ATOS 10-K & 10-Q changes, risk factors and insider trading

Our business is subject to a number of risks and uncertainties, including risks and uncertainties that may prevent us from achieving our business objectives or may adversely affect our business, clinical and commercialization activities, the manufacturing of our product candidates, intellectual property, third party relationships, competitive environment, product and environmental liabilities, our ability to continue as a going concern and our common stock. Purchasing shares of common stock is an investment in our securities and involves a high degree of risk and uncertainty. You should carefully consider the following information about these risks and uncertainties, together with the other information contained in this Annual Report on Form 10-K for the year ended December 31, 2024,2025, before purchasing our securities. If any of the following risks and uncertainties actually occur, our business, financial condition and results of operations may suffer. In that case, the market price of our common stock could decline, and you may lose part or all of your investment in our Company. These risks and uncertainties are discussed more fully below and include, but are not limited to, risks related to:

We have a history of operating losses and we have not established sources of ongoing revenue to cover operating costs and allow usexpect to continue asto aincur goinglosses concern.in the future.

We are dependent on third partythird-party service providers for a number of critical operational activities as well as for clinical trial activities.

We, or our wholly-owned subsidiary, could lose our ability to operate in Australia, or our subsidiary may be unable to benefit from the past or future R&D tax rebates available under current Australian regulations.regulations

Our shares of common stock are listed on the Nasdaq Capital Market, but we cannot guarantee that we will be able to regainmaintain compliance with the continued listing standards or satisfy the continued listing standards going forward.

In evaluating our business, you should carefully consider the following discussion of material risks, events and uncertainties that make an investment in us speculative or risky in addition to the other information included in this Annual Report. A manifestation of any of the following risks and uncertainties could, in circumstances we may or may not be able to accurately predict, materially and adversely affect our business and operations, growth, reputation, prospects, operating and financial results, financial condition, cash flows, liquidity and stock price. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past. The risks and uncertainties described below are not the only ones we face. Our operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our business. Therefore, you should not consider the following risks to be a complete statement of all the potential risks or uncertainties that we face.

We have a history of operating losses,losses and expect to continue to incur losses in the future, and, as such, an investor cannot assess our profitability or performance based on past results.

Since December 2015, our business has primarily focused on the development of novel therapeutics for the treatment of breast cancer and other breast conditions. BecauseWe have a limited operating history and have incurred net losses each year. Our net losses for the years ended December 31, 2025 and 2024 were $34.8 million and $25.5 million, respectively. We will continue to incur further losses in connection with costs for development of our limitedprograms, operatingincluding history, particularly in the area of pharmaceutical development, our revenueongoing and incomeadditional potentialclinical is uncertain and cannot be based on prior results. Any evaluation of our business and prospects must be considered in light of these factors and the risks and uncertainties often encountered by companies in the development stage. Some of these risks and uncertainties include our ability to:studies.

For the years ended December 31, 20242025 and 2023,2024, we incurred a net lossesloss of approximately $25.5$34.8 million and $30.1$25.5 million, respectively, and we had an accumulated deficit of approximately $211.8$246.6 million since inception. As of December 31, 20242025 and 2023,2024, we had cash and cash equivalents of approximately $71.1$41.3 million and $88.5$71.1 million, respectively. Because we have no current sources of revenue, substantial doubt exists about our ability to continue as a going concern, and we expect that we will need to raise capital again in the future to continue to fund our operations. When we elect to raise additional funds or when additional funds are required, we may raise such funds through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives. These financing arrangements may not be available on acceptable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be prevented from developing our pharmaceutical candidates, pursuing acquisitions, and investing in other companies, including as a sponsor or investor in special purpose acquisition companies, licensing, development and commercialization efforts, and our ability to continue our operations, generate revenues, and achieve or sustain profitability may be substantially harmed.

For example, our ability to raise capital in the public capital markets, including through "“at the market"” offerings pursuant to our Open Market Sale AgreementSM (the SaleSales Agreement) with Jefferiesthe LLCSales (Jefferies),Agent, may be limited by, among other things, SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities. Although alternative public and private transaction structures may be available, these may require additional time and cost, may impose operational restrictions on us, and may not be available on attractive terms.

If we raise additional funds by selling or issuing equity securities or equity-linked securities, including through our SaleSales Agreement, our stockholders will experience dilution and it may have an adverse effect on the price of our common stock. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity, including securities convertible into or exercisable for equity securities, that we raise may contain terms, such as liquidation, conversion and other preferences, that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary for us to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, our business, operating results, financial condition and prospects could be materially and adversely affected, and we may be unable to continue our operations.

We intend to use our capital resources to execute on our business plan, which may include acquiring or in-licensing programs and may also include the internal development of additional programs that may or may not be related to oncology. We may also use our capital resources to invest directly or indirectly in business opportunities in healthcare or other industries, including through purchases of equity in other companies and as a sponsor or as an equity investor in special purpose acquisition companies, and we may not be able to realize the expected business or financial benefits of these investments. For example, infor the fourthyear quarterended December 31, 2024, we wrote down our Investment in equity securities by $1.7 million due to the impairment of 2024,our investment in Dynamic Cell Therapies, Inc. (DCT), a U.S. private company previously focused on Chimeric Antigen Receptor (CAR) T-cell therapies, which laid off all employees and ceased operations, and we incurred a $1.7 million and $3.0 million impairment charge for the years ended December 31, 2024 and 2023, respectively.operations.

Our acquisitions of, collaborations with, licenses with and investments in, other businesses may not yield expected benefitsbenefits, and our inability to successfully integrate these transactions may negatively impact our business, financial condition, and results of operations.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and other transactions have in the past and could in the future cause us to fail to realize the anticipated benefits of such acquisitions and transactions, and result in higher than expected costs, the recording of asset impairment or restructuring charges and other actions which could negatively impact our business, financial condition, results of operations and our ability to execute on our strategic plan. For example, we incurred a $1.7 million and $3.0 million impairment charge for the yearsyear ended December 31, 2024 and 2023, respectively, in connection with our investment in DCT.

In addition, from time to time we expect to report interim, top-line or "preliminary" data for clinical trials, including for example the results reported in 2024 for our EVANGELINE study, a Phase 2 randomized study of (Z)-endoxifen as a neoadjuvant treatment for pre-menopausalpremenopausal women with estrogen receptor positive (ER+) / human epidermal growth factor receptor 2 negative (HER2-) breast cancer, and in 2025, for our Phase 2 Endocrine Optimization Pilot sub‑study within the I‑SPY 2 TRIAL evaluating low‑dose oral (Z)‑endoxifen as a neoadjuvant treatment in women with stage II/III ER+/HER2‑negative breast cancer. Such data isare based on a preliminary analysis of then-available efficacy and safety data, and such findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. Interim, top-line or preliminary data are based on important assumptions, estimations, calculations and information then available to us to the extent we have had, at the time of such reporting, an opportunity to fully and carefully evaluate such information in light of all surrounding facts, circumstances, recommendations and analyses. As a result, interim, top-line or "preliminary" results may differ from future/final results, or different conclusions or considerations may qualify such results once existing data have been more fully evaluated. In addition, third parties, including regulatory agencies, may not accept or agree with our assumptions, estimations, calculations or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvabilityability to obtain approvals, or commercialization of the particular compound and our business generally.

Our business is dependent on the performance by third parties of their responsibilities under contractual relationships. In particular, we heavily rely on third parties for the manufacture and testing of our products. We do not have an internal analytical laboratory or manufacturing facilities to allow the testing or production of products in compliance with Good Manufacturing Practices (cGMP). As a result, we rely on third parties to supply us in a timely manner with manufactured product candidates. We may not be able to adequately manage and oversee the manufacturers we choose; they may not perform as agreed or they may terminate their agreements with us. In particular, we depend on third party manufacturers to conduct their operations in compliance with applicable requirements under current Good Laboratory Practices (GLP), cGMP, Good Clinical Practices (GCP) or similar standards imposed by the U.S. and/or applicable foreign regulatory authorities, including the FDA and EMA. Any of these regulatory authorities may take action against a contract manufacturer who violates cGMP. Failure of our manufacturers to comply with FDA, EMA or other applicable regulations may cause us to curtail or stop the manufacture of such products until we obtain regulatory compliance.

In addition, we depend on medical institutions and CROs (together with their respective agents) to conduct clinical trials and associated activities in compliance with Good Clinical Practices (GCP) and data privacy standards such as defined under the Health Insurance Portability and Accountability Act (HIPAA), General Data Protection Regulation (GDPR) and UK GDPR, and in accordance with our timelines, expectations and requirements. We are substantially dependent on the organizations conducting our clinical trials. To the extent any such third parties are delayed in achieving or fail to meet our clinical trial enrollment expectations, fail to conduct our trials in accordance with GCP, patient and data privacy standards such as HIPAA or study protocol or otherwise take actions outside of our control or without our consent, our business may be harmed. Furthermore, we conduct clinical trials in foreign countries, subjecting us to additional risks and challenges, including, patient and data privacy standards, such as GDPR and UK GDPR and in particular, as a result of the engagement of foreign medical institutions and foreign CROs, who may be less experienced with regard to regulatory matters applicable to us and may have different standards of medical care.

In addition, our employees and personnel or our vendors or partners may use AI, including generative AI, technologies to perform their work or in their operations, and the disclosure and use of personal information in AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating AI, controlling for data bias and antidiscrimination.anti-discrimination. Any use of this technology could result in additional compliance costs, regulatory investigations and actions, and consumer lawsuits.

supply chain disruptions, or lack of availability or increased costs of materials for our product candidatescandidates, including as a result of changes in trade policies, including tariffs or other trade restrictions or the threat of such actions;

failure to obtain on a timely basis, or at all, approval from the applicable Regulatory Agencies, institutional review board or ethics committee to open a clinical study;

We or our collaborators may integrate AI, including generative AI, and machine learning tools in ourconnection with drug discovery efforts and effortsthe todevelopment developof our product candidates. As a new and rapidly evolving technology, the use of AI is subject to numerous risks and uncertainties, including operational, technical, legal, compliance, privacy, data security, ethical, competitive and reputational risks. Machine learning and predictive analytics may produce flawed, biased, incomplete, overbroad or inaccurate results, which could negatively impact the development of our or our collaborators’ product candidates and expose us to competitive and reputational harm. Developing, testing and deploying resource-intensive AI systems, or supporting our collaborator’s development of such systems, including our sponsorship of the Phase 2 SMART study that seeksseeking to validate an AI-driven breast cancer risk assessment model, requiresmay require significant investment and may increase our costs, and there is no guarantee that our investment inany such systemsinvestment will lead to the discovery of new product candidates orcandidates, eventual regulatory approval or commercialization of any product candidatescandidates, or accelerateacceleration of, or reducereduction in, costs associated with the drug discovery, development or approval timeline. Our inabilityinability, or our collaborators' inability, to successfully deployuse AIAI-enabled tools in the discovery or development of our or our collaborators’ product candidates, or the public’s lack of public acceptance of such products, could adversely affect our business, reputation and financial results.

Based on our evaluation of the ATO's taxpayer alert published in the fourth quarter of 2023, we believe that it is no longer reasonably assured that our full tax position would be sustained under an audit. Accordingly, we recorded a change in estimate that represents our estimate of the amount (inclusive of potential penalties) that no longer meets the reasonably assured threshold. We recorded an estimated accrued current liability of $1.5$1.1 million and $1.8$1.5 million in our Consolidated Balance Sheets as of December 31, 20242025 and 2023,December 31, 2024, respectively. We may in the future be required to record additional changes in estimates, which could further increase our expenses and adversely affect our business and results of operations.

Our commercial success will depend, in part, on our ability to obtain additional patents and licenses and to protect our existing patent position, both in the U.S. and in other countries, for therapeutics and related technologies, processes, methods, compositions, and other inventions that we believe are patentable, all of which provide limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. As of February 3,2, 2025,2026, we ownowned and arewere pursuing 119141 pending provisional and non-provisional patent applications (2830 U.S. patent applications and 91111 international patent applications, including twoone allowed U.S. applicationsapplication and threetwo allowed international applications) and 1324 issued patents (five8 U.S. patents and eight16 international patents). We continue to evaluate the full range of our technologies and file new patent applications consistent with our evolving business goals.

If third parties successfully challenge the validity of one or more of our patent applications, we may lose certain patent rights, even if previously granted by a patent office. For example, on August 18, 2023, Intas Pharmaceuticals LTD.Ltd. (Intas) filed a Petition for Post Grant Review (PGR) with the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office, theOffice (PGR PetitionUSPTO), seeking to invalidate all claims related to one of our issued patents (U.S. Patent No. 11,572,334) titled "“Methods for Making and Using Endoxifen,"Endoxifen”, (theand Patent).on WeJanuary actively29, contested2025, the PGRPTAB Petitionissued a final written decision finding all claims of U.S. Patent No. 11,572,334 were unpatentable. In addition, on April 3, 2025, Intas filed two separate petitions with the PTAB seeking to invalidate two additional patents. For more information regarding our legal proceedings, including these additional petitions, refer to Note 13 “Commitments and believedContingencies” thatto the PatentConsolidated wasFinancial properly granted and was valid and enforceable.Statements.

UnitedThe States Patent and Trademark Office (USPTO) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent process. Periodic maintenance fees, renewal fees, annuity fees, and various other governmental fees on any issued patents and/or applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patents and/or applications. We have systems in place to remind us to pay these fees, and we employ outside firms and rely on our outside counsel to pay these fees. While an inadvertent lapse may sometimes be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on our intellectual property, particularly on obtaining and enforcing patents. Obtaining and enforcing patents in the biotechnology and pharmaceutical industries involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. For the past several years, the U.S. has conducted proceedings involving post-issuance patent review procedures, such as inter partes review (IPR), and post-grant review (PGR) and covered business methods. These proceedings are conducted before the PTAB, of the USPTO. Each proceeding has different eligibility criteria and different patentability challenges that can be raised. In this regard, the IPR process permits any person (except a party who has been litigating the patent for more than a year) to challenge the validity of a U.S. patent on the grounds that it was anticipated or made obvious by prior art consisting of patents or printed publications. As a result, non-practicing entities associated with hedge funds, pharmaceutical companies who may be our competitors and others have challenged certain valuable pharmaceutical U.S. patents based on prior art through the IPR process. A decision in such a proceeding adverse to our interests could result in the loss of valuable patent rights, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects. For example, therewe isare acurrently contesting the 391 PGR Petition relatingand the 151 IPR Petition. Refer to one of our issued patents. See Note 13 “Commitments and Contingencies” to the Consolidated Financial Statements. Any potential future changes to the U.S. patent system could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Further, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In particular, on March 20, 2012, the U.S. Supreme Court issued the Mayo Collaborative Services v. Prometheus Laboratories, Inc. decision, holding that several claims drawn to measuring drug metabolite levels from patient samples were not patentable subject matter. The full impact of the Mayo Collaborative Services v. Prometheus Laboratories, Inc. decision on diagnostic and certain method claims is uncertain. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. The standards that courts use to interpret patents are not always applied predictably or uniformly and may evolve, particularly as new technologies develop. In addition, changes to patent laws in the U.S. or other countries may be applied retroactively to affect the validity, enforceability, or term of our patent. For example, the U.S. Supreme Court has modified some legal standards applied by the USPTO in examination of U.S. patent applications, which may decrease the likelihood that we will be able to obtain patents and may increase the likelihood of challenges to patents we obtain or license.

Filing, prosecuting and defending patents on our products in all countries throughout the world would be prohibitively expensive. In addition, the laws of some foreign countries do not protect intellectual property rights in the same manner and to the same extent as laws in the U.S. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S. For example, the Indian Pharmaceutical Alliance filed the Opposition against our pending Indian Patent Application. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement of such patent protection is not as strong as that in the U.S. These products may compete with our products and services, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing with our products.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties, including the intellectual property rights of competitors. There is a substantial amount of litigation, both within and outside the U.S., involving patents and other intellectual property rights in the medical device and pharmaceutical fields, as well as administrative proceedings for challenging patents, including interIPR, partes review, post-grant review,PGR, derivation, and reexamination proceedings before the USPTO or oppositions and other comparable proceedings in various foreign jurisdictions,jurisdictions. forFor example, we are currently contesting the 391 PGR Petition and the Indian151 PharmaceuticalIPR Alliance Pre-Grant Opposition.Petition. These procedures bring uncertainty to the possibility of challenges to our patents in the future, including those patents perceived by our competitors as blocking entry into the market for their products, and the outcome of such challenges. Any such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our drug product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art and that prior art that was cited during prosecution, but not relied on by the patent examiner, will not be revisited. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our products. As the medical device, biotechnology, and pharmaceutical industries expand and more patents are issued, the risk increases that our activities related to our products may give rise to claims of infringement of the patent rights of others.

We are a clinical-stage biopharmaceutical company developing proprietary innovative medicines in areas of significant unmet medical need in oncology, with a focus on women’s breast cancer and other breast conditions.conditions, as well as certain rare diseases. Our lead drug candidate under development is oral (Z)-endoxifen, whicha weselective areestrogen developingreceptor modulator (SERM)/ selective estrogen receptor degrader (SERM/D) currently in Phase 2 clinical development. The Company is evaluating potential indications for (Z)-endoxifen based on its pharmacologic profile, including its potential for both reducing the preventionrisk of and for the treatment of breast cancercancer, andas well as in other therapeutic areas.

We have been granted fourseven U.S. and eight16 international patents covering our proprietary (Z)-endoxifen, and we have numerous applications pending in the U.S. and in other major countries. We expect to have patent protection covering our proprietary (Z)-endoxifen through at least November 17, 2038.

Our business strategy is to advance our programs through clinical studies, including potentiallywith withpotential partners, and opportunistically add programs in areas of high unmet medical need through acquisition, minority investment, collaboration or internal development.

The following is a summary of the status of our major oncology and rare disease clinical development programs as of the date of this Annual Report:

(Z)In endoxifen. (Z)-endoxifen is an active metabolitesupport of tamoxifen, which is an FDA-approved drug to treat and preventour breast cancer inrisk high-riskreduction women. It is also referred to as a Selective Estrogen Receptor Modulator (SERM). We are developing a proprietary form of (Z)-endoxifen which is administered orally for the potentialand treatment ofindications, breast cancer and the reduction of breast density. Wewe have completed four Phase 1 clinical studies,studies (including a study in men,men) and two Phase 2 clinical studies with our proprietary (Z)-endoxifen,-endoxifen (including oral and topical formulations.formulations). We have also completed significant pre-clinical development and have developed clinical manufacturing capabilities through qualified third-parties.third parties.

Karisma Study (Z)-endoxifen for Women with Mammographic Breast Density. Mammographic breast density (MBD) is an emerging public health issue. Almost half of the women in the world over the age of 40 have dense breasts, and there are currently no approved treatments to reduce breast density. Elevated breast density can make a mammogram more difficult to interpret because dense breast tissue and some abnormal breast changes, such as calcifications and tumors, appear as white areas in a mammogram. Women with the highest density are four to six times more likely to develop breast cancer in their lifetime and more likely to develop cancer between mammograms compared to those with low breast density. The latter are sometimes referred to as "interval cancers," which are often larger, more advanced, and more difficult to treat.

In December 2021, we commenced a Phase 2 study of our proprietary oral (Z)-endoxifen. The study, known as the Karisma-(Z)-endoxifen study, was a Phase 2, randomized, double-blind, placebo-controlled, dose-response study of our proprietary oral (Z)-endoxifen in healthy premenopausal women with measurable mammographic breast density.MBD. The primary objective of the study was to determine the dose-response relationship of daily (Z)-endoxifen on breast density reduction. Secondary endpoints assessed safety and tolerability. The study was conducted in Stockholm, Sweden and included approximately 240 participants who received daily doses of oral (Z)-endoxifen or placebo for six months after enrollment, randomized to one of three arms: placebo, 1 mg,mg of (Z)-endoxifen, or 2 mgmgs of (Z)-endoxifen. The study also included an exploratory endpoint to assess twenty-four month durability of the breast density changes. Top line data for this study measuring both MBD reduction after six months of treatment and data regarding twenty-four month durability is expected in the first quarter of 2026.

The study fully enrolled in November 2023 and in September 2024, the studyprimary objective measuring MBD after six months of treatment, was concluded. The data showed the potential of low-dose (Z)-endoxifen to significantly reduce MBD,MBD a key risk factor for breast cancer, while showingwith a favorable safety profile.

Results showed that theThe 1 mg dose of (Z)-endoxifen reduced MBD by 17.3% (p<0.01), while the 2 mg dose achieved a reduction of 23.5% (p<0.01), compared to a minimal change in the placebo group of 0.27%. Plasma concentrations for (Z)-endoxifen were measured at 4.8 ng/mL and 9.7 ng/mL for the 1 mg and 2 mg arms, respectively, which showeddemonstrating the effectiveness of the lower dose in achieving significant MBD reductions. Importantly, no significant differences in adverse events were observed between the 1 mg dose and the placebo. The 2 mg dose was associated with higher rates of hot flashes, night sweats and vaginal discharge.

(Z)-endoxifen for Ductal Carcinoma In Situ. Ductal carcinoma in situSitu (DCIS) is the presence of abnormal cells inside a milk duct in the breast. It rarely produces symptoms, or a breast lump one can feel, and is typically being detected through screening mammography. In some cases, DCIS may become invasive and spread to other tissues, but there is no way of determining which lesions will remain stable without treatment,treatment and which will go on to become invasive. This uncertainty can result in aggressive and unnecessary treatment approaches that can have harmful side effects without significant benefit.

In October 2023, the Quantum Leap Healthcare Collaborative (the QLHC) announced the initiation of the Phase 2 DCIS: Re-Evaluating Conditions for Active Surveillance Suitability as Treatment (the RECAST) study. (Z)-endoxifen is being investigated as part of this platform trial, which offers women with DCIS six months of neoadjuvant treatment with the intent of determining their suitability for long-term active surveillance without surgery. Approximately 100 patients are expected to be treated with (Z)-endoxifen. The study incorporates both a neoadjuvant therapy phase, with patients at high risk for progression to invasive disease proceeding to surgery, followed by an extended surveillance phase for low-risk patients. Enrollment in this study is ongoing.

(Z)-endoxifen for Neoadjuvant Treatment of Breast Cancer. We are also developing (Z)-endoxifen to treat estrogen receptor positive (ER+) / human epidermal growth factor receptor 2 negative (HER2-) breast cancer in the neoadjuvant setting, which is the administration of a therapy before the main treatment, which is usually surgery. Although there are neoadjuvant treatments for breast cancers that are not ER+, there are few neoadjuvant treatments for ER+ breast cancer which comprises approximately 240,000 new cases or 78%approximately 80% of all breast cancers.cancers each year.

In October 2022, we received authorization from the FDA for our Investigational New Drug (IND) application for oral (Z)-endoxifen. The study, known as "EVANGELINEEVANGELINE," is a Phase 2 randomized study assessingdesigned to assess (Z)-endoxifen as neoadjuvant therapy in premenopausal women with primary ER+, /HER2– breast cancer. TheAs originally designed, the study will enroll approximately 190 patients across upwas to 25consist U.S.of sites,two parts: Part 1 was a Pharmacokinetic (PK) Run-In Cohort evaluating daily dosing of 40 mg and 80 mg to assess if a plasma steady state concentration (Css) of 500 to 1000 ng/mL, which is structuredrequired infor optimal PKC-β inhibition, could be achieved; and Part 2 was expected to compare the two parts.treatment arms based on baseline Ki-67 levels, with the aim of evaluating the endocrine sensitive disease rate, pathologic complete response, and other key endpoints.

Data showed that none of the patients in the 40 mg cohort reached the target Css. However, in the 80 mg cohort, approximately 50% of patients receiving (Z)-endoxifen with goserelin and 38% of patients receiving (Z)-endoxifen alone attained the target plasma Css, with an average of 484 ng/mL. Importantly, tumor Css levels were found to be more than double the plasma levels, exceeding 500 ng/g in 90% of patients, and 85% of patients exhibited a 4-week Ki-67 response (≤10%), indicating substantial tumor suppression. (Z)-endoxifen was generally well tolerated, with no significant Grade 3 or 4 toxicities, thoughalthough four gynecologic events (including one Grade 3 hemorrhagic ovarian cyst) were noted in the 80 mg group.

In March 2023, a second neoadjuvant Phase 2 trial investigating oral (Z)-endoxifen as a neoadjuvant treatment for women diagnosed with locally advanced ER+/HER2- breast cancer was initiated. This trial is a study arm in the ongoing I‑SPY 2 Endocrine Optimization Pilot (I-SPY 2 EOP). The I-SPY 2 EOPwhich is a collaborative effort among academic investigators from major cancer research centers across the U.S., QLHC, the FDA, and the Foundation for the National Institutes of Health (FNIH) Cancer Biomarkers Consortium. 20This patientsstudy wereincluded treatedtwenty withwomen who received 10 mg of (Z)-endoxifen (monotherapy) orally once daily for six cycles (each cycle = 28 days) or up to 24 weeks prior to surgery. Enrollment was completed in January 2024.

Research and Development (R&D) costs are generally expensed as incurred. R&D expenses include, for example, manufacturing expense for our drugs under development, expenses associated with preclinical studies, clinical trials and associated salaries, bonuses, stock-based compensation and benefits. R&D expenses also include an allocation of the CEO's salary and related benefits, including bonus and non-cash stock-based compensation expense, based on an estimate of his total hours spent on research and development activities.

The fair value of each option grant is estimated using the Black-Scholes option-pricing model, which requires assumptions regarding the expected volatility of the price of our common stock, the expected life of the options, an expectation regarding future dividends on our common stock, an estimate of the appropriate risk-free interest rate and the expected term. Our expected common stock price volatility assumption is based upon the historic volatility of our stock price. The expected life for stock option grants is based on an average of the contractual term of the options of 10 years with the average vesting term of one to four years. The dividend yield assumption of zero is based upon the fact that we have never paid cash dividends and presently have no intention of paying cash dividends in the future. The risk-free interest rate is based upon prevailing short-term interest rates over the expected lives of the options.

Operating Expenses. Total operating expenses were $27.6$37.1 million for the year ended December 31, 2024,2025, which was aan decreaseincrease of $3.8$9.5 million, from the year ended December 31, 20232024 of $31.4$27.6 million. Factors contributing to the decreasedincreased operating expenses in the year ended December 31, 20242025 are explained below.

Research & Development (R&D) Expenses. The following table provides a breakdown of major categories within R&D expenses for the years ended December 31, 20242025 and 2023,2024, together with the dollar change in those categories (dollars in thousands):

Interest Income. Interest income of $4.1$2.4 million for the year ended December 31, 20242025 represented a decrease of $0.2$1.7 million compared to the prior year, and was due primarily due to a decrease in the average funds invested in theour money market account.

Impairment Charge on Investment in Equity Securities. For the year ended December 31, 2024 and 2023,2024, we wrote down our Investment in equity securities by $1.7 million and $3.0 million, respectively, due to impairment of our investment in DCT.Dynamic Cell Therapies, Inc. Refer to Note 4 "Investment in Equity Securities" to the Consolidated Financial Statements.Statements for more information.

On June 27, 2024, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our common stock, par value $0.18 per share, from 175,000,000 to 350,000,000. As of December 31, 2024,2025, we are authorized to issue 350,000,000 shares of common stock, par value $0.18 per share. On November 19, 2024, we entered into an Open Market Sale AgreementSM with Jefferies LLC. We may offer, from time to time, to sell, in an "at the market offering", shares of our common stock up to an aggregate offering price of up to $100.0 million. We did not make any sales under the at the market offering facility during the year ended December 31, 2024.

During the year ended December 31, 2024, we received $3.7 million from the exercise of warrants resulting in the issuance of 3,672,500244,833 shares of common stock. No warrants were outstanding as of December 31, 2025.

Our business is subject to a number of risks and uncertainties, including risks and uncertainties that may prevent us from achieving our business objectives or may adversely affect our business, clinical and commercialization activities, the manufacturing of our product candidates, intellectual property, third party relationships, competitive environment, product and environmental liabilities, our ability to continue as a going concern and our common stock. Purchasing shares of common stock is an investment in our securities and involves a high degree of risk and uncertainty. You should carefully consider the following information about these risks and uncertainties, together with the other information contained in this Quarterly Report on Form 10-Q for the three and six months ended MarchJune 31,30, 2026, before purchasing our securities. If any of the following risks and uncertainties actually occur, our business, financial condition and results of operations may suffer. In that case, the market price of our common stock could decline, and you may lose part or all of your investment in our Company. These risks and uncertainties are discussed more fully below and include, but are not limited to, risks related to:

Since December 2015, our business has primarily focused on the development of novel therapeutics for the treatment of breast cancer and other breast conditions. We have a limited operating history and have incurred net losses each year. Our net losses for the three and six months ended MarchJune 31,30, 2026 and 2025 were $9.6$8.5 million and $6.7$18.1 million, respectively. We will continue to incur further losses in connection with costs for development of our programs, including ongoing and additional clinical studies.

For the three and six months ended MarchJune 31,30, 2026, we incurred a net loss of $9.6$8.5 million and $18.1 million, respectively, and we had an accumulated deficit of $256.2$264.6 million.million since inception. As of the date of filing this Quarterly Report, we expect that our existing resources will likely be insufficient to fund our planned operations for the next 12 months, and additional capital resources will be needed to fund operations longer-term. We have not yet established an ongoing source of revenue sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable. We plan to obtain additional capital resources by selling our equity securities as well as short-term borrowing from banks, stockholders or other related parties, if needed. However, we cannot assure you that we will be successful in accomplishing any of these plans and, if we are unable to obtain adequate capital on reasonable terms, if at all, we may be unable to develop and commercialize our product offerings or increase our geographic reach, and we could be forced to cease operations or substantially curtail our activities. We do not anticipate any revenue until our pharmaceutical programs are developed, including receipt of all necessary regulatory approvals, and we successfully commercialize these programs. These conditions raise substantial doubt as to our ability to continue as a going concern.

The United States has announced tariffs on imports from most countries, including significant tariffs on imports from Canada, Mexico and China, leading to increasing trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. InFor addition,example, in September 2025, the United States announced plans to impose up to 100% tariffs on imported branded or patented pharmaceuticals, subject to certain exceptions (the Pharmaceutical Tariffs) and inearly April 2026, the U.S. Administration issued a Proclamationproclamation regardingunder Section 232 of the Trade Expansion Act of 1962 determining that imports of certain pharmaceutical products, including patented pharmaceuticals, associated active pharmaceutical ingredients and related materials could threaten U.S. national security and authorized the imposition of suchtariffs tariffs.of up to 100% on covered imports (the Pharmaceutical Tariffs). Imports of certain listed products from specific partner countries, including South Korea and the European Union, may be subject to reduced tariff rates. Certain tariff exemptions or zero-rate treatment may be available for products where all approved indications are designated as orphan, subject to applicable determinations, conditions and implementation guidance. There remains substantial uncertainty as to the implementation and potential impacts of such tariffs and, more generally, abouttariffs, the duration of existing tariffs, tariff levels, and whether additional tariffs or other retaliatory actions may be imposed, modified or suspended. For example, the U.S. Supreme Court ruled in February 2026 that certain tariffs imposed by the U.S. federal government under the International Emergency Economic Powers Act exceeded presidential authority and therefore are invalid. However, tariffs imposed under different statutes (including the Pharmaceutical Tariffs, if implemented) were not directly impacted by the decision and therefore remain in place. These actions and the related rising political tensions could negatively impact global macroeconomic conditions and the stability of global financial markets, which could have a material adverse effect on our business, financial condition and results of operations, including through increased supply chain costs.

For the three and six months ended MarchJune 31,30, 2026, we incurred a net loss of $9.6$8.5 million and $18.1 million, respectively, and we had an accumulated deficit of $256.2$264.6 million since inception. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $31.7$26.1 million. Because we have no current sources of revenue, substantial doubt exists about our ability to continue as a going concern and we expect that we will need to raise capital again in the future to continue to fund our operations. When we elect to raise additional funds or when additional funds are required, we may raise such funds through public or private equity offerings, debt financings, corporate collaboration and licensing arrangements or other financing alternatives. These financing arrangements may not be available on acceptable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be prevented from developing our pharmaceutical candidates, pursuing acquisitions, and investing in other companies, including as a sponsor or investor in special purpose acquisition companies, licensing, development and commercialization efforts, and our ability to continue our operations, generate revenues, and achieve or sustain profitability may be substantially harmed.

If we raise additional funds by selling or issuing equity securities or equity-linked securities, including through our Sales Agreement,Agreement or through future registered direct offerings, our stockholders will experience dilution and it may have an adverse effect on the price of our common stock. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity, including securities convertible into or exercisable for equity securities, that we raise may contain terms, such as liquidation, conversion and other preferences, that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary for us to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, our business, operating results, financial condition and prospects could be materially and adversely affected, and we may be unable to continue our operations.

Our success is dependent in large part upon our ability to execute our business plan, manufacture our pharmaceutical drugs and attract and retain highly skilled professional personnel. In particular, due to the relatively early stage of our business, our future success is highly dependent on the services of Steven C. Quay, our Chairman, President, Chief Executive Officer and founder, who provides much of the necessary experience to execute our business plan. He currently also serves, in an unpaid capacity, as a Senior Fellow at the Hudson Institute, where he advises on national-security issues relating to the convergence of artificial intelligence and biotechnology. From time to time, he may be considered for, asked to serve in, or accept public-service, governmental, academic, scientific, advisory, policy, or other external roles. If he were to accept any such role, reduce his time commitment to us, resign, take a leave of absence, or become subject to government ethics, recusal, conflict-of-interest, confidentiality, or other service-related requirements, or if speculation regarding any such role were to affect investor perceptions, our operations, financing activities, business-development efforts, clinical programs, investor communications, and the market price of our common stock could be adversely affected.

In addition, from time to time we expect to report interim, top-line or "preliminary" data for clinical trials, including for example the results reported in 2025 for our Phase 2 Endocrine Optimization Pilot sub‑study within the I‑SPY 2 TRIAL evaluating low‑dose oral (Z)‑endoxifen as a neoadjuvant treatment in women with stage II/III ER+/HER2‑negative breast cancer. Such data are based on a preliminary analysis of then-available efficacy and safety data, and such findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. Interim, top-line or preliminary data are based on important assumptions, estimations, calculations and information then available to us to the extent we have had, at the time of such reporting, an opportunity to fully and carefully evaluate such information in light of all surrounding facts, circumstances, recommendations and analyses. As a result, interim, top-line or "preliminary" results may differ from future/final results, or different conclusions or considerations may qualify such results once existing data have been more fully evaluated. In addition, third parties, including regulatory agencies, may not accept or agree with our assumptions, estimations, calculations or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the ability to obtain approvals, or commercialization of the particular compound and our business generally.

We are subject to rigorous and extensive regulation by the FDA in the U.S. and by comparable agencies in other jurisdictions, including the EuropeEuropean Medicines Agency (EMA) in the European Union (E.U.), the United Kingdom’s Medicines and Healthcare products Regulatory Agency and the Therapeutic Goods Administration (TGA) in Australia.

We may not be able to obtain sufficient quantities of our products if we are unable to secure manufacturers when needed, or if our designated manufacturers do not have the capacity or otherwise fail to manufacture compounds according to our schedule and specifications or fail to comply with cGMP regulations. Furthermore, in order to ultimately obtain and maintain applicable regulatory approvals, any manufacturers we utilize are required to consistently produce the respective products in commercial quantities and of specified quality or execute fill-finish services on a repeated basis and document their ability to do so, which is referred to as process validation. In order to obtain and maintain regulatory approval of a compound, the applicable regulatory authority must consider the result of the applicable process validation to be satisfactory and must otherwise approve of the manufacturing process. Even if our compound manufacturing processes obtain regulatory approval and sufficient supply is available to complete clinical trials necessary for regulatory approval, there are no guarantees we will be able to supply the quantities necessary to affecteffect a commercial launch of the applicable drug, or once launched, to satisfy ongoing demand. Any product shortage could also impair our ability to deliver contractually required supply quantities to applicable collaborators, as well as to complete any additional planned clinical trials.

Based on our evaluation of the ATO's taxpayer alert published in the fourth quarter of 2023, we believe that it is no longer reasonably assured that our full tax position would be sustained under an audit. Accordingly, we recorded a change in estimate that represents our estimate of the amount (inclusive of potential penalties) that no longer meets the reasonably assured threshold. We recorded an estimated accrued current liability of $1.1 million in our Condensed Consolidated Balance Sheets as of both MarchJune 31,30, 2026 and December 31, 2025. We may in the future be required to record additional changes in estimates, which could further increase our expenses and adversely affect our business and results of operations.

Our commercial success will depend, in part, on our ability to obtain additional patents and licenses and to protect our existing patent position, both in the U.S. and in other countries, for therapeutics and related technologies, processes, methods, compositions, and other inventions that we believe are patentable, all of which provide limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. As of February 2, 2026, we ownedhave andbeen weregranted pursuing 141 pending provisional and non-provisional patent applications (30seven U.S. patent applications and 111 international patent applications, including one allowed U.S. application and two allowed international applications) and 24 issued patents (8 U.S. patents and 16 international patents covering our proprietary (Z).-endoxifen, and we have numerous applications pending in the U.S. and in other major countries. We expect to have patent protection covering our proprietary (Z)-endoxifen through at least November 17, 2038. There have been no material changes to our patent portfolio in the three and six months ended June 30, 2026. We continue to evaluate the full range of our technologies and file new patent applications consistent with our evolving business goals.

IfAny thirdlitigation partiesproceedings successfullyrelating challenge the validity of one or more ofto our patentproprietary applications, wetechnology may loseresult certainin patentunsuccessful rights,outcomes for us and, even if previouslysuch grantedproceedings byresult ain patentsuccessful office.outcomes for us, the proceedings may result in substantial costs and distract our management and other employees. For example, on August 18, 2023, Intas Pharmaceuticals Ltd. (Intas) filed a Petition for Post Grant Review with the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO), seekingwhich sought to invalidate all claims related to one of our issued patents (U.S. Patent No. 11,572,334) titled “Methods for Making and Using Endoxifen”, and on January 29, 2025, the PTAB issued a final written decision finding all claims of U.S. Patent No. 11,572,334 were unpatentable. In addition, on April 3, 2025, Intas filed two separate petitions with the PTAB seekingwhich sought to invalidate two additional patents, and on April 13, 2026, the Company entered into a Settlement Agreement with Intas which is intended to resolveresolved these additional petitions. For more information regarding our legal proceedings, refer to Note 12 “Commitments and Contingencies” to the Condensed Consolidated Financial Statements.

Any litigation proceedings relating to our proprietary technology may result in unsuccessful outcomes for us and, even if such proceedings result in successful outcomes for us, the proceedings may result in substantial costs and distract our management and other employees. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Finally, we may not be able to prevent, alone or with the support of our licensors, if any, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the U.S.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on our intellectual property, particularly on obtaining and enforcing patents. Obtaining and enforcing patents in the biotechnology and pharmaceutical industries involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. For the past several years, the U.S. has conducted proceedings involving post-issuance patent review procedures, such as inter partes review (IPR), and post-grant review (PGR) and covered business methods. These proceedings are conducted before the PTAB, of the USPTO. Each proceeding has different eligibility criteria and different patentability challenges that can be raised. In this regard, the IPR process permits any person (except a party who has been litigating the patent for more than a year) to challenge the validity of a U.S. patent on the grounds that it was anticipated or made obvious by prior art consisting of patents or printed publications. As a result, non-practicing entities associated with hedge funds, pharmaceutical companies who may be our competitors and others have challenged certain valuable pharmaceutical U.S. patents based on prior art through the IPR process. A decision in such a proceeding adverse to our interests could result in the loss of valuable patent rights, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects. For example, we recently entered into a Settlement Agreement which is intended to resolve the 391 PGR Petition and the 151 IPR Petition. Refer to Note 12 “Commitments and Contingencies” to the Condensed Consolidated Financial Statements. Any potential future changes to the U.S. patent system could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Further, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In particular, on March 20, 2012, the U.S. Supreme Court issued the Mayo Collaborative Services v. Prometheus Laboratories, Inc. decision, holding that several claims drawn to measuring drug metabolite levels from patient samples were not patentable subject matter. The full impact of the Mayo Collaborative Services v. Prometheus Laboratories, Inc. decision on diagnostic and certain method claims is uncertain. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. The standards that courts use to interpret patents are not always applied predictably or uniformly and may evolve, particularly as new technologies develop. In addition, changes to patent laws in the U.S. or other countries may be applied retroactively to affect the validity, enforceability, or term of our patent. For example, the U.S. Supreme Court has modified some legal standards applied by the USPTO in examination of U.S. patent applications, which may decrease the likelihood that we will be able to obtain patents and may increase the likelihood of challenges to patents we obtain or license.

In January 2025, an executive order entitled “Unleashing Prosperity Through DeregulationDeregulation,”, was issued which calls for at least 10 existing regulations to be repealed whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation. Recent developments at the FDA include announcement of a plan to phase out animal testing for monoclonal antibodies and certain other drugs, the proposed rare disease evidence principles (RDEP) program to facilitate approval of drugs to treat rare diseases with very small patient populations with significant unmet medical need and with a known genetic defect that is the major driver of the pathophysiology, and the announcement of a new Commissioner’s National Priority Voucher program for companies supporting certain U.S. national health priorities and interests,interests. FDA leadership has expressed increased willingness, where scientifically appropriate and thelegally announcement of the FDA’s new default positionsupportable, to require onlyconsider a single pivotal trial fortogether newwith drugconfirmatory approvals instead of the previous default standard requiring two trials .evidence. To the extent our competitors are selected for this new voucher pilot program, or are otherwise able to participate in any of these initiatives intended to accelerate drug development and application review, and obtain approval faster, our competitive position may be harmed, which could have a material adverse effect on our business. FDA has also increased its scrutiny of foreign drug manufacturing facilities and other contractors based in China, especially with respect to the transfer of biological materials, genetic data, and other sensitive data of American patients to parties located in China. It is unclear how the industry and our clinical programs will be impacted by policies and regulations implemented under the current administration and FDA leadership, or other executive orders.

We are unable to predict the extent to which the presidential administration may impose or seek to impose leadership or policy changes at the FDA or changes to rules and policies impacting our business and operations. It is unclear how these executive actions or other potential actions by the federal government will impact the FDA or other regulatory authorities that oversee our business. Government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities, which could result in delays in our clinical trial timelines. A significant reduction in the FDA’s workforce or budget or a government shutdown could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or approval of our product candidates, which could have a material adverse effect on our business.

our ability to successfully deploy artificial intelligence (AI) in our or our collaborators’ product candidates;

our ability to receive orphan-drug exclusivity for (Z)-endoxifen for DMDMAS;

As of February 2, 2026, we have been granted seven U.S. and 16 international patents covering our proprietary (Z)-endoxifen, and we have numerous applications pending in the U.S. and in other major countries. We expect to have patent protection covering our proprietary (Z)-endoxifen in our principal areas of focus of oncology, endocrine dysfunction disorders and muscular dystrophy-related diseases through at least November 17, 2038. There have been no material changes to our patent portfolio in the three and six months ended June 30, 2026.

(Z) endoxifen.-endoxifen. (Z)-endoxifen is the most active metabolite of Tamoxifen, aan FDA approved drug to treat and prevent breast cancer in high-risk women, and it is substantially more potent as an estrogen receptor antagonist than Tamoxifen and other approved SERMs. Unlike Tamoxifen, which requires metabolic activation through CYP2D6 and other liver enzymes, (Z)-endoxifen does not require first-pass metabolism to achieve therapeutic concentrations. As a result, its activity is not dependent on patient-specific metabolic variability.

In an ongoing neoadjuvant clinical study, (Z)-endoxifen has demonstrated early signs of anti-tumor activity. Reported results include one pathological complete response and multiple responses, as well as substantial reductions in Ki-67 proliferation across dose levels. ThisSuppression is important because early reductions inof Ki-67 during endocrine therapy are prognostic in ER+/HER2- breast cancer, and which we believe could indicateshort-term endocrine sensitivity, whichtreatment has been associated with improvedendocrine responsiveness and with more favorable long-term outcomesprognosis andin lowerER-positive recurrencebreast risk.cancer. TumorMeaningful shrinkagereductions wasin observedMRI-assessed byfunctional MRItumor imaging,volume whichwere isobserved, atypicalproviding foradditional endocrineevidence therapiesof thatantitumor areactivity generallyduring cytostatic.therapy.

The study was conducted in Stockholm, Sweden and enrolled 240 participants who were randomized to receive daily oral dosing for six months of either placebo, 1 mg of (Z)-endoxifen, or 2 mg of (Z)-endoxifen. The primary endpoint was dose-response reduction in MBD. Secondary endpoints included safety and tolerability, and an exploratory endpoint assessed durability of MBD changes over 24 months. The study was fully enrolled in November 2023 and concluded in June 2024 with database lock in September 2024. The follow up 24-month mammographic record review of participants was concluded as of March 31, 2026, and top-line durability data is expected to be received before the end of the secondthird quarter of 2026.

We expect to report top-line durability data from the Karisma-(Z)-endoxifen study in the firstthird halfquarter of 2026. Further development will depend on regulatory guidance, study outcomes, and available resources.

Based on these findings, the study is beingwas expanded to a 40 mg daily dose of (Z)-endoxifen in premenopausal and postmenopausal patients, targeting enhanced ERα antagonism and PKCβ1 inhibition, with or without combination therapy. For the expanded arms of this study, (Z)-endoxifen is being used in combination with two FDA approved drugs: 1) abemaciclib (VERZENIO®), a cyclin-dependent kinase (CDK) 4/6 inhibitor marketed by Eli Lilly and Company, and 2) elagolix (ORILISSA®), a prescription medicine used to treat moderate to severe pain associated with endometriosis marketed by AbbVie, Inc. More specifically, (Z)-endoxifen is being used in combination with abemaciclib in postmenopausal patients and in combination with elagolix for certain premenopausal patients where ovarian function suppression (OFS) treatment is required. Enrollment for the two primaryall arms of this expanded study using (Z)-endoxifen as a combination therapy is nearly completecomplete, and we expect to begin receiving data early inthroughout the second half of 2026. For the ongoing arms of the study involving premenopausal women, (Z)-endoxifen is being used in combination with elagolix or a GnRH Agonist. Enrollment is nearly complete for these arms, and we expect to begin receiving data in the second half of 2026.

Enrollment in this study is ongoing, and a substantial proportion of patients have elected to continue active surveillance following initial treatment and imaging assessment. These early observations support the potential of the therapy and assessment to reduce the risk of overtreatmentover treatment in selected DCIS patients while maintaining oncologic safety.

EVANGELINE: EVANGELINE is a Phase 2 study evaluating (Z)-endoxifen plus OFS compared to exemestane plus OFS as a neoadjuvant therapy in premenopausal women with ER+/HER2- breast cancer.

The EVANGELINE study utilizes a Simon two-stage design to assess whether the regimen meets or exceeds a predefined Ki-67 response threshold of 65%. Secondary endpoints include safety and tolerability, residual cancer burden, preoperative endocrine prognostic index score, and MRI-based tumor response. Enrollment in this study was complete as of June 30, 2026.

Duchenne muscular dystrophy: DMD is a serious, progressive neuromuscular disease that primarily affects boys, leading to loss of muscle function, loss of ambulation, and life-threatening heart and respiratory complications. We believe that (Z)-endoxifen’s direct estrogen-receptor modulation, protein kinase C inhibition, and effects on key signaling pathways could be relevant in addressing various pathologies associated with DMD, including inflammation, fibrosis, and cardiomyopathy. Through its potential ability to upregulate utrophin, (Z)-endoxifen may help stabilize muscle health, including muscle growth, repair, and fibrosis. FDA engagement commenced in Q4 2025.2025 and is ongoing.

WomenSymptomatic women carriers of DMD: (Z)-endoxifen has also shown potential relevance in symptomatic female Duchenne and Becker muscular dystrophy carriers, an under-recognized population in which a subset may experience skeletal-muscle symptoms or develop dilated cardiomyopathy in adult life. The work done in 2025, including our manuscript entitled, “(Z)-Endoxifen as a Modulator of Utrophin Pathways in Duchenne Muscular Dystrophy,” will continue to inform our hypotheses and potential clinical trial protocols in the remainder of 2026. Additionally, we believe this condition meets the requirements of and could qualify for Orphan Drug Designation,designation, and we intend to pursue this designation.

McCune-Albright Syndrome: MAS is a rare, non-inherited genetic disorder caused by a postzygotic activating mutation in GNAS, resulting in abnormal hormone signaling in affected tissues and involving bone, skin, and the endocrine system, with symptoms typically appearing in early childhood. In young girls (as early as 2 years old), early onset puberty can occur (Precocious Puberty) which can have a very significant effect on quality of life and limit growth. WeBecause believeestrogen thatsignaling contributes to peripheral precocious puberty in girls with MAS, we are evaluating whether (Z)-endoxifen could provereduce toestrogen-mediated bemanifestations, anincluding effectiverecurrent hormonevaginal blockerbleeding, accelerated skeletal maturation and potentiallycompromised significantlyadult reduce the effects of Precocious Puberty until young girls reach a more typical age for the onset of puberty and related developmental changes.height.

In May 2026, we received an additional FDA Rare Pediatric Disease designation for (Z)-endoxifen for the treatment of MAS. Additionally, given the relatively small size of this impacted population, we expect to seek Orphan Drug designation for MAS in the firstsecond half of 2026. Similarly with the potential PRV for DMD, we believe a potential PRV for MAS could provide us with several potential strategic benefits including meaningful, non-dilutive value opportunities, either through use in another program or monetization through sale to third parties.

There have been no material changes to our critical accounting estimates during the three and six months ended MarchJune 31,30, 2026 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 25, 2026.

Comparison of Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Revenue and Cost of Revenue. For the three and six months ended MarchJune 31,30, 2026 and 2025, we had no source of revenue and no associated cost of revenue.

Operating Expenses. Total operating expenses were $9.9$8.7 million and $18.6 million for the three and six months ended MarchJune 31,30, 2026, respectively, which was a decrease of $0.3 million and an increase of $2.5$2.1 million,million from total operating expenses for the three and six months ended MarchJune 31,30, 2025 of $7.4$9.0 million.million and $16.5 million, respectively. Factors contributing to the increasedchanges in operating expenses induring the three and six months ended MarchJune 31,30, 2026 are explained below.

Research & Development (R&D) Expenses. The following table provides a breakdown of major categories within R&D expenses for the three and six months ended MarchJune 31,30, 2026 and 2025, together with the dollar change and percentage change in those categories (dollars in thousands):

The increase in R&D compensation expenses of $0.1 million and $0.2 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the three and six months ended MarchJune 31,30, 2025, was due primarily to increases in non-cash stock-based compensation expense of $0.1 million.

The decreasesdecrease in R&D professional fees and other of $0.4$0.1 million and $0.5 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the three and six months ended MarchJune 31,30, 2025, werewas primarily attributable to lowera decrease in regulatory consulting fees in the first2026 quarter of 2026periods related to our (Z)-endoxifen program as compared to the same quarterperiods in the prior year.

General and Administrative (G&A) Expenses. The following table provides a breakdown of major categories within G&A expenses for the three and six months ended MarchJune 31,30, 2026 and 2025, together with the dollar change and percentage change in those categories (dollars in thousands):

The decrease in G&A compensation expenses of $0.2$0.3 million and $0.5 million for the three and six months ended MarchJune 31,30, 20262026, respectively, compared to the three and six months ended MarchJune 31,30, 2025, was due primarily to a decrease in headcount in the current year periodperiods compared to the same periodperiods in the prior year.

The increase in G&A professional fees and other of $2.0$0.6 million and $2.6 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to the three and six months ended MarchJune 31,30, 2025, was due primarily to higher legal fees of $1.8$0.7 million and $2.5 million, for the three and six months ended June 30, 2026, respectively, related to our ongoing patent litigation activity,matters, which hashave subsequentlynow been settled, as well as fees associated with management of our intellectual property portfolio and legal costs related to our SEC compliance and other legalstock matters.administration matters incurred during the current year periods.

Interest Income. Interest income was $0.3$0.2 million and $0.5 million for the three and six months ended MarchJune 31,30, 20262026, representedrespectively, aand decrease ofdecreased $0.4 million and $0.8 million compared to the priorthree yearand period.six months ended June 30, 2025, respectively. The decrease was due primarily to lower average cash balances invested in our money market account during the current year periodperiods relative to the same periodperiods in the prior year.

Income Taxes. We did not record an income tax expense or benefit for the three monthand six months ended MarchJune 31,30, 2026 and 2025. We have incurred net losses since inception. Additionally, due to uncertainty regarding utilization of our net operating loss carryforwards and our history of losses, we maintain a full valuation allowance against our net deferred tax assets due to uncertainty regarding future taxable income.

On February 20, 2026, we entered into an At the MarketAt-the-Market Offering Agreement,Agreement (ATM), dated February 20, 2026 (the Sales Agreement), with Rodman & Renshaw LLC.LLC (the Sales Agent). Pursuant to the Sales Agreement, we may offer, from time to time, to sell, in an "at the marketat-the-market offering," shares of our common stock up to an aggregate offering price of up to $50.0 million. The Sales Agreement was effective as of March 31, 2026. We did not make any sales under the Sales Agreement duringFor the three months ended MarchJune 31,30, 2026, orwe priorreceived tonet proceeds of $21 thousand and we issued 4,300 shares of common stock under the issuance date of this report.ATM.

We have incurred net losses and negative operating cash flows since inception. For the threesix months ended MarchJune 31,30, 2026, we recorded a net loss of $9.6$18.1 million and used $9.6$19.2 million of cash and cash equivalents in operating activities. As of MarchJune 31,30, 2026, we had $31.7$26.1 million in cash and cash equivalents and working capital of $29.2$25.6 million. We have not yet established an ongoing source of revenue sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable. We plan to obtain additional capital resources by selling our equity securities as well as short-term borrowing from banks, stockholders or other related parties, if needed. However, we cannot assure you that we will be successful in accomplishing any of these plans and, if we are unable to obtain adequate capital, we could be forced to cease operations or substantially curtail our activities. We do not anticipate any revenue until our pharmaceutical programs are developed, including receipt of all necessary regulatory approvals, and we successfully commercialize these programs. These conditions raise substantial doubt as to our ability to continue as a going concern. As of the date of filing this Quarterly Report, we expect our existing resources will likely be insufficient to fund our planned operations for the next twelve months, and additional capital resources will be needed to fund operations longer-term.

Net Cash Flows from Operating Activities. During the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, net cash used in operating activities increased $3.6$6.0 million due primarily to the following:

an increase of $1.3$4.2 million in cash used related primarily to professional fees supportingrelated to our ongoingsettled patent litigation matters, as well as higher legal fees for intellectual property matters, SEC registrations and filings, accounting fees, and recruitingaccounting fees, partially offset by decreases in investor relations fees; and aregulatory decreaseconsulting of $0.4 million resulting from lower interest income due to lower average amounts invested in our money market account during the current period when compared to the same period in the prior year.fees;

Net Cash Flows from Investing Activities. Our investment activity, including investments in capital equipment and other types of assets, were not material for the threesix months ended MarchJune 31,30, 2026 and 2025.

Our contractual obligations represent our future cash commitments and liabilities under agreements with third-party clinical trial service providers. Apart from contracts with one third-party clinical trial service provider, such agreements are cancellable upon written notice by us. The non-cancellable contracts expire upon completion of the clinical trial and release of the final report, or the contract may be terminated by the clinical trial service provider, by the FDA or another governmental agency. As of MarchJune 31,30, 2026, our estimated non-cancellable commitment was $5.3$4.3 million, which will be paid over the term of the clinical trials.