Shuttle Pharmaceuticals Holdings, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
SHPH$5.59+10.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-26.
0001493152-25-008300
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001493152-26-014131
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 72 current paragraphs.
21 unchanged; 27 reworded; 23 added; 17 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
On November 21, 2025, we acquired substantially all of the assets of Molecule.ai, a pharmaceutical software company building an artificial intelligence (“AI”) driven platform for molecular discovery and early-stage drug development, were acquired by a wholly owned subsidiary of ours. By combining modern AI techniques with structured scientific workflows, the Molecule.ai platform (hereafter, “Molecule.ai” or the “platform”) helps researchers explore the chemical space more efficiently, evaluate molecular ideas with greater clarity and make more informed decisions during the earliest stages of drug development. The platform is engineered to accelerate the iteration cycles that characterize modern drug discovery while preserving scientific reproducibility, traceability and operational reliability. Molecule.ai adapts state of the art AI algorithms to create a practical, domain-specific AI infrastructure layer for molecular research and development. We will seek to leverage Molecule.ai’s molecular modeling and predictive analytics platform to significantly augment our drug discovery and development business purpose. In tandem with the Molecule.ai asset acquisition, on November 20, 2025, we committed to a plan to wind-down the Clinical Trials of Ropidoxuridine.
Current report
Following the March 2025 $5.75 million equity financing, on March 14, 2025, Nasdaq acknowledged that we had regained compliance with the Listing Rule 5550(b)(1) but indicated that if we failed to evidence compliance upon filing the March 31, 2025 Form 10-Q, we may have been subject to delisting. We evidenced compliance through maintaining a minimum closing bid price of our common stock of $1.00 per share or greater from June 16, 2025 to July 1, 2025. Accordingly, we regained compliance with the Minimum Bid Price Requirement.
Current report
On June 16, 2025, in order to maintain the Minimum Bid Price Requirement, we effectuated a 1-for-25 reverse stock split of our issued and outstanding common stock, rounding up to account for any fractional shares. The reverse stock split had no effect on our authorized shares of common stock or preferred stock and the par value will remain unchanged at $0.00001, respectively. All common stock share, option, warrant and per share amounts (except our authorized but unissued shares and previously reserved shares) have been retroactively adjusted in these consolidated financial statements and related disclosures.
Current report
On July 2, 2025, we received notification from Nasdaq acknowledging that we maintained the requisite minimum closing bid price of our common stock of $1.00 per share or greater. Accordingly, we regained compliance with Listing Rule 5550(a)(2), and the matter was closed.
Current report
We reported stockholders’ equity of $1,394,161 in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025, and, as a result, were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires companies listed on the Nasdaq Capital Market (“Nasdaq”) to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing (the “Stockholders’ Equity Requirement”). We believe as of November 17, 2025, we regained compliance with the Stockholders’ Equity Requirement based upon our private placement consummated on November 4, 2025, pursuant to which we raised aggregate gross proceeds of approximately $2.5 million, before deducting placement agent fees and offering expenses payable by us.
Current report
For the year ended December 31, 2025, we reported stockholders’ equity of$2,254,446, and, as a result, were not in compliance with the Stockholders’ Equity Requirement. We believe, as of March 9, 2026, we regained compliance with the Stockholders’ Equity Requirement based upon our underwritten public offering of 2,238,800 shares of its common stock at a public offering price of $0.50 per share, resulting in gross proceeds of $3,500,000 and net proceeds of approximately $3,360,000 after deducting underwriting discounts, commissions, and estimated offering expenses of $140,000. The offering included 4,761,000 pre-funded warrants at a price of $0.499 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share.
Current report
*Research and Development.*Research and development (“R&D”) expense was $4.1 million for the year ended December 31, 2025, as compared to $3.6 million for year ended December 31, 2024. The increase primarily relates to costs incurred with the Company’s CRO and wind down costs associated with the contract termination. Although R&D expenses increased, the Company anticipates its future research and development activities will cease until such time as it determines the direction of its preclinical and clinical drug development efforts. The Company currently estimates wind down costs associated with Theradex contract termination to be approximately $0.8 million, and for the year ended December 31, 2025, have been recorded in the consolidated statements of operations as research and development expense.
Current report
In January 2025, we entered into a change order to the existing agreement with Theradex Systems, Inc., our primary third-party CRO, for purposes of supporting our clinical trials of Ropidoxuridine. As disclosed in our SEC Form 8-K filings on October 21, 2025 and November 21, 2025, the Company received a letter from Theradex Systems, Inc., providing written notice of termination of the master agreement, dated November 1, 2018 (the “Master Agreement”), between us and Theradex, and all work orders thereunder, and demanding immediate payment of all outstanding amounts owed thereunder in the aggregate amount of $1.091 million. Pursuant to the notice of termination, on November 20, 2025, we entered into a release and settlement agreement (the “Settlement Agreement”) with Theradex, pursuant to which we will pay a partial payment of $300,000 to Theradex as full and final payment of any and all claims relating to the debt or obligation previously owed by us to Theradex, totaling approximately $557,000 (the “Outstanding Liabilities”) and in consideration of such payment, each party will release, acquit and discharge each other from all claims arising from the Outstanding Liabilities and Theradex will properly wind down operations in a manner compliant with the Food and Drug Administration. After the payments pursuant to the Settlement Agreement, we will still owe amounts, under five separate research site agreements between the Company and various hospitals, as disclosed in the Settlement Agreement. As part of the Company’s wind down of its Clinical Trials, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include right of use asset impairment charges, accelerated expense recognition of share-based payments, and contract termination costs. Costs associated with the wind down of the Clinical Trials are recorded within research and development expenses in the consolidated financial statements of operations.
Current report
In March 2025, we entered into a consulting services agreement (the “Bowery Consulting Agreement”) with Bowery Consulting Group Inc. (the “Consultant”). According to the Bowery Consulting Agreement, the Consultant will provide consulting services in connection with our business, advising on viability of plans for scaling activities, growth and capital raising strategies and cost minimization associated with technological platform improvements and marketing spend. We agreed to pay the Consultant $260,000 for their services, which we are not obligated to pay until we regain full Nasdaq listing requirement. We received notice from Nasdaq on July 2, 2025 that we had regained compliance with the listing requirement and have since paid the fee.
Current report
On April 3, 2025, the Company entered into a consulting agreement with the IR Agency LLC (the “IR Agency”). Pursuant to the consulting agreement, IR Agency agreed to provide certain marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $2.0 million on April 5, 2025. The term of the consulting agreement was three months starting on April 3, 2025. For the year ended December 31, 2025, the Company incurred $2.0 million of costs under the consulting agreement.
Current report
On September 15, 2025, the Company entered into another consulting agreement with the IR Agency. Pursuant to the consulting agreement, IR Agency agreed to provide marketing and advertising services to communicate information about the Company to the financial community, including, but not limited to, creating company profiles, media distribution and building a digital community with respect to the Company. As consideration for the performance of the Services, the Company paid IR Agency $1.5 million. The term of the consulting agreement will be two months. For the year ended December 31, 2025, the Company incurred $1.5 million of costs under the consulting agreement.
Current report
In October 2025, the October 2024 Convertible Bridge Notes mandatorily converted into 117,612 shares of common stock due to reaching maturity. The Convertible Bridge Notes converted at a share price of $6.38, which is the conversion price with a 15% discount per the Convertible Bridge Notes’ terms. See Note 5 for more information.
Current report
On November 20, 2025, the Company entered into an asset purchase agreement (the “APA”) to acquire Molecule.ai. The total purchase consideration was $10,117,304. For the year ended December 31, 2025, the Company made a $3,000,000 cash payment and issued 320,496 shares of common stock with a fair value of $564,073. As of December 31, 2025, the Company had contingent consideration payable and consideration payable of $2,000,000 and $4,435,927, respectively, related to the Molecule.ai acquisition.
Current report
On February 27, 2025, we entered into a Revolving Loan Agreement (the “Revolving Loan Agreement”) with a lender. Pursuant to and under the terms of the Revolving Loan Agreement, we issued a revolving note dated February 28, 2025 in the principal amount of up to $2.0 million (the “Revolving Note”), which we may draw upon at our discretion from time to time through its maturity on February 28, 2026. The Revolving Note bears interest at the rate of 18% per annum calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and shall accrue interest daily commencing from the date of any draw down until paid in full.
Current report
On March 12, 2025, we consummated a public offering of an aggregate of (i) 53,637 shares of common stock, of the Company, at a public offering price of $7.50 per share and (ii) pre-funded warrants to purchase 713,030 shares of common stock at an exercise price of $0.025 per share, at a public offering price of $7.48 per pre-funded warrant (the “Offering”). The Offering closed on March 13, 2025. We received gross proceeds of approximately $5.7 million and net proceeds of approximately $5.0 million, reflecting approximately $0.7 million of legal costs and other expenses connected with the Offering.
Current report
On June 20, 2025, we consummated a private placement of an aggregate of (i) 21,924 shares of common stock, of the Company, at a purchase price of $3.60 per share and (ii) pre-funded warrants to purchase 1,158,953 shares of common stock at an exercise price of $0.001 per share, at a purchase price of $3.599 per pre-funded warrant. The private placement closed on June 24, 2025. We received gross proceeds of approximately $4.3 million and net proceeds of approximately $3.9 million, reflecting approximately $0.4 million of legal costs and other expenses connected with the private placement.
Current report
On November 3, 2025, we consummated a private placement of prefunded warrants to purchase up to 625,156 shares of common stock at an exercise price of $0.001 per share, at a price of $3.99 per prefunded warrant. The private placement closed on November 4, 2025. We received gross proceeds of approximately $2.5 million and net proceeds of approximately $2.3 million, reflecting approximately $0.2 million of legal costs and other expenses connected with the private placement.
Current report
On March 9, 2026, the Company closed an underwritten public offering of 2,238,800 shares of our common stock at a public offering price of $0.50 per share, resulting in gross proceeds of $3.5 million and net proceeds of approximately $3.36 million after deducting underwriting discounts, commissions, and estimated offering expenses of $140,000. The offering included 4,761,200 pre-funded warrants at a price of $0.499 per warrant, each exercisable for one share of common stock at a nominal exercise price of $0.001 per share. The Company used $1.25 million of the net proceeds from this offering for marketing efforts and the remainder will be used for working capital and general corporate purposes.
Current report
For the year ended December 31, 2025, cash flows from financing activities was primarily comprised of proceeds of $5.4 million from the sale of common stock and pre-funded warrants as part of the March 2025 equity financing, net of placement agent costs of $0.3 million, and proceeds of $4.1 million, from the sale of common stock and pre-funded warrants as part of the June 2025 equity financing, net of placement agent costs of $0.2 million, proceeds of $2.3 million from the sale of pre-funded warrants as part of the November 2025 equity financing, net of placement agent costs of $0.2 million, partially offset by $0.6 million of payments of other issuance costs for issuance of common stock and equity-classified warrants in the March 2025 and June 2025 equity financings, $0.1 million for finance costs, and $0.2 million of repayment of note payable-related party used to finance our ongoing operations.
Current report
Research and Development Expense
Current report
In the current reporting period, the Company calculated the fair value of the October 2024 Convertible Bridge Notes immediately prior to their conversion at mandatory conversion based on the fair value of the conversion shares. The fair value was determined by calculating the number of shares into which the October 2024 Convertible Bridge Notes converted upon mandatory conversion, multiplied by the fair value per share of the Company’s common stock at the balance sheet date.
Current report
Useful Life of Molecule.ai Intangible Asset
Current report
The Company’s identifiable intangible asset consists of the Molecule.ai platform classified as developed technology. The Molecule.ai platform is a definite-lived intangible asset and is amortized on a straight-line basis over its estimated 4-year useful life, which reflects the period over which the asset is expected to generate economic benefits. The Company periodically reviews useful life assumptions and related classifications and updates them when facts and circumstances indicate a change is warranted.
Removed paragraphs (17)
Previous report
Founded by Georgetown University Medical School faculty members, Shuttle Pharmaceuticals Holdings, Inc. is a discovery and development stage pharmaceutical company leveraging our proprietary technology to develop novel therapies that are designed to cure cancer. Originally formed as Shuttle Pharmaceuticals, LLC in 2012, our goal is to extend the benefits of cancer treatments by leveraging insights into cancer therapy with surgery, radiation therapy, chemotherapy and immunotherapy. While there are several therapies being developed with the goal of curing cancer, one of the most effective and proven approaches to this is RT. The Company is developing a pipeline of products designed to address the limitations of the current standard of cancer therapies. We believe that our product candidates will enable us to deliver cancer treatments that are safer, more reliable and at a greater scale than that of the current standard of care.
Previous report
Operations to date have focused on continuing our research and development efforts to advance Ropidoxuridine clinical testing and improved drug formulation, to advance HDAC6 inhibitor (SP-2-225) preclinical development and explore application of the PC-RAD Test, predictive biomarkers of radiation response. The clinical development of Ropidoxuridine has included completion of a Phase I clinical trial to establish drug bioavailability and a maximum tolerated dose for use in Phase II clinical trials. TCG GreenChem, with whom we have contracted for process research, development andcGMP compliant manufacture of IPdR, has manufactured the API of Ropidoxuridine and the University of Iowa Pharmaceuticals has formulated the drug product for use in the Company’s upcoming Phase II clinical trial in brain cancer patients undergoing radiation therapy. The drug product (capsules) were shipped to CRO Theradex Oncology and distributed to clinical trial sites that are fully approved to enroll patients in the trial. Shuttle received approval from the FDA to begin the clinical trial. The FDA made recommendations to expand the clinical trial to include a randomized dose “optimization” step and we agreed with the recommendation. Meetings with engaged clinical sites to review the protocol documents have occurred and FDA required IRB approvals have been received. With FDA recommended changes incorporated into the revised protocol and the completion of site initiation visits, the Company has commenced its Phase II clinical study. The radiation biomarker project and the health disparities project have been completed and the Company is proceeding with plans for clinical validation and potential for commercialization of Ropidoxuridine as a radiation sensitizer.
Previous report
If the Company cannot regain compliance during the Compliance Period by June 30, 2025, whether organically or by completing a reverse stock split and subsequently trading above $1.00 per share for 10 consecutive trading days, Nasdaq will provide the Company with notice that its common stock will be subject to delisting. At that time, the Company may appeal Nasdaq’s delisting determination to a Nasdaq Hearings Panel.
Previous report
Nasdaq’s notice to the Company of noncompliance has no immediate effect on the listing of the Company’s common stock and its common stock will continue to be listed on The Nasdaq Capital Market under the symbol “SHPH.” There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement or maintain compliance with any of the other Nasdaq continued listing requirements. The Company will continue to monitor the closing bid price of its common stock and will, as appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement.
Previous report
On September 10, 2024, the Company received a letter from Nasdaq, notifying the Company that it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2.5 million. In the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2024, the Company reported stockholders’ equity of $801,434, which is below the minimum stockholders’ equity required for continued listing pursuant to Nasdaq Listing Rule 5550(b)(1). In addition, presently, the Company does not meet the alternatives of market value of listed securities or net income from continuing operations.
Previous report
On October 15, 2024, the Company submitted a plan to Nasdaq to regain compliance and Nasdaq subsequently granted the Company until March 10, 2025 to regain compliance. We are now in the process of evaluating potential fundraising opportunities, have filed a preliminary registration statement on Form S-1 with the intent of completing an up to $6.5 million public offering, and are working to complete the offering on or prior to March 10, 2025. Nonetheless, there can be no assurance that the Company will be able to regain compliance prior to March 10, 2025, or if the Company fails to satisfy another Nasdaq requirement for continued listing, Nasdaq could provide notice that the Company’s securities will become subject to delisting. In that event, the Company will have an opportunity to appeal Nasdaq’s decision to a hearings panel.
Previous report
*Research and Development.*Total research and development (“R&D”) expense was $3.6 million for the year ended December 31, 2024, as compared to $3.5 million for the year ended December 31, 2023. The increase in total R&D expense of $0.1 million, or 3%, is primarily related to the Company having completed production of the drug product and the start of work related to the initiation of trials including contract research organization (“CRO”) expenses, clinical trial sites, other regulatory activities.
Previous report
In October 2024, we completed an equity raise that provided $3.7 million net cash, after deducting placement agent fees of $0.5 million and issuance costs of $0.3 million, for the issuance of 395,574 shares of common stock and 2,555,246 pre-funded warrants, accompanied by an aggregate of 2,950,820 warrants with an exercise price of $1.40 per share. Also in October 2024, we completed an offering of senior secured convertible bridge notes, receiving $0.7 million in cash, after deducting issuance costs. The notes have a term of one-year and were accompanied by 329,461 warrants with a weighted-average exercise price of $1.42 per share. Refer to the “Recent Financing” section below for additional information. In September 2024, our CEO provided $0.3 million to us in exchange for a promissory note repayable in equal monthly installments of principal and interest over a term of one year. However, our existing cash resources and the cash received from the equity offering and senior convertible note are not expected to provide sufficient funds to carry out our operations and clinical trials through the next twelve months.
Previous report
Our capital raises have to date supported operations, the manufacture of drug product and FDA approval of the IND for the Phase II clinical trial of Ropidoxuridine and radiation therapy in glioblastoma and other radiation sensitizer discovery and therapy. The FDA recommended and we have agreed to an expansion of the Phase II clinical trial, necessitating additional capital to complete the trial as well as fund ongoing operations. Additionally, the Phase II clinical trial of Ropidoxuridine has evolved with finalized agreements with all six of the planned site enrollment locations to administer the Phase II clinical trial of Ropidoxuridine and the enrollment of the first three patients.
Previous report
On January 11, 2023, the Company entered into a stock purchase agreement (the “SPA”) with the Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B, a Cayman entity (the “Investor”), pursuant to which the Company sold to the Investor a $4.3 million convertible note (the “Convertible Note”) and warrant (the “Warrant”) to purchase 127,260 shares of common stock of the Company, in exchange for gross proceeds of $4.0 million Investment Amount. The Convertible Note amortizes on a monthly basis and the Company can make such monthly amortization payments in cash or, subject to certain equity conditions, in registered shares of common stock or a combination thereof. For equity repayment, the Convertible Note is convertible into shares of common stock at price per share equal to the lower of (i) $18.80 (ii) 90% of the three lowest daily volume-weighted average price (“VWAP”) of the 15 trading days prior to the payment date or (iii) 90% of the VWAP of the trading day prior to payment date. The Convertible Note is repayable over 26 months and bears interest at the rate of 5% per annum. The Warrant is exercisable for four years from the date of closing and is exercisable at $0.48 per share, as adjusted. In the event the Investor exercises the Warrant in full, such exercise would result in additional gross proceeds to the Company of approximately $0.1 million.
Previous report
On May 10, 2023, the Company entered into an amendment agreement to the SPA (the “Amendment Agreement”). Under the Amendment Agreement, the Company and the Investor amended the transaction documents as follows: (i) amended and restated Section 2 of the Warrant so as to remove a provision that would have potentially required an adjustment to the number of warrant shares exercisable under the Warrant, (ii) stipulated that the Company would obtain majority shareholder approval to issue up to an additional $10 million Subsequent Notes and Subsequent Warrants equal to 42.5% of the outstanding principal value of the Subsequent Notes, which Subsequent Note and Subsequent Warrant would be sold to the Investor on substantially the same terms as the existing Convertible Note and Warrant (each as amended by the Amendment Agreement) and upon conversion and/or exercise would cause the potential issuance of in excess of 19.9% of the Company’s issued and outstanding stock, (iii) that, upon obtaining majority stockholder approval, the Company would file a Schedule 14C related to such potential issuance of the shares of common stock related to the potential sale of the Subsequent Notes and Subsequent Warrants to the Investor within 30 calendar days of entry into the Amendment Agreement, and (iv) stipulated that the Investor would release $1,500,000 in cash collateral to the Company, with $1,000,000 to be released to the Company immediately upon singing of the Amendment Agreement and $500,000 to be released upon the Company’s filing of the Schedule 14C. The Company obtained majority stockholder consent to the potential sale of the Subsequent Notes and Subsequent Warrants to the Investor in advance of entry into the Amendment Agreement.
Previous report
On June 4, 2023, the Company entered into an amendment to the Amendment Agreement dated May 11, 2023 (the “Amendment to the Amendment Agreement”), for purposes of amending the terms of the SPA. Under the Amendment to the Amendment Agreement, the Company and the Investor agreed as follows: (i) that Section 15(q) to the Convertible Note, which required the Company to hold the Cash Collateral in a Controlled Account Agreement (as defined in the Convertible Note), would no longer be applicable, (ii) that the Investor would stipulate the release to the Company of the remaining Cash Collateral totaling $2,924,000 (thus releasing the full amount of the Cash Collateral to the Company), and (iii) that, should the Investor exercise its option to purchase the Subsequent Notes and Subsequent Warrants, that such Subsequent Notes would omit Section 15(q) and that the Company would not be required to maintain any controlled accounts or otherwise be subject to any controlled account agreements. The Convertible Note was paid in full as of September 30, 2024.
Previous report
During October 2024, the Company completed a senior convertible note offering in two closings, as further described below.
Previous report
On October 14, 2024, the Company closed on $600,000 of an up to $1.3 million 5% original issue discount senior secured convertible note and warrant offering (the “Offering”), entering into securities purchase agreements with a small group of accredited investors. The Company’s Chief Executive Officer, Anatoly Dritschilo, invested $237,500 in the Offering.
Previous report
On October 21, 2024, the Company closed on an additional $231,579 in Notes and Warrants purchased in the Offering (the “Second Closing”), receiving an additional $220,000 in proceeds and bringing the Offering to a close after receiving a total of $790,000 in gross proceeds, including $237,500 invested by the Company’s Chief Executive Officer in the First Closing. In the Second Closing, two accredited investors purchased a total of $231,579 in Notes and 88,544 Warrants, exercisable at $1.49 per share, or 125% of the closing price of the Company’s common stock on the day prior to closing. The Company received total net proceeds of $682,510 from the Offering. To date, the warrants from the Offering have yet to be exercised.
Previous report
On October 31, 2024, the Company consummated a public offering of an aggregate of (i) 395,574 Shares of common stock, and 2,555,246 Pre-Funded Warrants to purchase up to 2,555,246 shares of common stock, and (ii) 2,950,820 Common Warrants to purchase up to 2,950,820 Common Warrant Shares. Each share of common stock, or Pre-Funded Warrant in lieu thereof, was sold together with an accompanying Common Warrant to purchase one share of common stock. The public offering price for each share of common stock and one accompanying Common Warrant was $1.525. The public offering price of each Pre-Funded Warrant and one accompanying Common Warrant was $1.524, which equals the price at which one share of common stock and accompanying Common Warrant was sold to the public in the offering, minus $0.001. The exercise price of each Pre-Funded Warrant is $0.001 per share. Each Common Warrant offered in the offering is exercisable for one share of common stock and has an initial exercise price equal to $1.40. The Company received aggregate gross proceeds from the offering of approximately $4.5 million, before deducting placement agents’ fees and other offering expenses. A.G.P./Alliance Global Partners and Boustead served as placement agents of this offering. The Company received proceeds from the offering of approximately $4.0 million, net of placement agent fees of $0.5 million.
Previous report
Research and Development Expenses
Reworded paragraphs (27)
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ITEM 7. MANAGEMENT**’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current wording
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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The following Management’s Discussion and Analysis of Financial Condition and Result of Operations (the “MD&A”) should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Annual Report. The MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this Annual Report.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Annual Report. The MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, those noted under “Risk Factors” in this Annual Report.
Previous wording
On December 31, 2024, the Company received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 the Company’s common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has until June 30, 2025 to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days.
Current wording
On December 31, 2024, we received a letter from the Nasdaq Staff stating that for the 30 consecutive business day period between November 15, 2024 to December 30, 2024 our common stock had failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we had a period of 180 calendar days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.
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Comparison of the year ended December 31, 2024 and 2023
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Comparison of the years ended December 31, 2025 and 2024
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R&D compensation related expenses were $1.3 million in the year ended December 31, 2024 as compared to $1.5 million in the year ended December 31, 2023. For the year ended December 31, 2024, R&D compensation related expenses was 35% as a percent of total R&D expense, representing a decrease from the 43% of total R&D incurred in the year ended December 31, 2023. Subcontractor expense made up 60% of total R&D expenses in the year ended December 31, 2024 and 52% of total R&D expenses during the year ended December 31, 2023.
Current wording
R&D compensation related expenses were $1.2 million in the year ended December 31, 2025 as compared to $1.3 million in the year ended December 31, 2024. For the year ended December 31, 2025, R&D compensation related expenses were 30% as a percent of total R&D expense, representing a decrease from the 35% of total R&D incurred in the year ended December 31, 2024. The decrease in R&D compensation related expenses is largely attributable to the retirement of our former CEO and Chief Scientific Officer in 2025. Subcontractor expense made up 62% of total R&D expenses in the year ended December 31, 2025 and 60% of total R&D expenses during the year ended December 31, 2024.
Previous wording
General and Administrative Expenses. General and Administrative expenses in the year ended December 31, 2024 increased by $0.3 million, or 33%, from $1.0 million in the year ended December 31, 2023 to $1.4 million in the year ended December 31, 2024. The increase in general and administrative expenses was primarily due to costs associated with advertising of $0.1 million and marketing of $0.1 for investor relations and other administrative costs.
Current wording
General and Administrative Expenses. General and Administrative expenses in the year ended December 31, 2025 increased by $4.3 million, or 307% from $1.4 million in the year ended December 31, 2024 to $5.7 million in the year ended December 31, 2025. The increase in general and administrative expenses was primarily due to costs associated with advertising for investor relations of $3.5 million, and an increase in general and administrative stock-based compensation expense of $0.2 million.
Previous wording
Legal and Professional Expenses. During the year ended December 31, 2024, legal and professional expenses increased by $1.4 million or 102%. The increase in legal and professional fees was primarily due to increases in our accounting expenses related to our public filing requirements, legal and professional fees related to our restatement of certain prior periods and contracts.
Current wording
Legal and Professional Expenses. During the year ended December 31, 2025, legal and professional expenses decreased by $0.5 million or 18%. The decrease in legal and professional fees was primarily due to lower expenses related to our public filing requirements, contracts and financing related work that occurred in the year ended December 31, 2025 than compared to the year ended December 31, 2024.
Previous wording
*Other Income (expense).*During the year ended December 31, 2024, other expense increased by $0.7 million or 107%. The increase was primarily driven by a $1.7 million change in fair value of derivative liabilities and a $0.4 million loss on settlement of convertible debt related to the settlement of the Alto Convertible Note. These increases were partially offset by a decrease in interest expense of $1.3 million which was also due to the settlement of the Alto Convertible Note during the period ended September 30, 2024.
Current wording
Other Income (expense). During the year ended December 31, 2025, total other expense decreased by $1.6 million or 113% compared to the year ended December 31, 2024. The decrease was primarily driven by a $1.1 million decrease in interest expense resulting from the settlement of the Alto Convertible Note during the year ended December 31, 2024, $0.1 million decrease in the change in fair value of convertible notes, $0.6 million decrease in the change in fair value of derivative liabilities, a $0.2 million decrease in the finance fees, and a $0.8 million decrease in the loss on settlement of convertible debt also due to the settlement of the Alto Convertible Note during the year ended December 31, 2024, partially offset by a $0.3 million increase in gain on settlement of debt.
Previous wording
Our consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $9.1 million and no revenues during the year ended December 31, 2024 and working capital of approximately $0.7 million as of December 31, 2024. We do not expect to generate positive cash flows from operating activities in the near future.
Current wording
Our consolidated financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred losses since inception and had a net loss of $11.7 million and no revenues generated during the year ended December 31, 2025 and working capital deficit of approximately $7.5 million as of December 31, 2025. We do not expect to generate positive cash flows from operating activities in the near future.
Previous wording
The ability of the Company to continue as a going concern is dependent upon its ability to continue to successfully raise additional equity or debt financing to allow it to fund ongoing operations, conduct clinical trials and bring a drug candidate to commercialization to generate revenues. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
Current wording
Our ability to continue as a going concern is dependent upon our ability to continue to successfully raise additional equity or debt financing to allow us to fund ongoing operations, and commercialize, fund milestone and contingent payments due under the APA, and market our Molecule.ai platform in order to generate revenues. These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements contained in the report are issued.
Previous wording
As of December 31, 2024, total current assets were $2.2 million and total current liabilities were $1.5 million, resulting in working capital of $0.7 million. As of December 31, 2023, total current assets were $5.6 million and total current liabilities were $1.0 million, resulting in a working capital of $4.6 million. The Company’s current assets as of December 31, 2024 are comprised of $1.9 million of cash and cash equivalents and $0.3 million of prepaid expenses, with the decrease from December 31, 2023 being primarily due to ongoing cash burn from our R&D programs, filing expenses, reaudits, and general operations.
Current wording
As of December 31, 2025, total current assets were $0.5 million and total current liabilities were $8.0 million, resulting in working capital deficit of $7.5 million. As of December 31, 2024, total current assets were $2.2 million and total current liabilities were $1.5 million, resulting in a working capital of $0.7 million. The Company’s current assets as of December 31, 2025 are comprised of $0.3 million of cash and cash equivalents and $0.2 million of prepaid expenses and other current assets, with the decrease from December 31, 2024 being primarily due to cash paid for Molecule.ai asset acquisition of $3.0 million and costs incurred in winding down of clinical trials.
Previous wording
In addition, we continued progress on our R&D programs during the year ended December 31, 2024 that resulted in increased cash expenditures. The Company’s current liabilities as of December 31, 2024 are primarily comprised of $0.7 million of convertible notes payable, $0.6 million of accounts payable and accrued expenses, $0.2 million of notes payable to related parties, and the current portion of our operating lease liability of $0.1 million. The increase in current liabilities is primarily due to an increase in accounts payable and accrued expenses of $0.2 million, notes payable to related parties of $0.2 million, and convertible note payable of $0.1 million, primarily attributable to our efforts to preserve cash while we strive to raise funds to finance ongoing business and operations.
Current wording
The Company’s current liabilities as of December 31, 2025 are comprised of $1.5 million of accounts payable and accrued expenses, $2.0 million of contingent consideration, and $4.4 million of consideration payable. The increase in current liabilities is primarily due to an increase in contingent consideration and consideration payable of $2.0 million and $4.4 million related to the Molecule.ai acquisition, respectively, as well as an increase in accounts payable and accrued expenses of $0.9 million, partially offset by a $0.7 million decrease in convertible notes payable following their conversion into shares of common stock in October 2024, and a $0.2 million decrease in notes payable to related parties. This is primarily attributable to our efforts to preserve cash while we strive to raise funds to finance ongoing business and operations.
Previous wording
Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business. We have historically experienced negative cash flows from operating activities as we invested in research and development activities. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally attributable to stock-based compensation, changes in fair value of our derivative liabilities and amortization of debt discounts and finance fees, as well as changes in components of operating assets and liabilities, which are generally attributable to increased expenses and timing of vendor payments.
Current wording
Our cash flows from operating activities are greatly influenced by our use of cash for operations and working capital requirements to support the business. We have historically experienced negative cash flows from operating activities as we invested in research and development activities. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges, which are generally attributable to stock-based compensation, changes in fair value of our derivative liabilities, changes in fair value of our convertible notes, and amortization of debt discounts and finance fees, as well as changes in components of operating assets and liabilities, which are generally attributable to increased expenses and timing of vendor payments.
Previous wording
During the year ended December 31, 2023, net cash used in operating activities of $5.6 million was primarily due to our net loss of $6.6 million, partially offset by $0.5 million of loss on settlement of convertible notes payable and $0.3 million of accrued interest settled with common stock.
Current wording
During the year ended December 31, 2025, net cash used in operating activities of $9.5 million was primarily due to our net loss of $11.7 million, interest payments on convertible notes accounted for at fair value of $0.1 million, and the net change in operating assets and liabilities of $0.5 million, partially offset by stock-based compensation of $0.9 million, gain on settlement of debt of $0.3 million, and depreciation and amortization of $0.3 million.
Previous wording
During the year ended December 31, 2024, net cash used in operating activities of $7.3 million was primarily due to our net loss of $9.1 million and a change in derivative liability of $0.6 million, partially offset by $1.1 million of amortization of debt discount and finance fees and $0.8 million of loss on settlement of convertible notes payable.
Current wording
During the year ended December 31, 2024, net cash flows used in operating activities of $7.3 million was primarily due to our net loss of $9.1 million, change in fair value of derivative liabilities of $0.6 million and change in fair value of convertible notes of $0.1 million, partially offset by loss on settlement of convertible debt of $0.8 million, amortization of debt discount and finance fees of $1.1 million, accrued interest settled with common stock of $0.1 million, expense for debt issuance costs due to fair value election on convertible notes of $0.1 million, stock-based compensation of $0.3 million, and the net change in operating assets and liabilities of $0.1 million.
Previous wording
For the year ended December 31, 2024, cash flows provided by investing activities was primarily attributable to $3.0 million in proceeds from disposition of marketable securities, used to fund the Company’s ongoing operations. For the year ended December 31, 2023, cash flows used in investing activities was primarily attributable to the Company’s net investments in marketable securities of $2.8 million.
Current wording
For the year ended December 31, 2025, net cash flows used in investing activities was primarily attributable to $3.0 million of cash paid at the close of our acquisition of Molecule.ai. For the year ended December 31, 2024, cash provided by investing activities was primarily attributable to $3.0 million in proceeds from the disposition of marketable securities.
Previous wording
For the year ended December 31, 2024, cash flows from financing activities was primarily comprised of net proceeds from the sale of common stock, warrants and pre-funded warrants of $4.0 million, partially offset by $0.3 million of issuance costs, and proceeds from the issuance of convertible notes of $0.8 million, partially offset by issuance costs of $0.1 million, used to finance the Company’s ongoing operations. For the year ended December 31, 2023, the Company received net proceeds of $3.9 million from the sale and issuance of convertible notes payable and warrants and repaid $0.3 million in convertible notes, $0.3 million for finance costs related to convertible note payable, and $0.7 million in related party notes payable, all of which was used to finance the Company’s ongoing operations.
Current wording
For the year ended December 31, 2024, cash flows from financing activities was primarily comprised of net proceeds from the sale of common stock, warrants and pre-funded warrants of $4.0 million, partially offset by $0.3 million of issuance costs, and proceeds from the issuance of convertible notes of $0.8 million, partially offset by issuance costs of $0.1 million, used to finance the Company’s ongoing operations.
Previous wording
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Current wording
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Previous wording
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that the Company believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While the significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere in this report, the Company believes that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Current wording
This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While the significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere in this report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Previous wording
Research and development expenses are expensed as incurred, net of contract expense reimbursements, if applicable. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, and are subject to allocation.
Current wording
Research and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, which may include portions of the Company’s executives to the extent they are active involved in the research and development activities, materials, supplies, related subcontract expenses, and consulting costs. The periods presented include a portion of the Company’s former chief executive officer (prior to his transition to chief scientific officer), former chief operating officer, former vice president regulatory (formerly the chief financial officer) and directors’ compensation, prior to the individuals’ departures from the Company.
Previous wording
As permitted under ASC 825, Financial Instruments (“ASC 825”), the Company elected the fair value option to account for the October 2024 Convertible Bridge Notes. The valuation of the October 2024 Convertible Bridge Notes utilizes a Monte Carlo simulation model. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companiesand significant unobservable inputs including probabilities assigned to not achieving a successful capital raise and a registration of related securities. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.
Current wording
As permitted under ASC 825, Financial Instruments (“ASC 825”), we elected the fair value option to account for the October 2024 Convertible Bridge Notes. In prior periods, the valuation of the October 2024 Convertible Bridge Notes utilized a Monte Carlo simulation model. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned to not achieving a successful capital raise and a registration of related securities. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.
Previous wording
The significant inputs and assumptions used to estimate the fair value also include: (i) the expected timing of conversion, (ii) the amount subject to equity conversion, (iii) the sum of the notes’ principal and unpaid accrued interest, (iv) expected volatility, (v) risk-free interest rate, (vi) the discount rate, (vii) volume-weighted average price (“VWAP”), (viii) illiquidity discounts, and (ix) probabilities assigned. The October 2024 Convertible Bridge Notes are subject to revaluation at the end of each reporting period, with changes in fair value recognized in the accompanying Consolidated Statement of Operations, or for changes due to the Company’s credit worthiness, if any, as a component of other comprehensive income.
Current wording
The significant inputs and assumptions used to estimate the fair value also include: (i) the expected timing of conversion, (ii) the amount subject to equity conversion, (iii) the sum of the notes’ principal and unpaid accrued interest, (iv) expected volatility, (v) risk-free interest rate, (vi) the discount rate, (vii) volume-weighted average price (“VWAP”), (viii) illiquidity discounts, and (ix) probabilities assigned.
Previous wording
The Company has issued warrants to investors in our debt and equity offerings. The Company has also issued warrants to service providers in relation to our financing offerings.
Current wording
We have issued warrants to investors in our debt and equity offerings. We have also issued warrants to service providers in relation to our financing offerings.
Previous wording
For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulation models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average.
Current wording
For warrants with uncertain or more complex terms (such as variability in the warrant shares or exercise price), we may utilize more complex models to address such provisions, including Monte Carlo simulations or Black-Sholes Models. Monte Carlo simulation models require the use of simulations that are weighted based on projected future stock prices, the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. Black-Sholes Models require specification of the current stock price, exercise price, expected term, expected volatility, a risk-free interest rate aligned with the expected term, and expected dividend yield.
Previous wording
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, such as the Acceleration Option in the Alto Convertible Note (as defined in Note 5). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities are evaluated at the end of each reporting period.
Current wording
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, such as the Acceleration Option in the Alto warrants (as defined in Note 5). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities are evaluated at the end of each reporting period.
Previous wording
For our derivative financial instruments classified as a liability, the Company uses a Monte Carlo valuation model to value the derivative instruments at inception and on subsequent valuation dates. The model requires the use of simulations that are weighted basedthe volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. The Monte Carlo simulation uses an implied VWAP for valuation. The implied VWAP was backsolved by setting the summation of the parts (e.g., derivatives and debt without derivatives) equal to the cash proceeds and is updated each period.
Current wording
For our derivative financial instruments classified as a liability, we use a Monte Carlo valuation model to value the derivative instruments at inception and on subsequent valuation dates. The model requires the use of simulations that are weighted based the volatility of a set of guideline companies and significant unobservable inputs including probabilities assigned. Each simulation is based on the range of inputs in a scenario with the mean of the output on each simulation calculated as an average. The Monte Carlo simulation uses an implied VWAP for valuation. The implied VWAP was back solved by setting the summation of the parts (e.g., derivatives and debt without derivatives) equal to the cash proceeds and is updated each period.
Previous wording
The use of Monte Carlo valuation models require key inputs, some of which are based on estimates and judgements by management. Any change to these key inputs could produce significantly higher or lower fair value measurements.
Current wording
The use of Monte Carlo valuation models require key inputs, some of which are based on estimates and judgments by management. Any change to these key inputs could produce significantly higher or lower fair value measurements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The October 2024 Convertible Bridge Notes are subject to revaluation at the end of each reporting period, with changes in fair value recognized in the accompanying consolidated statements of operations, or for changes due to our credit worthiness, if any, as a component of other comprehensive income.