors in connection with a registered direct public offering (the “** December 23, 2024Registered Direct Offering**”) and concurrent private placement (the “** December 23, 2024Private Placement**” and, together with the December 23, 2024Registered Direct Offering, the “** December 23, 2024Offerings**” and, together with the December 19,* 2024 Offerings, the “*** December 2024Offerings**”). The December 23, 2024Offerings closed on December 24, 2024.The net proceeds to the Company from the December 23, 2024*Offerings were approximately $480,000, after deducting placement agent fees and offering expenses.

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Pursuant to the* December 23, 2024Securities Purchase Agreement, the Company offered and sold in the December 23, 2024Registered Direct Offering 240,000 shares of Common Stock at a purchase price of $2.00 per share. In the December 23, 2024Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 240,000 shares of Common Stock (the “Series F Warrants”). Under the terms of the December 23, 2024Securities Purchase Agreement, for each share of Common Stock issued in the December 23, 2024Registered Direct Offering, an accompanying Series F Warrant was issued to the purchaser thereof. Each Series F Warrant is exercisable forone share of Common Stock at an exercise price of $2.00 per share and will expire on December 24, 2029.The Series F Warrants were offered and sold at a purchase price of $0.125 per Series F Warrant, which purchase price is included in the offering price per share of Common Stock issued in the December 23, 2024*Registered Direct Offering.

In connection with the* December 2024Offerings, the Company agreed to issue to the Placement Agent, or its designees, warrants to purchase up to an aggregate of 50,789 shares of Common Stock (the “Placement Agent Warrants”), which represent 7.5% of the aggregate number of shares of Common Stock sold in the December 19, 2024Registered Direct Offering and the December 23, 2024Registered Direct Offering. The Placement Agent Warrants have substantially the same terms as the Series E Warrants and the Series F Warrants, except that (i)32,789 of the Placement Agent Warrants have an exercise price equal to $3.2938, or 125% of the offering price per share of Common Stock sold in the December 19, 2024Registered Direct Offering, and are exercisable until December 19, 2029,and (ii)18,000 of the Placement Agent Warrants have an exercise price equal to $2.50, or 125% of the offering price per share of Common Stock sold in the December 23, 2024Registered Direct Offering, and are exercisable until December 23, 2029.*

** January 13, 2025Concurrent Registered Direct Offering and Private Placement

On* January 13, 2025,the Company entered into a securities purchase agreement (the “** January 13, 2025Securities Purchase Agreement**”) with certain institutional and accredited investors in connection with a registered direct public offering (the “** January 13, 2025Registered Direct Offering**”) and concurrent private placement (the “** January 13, 2025Private Placement**” and, together with the January 13, 2025Registered Direct Offering, the “** January 13, 2025Offerings**”). The January 13, 2025Offerings closed on January 14, 2025.In addition, the Company issued warrants to the Placement Agent to purchase a total of 79,775 shares of Common Stock at an exercise price of $3.75 per share. The net proceeds to the Company from the January 13, 2025Registered Direct Offerings and the January 13, 2025*Private Placement were approximately $2.9 million, after deducting fees and estimated offering expenses.

Pursuant to the* January 13, 2025Securities Purchase Agreement, the Company offered and sold in the January 13, 2025Registered Direct Offering 1,063,670 shares of Common Stock at a purchase price of $3.00 per share. In the January 13, 2025Private Placement, the Company also issued to certain institutional and accredited investors unregistered warrants to purchase up to 2,127,340 shares of Common Stock (the “Series G Warrants”). Under the terms of the January 13, 2025Securities Purchase Agreement, for each share of Common Stock issued in the January 13, 2025Registered Direct Offering, two accompanying Series G Warrants were issued to the purchaser thereof. Each Series G Warrant is exercisable forone share of Common Stock at an exercise price of $3.00 per share and will expire on January 14, 2027.*

** January 14, 2025Concurrent Registered Direct Offering and Private Placement

On* January 14, 2025,the Company entered into a securities purchase agreement (the “** January 14, 2025Securities Purchase Agreement**”) with certain institutional and accredited investors in connection with a registered direct public offering (the “** January 14, 2025Registered Direct Offering**”) and concurrent private placement (the “** January 14, 2025Private Placement**” and together with the January 14, 2025Registered Direct Offering, the “** January 14, 2025Offerings**”). The January 14, 2025Offerings closed on January 15, 2025.In addition, the Company issued warrants to the Placement Agent to purchase a total of 62,500 shares of Common Stock at an exercise price of $3.75 per share. The net proceeds to the Company from the January 14, 2025Registered Direct Offering and the January 14, 2025*Private Placement were approximately $2.2 million, after deducting fees and estimated offering expenses.

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Pursuant to the* January 14, 2025Securities Purchase Agreement, the Company offered and sold in the January 14, 2025Registered Direct Offering 833,335 shares of Common Stock at a purchase price of $3.00 per share. In the January 14, 2025Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 1,666,670 shares of Common Stock (the “Series H Warrants”). Under the terms of the January 14, 2025Securities Purchase Agreement, for each share of Common Stock issued in the January 14, 2025Registered Direct Offering, two accompanying Series H Warrants were issued to the purchaser thereof. Each Series H Warrant is exercisable forone share of Common Stock at an exercise price of $3.00 per share and will expire on January 15, 2027.*

** January 16, 2025Concurrent Registered Direct Offering and Private Placement

On* January 16, 2025,the Company entered into a securities purchase agreement (the “** January 16, 2025Securities Purchase Agreement**”) with certain institutional and accredited investors in connection with a registered direct public offering (the “** January 16, 2025Registered Direct Offering**”) and concurrent private placement (the “** January 16, 2025Private Placement**” and, together with the January 16, 2025Registered Direct Offering, the “** January 16, 2025Offerings**” and the January 16, 2025Offerings, together with the January 13, 2025Offerings and the January 14, 2025Offerings, the “** January 2025Offerings**”). The January 16, 2025Offerings closed on January 17, 2025.In addition, the Company issued warrants to the Placement Agent to purchase a total of 45,750 shares of Common Stock at an exercise price of $3.75 per share The net proceeds to the Company from the January 16, 2025Registered Direct Offering and the January 16, 2025*Private Placement were approximately $1.6 million, after deducting fees and estimated offering expenses.

Pursuant to the* January 16, 2025Securities Purchase Agreement, the Company offered and sold in the January 16, 2025Registered Direct Offering 610,000 shares of Common Stock at a purchase price of $3.00 per share. In the January 16, 2025Private Placement, the Company also issued to such institutional and accredited investors unregistered warrants to purchase up to 1,220,000 shares of Common Stock (the “Series I Warrants”). Under the terms of the January 16, 2025Securities Purchase Agreement, for each share of Common Stock issued in the January 16, 2025Registered Direct Offering, two accompanying Series I Warrants were issued to the purchaser thereof. Each Series I Warrant is exercisable forone share of Common Stock at an exercise price of $3.00 per share and will expire on January 19, 2027.*

** July 2025Financing

On* July 25, 2025,the Company entered into inducement letter agreements (the “** July 2025Inducement Letter Agreements**”) with certain holders of certain of the Company’s existing warrants to purchase an aggregate of 928,596 shares of the Company’s common stock. Pursuant to the July 2025Inducement Letter Agreements, the existing warrants were originally issued in December 2024and January 2025,having exercise prices between $2.00 and $3.00 per share. Warrants to purchase 100,000 shares of common stock at the existing exercise price of $2.00 per share were exercised at their existing exercise price of $2.00 per share, and warrants to purchase 828,596 shares of common stock were exercised at a reduced exercise price of $2.485 per share. In consideration for the immediate exercise of such warrants for cash and the payment of an additional $0.125 per New Warrant (as defined below), or an aggregate of $232,149 for all New Warrants, the Company agreed to issue new unregistered five-year term Series J warrants (the “Series J Warrants”) to purchase an aggregate of up to 318,596 shares of common stock atan exercise price of $2.485 and new unregistered 24-month term Series K warrants (the “Series K Warrants” and, together with the Series J Warrants, the “New Warrants”) to purchase an aggregate of up to 1,538,596 shares of common stock atan exercise price of $2.485 (the “** July 2025*Financing**”).

In addition, the Company issued warrants to the placement agent, H.C. Wainwright & Co., LLC, to purchase up to 69,645 shares of common stock (the “Placement Agent Warrants”).7,500 of the Placement Agent Warrants issued have an exercise price of $2.8125 per share of Common Stock and a term offive years,16,395 of the Placement Agent Warrants issued have an exercise price of $3.4188 per share of Common Stock and a term offive years, and 45,750 of the Placement Agent Warrants issued have an exercise price of $3.4188 per share of Common Stock and a term oftwenty-four months. The net proceeds to the Company from the* July 2025*Financing were approximately $2.1 million, after deducting placement agent fees and offering expenses.

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Warrants

The Companyfirst assesses warrants that are issued by the Company under the FASB ASC Topic480, “Distinguishing Liabilities from Equity” (“ASC480”) to determine whether the warrants are within the scope of ASC480. If there areno instances outside of the Company’s control that could require cash settlement, the Company then applies and follows the applicable accounting guidance in the FASB ASC Topic815, “Derivatives and Hedging” (“ASC815”). Financial instruments are accounted for as either derivative liabilities or equity instruments depending on the specific terms of the agreement. Based on the assessment of the warrants issued by the Company under the guidance in ASC480 and ASC815, the warrants issued by the Company have been classified within stockholder’s equity.

During thethree months ended* September 30, 2025and2024*, there were 928,596 and 448,292 warrants exercised, respectively. During thenine months ended* September 30, 2025and2024*, there were 1,486,028 and 540,112 warrants exercised, respectively.

During thethree andnine months ended* September 30, 2025*, there wereno abeyance shares released and issued. During thethree months ended* September 30, 2024*,231,758 of the* July 2024Abeyance Shares were released and issued and during thenine* months ended* September 30, 2024,* all of the shares held in abeyance in connection with the Company's* December 2023financing transaction were released and issued, and 231,758 of the July 2024*Abeyance Shares were released and issued.

The following table summarizes the Company’s outstanding warrants, all of which are classified as equity instruments, at* September 30, 2025*:

6. Stock-based Compensation

Restricted Stock Units

Restricted stock units (“RSUs”) are issued under the Company’s2020 Long-Term Incentive Plan (the “2020 Plan”). RSUs are generally subject to the satisfaction of certain service requirements. RSUs granted by the Company to employees generally cliff vest 1 year after the grant date. Upon vesting, each outstanding RSU will be settled forone share of the Company’s common stock. Employee RSU recipients* mayelect to net share settle upon vesting, in which case the Company pays the employee’s withholding taxes due upon vesting and withholds a number of shares of equal value. The Company doesnot* expect to repurchase shares to satisfy RSU vests. The fair value of the RSUs awarded is based upon the Company’s closing stock price at the grant date and is expensed over the requisite service period.

The following table summarizes the activity of the Company’s RSUs for thenine months ended* September 30, 2025*:

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There were 512,800 RSUs granted during thethree andnine months ended* September 30, 2025* and 71,000 RSUs granted during thethree andnine months ended* September 30, 2024*.

Stock-based compensation expense related to RSUs was $113,000 and $52,000 for thethree months ended* September 30, 2025and2024*, respectively. Stock-based compensation expense related to RSUs was $207,000 and $99,000 for thenine months ended* September 30, 2025and2024*, respectively.

The aggregate fair value of awards that vested during thenine months ended* September 30, 2025* was $164,000, which represents the market value of the Company's common stock on the date that the RSU vested. The aggregate fair value of awards that vested during thenine months ended* September 30, 2024* was $21,000, which represents the market value of the Company’s common stock on the date that the RSUs vested.

Stock Options

Stock options are available for issuance under the2020 Plan. Stock options granted by the Company to participants generally vest annually over 4 years after the grant date and generally vest over 1 year after the grant date for members of the Board of Directors and expire withinten years of grant.

The Company uses the Black-Scholes option-pricing model to determine the fair value of all its option grants. The risk-free interest rate used for each grant was based upon the yield onzero-coupon U.S. Treasury securities with a term similar to the expected life of the related option. The Company’s expected stock price volatility assumption is based upon the Company’s own implied volatility. As the Company has limited stock option exercise information, the expected life assumption used for option grants is based upon the simplified method provided for under the FASB ASC Topic718, “Compensation —* Stock Compensation*”. The dividend yield assumption is based upon the fact that the Company has never paid cash dividends and presently hasno intention of paying cash dividends.

The Company didnot grant any stock options during thethree ornine months ended* September 30, 2025* or2024.

The following table summarizes the activity of the Company’s stock options for thenine months ended* September 30, 2025*:

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Stock-based compensation expense related to stock options for thenine months ended* September 30, 2025and2024* was $0 and $6,000, respectively. The Company didnot have any stock-based compensation expense related to stock options for thethree months ended* September 30, 2025and2024*.

Compensation Expense Related to Equity Awards

The following table sets forth total stock-based compensation expense for thethree andnine months ended* September 30, 2025and2024*, in thousands:

As of* September 30, 2025*, the total unrecognized compensation cost related to non-vested RSUs was approximately $1,125,000. This cost is expected to be recognized over a weighted-average period of 0.95 years.

7. Net Loss per Common Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share is computed by dividing the Company’s net loss by the weighted average number of common shares outstanding and the impact of the dilutive effect of potential common stock equivalents, except when the inclusion of such potential common stock equivalents would be anti-dilutive. Dilutive potential common stock equivalents primarily consist of stock options, RSUs and warrants. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented because the impact of these items is generally anti-dilutive during periods of net loss.

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

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8. Segment Information

The Company hasone reportable segment and operates as a clinical stage biopharmaceutical company. To date, the Company has yet to generate operating revenues and doesnot expect to generate any revenue in the foreseeable future. The Company's chief operating decision maker (CODM) is the President and Chief Executive Officer (CEO). The accounting policies of the single segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the single segment and decides how to allocate resources based on net loss as reported on the condensed consolidated statements of operations as net loss. The CODM uses net loss to monitor budget versus actual results and to evaluate overall cash burn of the business. All of the Company’s operations occur within the United States.

The following table presents selected financial information with respect to the Company's single operating segment (in thousands):

9. Subsequent Events

On* November 3,2025, the Company entered into inducement letter agreements (the “** November2025* Inducement Letter Agreements”) with certain holders of the Company’s existing common stock warrants to exercise such warrants for an aggregate of 5,663,182 shares of the Company’s common stock. These warrants were originally issued in* July 2024,** December 2024,** January 2025and July 2025,*having exercise prices between $2.00 and $5.45 per share. Warrants to purchase 60,000 shares of common stock were exercised at their existing exercise price of $2.00 per share, warrants to purchase 948,596 shares of common stock were exercised at their existing exercise price of $2.485 per share and warrants to purchase 4,654,586 shares of common stock were exercised at a reduced exercise price of $2.05 per share.

Pursuant to the* November 2025Inducement Letter Agreements, in consideration for the exercise of such warrants for cash and the payment of an additional $0.125 per new unregistered warrant, or an aggregate of $1.4 million for all new warrants, the Company agreed to issue new unregistered twenty-four month warrants (the “Series A Warrants”) to purchase an aggregate of up to 11,326,364 shares of common stock at an exercise price of $2.05 (the** “November 2025*Financing**”)

The gross proceeds to the Company from the* November 2025*Financing are approximately $13.4 million, prior to deducting placement agent fees and offering expenses of an anticipated $1.3 million.

Pursuant to the terms of the* November 2025Inducement Letter Agreements, in the event that the exercise of the existing warrants in the November 2025Financing would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that wouldnot* cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of common stock in abeyance. Accordingly, an aggregate of 1,302,822 shares of common stock were held in abeyance (the “*** November 2025Abeyance Shares**”) with such November 2025Abeyance Shares evidenced through the holder’s existing warrants and which are deemed to be prepaid. The November 2025Abeyance Shares will be held until notice is received by the holder that the balance of the shares of common stock maybe issued in compliance with such beneficial ownership limitations and maybe exercised pursuant to a notice of exercise from the holder. Until such time, the November 2025Abeyance Shares are evidenced through the holder’s existing warrants. Subsequent to the balance sheet date and through the date of the filing with the SEC of this Quarterly Report on Form10*-Q,800,000 of the* November 2025*Abeyance Shares were released.

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