GENELUX Corp

Notes to Financial Statements

For the years ended December 31, 2025 and 2024

(in thousands, except for share amounts)

NOTE 1 –ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Genelux Corporation (Genelux or the Company), a Delaware Corporation, incorporated on September 4, 2001, is a late clinical-stage biopharmaceutical company located in Westlake Village, California. The Company is engaged in the research and development of diagnostic and therapeutic solutions for cancer for which there is no effective treatment today. The Company is focused on developing a pipeline of next-generation oncolytic immunotherapies for patients suffering from aggressive and/or difficult-to-treat tumor types.

Basis of Presentation

The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP). Certain prior period amounts, which are not material, have been reclassified to conform with the current period presentation.

Liquidity and Capital Resources

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, the Company has experienced recurring losses from operations since inception and incurred a net loss of $32.1 million and used cash in operations of $25.3 million during the year ended December 31, 2025. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its strategies. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

As of December 31, 2025, the Company had cash, cash equivalents, restricted cash and marketable securities of $14.6 million, andsubsequent net proceeds of $18.5 million that were received on January 8, 2026 (see Note 13), representing a pro forma balance of $33.1 million. However the Company does not have any committed external source of funds or other support for its development efforts, except for payment and reimbursement obligations of the Company’s collaboration partner, Newsoara HYK Biopharmaceuticals Co., Ltd., under a License Agreement entered into in September 2021 (as amended, the Newsoara License Agreement). Until the Company can generate sufficient product revenue to finance its cash requirements, which it may never do, the Company expects to finance its future cash needs through a combination of public or private equity offerings, debt and/or other capital sources such as milestone payments, royalties or other payments or funding from existing or potential collaborations, strategic alliances, licensing arrangements, and other arrangements. Based on its research and development plans, the Company expects that its existing cash balance may not enable it to fund its planned operating expenses and capital expenditure requirements for the next 12 months from the date of filing of this Annual Report. In addition, because the design and outcome of its anticipated and any future clinical trials is highly uncertain, the Company cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of Olvi-Vec or any future product candidates. The Company’s existing cash balance may not be sufficient to complete the development of Olvi-Vec or any other product candidate.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on its operations, in the case of debt, or cause substantial dilution for its stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, judgments, and assumptions. The Company bases its estimates on historical experience and various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expense. Actual results could differ from these estimates.

Cash, Cash Equivalents and Restricted Cash

All highly liquid marketable securities are classified as cash equivalents. These marketable securities mainly include money market with maturities of three months or less when purchased. The carrying value of these cash equivalents approximate fair value.

As of December 31, 2025 and 2024, cash equivalents were comprised of money market funds that totaled $3.0 million and $7.6 million, respectively.

There was $2.0 million restricted cash at December 31, 2025, that is primarily held as a refundable security deposit for an equipment lease (see Note 6). At December 31, 2024, there wasno restricted cash.

Marketable Securities

The Company classified all of its investments in securities as marketable securities and current assets as they represent the investment of funds available for current operations as of December 31, 2025 and 2024. The marketable securities may consist of investment-grade interest bearing instruments, primarily money market accounts, government-sponsored enterprise securities, and treasury bonds, which are accounted for at fair value. Changes in fair values are reported as unrealized gains or losses and are recorded in the Company’s statement of operations and comprehensive loss. There were no realized gains or losses during the years ended December 31, 2025 and 2024. Non-credit related losses are reported as a component of accumulated other comprehensive loss and included in stockholders’ equity.

The Company evaluates its marketable securities for impairment. If an unrealized loss is determined to be other-than-temporary, it is written off as a realized loss through the statements of operations and comprehensive loss. The Company’s methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors, including the length of time to maturity and the extent to which the fair value has been less than the cost, recoverability of future cash flows as compared to carrying value of the security, the financial condition and the near-term prospects of the issuer, and the Company’s ability and intent to hold the security. If a decline in fair value of marketable securities is determined to be other than-temporary, the securities are written down to fair value as the new cost basis and the amount of the write down is accounted for as realized losses. The Company did not recognize any other-than-temporary impairments of its marketable securities for the years ended December 31, 2025, and 2024. In addition, no impairments have been recognized on the Company’s marketable securities in available-for-sale securities during the years ended December 31, 2025 and 2024.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentration of credit risk, consist primarily of cash, cash equivalents, restricted cash, and marketable securities. The Company has established guidelines relative to diversification and maturities that maintain safety and liquidity. The Company periodically reviews and modifies these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity. These accounts are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per institution. The Company has not experienced any losses on deposits since inception.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the expected useful life or the remaining lease term. Construction in progress reflects amounts incurred for construction or improvements of property and equipment that have not been placed in service. Upon disposition, the cost and accumulated depreciation of assets retired or sold are removed from the respective asset category, and any gain or loss is recognized in the Company’s statement of operations and comprehensive loss.

The estimated useful lives of property and equipment are as follows (in years):

The Company periodically assesses long-lived assets or asset groups, including property and equipment, for recoverability when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If the Company identifies an indicator of impairment, the Company assesses recoverability by comparing the carrying amount of the asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and is measured as the excess of carrying value over fair value. There were no impairment charges during the years ended December 31, 2025, and 2024.

Leases

The Company determines whether a contract is, or contains, a lease at inception. Leases with terms greater than one-year are recognized on the Company’s balance sheets as right-of-use assets that represent the Company’s right to use an underlying asset for the lease term, and lease liabilities that represent its obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the expected lease term. As of December 31, 2025 and 2024, the Company is not reasonably certain that it will exercise renewal options for any lease facilities. Therefore, these options are not included in the right-of-use assets and liabilities.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis an amount equal to the lease payments over a similar term and in a similar economic environment. The Company records expense to recognize lease payments on a straight-line basis over the expected lease term. Costs determined to be variable and not based on an index or rate are not included in the measurement of the lease liability and are expensed as incurred.

Research Contract Costs and Accruals

The Company has entered into various research and development-related contracts with companies inside of the United States. These agreements are generally cancellable, and related costs are recorded as research and development expenses as incurred. The Company records prepaid expenses and accruals for estimated ongoing research costs. When evaluating the adequacy of the prepaid expenses and accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received, and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs.

Revenue Recognition

Pursuant to Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied.

Research and Development Expenses

Costs and expenses that can be clearly identified as research and development are charged to expense as incurred. Research and development costs consist of costs incurred to discover, research, and develop drug candidates, including compensation-related expenses for research and development personnel, stock-based compensation expense, preclinical and clinical activities, costs of manufacturing, overhead expenses including facilities and laboratory expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation and amortization.

Stock-Based Compensation

Share-based compensation expenses for all stock-based awards, including stock options, restricted stock units (RSUs), and shares issued under the Employee Stock Purchase Plan (ESPP), are based on their estimated grant-date fair value. The Company’s policy is to recognize compensation cost for awards with only service conditions on a straight-line basis over the requisite service period for the entire award. Additionally, the Company’s policy is to issue new shares of common stock to satisfy stock option exercises. The fair value of stock option awards is estimated using the Black-Scholes option valuation model which requires the input of subjective assumptions to calculate the value of stock options. The Company uses historical data and other information to estimate the expected price volatility and the expected forfeiture rate for stock option awards. For restricted stock units, the value of the award is based on the Company’s stock price at the grant date.

The Company was a private company through January 30, 2023 and, as a result, lacked sufficient company-specific historical and implied volatility data. Accordingly, the expected stock price volatility for the year ended December 31, 2024 is estimated based on the historical volatility of a group of publicly traded peer companies with characteristics similar to the Company. The expected stock price volatility for the year ended December 31, 2025 is determined using the blended volatility by examining the historical volatility for the industry peer companies and the volatility of the Company’s stock from the effective date that the Company’s shares were publicly traded. The Company determined the average expected life of stock options based on the anticipated time period between the measurement date and the exercise date by examining the option holder’s past exercise patterns.

The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect on the grant date for maturities corresponding to the expected term of the awards. The Company does not assume any expected dividend yield, as it has never declared or paid dividends on its common stock.

The Company accounts for forfeitures as they occur. Compensation cost previously recognized for awards that are forfeited due to the failure to satisfy service or performance conditions is reversed in the period in which the forfeiture occurs.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting basis and the respective tax basis of the Company’s assets and liabilities, and expected benefits of utilizing net operating loss, capital loss, and tax-credit carryforwards. The Company assesses the likelihood that its deferred tax assets will be realized and, to the extent management does not believe these assets are more likely than not to be realized, a valuation allowance is established. 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 or laws is recognized in earnings in the period that includes the enactment date. As of December 31, 2025 and 2024, the Company’s deferred tax assets, consisting primarily of capitalized R&D under IRC Section 174, net operating loss carryforwards and research and development tax credit carryforwards, have been fully offset by a valuation allowance.

The Company has generated significant Net Operating Loss (NOL) carryforwards and research and development tax credits (R&D credits) as a result of its incurrence of losses and its conduct of research activities since inception. As of December 31, 2025, the Company had federal and state NOL carryforwards of approximately $192.2 million and$190.5 million, respectively. The Company does not anticipate generating revenue from sales of products for the foreseeable future, if ever, and the Company may never achieve profitability. The Company’s U.S. federal NOL carryforwards generated in taxable years beginning before January 1, 2018 can be carried forward to each of the 20 taxable years following the year of the loss. These NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under current law, U.S. federal NOLs incurred in tax years beginning after December 31, 2017, totaling $93.7 million, may be carried forward indefinitely, but the utilization of such U.S. federal NOLs is limited. As of December 31, 2025, the Company also had federal and state R&D credit carryforwards of $3.9 million and $3.0 million, respectively. The Company’s U.S. federal R&D credit carryforwards can be carried forward 20 taxable years. If not utilized in that period, these R&D credit carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under current law, the California state R&D credits carry forward indefinitely until utilized.

On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the OBBB), was signed into law. This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. The key provisions include the creation of Section 174A allowing immediate expensing of domestic research and experimental expenditures, new limitations on interest expense deductibility, and reinstatement of 100% bonus depreciation. The Company immediately expensed domestic research and experimental expenditures starting tax year ended December 31, 2025. Due to valuation allowances, the OBBB has no impact on the Company’s financial statements except changes in footnote disclosures.

Segment Information

The Company operates as a single segment because its chief operating decision maker (CODM) reviews operating results on an aggregate basis and manages its operations as a single operating segment.

Recent Accounting Pronouncements

In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory, employee compensation, and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is currently evaluating the provisions of this guidance and assessing the potential impact its financial statement disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

NOTE 2 –LICENSE AGREEMENTS

In September 2021, the Company entered into the Newsoara License Agreement with Newsoara BioPharma Co. Ltd. In October 2025, Newsoara BioPharma Co. Ltd. assigned all of its rights and obligations under the Newsoara License Agreement to an affiliate, Newsoara HYK Biopharmaceuticals Co., Ltd. The counterparty to the Newsoara License Agreement is referred to herein as “Newsoara.” Pursuant to the Newsoara License Agreement, the Company granted Newsoara an exclusive license to research, develop, commercialize or exploit (i) any and all oncolytic viruses that are controlled by the Company, including Olvi-Vec but excluding V-VET1 (licensed viruses); (ii) any pharmaceutical product in final form that is comprised of or contains the licensed viruses as an active ingredient (licensed products); (iii) any virus developed by or behalf of Newsoara that (a) has a vaccinia virus backbone; (b) is not disclosed or covered by any of the Company’s patents; and (c) includes modifications (as compared to the licensed viruses) of a gene function with therapeutic intent (derived molecules); and (iv) any pharmaceutical product in final form that is comprised of or contains derived molecule as an active ingredient (derived products), in each case in mainland China, Taiwan, Hong Kong and Macau (the “Newsoara Territory”) in the field of human diagnostic, prophylactic and therapeutic uses (the “Newsoara Field”). The license granted to Newsoara is royalty bearing for licensed products and royalty free for derived products.

Under the Newsoara License Agreement, Newsoara granted the Company an exclusive and royalty bearing license to develop, commercialize, and exploit outside the Newsoara Territory any derived products developed by Newsoara. Under the terms of the Newsoara License Agreement and to date, the Company has received from Newsoara an aggregate of $11.0 million ($5.0 million as an upfront payment and $6.0 million as a milestone payment) associated with the Newsoara License Agreement. Newsoara is obligated to pay the Company additional development and commercial milestone payments up to $160.5 million in the aggregate upon the occurrence of certain development, regulatory and commercial milestones by the licensed products, and royalties on net sales of the licensed products in the mid-single-digit to mid-teens percentage range (the “Newsoara Royalty”). The Newsoara Royalty term, with respect to a licensed product and each region in the Newsoara Territory, is the period beginning on the date of first commercial sale of such licensed product in such region and ending on the last to occur of: (a) the expiration of the last to expire patent controlled by the Company (including any applicable patent term extension) in such region that contains either (i) an issued valid claim that covers the licensed product (including the licensed virus contained therein, and including the composition of matter and method of making and using thereof) or (ii) a pending valid claim that covers the sequence of the licensed virus contained therein; (b) the 10th anniversary of the first commercial sale of such licensed product in such region; and (c) the expiration of all regulatory exclusivity for such licensed product in such region. If the Company, at its discretion, elects to develop and commercialize outside the territory any derived product developed by Newsoara, the Company is required to make certain milestone and royalty payments to Newsoara.

Pursuant to the Newsoara License Agreement, Newsoara is required to use commercially reasonable efforts to research, develop, manufacture, and commercialize the licensed products in the Newsoara Territory in the Newsoara Field and is solely responsible for all costs and expenses incurred in connection with such activities. In addition, Newsoara is required to use commercially reasonable efforts to conduct a multi-center Phase 2 clinical trial for Olvi-Vec in NSCLC using clinical sites in the United States and China, which is the VIRO-25 clinical trial. Newsoara is generally obligated under the Newsoara License Agreement to fund the costs of the VIRO-25 clinical trial in the United States and China. In November 2023, the Company and Newsoara agreed that the Company would engage a clinical research organization (CRO) to conduct certain start-up activities for the trial in the United States only, with Newsoara to reimburse the Company for the costs and expenses. Pursuant to a letter of understanding (the LOU), in September 2025, the Company agreed with Newsoara that the CRO would conduct additional study activities beyond startup for the VIRO-25 clinical trial in the United States and Newsoara would reimburse the Company for costs and expenses related to such additional activities; however, Newsoara is permitted to defer reimbursement of the foregoing costs and expenses until the earlier of: (i) completion of its next round of financing, or (ii) December 31, 2026.

In November 2022, the Company entered into a Clinical Supply Agreement with Newsoara to manufacture and supply Olvi-Vec for Newsoara’s clinical trials in the Newsoara Territory. The Company is responsible for supplying Olvi-Vec at its own costs of manufacturing, without markup.

NOTE 3 -FAIR VALUE MEASUREMENTS

The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date using the exit price. Accordingly, when market observable data is not readily available, the Company’s own assumptions are used to reflect those that market participants would be presumed to use in pricing the asset or liability at the measurement date.

Assets and liabilities recorded at fair value on the balance sheets are categorized based on the level of judgment associated with inputs used to measure their fair values and the level of market price observability, as follows:

Level 1 Unadjusted quoted prices are available in active markets for identical assets or liabilities as of the reporting date.

Level 2 Pricing inputs are other than quoted prices in active markets, which are based on the following:

Level 3 Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation.

In certain cases, inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability.

The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2, or from Level 2 to Level 3. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. There were no transfers during the years ended December 31, 2025 and 2024. At December 31, 2025 and 2024, the Company did not have any financial assets or financial liabilities based on Level 3 measurements.

The following table presents information about the Company’s assets measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized by the Company:

The underlying securities in the money market funds held by the Company are all government backed securities.

NOTE 4 –MARKETABLE SECURITIES

The Company’s marketable securities consisted of the following:

As of December 31, 2025 and 2024, all marketable securities consisted of investments that mature within one year.

The Company has determined that the marketable securities that were in an unrealized loss position did not have any credit loss impairment as of December 31, 2025 and 2024.

NOTE 5 –BALANCE SHEET ACCOUNTS

Property and Equipment

The following table summarizes the Company’s major classes of property and equipment:

Depreciation expense for each of the years ended December 31, 2025 and 2024, was $0.2 million, respectively.

Construction in progress is related to developments of the Company’s manufacturing and laboratory facilities in San Diego, California.

Accrued Expenses

Accrued expenses consist of the following:

As of December 31, 2025, the Company’s accrued research and development expenses were primarily attributable to ongoing clinical trial operations.

NOTE 6 –LEASES

Westlake Village, California: The Company leases 4,050 square feet of office space located at 2625 Townsgate Road for its corporate headquarters. The lease expires on July 14, 2027. The lease contains an option to renew for two additional five-year terms and first right of refusal for certain additional space at the same premises. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

San Diego, California: The Company leases 6,755 square feet of office and research and development laboratory space located at 6365 Marindustry Drive. The lease expires on October 31, 2030. The lease contains an option to renew for one five-year term. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

The Company leases 7,569 square feet of manufacturing space located at 6335 Marindustry Drive. The lease expires on October 31, 2030. The lease contains an option to renew for one five-year term. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

On December 9, 2025, the Company entered into a lease agreement, whereby the Company leases an office space located at 6215 Ferris Square, San Diego. The lease expires on December 31, 2027. The lease contains an option to renew for one additional year. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025.

Manufacturing equipment lease: On September 4, 2025, the Company entered into written agreements (Equipment Agreements), whereby the Company agreed to acquire certain equipment through a financing arrangement structured as a capital lease. Lease commencement will occur when the equipment is made available to the Company, which is the final onsite installation date and is expected to be approximately 14 months after the execution of the Equipment Agreements, or approximately November 2026. Upon commencement, the lease term will be 60 months (Initial Term), with future lease payments up to approximately $6.2 million. The Company has the right to terminate the lease without cause at the end of the Initial Term or any term thereafter upon 90 days prior written notice without incurring penalties or interest.

As of December 31, 2025, no right-of-use asset or liability has been recognized in the financial statements, as the Company does not have possession of the equipment. The Equipment Agreements also include a refundable security deposit, equal to $2.0 million as of December 31, 2025, which is classified as restricted cash on the Company’s balance sheet.

The following table presents maturities of operating lease liabilities on an undiscounted basis as of December 31, 2025:

Supplemental cash flow and other information related to leases was as follows:

Other Leases

In November 2019, the Company entered into a short-term lease agreement for one of its office facilities, which was subsequently extended until December 2022 and is currently on a month-to-month basis. Rent expense was de minimis during the years ended December 31, 2025 and 2024, respectively. In February 2026, the Company terminated the lease agreement effective March 31, 2026.

NOTE 7 –STOCKHOLDERS’ EQUITY

The following table summarizes the Company’s share of common stock and preferred stock:

The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue up to 200,000,000 shares of its common stock. Holders of shares of common stock have full voting rights, one vote for each share held of record. Stockholders are entitled to receive dividends as may be declared by the Company’s board of directors (the “Board”) out of funds legally available therefore and share pro rata in any distributions to stockholders upon liquidation. Shares of common stock do not include conversion, pre-emptive or subscription rights. All outstanding shares of common stock are fully paid and non-assessable. As of December 31, 2025, and December 31, 2024, there were 38,139,144 and 34,728,140 shares of common stock issued and outstanding, respectively.

2025 Common Stock Issuance

In March 2025, the Company completed an underwritten offering of 3,000,000 shares of its common stock at an offering price of $3.50 per share. The Company received net proceeds of $9.6 million from the offering, after deducting discounts and commissions and offering expenses payable by the Company.

The Company also agreed to issue the underwriter a warrant to purchase 120,000 shares of the Company’s common stock at an exercise price of $4.20 per share and which may be exercised until March 25, 2030, subject to certain terms and conditions (see Note 8).

2024 Common Stock Issuances

In May 2024, the Company completed an underwritten public offering of its common stock and accompanying warrants, in which the Company issued and sold 7,500,000 shares of its common stock and accompanying warrant to purchase 7,500,000 shares of the Company’s common stock, including the partial exercise of the underwriters’ option to purchase 625,000 shares of the Company’s common stock and accompanying warrants to purchase 625,000 shares of the Company’s common stock, at a combined offering price of $4.00 per share and accompanying warrant. The Company raised $27.7 million in net proceeds after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Each warrant has an exercise price of $5.25 per share. The warrants expire five years from the date of grant.

During the three months ended December 31, 2024, the Company sold 5,460 shares of its common stock under an At-the-Market (ATM) offering for net proceeds of $15.

NOTE 8 – STOCK BASED COMPENSATION

In August 2009, the Board approved the adoption of the 2009 Equity Incentive Plan (the 2009 Plan). No shares are available for grant under the 2009 Plan.

In September 2018, the Board approved the adoption of the 2019 Equity Incentive Plan (the 2019 Plan). No shares are available for grant under the 2019 Plan.

In June 2022, the Board approved the adoption of the 2022 Equity Incentive Plan (the 2022 Plan). The 2022 Plan provides for the grant of incentive stock options (ISOs) to employees, including employees of any parent or subsidiary, and for the grant of non-qualified stock options (NSOs), stock appreciation rights, restricted stock awards, RSUs, performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of its affiliates. The 2022 Plan is a successor to the 2019 Plan. The aggregate number of shares of the Company’s common stock initially reserved for issuance under the 2022 Plan is 2,800,000 shares. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2022 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2024 and continuing through and including January 1, 2032, in an amount equal to 5% of the total number of shares of its common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board. In January 2025, the number of shares available to be issued under the 2022 Plan automatically increased by 1,729,664 shares, as determined by the 2022 Plan. As of December 31, 2025, the total number of shares reserved for issuance was 2,227,576.

In September 2023, the Board approved the adoption of the Company’s 2023 Inducement Plan (the Inducement Plan) to reserve 1,000,000 shares of the Company’s common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company. The Inducement Plan provides for the grant of NSOs, stock appreciation rights, restricted stock awards, RSUs, performance-based cash and stock awards, and other stock-based awards. The terms and conditions of the Inducement Plan are substantially similar to the Company’s stockholder-approved 2022 Plan.

In June 2025, the Board approved an amendment of the Inducement Plan to increase the maximum aggregate number of shares of Common Stock issuable by 1,000,000. As of December 31, 2025, the total number of shares reserved for issuance was 1,133,700.

The following table presents a summary of awards outstanding:

The following table summarizes stock-based compensation expenses included in operating expenses:

Restricted Stock Units

The following table summarizes the activity of the Company’s RSUs:

As of December 31, 2025, $3.9 million of unamortized stock compensation expense remains.

Stock Options Awards

Option exercise prices are set forth in the grant notice, without commission or other charge, provided however, that the price per share of the shares subject to the option shall not be less than the greater of(i) 100% of the fair market value of a share of stock on the grant date, or (ii) with respect to awards under the 2019 Plan or 2022 Plan, 110% of the fair market value of a share of stock on the grant date in the case of a Participant then owning more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company. Options to employees, directors, and consultants generally vest and become exercisable over a period not exceeding four years. Options typically expire ten years after the date of grant.

In September 2025, the Board approved a reduction in the exercise prices of certain stock options held by employees to purchase shares of the Company’s common stock under the Company’s 2022 Plan, 2019 Plan and 2009 Plan that had exercise prices greater than $5.00 per share. The exercise price for such options was reduced to $3.33 per share, which was the closing price of the common stock on September 1, 2025, the effective date of the reduction. The total cost of the repricing was $1.3 million, of which $0.8 million was recorded as expense during the year ended December 31, 2025. The remainder of the cost will be recorded over the future vesting periods of the options.

In September 2022, the Board approved a stock option repricing whereby the exercise price of previously granted and unexercised options held by certain employees, directors, and key advisers with exercise prices between $9.00 and $10.50 per share, was adjusted to $6.00 per share, the closing price of the Company’s initial public offering. The total cost of the repricing was $2.73 million, of which $2.72 million was recorded as of December 31, 2024, and the remaining was recorded during the twelve months ended December 31, 2025.

The following table presents a summary of stock option activity for the year ended December 31, 2025:

As of December 31, 2025, unvested stock option expense of $11.7 million remained and will be amortized over the remaining vesting period, through December 2029.

The assumptions used for the options granted during the period are as follows:

Stock Warrants

The table below summarizes the Company’s warrants activities for the years ended December 31, 2025:

Stock warrants to purchase up to an aggregate total of 44,441 shares of its common stock with an exercise price of $5.40 per share issued to certain noteholders in prior years expired in December 2025.

During the year ended December 31, 2025, warrant holders exercised 42,749 warrants to acquire common stock at an exercise price of $5.25 per share for proceeds of $0.2 million. During the year ended December 31, 2024, the Company issued warrants to purchase 7,500,000 shares of its common stock with an exercise price of $5.25 per share to the underwriters of its second public offering. The warrants expire five years from the date of grant. During the year ended December 31, 2024, warrant holders exercised 76,487 warrants to acquire common stock at an exercise price of $9.00 per share for proceeds of $0.7 million.

There was $0.2 million and no aggregate intrinsic value for warrant shares outstanding at December 31, 2025.

Employee Stock Purchase Plan

The Company’s 2022 Employee Stock Purchase Plan (ESPP) permits eligible employees to purchase Company shares on an after-tax basis in an amount between 1% and 15% of their earnings: (i) on May 16th of each year at a 15% discount of the fair market value of the Company’s common stock on November 17th of the previous year or May 16th of the then-current year, whichever is lower, and (ii) on November 15th of each year at a 15% discount of the fair market value of the Company’s common stock on May 17th or November 15th of the then-current year, whichever is lower. The ESPP includes an “evergreen” feature, which provides that an additional number of shares of common stock will automatically be added to the shares authorized for issuance under the ESPP on January 1st of each year, beginning on January 1, 2024 and ending on (and including) January 1, 2032. The number of shares added each calendar year will equal the lesser of 1% of the Company’s common stock outstanding on December 31st of the preceding calendar year or 2,100,000 or a lesser number as determined by the Board.

During the twelve months ended December 31, 2025,50,463 shares of common stock were purchased for an aggregate purchase price of $0.18 million under the ESPP, and as of December 31, 2025,1,209,541 shares remain authorized and available for issuance.

NOTE 9 - INCOME TAXES

Significant components of the provision for income taxes for the years ended December 31, 2025 and 2024 are as follows:

The following table presents a reconciliation of the tax expense based on the statutory rate to the Company’s actual tax expense in the statements of operations and comprehensive loss. A notional 21% tax rate was applied as follows (in thousands):

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:

Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company has evaluated the available evidence supporting the realization of its gross deferred tax assets, including the amount and timing of future taxable income, and has determined it is more likely than not that the assets will not be realized. Due to uncertainties surrounding the realizability of the deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets at December 31, 2025 and 2024.

At December 31, 2025 and 2024, the Company had federal income tax net operating loss carryforwards of approximately $192.2 million and $160.0 million, respectively. At December 31, 2025 and 2024, the Company had California income tax net operating loss carryforwards of approximately $190.5 million and $165.9 million, respectively. Of the total federal net operating loss, approximately $93.7 million has an indefinite carryforward period as of December 31, 2025. The remaining federal and California net operating loss carryforwards will expire through December 31, 2045, unless previously utilized. At December 31, 2025, the Company also has federal and California research and development tax credits of approximately $3.9 million and $3.0 million, respectively. The federal credits will expire through 2042 unless previously utilized. The California credits carryforward indefinitely. The utilization of net operating loss and tax credit carryforwards may be subject to limitation under the provisions of the Internal Revenue Code Section 382 and similar state provisions.

The Company has adopted the provisions in ASC 740 relating to the accounting for uncertain tax positions. This provision requires that the Company recognize the impact of a tax position in its financial statements if the position is more likely than not to be sustained upon examination and on the technical merits of the position. The Company also has a policy to recognize interest and/or penalties on the income tax expense related to uncertain tax positions. The Company had no material uncertain tax positions as of December 31, 2025 and 2024, respectively, and consequently, no interest or penalties have been accrued by the Company.

The Company is subject to taxation in the United States and state jurisdictions. The Company’s tax years for 2010 and forward are subject to examination by the United States and California tax authorities due to the carry forward of unutilized net operating losses.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may be subject to various claims and legal proceedings in the ordinary course of business. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount is reasonably estimable, the Company will accrue liability for the estimated loss. There were no contingent liabilities recorded as of December 31, 2025 and 2024.

NOTE 11 – SEGMENT INFORMATION

The Company operates and manages its business asone reportable and operating as a clinical stage biopharmaceutical company. The Company’s current focus is on developing oncolytic immunotherapies for the treatment of cancer. The Company’s Chief Operating Decision Maker (CODM) reviews financial information presented and decides how to allocate resources based on net income (loss). Net income (loss) is used for evaluating financial performance.

Significant segment expenses include research and development, salaries, insurance, and stock-based compensation. Operating expenses include all remaining costs necessary to operate our business, which primarily include external professional services and other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by the Company’s CODM:

NOTE 12 –NET LOSS PER SHARE

The following table presents the computation of basic and diluted net loss per share for the years ended December 31, 2025 and 2024.

The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share.

NOTE 13 -SUBSEQUENT EVENTS

On January 8, 2026, the Company completed an underwritten offering of 6,666,667 shares of its common stock at $3.00 per share. The net proceeds received from the offering were $18.5 million, after deducting underwriting discounts, commissions, and offering expenses payable by the Company.

Effective as of March 18, 2026, the Company terminated the 2024 Sales Agreement with Guggenheim.