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

The report of our independent registered public accounting firm on the Company’s financial statements as of and for the year ended December 31, 2024,2025, includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern for at least one year from the date of filing. Through the date of the Business Combination, Old Conduit financed its working capital requirements by raising capital through private placements of its ordinary shares and issuing of short-term and convertible notes. The Company has financed its working capital requirements since the Business Combination primarily through the PIPE Financing (the “PIPE Financing”) completed in September 2023, and through issuing of short-term and convertible notes.notes, and via an at the market program with A.G.P./Alliance Global Partners.

The scientific discoveries that form the basis for our efforts to generate and develop our clinical assets are relatively recent. AZD1656 is a glucokinase activator that is in a number of Phase II ready autoimmune disorders including uveitis, Hashimoto’s thyroiditis, preterm labor, and renal transplant, and the successful development of AZD1656 may require additional studies and efforts to optimize its therapeutic potential. In addition, our development pipeline includes what we believe to be a potent irreversible inhibitor of human Myeloperoxidase (MPO) that has the potential to treat idiopathic male infertility, which we refer to as AZD5904. AZD5904 may not demonstrate in patients the therapeutic properties ascribed to it in the laboratory or preclinical studies, and may interact with human biological systems in unforeseen, ineffective, or even harmful ways. If we are not able to successfully develop and commercialize our clinical assets, including AZD1656 and AZD5904, we may never become profitable and the value of our capital stock may decline. Additionally, Manoira may not be successful in evaluating the CDT Assets’ applicability in animal health, explore veterinary market opportunities related to AZD1656, and as such we may never develop and commercialize such assets.

WeWith the exception of our work at our Cambridge facilities, we do not currently have, nor do we plan to acquire, the infrastructure or capability to supply, manufacture, or distribute preclinical, clinical, or commercial quantities of drug substances or products. Our ability to develop our clinical assets depends and our ability to commercially supply our products will depend, in part, on our ability to successfully obtain the raw materials and APIs and other substances and materials used in our clinical assets from third parties and to have finished products manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for preclinical and clinical testing and commercialization. If we fail to develop and maintain supply relationships with these third parties, we may be unable to continue to develop or commercialize our clinical assets.

Our ability to compete in the highly competitive pharmaceuticals industry depends upon our ability to attract and retain highly qualified managerial, scientific, medical, sales, marketing, and other personnel. We are highly dependent on our management, including our Chief Executive Officer, DavidAndrew Tapolczay.Regan. The loss of the services of any of these individuals could impede, delay, or prevent the successful development of our product pipeline, completion of our planned clinical trials, commercialization of our clinical assets, or in-licensing or acquisition of new assets and could negatively impact our ability to successfully implement our business plan. If we lose the services of any of these individuals, we might not be able to find suitable replacements on a timely basis or at all, and our business could be harmed as a result. We do not maintain “key man” insurance policies on the lives of these individuals or the lives of any of our other employees. In order to retain valuable employees, in addition to salary and cash incentives, we provide stock options that vest over time.

We have registered the domain name for the website that we use in our business, which is www.conduitpharma.com.www.cdtequity.com. The inclusion of the website address in this Annual Report does not include or incorporate by reference the information on the Company’s website into this document.

In addition, in August 2023, prior to the Business Combination, our now wholly-owned subsidiary, Conduit Pharmaceuticals Limited, received a letter from Strand Hanson Limited (“Strand”) claiming it was owed advisory fees pursuant to a previously executed letter. Conduit Pharmaceuticals Limited rejected and disputed the substance of the letter in full. Following such rejection, on September 7, 2023, Strand filed a claim in the Business and Property Courts of England and Wales claiming it is entitled to be paid the sum of $2 million and, as a result of the event the Business Combination is completed, to be issued 65 thousand21 shares of common stock. WeOn intendDecember 16, 2025, the High Court of Justice, Business and Property Courts of England and Wales, ultimately ruled in favor of Strand, with a judgment amount payable from CPL to vigorouslyStrand defendtotaling against these$9.6 claims. Regardless of its outcome, the litigation may impact our business due to, among other things, defense legal cost and the diversion of the attention of our management.million.

On December 12, 2024, we entered into the Sarborg Agreement with Sarborg. Under the terms of the Sarborg Agreement, Sarborg willagreed to provide algorithmic and cybernetic technology services to Conduit,CDT, including the development of decision-support tools and advanced cybernetic systems tailored to enhance Conduit’sCDT’s decision-making processes and maximize the value of its pharmaceutical asset portfolio.

Sarborg willagreed to perform the services to ConduitCDT comprised of three phases: the Initial Phase (0-24 weeks) focuses on establishing a foundation for collaboration and aligning Sarborg’s services with Conduit’sCDT’s strategic goals; the Development Phase (24-36 weeks) involves building technological infrastructure, including dashboards and predictive models; and the Ongoing Services Phase (36-52 weeks) ensures the sustained functionality and relevance of Sarborg’s deliverables while supporting Conduit’sCDT’s growth through iterative improvements and updates. Sarborg will create specific deliverables, including reports, computer programs, software applications, APIs, mobile applications, source code, written technical specifications and designs, operating and maintenance manuals, and other recorded data and information arising from or relating to the services. Sarborg will provide all necessary resources to perform the services and deliver the deliverables in accordance with the Sarborg Agreement. To date, Sarborg has successfully completed all phases and has achieved all milestones provided for pursuant to the Sarborg Agreement.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms may be flawed or biased. Datasets used to train or develop AI systems may be insufficient, of inferior quality, or contain biased information. Additionally, the laws and regulations concerning the use of AI continue to evolve. If the use or integration of AI systems, or the outputs generated by such systems, were determined to be non-compliant (e.g., in relation to intellectual property or data privacy rights), this may result in liability, including legal liability, or adversely affect our business, reputation, brand, financial condition and results of operations. It is possible that emerging regulations may limit or block the use of AI in our business and solutions or otherwise impose other restrictions that may affect or impair the usability or efficiency of our business or services for an extended period of time or indefinitely. Our competitors or other third parties may incorporate AI into their product development, technology and infrastructure more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our business, financial condition and results of operations. For more information on our dealings with Sarborg, see “Business- Principal Strategic Partnerships Services Agreement – CDT and Sarborg Limited”.

FollowingThe the transfer to the Nasdaq Capital Market, the Company’s current MVPHS will be compliant with the MVPHS continued listing standard of greater than $1.0 million and the Company believes it will be able to demonstrate its compliance with the Equity Standard of Stockholder’s Equity greater than $2.5 million prior to the March 31, 2025, deadline to the satisfaction of Nasdaq, although no such assurance can be given. The inability to comply with Nasdaq’s continued requirements or standards could result in the delisting of our common stock, which could have a material adverse effect on our financial condition and could cause the value of the common stock to decline.

The current expectation is that we will retain our future earnings to fund the development and growth of our business. As a result, capital capital appreciation, if any, of the shares of our common stock will be stockholders’ sole source of gain, if any, for the foreseeable future.

On MarchApril 27,15, 2025,2026, the last quoted sale price for our common stock as reported on Nasdaq was $0.77$4.88 per share. Currently, the exercise prices of the Company’s warrantsPublic Warrants are significantly greater than the current market price of our common stock. Accordingly, such warrantsPublic Warrants are unlikely to be exercised and therefore the Company does not expect to receive any proceeds from such exercise of the warrants in the near term. Whether any holders of Public Warrants determine to exercise such warrants,Public Warrants, which would result in cash proceeds to the Company, will likely depend upon the market price of our common stock at the time of any such holder’s determination.

We may issue additional shares of common stock or preferred stockstock, including issuances upon exercise of outstanding pre-funded warrants, in connection with capital raising transactions and under an employee incentive plan or under our existing at the market offering program, which would dilute the interest of our stockholders.

We may issue a substantial number of additional shares of common or preferred stock pursuant to the exercise of previously issued pre-funded warrants, under an employee incentive plan or under our ongoing at the market offering program. The issuance of additional shares of common or preferred stock:

The following discussion and analysis of our financial condition and results of operations should be read together with the other sections sections of this Annual Report on Form 10-K, including our audited financial statements for the year ended December 31, 2024, 2025, together with related notes thereto, included elsewhere in this Annual Report. The following discussion contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” or in other parts of this Annual Report and our other filings with the SEC. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. CDT Equity Inc. (formerly Conduit Pharmaceuticals Limited) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Murphy Canyon Acquisition Corp. (“MURF”) on November 8, 2022. The transaction contemplated by the terms of the Merger Agreement was completed on September 22, 2023, in conjunction with which MURF changed its name to Conduit Pharmaceuticals Inc. (hereafter referred to, collectively with is subsidiaries as “ConduitCDT”, “CDT Equity”, the “Company”, “we”, “us” or “our”, unless the context otherwise requires. All dollar amounts are expressed in thousands of of United States dollars (“$”), unless otherwise indicated.

On September 22, 2023, a merger transaction (the “Business Combination”) between Conduit Pharmaceuticals Limited (“Old Conduit”), Murphy Canyon Acquisition Corp (“MURF”) and Conduit Merger Sub, Inc., a Cayman Islands exempted company and a wholly owned subsidiary of MURF (“Merger Sub”), was completed pursuant to the Agreement and Plan of Merger, dated November 8, 2022, as amended, (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, at the closing, (i) Merger Sub merged with and into Old Conduit, with Old Conduit surviving the Business Combination as a wholly-owned subsidiary of MURF, and (ii) MURF changed its name from Murphy Canyon Acquisition Corp. to Conduit Pharmaceuticals Inc. Effective August 5, 2025, the Company changed its name from Conduit Pharmaceuticals Inc. to CDT Equity Inc. Our change to CDT Equity Inc. reflects the evolution of our strategy as a data-driven biotech development company focused on identifying, enhancing, and advancing high-potential therapeutic assets through scientific innovation and strategic partnerships.

Simultaneously,Our Conduitcurrent leveragespipeline theincludes capabilitiescandidates oftargeting our Cambridge laboratory facilityinflammatory and highlyautoimmune experienceddisorders, teamas ofwell solid-formas expertsidiopathic tomale extend orinfertility, develop proprietary solid-form intellectual property for our existingdermatology, and futureanimal clinicalhealth. assets. Our ownThe intellectual property portfolio comprises pending patent applications in several international jurisdictions describing a solid-form compound, including the AZD1656 Cocrystal (a HK-4 Glucokinase Activator), targeting a wide range of autoimmune disorders.. Our pipeline research includes a number of additional compounds that serve as promising alternatives to existing clinical assets currently marketed and sold by large pharmaceutical companies, which we have identified as havingpotential an opportunityopportunities to develop further intellectual property positions through solid-form technology.

The Sarborg Agreement entered into between the Company and Sarborg on December 12, 2024 is designed to address longstanding challenges in the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical development and asset identification. By integrating Sarborg’s algorithmic AI/cybernetics technology, ConduitCDT Equity aims to enhance efficiency, lower costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle and giving ConduitCDT Equity a competitive advantage in the sector.

Through this relationship, ConduitCDT Equity will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug candidates, candidates, streamline clinical trials, and optimize asset management with real-time data. These tools will drive faster, more accurate decisions, decisions, improving efficiency and reducing costs. By leveraging these insights, ConduitCDT Equity can differentiate itself in a competitive sector and gain unique data-driven insights that position the Company for success across both its current and future asset portfolio.

Furthermore, ConduitCDT Equity is well positioned to pursue, and intends to pursue,pursue additional relationships and/or partnerships with third parties forto thelicense licensing of further assets which are currently deprioritized. We plan to focus our efforts on developing clinical assets to address disorders that impact a large populationpopulations where there is no present treatment or the presentexisting treatment,treatments carriescarry significant unwanted side effects.

As a result of the aggregate of the reverse stock split,splits, every 100300,000 shares of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock,stock. and theThe number of our issued and outstanding shares of common stock, when accounting for the reverse stock splits, was reduced92,140 to 1,384,801 and 738,295461 shares as of December 31, 20242025 and December 31, 2023,2024, respectively. All references to numbers of shares of common stock and per-share information in this Annual Report on Form 10-K have been adjusted retroactively, as appropriate, to reflect the reverse stock split.

Other income (expense),expense, net

For further details refer to Note 1717, “Other income (expense), net,” in the consolidated financial statements as of December 31, 20242025 and 20232024 included elsewhere in this Annual Report.

Interest expense, net changed by $1.3$1.2 million or 614%,79%, to $1.5$0.3 million for the year ended December 31, 2024,2025, from $0.2$1.5 million for the year ended ended December 31, 2023.2024. The changedecrease was drivenprimarily byattributable to a $0.9 million increasedecrease in the amortization of debt issuance costscosts, debt discounts, and debt discountsconversion costs, and a $0.4 million increasedecrease in interest expense incurredand onconversion costs related to interest-bearing convertible promissory notes.notes, partially offset by a $0.1 million increase in loan settlement fees.

Our primary uses of cash are to fund our operations as we continue to grow our business. We will require a significant amount of cash for for expenditures as we invest in ongoing research and development and business operations. Until such time we can generate significant revenue from the successful approval and commercialization of a product candidate, we expect to finance our cash needs for ongoing research and development and business operations through public or private equity or debt financings or other capital sources, including strategic partnerships. However, we may be unable to raise additional funds or enter into such other arrangements, when needed, on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, 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. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, or substantially reduce research and development efforts all of which could have a material adverse effect on the Company and its financial results.

At any time prior to the full payment of the A.G.P. Convertible Note, provided that the A.G.P. has given at least three business days written written notice to the Company, A.G.P., in its sole discretion, may elect to have all or any portion of the outstanding principal amount and all interest accrued converted into shares of the Company’s common stock, at the lower of the Reverse Split price and the market price price per share at the time of the conversion date, but in no event less than $1.00, subject to adjustment as provided therein and to take take into account any future share splits or reverse splits. However, the conversion of the A.G.P. Convertible Note may not occur prior to the Company having sufficiently authorized shares of common stock to permit the entire conversion of the convertible promissory note. note. Refer to Note 8 to our financial statements included elsewhere in this Annual Report. Per the terms outlined in the agreement, we are required to undertake capital raises to paydown the A.G.P. Convertible Note.

On December 12, 2024, Sarborg and the Company entered into an agreement (the “Sarborg Agreement”) designed to address longstanding longstanding challenges in the pharmaceutical sector, in particular by reducing human error in critical decision-making processes in both clinical development and asset identification. By integrating Sarborg’s signature intelligence technology, the Company aims to enhance efficiency, lower costs, and accelerate timelines by minimizing human intervention, ultimately optimizing the drug development cycle and giving the Company a competitive advantage in the sector. Through this relationship, the Company will gain access to cutting-edge predictive models and dashboards, enabling the Company to evaluate drug candidates, streamline clinical trials, and optimize asset management with real-time data. These tools will drive faster, more accurate decisions, improving efficiency and reducing costs. By leveraging these insights, the Company can differentiate itself in a competitive sector and gain unique data-driven insights that position the Company for success across both its current and future asset portfolio. Our collaboration with Sarborg enables us to apply proprietary algorithms utilizing AI-powered disease mapping to identify novel re-purposing opportunities across a database of more than 3,000 disease signatures. Sarborg’s insights have directly informed two new combination patent filings, strengthening our intellectual property portfolio. In addition, the Company has initiated pre-clinical in-vitro models to explore new indications, guided by AI-insights without human intervention. We will seek an exit through third-party license deals following successful in vitro and in vivo pre-clinical trials, entering into agreements with third parties to pursue further development, FDA approval, commercialization, and marketing of our assets. We continue to evaluate novel novel artificial intelligence and cybernetics approaches to drug re-purposing, intellectual property, and asset selection to give the Company a competitive advantage. Sarborg is considered to be a related party of CDT, as Dr. Andrew Regan, Chief Executive Officer of CDT, also sits on the board of directors of Sarborg,Sarborg and is a shareholder of Sarborg through his ownership of Corvus, Chele Chiavacci Farley, a director of CDT is also a shareholder of Sarborg and Ulrik Olsen, a director of CDT is also a shareholder of Sarborg.

The Company effected fourfive reverse stock splits of its common stock pursuant to amendments to the Company’s Second Amended and Restated Certificate of Incorporation that were previously approved by the Company’s stockholders and authorized by the Board of Directors. The reverse stock splits were implemented as follows: a 1-for-100 reverse stock split effective January 24, 2025, a 1-for-15 reverse reverse stock split effective May 19, 2025, a 1-for-8 reverse stock split effective October 10, 2025 and2025, a 1-for-25 reverse stock split effective effective March 26, 2026, a 1-for-10 reverse stock split effective July 20, 2026.

As a result of the aggregate of the reverse stock splits, every 300,0003,000,000 shares of our common stock issued or outstanding were automatically reclassified into and became one new share of common stock. The number of our issued and outstanding shares of common stock, when accounting for the reverse stock splits, was 4,722,457631,080 and 92,1409,214 shares as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

We incurred approximately $0.8$0.3 million and $0.9$1.1 million on research and development activities during the three and six months ended MarchJune 30, 31, 20262026, respectively. We incurred approximately $1.8 million and March$2.8 31,million on research and development activities during the three and six months ended June 30, 2025, respectively. Our research and development activities have been focused on developing co-crystals of of AZD1656 to increase patent life as well as purchasing technology to help us determine the feasibility that AZD1656, and potentially other de-prioritized assets, may reach commercialization. Some of this work was completed by third-party CROs but all intellectual property property is retained by us. We currently have one pending international patent application and two pending national patent applications. The successful completion of clinical trials increases the value of clinical assets and may lead to the commercialization and/or licensing of such assets to other pharmaceutical companies. There is no assurance that any clinical trials on the assets owned or licensed by us will be successful.

Other income (expenses), net consists of change in the fair value of options, change in fair value of convertible notes, change in fair value of digital assetsnotes and expense incurred upon the issuance of warrants during the threesix months ended MarchJune 31,30, 2026.

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

Research and development expenses decreased by $0.1$1.6 million, or 15%,84%, to $0.8$0.3 million for the three months ended MarchJune 31,30, 2026, as compared to to $0.9$1.9 million for the three months ended MarchJune 31,30, 2025. The decrease was primarily attributable to a $0.2$1.5 million decrease in expense expense related to our transactions with Sarborg and a $0.1 million decrease related to Charles River activity. The decrease was partially offset by an increase of $0.1 million related to the Thesprogen agreement entered into during 2026the andthree anmonths increaseended June of30, $48 thousand related to a third-party consultant’s research and development activity.2026.

Other expense, net decreasedincreased by $0.7$0.5 million or 70%,50%, to $0.3$1.5 million for the three months ended MarchJune 31,30, 2026, compared to a $1.0 million for for the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily driven by a decrease of $1.6$0.2 million of expense forrelated theto netconversions and changes in fair value of convertible notes payable,payable partially offset by $0.4 million change in the gain uponand a waiver of accrued interest, $0.3 million change in gain loss upon debt extinguishment, $0.1 million change on the gain on change in the fair value of warrants, and a $0.1 million change on the gain on the issuance of shares for services.extinguishment.

For further details refer to Note 14 in the unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and March 31, 2025 included elsewhere in this document.

Loss on equity method investments was $0.1 million for the three months ended MarchJune 31,30, 2026. The loss was driven by a loss on the change in the carrying value of our investment in Sarborg with no comparable activity during the three months ended MarchJune 31,30, 2025.

Interest expense, net decreased by $0.1 million,$40,000, or 72%,70%, to $0.1 million$17,000 for the three months ended MarchJune 31,30, 2026, as compared to $0.2 million$57,000 for the three months ended MarchJune 31,30, 2025. The decrease was driven by a decrease of the principal outstanding on the A.G.P. Convertible Note as a result of conversions, decrease of the principal outstanding on the August 2024 Nirland Note and October 2025 Nirland Note as a result of conversions and repayment in fullsettlement during the three months ended MarchJune 31, 2025, and a decrease of $65 thousand of debt issuance cost amortization related to the Convertible Promissory Note Payable, partially offset by $23 thousand of interest expense related to the Ascent Note which was entered into during the three months ended March 31,30, 2026.

Management assesses liquidity in terms of our ability to generate cash to fund operating, investing and financing activities. Since our inception, and in line with our growth strategy, we have prepared our financial statements assuming we will continue as a going concern. Since our inception, we have incurred net losses and experienced negative cash flows from operations. To date, our primary sources of capital have been through convertible debt, private placements of equity securities and the Sales Agreement with A.G.P., dated October 23, 2024, as amended.A.G.P. During the threesix months ended MarchJune 31,30, 2026 and 2025, we incurred operating losses of $3.7$6.7 million and $3.6$8.6 million, respectively.

As consideration for the purchase, the Company has agreed to issue to the investors, in the aggregate: (i) 23,9202,392 shares of the Company’s Company’s Common Stock, exercise price of $0.0025$0.025 per share and (ii) pre-funded warrants (the to purchase up to 4,399,156439,915 shares of Common Common.Stock. In addition, the Company has agreed to pay Sarborg cash consideration of $8 million, with the cash portion of the consideration deferred until such time as the Company raises no less than $20 million through the use of an at-the-market facility program. As of MarchJune 31,30, 2026, the $8 million cash portion of consideration for our investment in Sarborg was still outstanding. We expect to raise the funds through an at-the-market facility program and repay the $8 million within 12 months of the issuance of the financial statements.

During the threesix months ended March 31,June 30, 2026, the holder of the A.G.P. Convertible Note converted $0.7the remaining $2.5 million of principal and interest into 25,760 129,911 shares of the Company’s Common Stock, respectively. As of March 31, 2026, there was approximately $1.9 million in outstanding principal and interest remaining.Stock.

The Note is payable to the Lender over twenty-four equal weekly installments of $82 thousand$82,000 commencing on JuneJuly 18,10, 2026, which may be paid in in cash or, at the option of the Company once an applicable resale registration statement is declared effective by the Securities and Exchange Exchange Commission covering the resale of any shares of the Company’s common stock, par value $0.0001 per share that may be received on on such conversion.

We currently anticipate that cash required for working capital for the next 12 months is approximately $19.5$21.0 million, which includes forecasted research and development costs of $0.1 million,$40,000 forecasted general and administrative costs of $6.2$6.1 million, current liabilities of $11.2$12.5 million million and convertible promissory notes payable, if not converted prior to maturity of $2.0$2.4 million. We do not anticipate being able to fund required working capital for the next 12 months with cash and cash equivalents on hand and current borrowings. Management believes that that we will be able to fund cash required for the next 12 months through borrowings and equity raises. We have historically been able to to access funds through the issuance of debt, and more recently our at the market offering program through the Sales Agreement and believe we can continue to obtain funding through such debt financing agreements and Sales agreement as needed to meet cash requirements for the next 12 months.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026, was $1.9$2.4 million, resulting primarily from a net loss of $4.1$8.7 million, adjusted for non-cash items including: a $0.3$0.7 million loss on the change in fair value of convertible notes payable, $1.0 $0.5 million of amortization expense, $0.5 million issuance of common stock for services, $0.3$0.6 million of amortization of directors and officers insurance, $0.2$0.4 million of stock-based compensation, a $0.1$1.1 million loss on debt extinguishment, $0.2 million loss on equity method investment, $0.1 million of non-cash lease expense, $0.1 million of non-cash interest expense and depreciationa expense.$1.5 million cash inflow from operating assets and liabilities. The net$1.5 million cash inflow from changes in operating assets and liabilities amountedis primarily due to toa $1.8 million cash inflow from accounts payable, a $0.4 million cash inflow from accrued expenses, partially offset by a $0.7 million cash outflow from prepaid expenses and other current assets and a $0.1 million.million cash outflow from operating lease liabilities.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025, was $3.9$6.5 million, resulting primarily from a net loss of $4.8 $10.8 million, adjusted for non-cash items including a $1.8 million loss on the change in fair value of convertible notes payable, a $0.3 million gain on debt extinguishment, $0.3$0.4 million gain on waiver of accrued interest, a $0.1$0.3 million gain on debt extinguishment, $0.1 change in fair value of derivative warrant liability, $0.2a $2.9 million change in fair value of convertible notes, $1.8 million of amortization expense, $0.4 million of stock-based compensation expense,compensation, $0.2 million of non-cash interest expense, $0.2 million of amortization expense, $0.4 million of prepaid directors and officers insurance amortization and a $1.6$0.2 million cash outflow from operating assets and liabilities. The $1.6$0.2 million cash outflow from operating assets and liabilities is primarily due to a $0.7 $0.2 million cash outflow from accounts payable, a $0.2$0.1 million cash outflow from accrued expenses and other current liabilities,liabilities and a $0.3 $0.1 million cash outflow from operating lease liabilities, partially offset by a $0.2 million cash inflow from prepaid expenses and other current assets.

No cash was used in investing activities for the threesix months ended MarchJune 31,30, 2026.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 20252025, was $0.4 million, resulting from $0.4 million in diagnostic asset purchases and purchases of property, plant and equipment totaling $0.4 million.equipment.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 20252026, was $5.9$1.7 million, resulting from proceeds received from the issuance of convertible notes payable of $1.8 million, and from proceeds from the issuance of common shares related to the ATM program of $8.1$0.4 million.million, This waspartially offset by repayments of convertible notes payable of $1.6to million,related and repaymentsparties of notes payable of $0.6$0.5 million.

InvestmentsThe areCompany’s current investment is accounted for under the cost or equity method of accounting, under which the Company records its proportionate share of the investee’s earnings and losses within earnings and evaluates the investment for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. The determination of whether a decline in value is other-than-temporary requires significant judgment regarding the investee’s financial condition, operating performance, business prospects, market conditions, and estimated recoverable value.