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

Our ability to become profitable depends upon our ability to generate revenue. To date, we have not generated any revenue. We do not expect to generate significant revenue unless or until we successfully complete clinical development and obtain regulatory approval of, and then successfully commercialize, our product candidates. We do not know when, or if, we will generate any revenue. We receivedhave clearanceinitiated ofa ourclinical INDtrial for our first product candidate, CER-1236, in AML, are expanding to MDS and MF patients in the first half of 2026 with later plans to expand into ovarian cancer and NSCLC, and the rest of our product candidates are in the preclinical stages of development. Our product candidates will require additional preclinical studies, clinical development regulatory review and approval, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales. Our ability to generate revenue depends on a number of factors, including, but not limited to, our ability to:

Many of the factors listed above are beyond our control and could cause us to experience significant delays or prevent us from obtaining regulatory approvals or commercializecommercializing our product candidates. Even if we are able to commercialize our product candidates, we may not achieve profitability soon soon after generating product sales, if ever. If we are unable to generate sufficient revenue through the sale of our product candidates or or any future product candidates, we will be unable to continue operations without continued funding.

Our current product candidates are in early clinical and preclinical development and we are subject to the risks of failure inherent in the development of product candidates based on novel approaches, targets and mechanisms of action. Although we receivedhave INDinitiated clearanceour clinical trial for CER-1236 from the FDA in NovemberAML, 2024are expanding to MDS and forMF additional indications in March 2025, and we anticipate beginning clinical trialspatients in the first half of 2025,2026 with later plans to expand into ovarian cancer and NSCLC, there is no guarantee that we will be able to proceed with clinical development of CER-1236 or any of our other product candidates as planned or that any product candidate will demonstrate a clinical benefit once we advance these candidatesadvanced to testing in patients. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by early clinical stage biotechnology companies such as ours.

Data from our preclinical studies and clinical trials is limited and may change as additional patient data become available or may not be validated in any future or advanced clinical trial.

Data from preclinical studies and any clinical trials that we may complete is subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data becomes available. For example, preclinical and Phase 1 results are preliminary in nature and should not be viewed as predictive of ultimate success. It is possible that such results will not continue or may not be repeated in any clinical trial of our product candidates. For instance, our preclinical studies provide limited data and any clinical trials may not validate such results. Additionally, manufacturing can impact clinical outcomes and we have not yet completed manufacturing runs with a CDMO. We may also fail to develop and transfer to a CDMO any optimized manufacturing processes for any of our programs.outcomes. Ultimately, if we cannot manufacture our product candidates with consistent and reproducible product characteristics, our ability to develop and commercialize any product candidate would be significantly impacted.

TheWe INDhave forsubmitted CER-1236INDs wasto the filed on June 28, 2024FDA, and on November 15, 2024, the FDA has cleared us to begin clinical trials for the treatment of AMLAML, MDS and weMF submittedas awell second IND application foras the investigation treatment of CER-Tadvanced solid celltumors, therapy inspecifically NSCLC and ovarian cancer, which was accepted by the FDA on March 27, 2025, but there are no assurances regarding the acceptance of any amendments or future INDs, which may impact the timelines we expect. For example, we may experience manufacturing delays or other delays with future IND-enabling studies. Moreover, there can be no assurances that once trials begin, issues will not arise that suspend or terminate such clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to existing INDs.

In particular, some of our clinical trials will look to enroll patients with characteristics which are found in a very small population. For example, our clinical trial for CER-1236 willis seek to enrollenrolling patients with hematologic malignancies,malignancies and dysplasias, including AML, MCL, CLL,MDS, and otherMF. B cell and myeloid neoplasms. Other companies are conducting clinical trials with their engineered T cell therapies in hematologic malignancies and seek to enroll patients in their studies that may otherwise be eligible for our clinical trials, which could lead to slow recruitment and delays in our clinical trials. In addition, since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which could further reduce the number of patients who are available for our clinical trials in these clinical trial sites.

We are focused initially on the development of treatments for cancers such as AML, MCL and CLL, and plan to eventually extend our treatments to other forms of cancer. Our internal projections of addressable patient populations that have the potential to benefit from treatment with our product candidates are based on estimates. If any of our estimates are inaccurate, the market opportunities for any of our product candidates could be significantly diminished and have an adverse material impact on our business.

As of December 31, 2025 and 2024, we had approximately $1.7 million and $3.3 million in cash and cash equivalents.equivalents, respectively. Changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may also need to raise additional capital sooner than we currently anticipate if we choose to expand more rapidly than we presently plan. In any event, we will require additional capital for the further development and commercialization of our product candidates, including funding our internal manufacturing capabilities.

As of April 11,14, 2025,2026, the the Company currently has outstanding: (i) 36,786,686 shares of Common Stock, (ii) 1,429 shares of Series A Preferred Stock with a stated value of approximately $1.4 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $0.05 per share; (iii) no shares of Series B Preferred Stock; (iv) 7 shares of Series C Preferred Stock with a stated value of $7,000, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a conversion price of $0.05 per share; (v) Series A Warrants to purchase 306 shares of Common Stock at an exercise price of $2,780.00 per share; (vi) Series C Warrants to purchase 4,088 shares of Common Stock at an exercise price of $0.80 per share; (vii) December 2024 and January 2025 Common Warrants to purchase an aggregate of 12,396 shares of Common Stock at an exercise price ranging from $112.20 to $116.40 per share, (viii) February 2025 Common Warrants to purchase an aggregate of 127,551 shares of Common Stock at an exercise price of $39.20 per share, (ix) February 2025 Pre-Funded Warrants to purchase an aggregate of 10,787 shares of Common Stock at an exercise price of $0.002 per share, (x) Public Warrants and Private Placement Warrants to purchase an aggregate of 4,596 shares of Common Stock at an exercise price of $23,000.00 per share, (xi) 5,233 shares of Series D Preferred Stock with a stated value of approximately $1.4$5.2 million, million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $1.96;$0.05 per share, (iixii) 1983,816 shares of Series BE Preferred Stock with a conversionstated value of approximately $0.2$3.8 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a floatingcurrent effective conversion price of $4.1625 per 80%share of the lowest volume weighted average price during the five trading days immediately prior to conversion;and (iiixii) 2,537 shares of Series C Preferred Stock with a stated value of approximately $2.5 million, convertible into50,000,000 shares of Common Stock atissuable aupon the conversion rate of the statedConvertible valueNotes thereof divided by a conversion price of $1.96 (iv) Series A Warrantsissued to purchase 6,127 shares of Common Stock at an exercise price of $139.00 per share; (v) Series C Warrants to purchase 81,753 shares of Common Stock at an exercise price of $0.04; (vi) December 2024 and January 2025 Common Warrants to purchase an aggregate of 247,914 shares of Common Stock at an exercise price ranging from $5.61 to $5.82, (vii) February 2025 Common Warrants to purchase an aggregate of 2,551,020 shares of Common Stock at an exercise price of $1.96, (viii) Pre-Funded Warrants to purchase an aggregate of 215,740 shares of Common Stock at an exercise price of $0.0001, and (ix) Public Warrants and Private Placement Warrants to purchase an aggregate of 91,925 shares of Common Stock at an exercise price of $1,150.00 per share.Keystone.

Although each of the conversion conversionprice priceof most of the Preferred Shares and the exercise prices of the December 2024 Common Warrants, January 2025 Common Warrants, Series A Warrants, Public and SeriesPrivate APlacement Warrants, and February 2025 Common Warrants are at or above the trading price of our Common Stock as of the date of this Annual Report, if such trading price increases, such conversion prices and exercise prices will not change as a result thereof and could be below the trading price of our Common Stock as of the date of any future conversion or exercise thereof, resulting in dilution to our stockholders. In addition, the terms of the Series A Preferred Stock, the Series BC Preferred Stock, the Series D Preferred Stock and the Series CE Preferred Stock contain certain penalties and adjustments to the amount included in determination of the conversion rate following certain breaches of the Company’s obligations thereunder, including, among other things, as a result of a failure to file or cause the SEC to declare one or more registration statements relating to the resale of the shares of Common Stock issuable upon conversion thereof by specified deadlines, certain defaults under indebtedness of the Company or judgments against the Company and failure to deliver shares of Common Stock upon conversion in a timely manner. For example, the penalties and adjustments include a 25% premium premium added to the stated value for determining the conversion rate in connection with breaches other than the breach of the requirement to redeem the shares of Series A Preferred Stock and Series B Preferred Stock by August 14,31, 2025, which resultsresulted in a 50% premium, and the addition to the stated value of an amount equal to the value of the shares of Common Stock into which the Series A Preferred Stock or Series B Preferred Stock would have been convertible if the conversion price were equal to 80% of the lowest volume weighted average price during the five trading days immediately prior to conversion. Such penalties and adjustments, which applied during the period when substantially all of the conversions since the Business Combination described in the preceding paragraph occurred as a result of a failure to file and cause the SEC to declare a registration statement with respect to the resale of the underlying underlying shares in a timely manner, have resulted and may in the future result in the issuance of shares of Common Stock at an effective conversion price below the trading price of our Common Stock at the time of such conversion.

We cannot assure you that we will remain in compliance with all of the terms of the Series A Preferred Stock, Series BC Preferred Stock, Series D Preferred Stock or Series E Preferred Stock or Series C Preferred Stock and that such penalties and adjustments will not apply in the future. In addition, we cannot assure you that we will not issue additional convertible or other derivative securities with highly dilutive penalty or adjustment provisions. As described elsewhere in this Annual Report, the Company needs to obtain financing to fund its research and development activities and clinical trials, as well as other operations. Under challenging conditions in the equity capital markets, particularly for pre-commercialization biotech companies, we may have no viable alternatives to agreeing to inclusion of such provisions in the terms of future financings.

The ability of the FDA to review review and approve new products can be affected by a variety of factors, including staffing levels, government budget and funding levels, ability ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on on which our operations may rely, including those that fund R&D activities is subject to the political process, which is inherently fluid fluid and unpredictable.unpredictable, Theand Trumpany Administrationreduction has issued executive orders seeking to greatly reducein the size of the federal workforce, including through layoffs and severance packages offered to employees of federal agencies within the executive branch and independent agencies, including the SEC and the FDA. Any such reduction in personnelemployees, may result in longer review timestimes, including by the FDA or SEC. For example, in 2025, changes and cuts in FDA staffing have been reported as resulting in delays in the FDA’s responsiveness or in its ability to review IND submissions or marketing applications.

Disruptions and personnel turnover, as a result of leadership changes, staff reductions or otherwise, at the FDA and other government agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. In addition to the potential reduction in staffing, a government shutdown could adversely affect the FDA review process. Over the last several yearsyears, including for a 43-day period that began on October 1, 2025, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

In addition, we utilize a lymphodepletion regimen, which generally includes fludarabine,fludarabine cyclophosphamideand or bendamustine,cyclophosphamide, that may cause serious adverse events. For instance, because the regimen will cause a transient and sometimes prolonged immune suppression, patients will have an increased risk of infection, such as to COVID-19, that may be unable to be cleared by the patient and ultimately lead to other serious adverse events or death. Our lymphodepletion regimen has caused and may also cause prolonged cytopenia and aplastic anemia.

We have received fast track designation for CER-1236 for AML, and we may seek fast track anddesignation for additional indications, or fast track designation, breakthrough therapy designation, regenerative medicine advanced therapy designationsdesignation or priority review for one or more of our product candidates, but we might not receive such designation or priority review, and even iffor those that we do, such designation or priority review may not lead to a faster development or regulatory review or approval process, and does not assure FDA approval of our product candidates. Even if a product qualifies for such designation or priority review, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

We mayhave received fast track designation for CER-1236 for AML, and we will seek fast track designation for CER-1236 for additional indications. We may further seek fast track, breakthrough therapy, and/or regenerative medicine advanced therapy designations or priority review for one or more of our product candidates.

Fast track designation, prioritybreakthrough review,therapy anddesignation, breakthroughregenerative medicine advanced therapy designation and priority review are within the discretion of the FDA. Accordingly, even if we believe that one of our product candidates meets the criteria for any such designation, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of such designation may expedite the development or approval process, but do not change the standards for approval. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

We may not be able to obtain orphan drug designation or orphan drug exclusivity for one or more of our product candidates, and even if we do, that exclusivity may not prevent the FDA from approving other competing products.

Obtaining orphan drug designation and orphan drug exclusivity for our product candidates may be important to our commercial strategy. For example, we have received orphan drug designation in the United States from the FDA for CER-1236 for the treatment of AML. We may in the future seek orphan drug designation for CER-1236 for additional indications, and we may in the future seek orphan drug designation for one or more of our other product candidates, but we may be unable to maintain orphan drug designation or obtain any benefits associated with orphan drug designation, including market exclusivity. If a competitor obtains orphan drug exclusivity for and approval of a product with the same indication as our product candidates before we do, and if the competitor’s product is the same drug or a similar medicinal product as ours, we could be excluded from the market. Even if we obtain orphan drug exclusivity after FDA approval, we may not be able to maintain it. For example, if a competitive product that is the same drug or a similar medicinal product as our product candidate is shown to be clinically superior to our product candidate, any orphan drug exclusivity we have obtained will not block the approval of such competitive product. In addition, orphan drug exclusivity will not prevent the approval of a product that is the same drug as our product candidates if the FDA finds that we cannot assure the availability of sufficient quantities of the drug to meet the needs of the persons with the disease or condition for which the drug was designated. If one or more of these events occur, it could have a material adverse effect on our company.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws and other similar laws (e.g., unfair or deceptive acts or practices pursuant to Section 5(a) of the Federal Trade Commission Act).laws. For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations, imposes requirements relating to the privacy, security and transmission of protected health information. Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA as well as their covered subcontractors.

In addition, the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act,Act (“CPRA”), applies to personal information of consumers, business representatives, and employees, and creates individual privacy rights and places increased privacy and security obligations on entities handling personal data of consumers or households. The CCPA requires covered companies to provide disclosures to California consumers, affords California residents certain rights related to their personal data, including the right to opt-out of certain sales of personal data, and allow for a private cause of action for certain data breaches. The CCPA also created a new state regulatory agency to implement and enforce the law. Although there are limited exemptions for clinical trial data under the CCPA, as our business progresses, the CCPA may become applicable and significantly impact our business activities and exemplifies the vulnerability of our business to evolving regulatory environment related to personal data and protected health information. In addition, severalnumerous other states have also passed comprehensive privacy laws, and similar laws are being considered in additional states, as well as at the federal and local levels. While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely. Moreover, a somenumber states,of other states have passed or proposed more limited privacy laws that focus on specific issues, including health, genetic and biometric information, such as Washington, Nevada and Connecticut, adopted legislation protecting consumer health information specifically. Washington’s My Health My Data Act, which is now in effect, featureshas a private right of action,action heighteningthat noncompliancefurther risks.increases the relevant compliance risk. Connecticut and Nevada have also passed similar laws regulating consumer health data. In addition, state laws such as the Texas Genomic Privacy Act and others focus specifically on genetic information. These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

RegulatorsThe federal government and several legislators instates have also taken steps to restrict data transactions involving countries outside the U.S. are increasingly scrutinizing and restricting certain personal data transfers and transactions involving foreign countries. For example, Executivethe Order 14117Department of Justice’s FebruaryJanuary 28,8, 2024,2025 Rule on “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern, as implemented by U.S. Department of Justice,Concern”, prohibits data brokerage transactions involving certain sensitive personal data categories, including health data, genetic data, and biospecimens, to countries of concern, including China. The regulationsrule also restrictprohibits covered businesses from engaging in certain investment agreements, employment agreements and vendor agreements involving such data and countries of concern, absent specified cybersecurity controls. Actual or alleged violations of these laws and regulations may be punishable by criminal and/or civil sanctions, and may result in exclusion from participation in federal and state programs.programs or restrict our ability to use certain vendors, sites, investigators, or service providers in global clinical trials.

The use of new and evolving technologies, such as artificial intelligence (“AI”), in our offerings may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential information, proprietary information information and personal information, and as a result we may be exposed to reputational harm and liability.

Likewise, in the U.S., severalover states,the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI governance and regulation, including Coloradoon deployment of AI in healthcare settings. At the federal level, the Trump Administration has endorsed a federal moratorium on the enforcement of state AI laws, including through a December 11, 2025, executive order on “Ensuring a National Policy Framework for Artificial Intelligence.” So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated legislative patchwork, which may be litigated in state and California,federal passed laws that will take effect in 2026, to regulate various uses of artificial intelligence, including to make consequential decisions.courts. In addition, various federal regulators have issued guidance and focused enforcement efforts on the use of AI in regulated sectors. The U.S. Food and Drug Administration, for example, issued guidance on the use of artificial intelligence in medical devices, requiring detailed risk management and review processes to obtain approvals. If we develop or use AI systems governed by these laws or regulations, we will need to meet higher standards of data quality, transparency, monitoring and human oversight, and we would need to adhere to specific and potentially burdensome and costly ethical, accountability, and administrative requirements, with the potential for significant enforcement or litigation in the event of any perceived non-compliance.

The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts. In addition, the use of generative AI models in our internal or third-party systems may create new attack surfaces or methods for adversaries, which could impact us and our vendors. Our vendors may in turn incorporate AI tools into their own offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property. Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. For more information, see the section of this report titledentitled “Business – – Healthcare Laws and Regulations – Healthcare Reform.”

Under current law, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited to 80% of taxable income. Federal net operating losses generated in taxable years ending before January 1, 2018 are available for twenty years from the period the loss was generated. It is uncertain if and to what extent various states will conform to federal tax laws. Under Sections 382 and 383 of the Code,Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. We have not yet completed a Section 382 or Section 383 analysis, and therefore, there can be no assurances that any previously experienced ownership changes have not materially limited our utilization of affected net operating loss carryforwards or other tax attributes. We may experience ownership changes in the future as a result of shifts in our stock ownership. We anticipate incurring significant additional net losses for the foreseeable future, and our ability to utilize net operating loss carryforwards associated with any such losses to offset future taxable income may be limited to the extent we incur future ownership changes. In addition, at the state level, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. As a result, we may be unable to use all or a material portion of our net operating loss carryforwards and other tax attributes, which could adversely affect our future cash flows.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, the TrumpOne administrationBig hasBeautiful proposedBill variousAct (the “OBBBA”) was enacted on July 4, 2025 and made significant changes to U.S. federal tax lawlaw. changes,Under whichSection if174 enactedof the Code, in taxable years beginning after December 31, 2021, expenses couldthat haveare incurred for R&D performed outside the U.S. were be capitalized and amortized. The OBBBA provides that for taxable years beginning after December 31, 2024, expenses that are incurred for R&D performed in the U.S. may, at the taxpayer’s election, be immediately deducted or capitalized and amortized Pursuant to the OBBBA’s transition rules, we elected to expense all unamortized domestic R&E costs previously capitalized between 2022 and 2024 in 2025. As we maintain a materialvaluation impactallowance onagainst our business,net cashdeferred R&D flows,tax financialassets, conditionincluding orNOLs, resultsthis ofelection operations.resulted in no change to tax expense for the year ended December 31, 2025. In addition, it is uncertain if and to what extent various states will conform to federal tax laws. Future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.expenses.

Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the U.S. federal Anti-Kickback Statute and the U.S. federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we sell, market and distribute any product candidates for which we obtain marketing approval. In addition, we may be subject to physician payment transparency laws and patient privacy and security regulation by the U.S. federal government and by the states and foreign jurisdictions in which we conduct our business. For more information, see the section of thisentitled report titled “Business – Healthcare Laws and Regulations.”

On March 6, 2024, the SEC finalized new rules for public companies that would require extensive climate-related disclosures and significant analysis of the impact of climate-related issues on our business strategy, results of operations, and financial condition (the “SEC Climate Disclosure Rules”). Following court challenges initiated during the Biden administration and while the SEC was led by former Chairman Gensler that resulted in the indefinite delay in implementation of the SEC Climate Disclosure Rules, on March 27, 2025, the SEC announced that it had voted to end its defense of such rules in court. Nevertheless, if the SEC or state regulatory authorities were to seek to impose such rules in the future, our legal, accounting and other compliance expenses would increase significantly. . We may also be exposed to legal or regulatory action or claims as a result of any such new regulations. All of these risks could have a material adverse effect on our business, financial position, and/or stock price.

Presently, we have rights to certain intellectual property, under issued patents that we own, including U.S. Patent No. 11,708,42311,708,423, U.S. Patent No. 12,291,557, U.S. Patent No. 12,303,551, EP Patent No. 3,519,441, EP Patent No. 3,688,032, and EP Patent No. 3,519,441, 4,376,874, which relate to CER-1236, as well as additional patents which relate to certain other product candidates. U.S. Patent Application Number 16/646,530 was allowed and later issued on July 25, 2023 as U.S. Patent Number 11,708,423. This patent provides coverage over our CER-1236 product candidate and includes claims directed to a CER comprising, at least in part, a Tim-4 phosphatidylserine binding domain and a TLR signaling domain. Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights. In addition, while we have patent rights directed to certain T cell constructs, we may not be able to obtain intellectual property rights to broader T cell or engineered T cell constructs.

We have filed (in each case, the share numbers set forth below have been adjusted for the Reverse Stock SplitSplits):

Holders of our Warrants will be less likely to exercise their Warrants if the exercise prices of their Warrants exceed the market price of our Common Stock. There is no guarantee that ourOur Warrants willmay continue to be inout of the money prior to their expiration, and as such, the Warrants may expire worthless. As such, any cash proceeds that we may receive in relation to the exercise of the Warrants overlying shares of Common Stock being offered for sale in this Annual Report will be dependent on the trading price of our Common Stock. There is no no assurance that the holders of the Warrants will elect to exercise any or all of such Warrants. As of the date of this Annual Report, (i) all of the Private Placement Warrants and Public Warrants, which have an exercise price of $1,150.00$23,000.00 per share, (ii) December 2024 Common Warrants, which have an exercise price of $5.61$112.20 per share, (iii) January 2025 Common Warrants, which have an exercise price of $116.40 $5.82 per share, (iv) February 2025 Common Warrants to purchase shares of Common Stock, at a current exercise price of $1.96$39.20 per share issued issued by the Company in a public offering on February 7, 2025.2025, and (v) all of the Series A Common Warrants, which have a current exercise price of $139.00$2,780.00 per share, are “out of the money,” meaning the exercise price is higher than the market price of our Common Stock. Holders of such “out of the money” Warrants are not likely to exercise such Warrants. There can be no assurance that such Warrants will be in the money prior to their respective expiration dates, and therefore, we may not receive any cash proceeds from the exercise of such Warrants.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various public company reporting requirements that are applicable to other public companies that are not emerging growth companies, including being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, not being required to have its internal control control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act (“Section 404”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute parachute payments not previously approved. We may take advantage of these exemptions until the last day of the fiscal year ending after the fifth anniversary of the consummation of our Initial Public Offering or until we are no longer an emerging growth company, whichever is earlier. We will cease to be an emerging growth company prior to the end of such five-year period if certain earlier events occur, including if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues equal or exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period prior to such time. In particular, in this Annual Report, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if it were not an emerging growth company, and it may elect to take advantage of other reduced reporting requirements in future filings. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. The five-year period will end in October 2026, following which we will cease to be an “emerging growth company” and will not be able to take advantage of the certain exemptions available to emerging growth companies.

As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq,Act and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

We have identified a material weaknessweaknesses in our internal control over financial reporting. If our remediation of such material weaknesses is not effective, or if we identify additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

In preparing each of our accompanying consolidated financial statements,statements for the fiscal years ended December 31, 2025 and 2024, we identified a material weaknessweaknesses in our system of internal financial and accounting controls and procedures, as defined in the SEC guidelines for public companies. The material weaknessweaknesses identified relatesrelate to our conclusion that due to a lack of sufficient and qualified resources, we lack effective processes and controls to ensure the accuracy and completeness of our consolidated financial statements, including processes for assessing and accounting for the impact of preferred stock conversions. statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected detected and corrected on a timely basis. As a result of the material weaknesses identified in connection with the preparation of the accompanying consolidated financial statements, we were unable to file this Annual Report and file our Quarterly Report on Form 10-Q for the quarters ended June 30, 2025 and September 30, 2025 in a timely manner. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness.weaknesses. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our consolidated financial condition, results of operations or cash flows. If our financial statements are not accurate, investors may not have a complete understanding of our operations. If we do not file financial statements on a timely basis as required by the SEC, we could face severe consequences. If we are unable to conclude conclude that itsour internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Common Stock could decline, and we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities. Moreover, responding to such investigations are likely to consume a significant amount of our management resources and cause us to incur significant legal and accounting expenses. Failure to remedy any material weakness in internal internal control over financial reporting, or to maintain effective control systems, could also restrict our future access to the capital markets. markets. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Following the consummation of the Business Combination, we failed to timely file our Form 8-K with Form 10 information prior to the “staleness” date (as determined in accordance with the applicable rules and regulations of the SEC) applicable to the financial statements that were required by the applicable accounting requirements and other rules and regulations of the SEC to be included in such filing (including pro forma financial information); thus, we have not remained currenttimely in our reporting requirements with the SEC since we became an SEC reporting company on February 14, 2024. Although we have since regained status as a current filer by filing a Form 8-K/A with current financial statements statements on April 1, 2024, we were unable to remain timely in our reporting requirements as a result of our failure to file our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 by August 19, 2025, the extended deadline resulting from our filing of a notice on Form 12b-25 on August 15, 2025, as a result, we will not be eligible to file any new registration statement on Form S-3 and, following any requirement to amend any existing registration statement on Form S-3, including as a result of the updating of such registration statement pursuant to Section 10(a)(3) of the Securities Act upon the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2025, we will not be eligible to use aany existing registration statement on Form S-3S-3, in each case, that would allow us to continuously incorporate incorporate by reference our SEC reports into the registration statement, or to use “shelf” registration statements to conduct offerings, offerings, until approximately one year from the date we regained (and maintain) status as a current and timely filer. Until such time, if we determine to pursue an offering, we would be required to conduct the offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our liquidity, ability to raise capital or complete acquisitions in a timely manner. The use of Form S-1 would also prevent us from conducting offerings on a “shelf basis,” limiting our flexibility as to the terms, timing or manner of any such offering.

In addition, the holders of Predecessor common stock and Predecessor preferred stock have the contingent right to receive the Earnout Shares. At the Closing, the Company issued three pools of shares of Common Stock subject to forfeiture if the applicable conditions to transferability thereof are not satisfied: (i) 12,000600 shares of Common Stock (giving retroactive effect to the Reverse Stock SplitSplits), which will be fully vested upon the achievement of certain adjusted stock price-based earnout targets or upon entering into a qualifyingchange transactionof control agreement, (ii) 8,750438 shares of Common Stock (giving retroactive effect to the Reverse Stock SplitSplits), pursuant to a Letter Agreement, dated as of February 14, 2024 which were fully vested at Closing of the Merger and which were issued as an offset to the Sponsor Share Forfeiture Agreement, and (iii) 10,000 500 shares of Common Stock (giving retroactive effect to the Reverse Stock SplitSplits), which were fully vested upon the June 28, 2024 achievement of of certain regulatory milestone-based earnout targets.

As consideration for the Merger, the Company issued to Predecessor stockholders an aggregate of 84,4834,038 shares of Common Stock, including 22,0001,100 Earnout Shares and and 3,733187 shares issuable upon exercise of rollover options or warrants (giving retroactive effect to the Reverse Stock SplitSplits).

The accompanying financial statements have been prepared assuming thatDuring the Companyyear will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its R&D activities and meet its obligations on a timely basis. As ofended December 31, 2024, the Company reported $3.3 million of cash and cash equivalents, with an accumulated deficit of $70.9 million. On February 5, 2025, the Companywe entered into a securities purchase agreement (the “SPA”), with participation from a member of the Board and a single institutional investor, for the purchase and sale of (i) 2,551,020 shares of Common Stock or Common Stock equivalents in lieu thereof; and (ii) February 2025 Common Warrants to purchase up to 2,551,020 shares of Common Stock at an exercise price of $1.96. In connection with such offering, the Company received net proceeds of approximately $4.5 million. Additionally, since December 31, 2024, the Company received net proceeds from the sale of pre-funded warrants. exercise of the remaining Series A Preferred Warrants, the collection of ofstock subscriptions receivable and equityELOC linefundings. Furthermore, during the year ended December 31, 2025, we received net proceeds from the sales of creditSeries fundingsD Preferred Stock of approximately $2.5$2.6 million and the sales of Series E Preferred Stock of approximately $1.9 million. Additional funds are necessary to maintain current operations and to continue R&D activities. However, there can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and planned regulatory filings with the FDA. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date thesethe accompanyingconsolidated financial statements are issued. TheThese accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Reverse Stock SplitSplits

Investigational New Drug Application Submission

The Company anticipates that its general and administrative expenses will increase in the future as the Company increases headcount and contracted services for operational support for expanded operations and infrastructure. The Company also anticipates that general and administrative expenses will increase as a result of expenses for accounting, audit, legal and consulting services, as well as costs associated with maintaining compliance with Nasdaq listing rules and SEC requirements, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

General and administrative expenses were $9.1 million for the year ended December 31, 2024, compared to $2.4$8.1 million for the year ended December 31, 2023,2025, reflectingcompared anto increase$9.1 ofmillion $6.7 million. The increase infor the year ended December 31, 2024, reflecting a decrease of $1.0 million. The decrease in the year ended December 31, 2025 over the year ended December 31, 2023,2024 was partially due to a adecrease of $1.8 million in expense consisting of the remaining underwriting fees from the PBAX initial public offering, which were earned on the consummation of the business combination.combination in 2024. Additionally, legal and other professional fees decreased $0.5 million Additionally,in the year ended December 31, 2025, versus the year ended December 31, 2024. These decreases were offset by the following increases in general and administrative expense in 2025 versus 2024: (i) the hiring of senior management in G&A resulted in an increase of $2.0 $1.1 million, including(ii) recruiting fees. Legal fees increased $1.0 million and business consulting increased $0.8 million in the year ended December 31, 2024, versus the year ended December 31, 2023. Expensesexpenses related to services required for SEC compliance, such as printing and transfer agency fees, increased $0.5$0.2 million; and (iii) public companyrelations insurance coverage increased insurance expenses $0.5 million in the year ended December 31, 2024, compared to the year ended December 31, 2023. Corporateand communications and director fees eachexpenses increased $0.2 million in the year ended December 31, 20242025, compared to the year ended December 31, 2023. The additional expenses are all driven by the increased expenses of operational compliance as a public company.2024.

Other Income,Income (Expenses), Net

Other incomeexpenses, net was $7.9$(1.5) million million for the year ended December 31, 2024,2025, compared to $0.4other income, net of $7.9 million for the year ended December 31, 2023,2024, reflecting a annegative increasechange of $7.5$9.4 million. The increasenegative change in 20242025 as compared to 20232024 was primarily due to the $4.8recording of a $4.9 million gain positivefrom the change in value of the Company’s earnout liability and the $0.4$0.3 million gain recorded for the change in value of the Predecessor’s preferred stock warrant liability in the year ended December 31, 2024.2024 as compared to $0 in the year ended December 31, 2025. Additionally, settlement of vendor liabilities in 2024 resulted in a $3.3 million increase in other income in 2024. ThisIn other2024, we income was offset by an increase inrecorded other expenses attributable to an increase in registration and other penalties of $0.6 million as compared to $0 during the year ended December 31, 2025. During the year ended December 31, 2025, we recorded a write-off of deferred offering costs of $0.6 million and arecorded decreasean inducement expense of $0.9 million compared to $0 in interestthe incomeyear ofended $0.1December million.31, 2024.

For the years ended December 31, 20242025 and 2023,2024, net loss amounted to $8.3 $19.9 million and $7.3$8.3 million, respectively, an increase of $1.0$11.6 million, or 13.9%.140.0%. During 2025, in connection with our Series A, Series B, Series C, Series D and Series E preferred stock conversions and the lowering of conversion prices, the redemption of Series C Preferred Stock at a premium and the lowering of the Series C Common Warrant exercise price, we recorded a deemed dividend of $75.6 million. Accordingly, for the years ended December 31, 2025, net loss attributable to common stockholders amounted to $95.5 million, or $(22.58) per common share. During 2024, in connection with our Series A and Series B preferred stock conversions and the repricing of Series A Warrants, we recorded a deemed dividend of $2.8 million. Accordingly, for the yearsyear ended December 31, 2024 and 2023,2024, net loss attributable to common stockholders amounted amounted to $11.1 million, or $(19.141,571.00) per common share, and $7.3 million, or $(97.90) per common share, respectively.share.

The Company, therefore, anticipates that substantial additional funding will be needed in connection with its continuing operations. AtAs of December 31, 2024,2025, the Company had $3.3approximately $1.7 million in cashcash, restricted cash, and cash equivalents, a working capital deficit of approximately $6.4 million, and an accumulated deficit of equivalents.approximately $90.8 million. Additionally, during the year ended December 31, 2025, the Company used approximately $16.2 of net cash in operating activities. The Company intends to devote most of the available cash to the preclinical and clinical development of its product candidates candidates and public company compliance costs. Based on current business plans, the Company believes that the cash available atas of December 31, 2024 2025 will not fund its operations and capital requirements for 12 months after the filing of the auditedthese financial statements for the year ended December 31, 2024.2025. The Company has arranged two equity lines of credit, one providing for the sale of up to 25,000,000 newly issued shares of Common Stock and the other providing for the purchase of up to $25$17.5 million of Common Stock on the satisfaction of certain conditions. conditions. The Company has no guarantee that the conditions will be satisfied to require the purchase of all, or any additional amount, of the ELOC funds. On February 5, 2025,During the Companyyear entered into the SPA, with participation from a member of the Company’s Board and a single institutional investor, for the purchase and sale of (i) 2,551,020 shares of our common stock or common stock equivalents in lieu thereof; and (ii) February 2025 Common Warrants to purchase up to 2,551,020 shares of common stock, at a combined public offering price of $1.96 per share and warrant. In connection with this offering, the Company received net proceeds of approximately $4.5 million. Additionally, sinceended December 31, 2024,2025, the Companywe received net proceeds from the sale of pre-funded warrants, exercise of the remaining Series A Preferred Warrants, the collection of stock subscriptions receivable and ELOC fundingsfundings. Furthermore, during the year ended December 31, 2025, we received net proceeds from the sales of Series D Preferred Stock of approximately $2.5$2.6 million. Any estimate as to how long the Company expects the net proceeds from the ELOC funding may fund the Company’s operations is based on assumptions that may prove to be wrong,million and the sales Companyof could useSeries itsE availablePreferred capitalStock resourcesof soonerapproximately than$1.9 itsmillion. Additional funds are necessary to maintain current expectations.operations Changingand circumstances,to continue someR&D ofactivities. whichHowever, maythere can be beyondno theassurance Company’s control,that couldsufficient resultfunding inwill less cash and cash equivalentsbe available to fund operations or causeallow the Company to consumesuccessfully continue capitalits significantlyR&D activities and planned regulatory filings with the FDA. If the Company is unable to obtain the necessary funds, significant fasterreductions thanin currently anticipated,spending and the Companydelay or cancellation of planned activities may needbe necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to seekcontinue additionalas fundsa going concern within one year from additionalthe sourcesdate soonerthese thanfinancial planned.statements are issued. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

As of MayAugust 14, 2026, the Company currently has outstanding: (i) 45,112,40671,630,992 shares of Common Stock, (ii) 1,429 shares of Series A Preferred Stock with a stated value of approximately $1.4 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $0.01 per share; (iii) no shares of Series B Preferred Stock; (iv) 7 shares of Series C Preferred Stock with a stated value of $7,000, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a conversion price of $0.01 per share; (v) Series A Warrants to purchase 306 shares of Common Stock at an exercise price of $2,780.00 per share; (vi) Series C Warrants to purchase 4,088 shares of Common Stock at an exercise price of $0.80 per share; (vii) December 2024 and January 2025 Common Warrants to purchase an aggregate of 12,396 shares of Common Stock at an exercise price ranging from $112.20 to $116.40 per share, (viii) February 2025 Common Warrants to purchase an aggregate of 127,551 shares of Common Stock at an exercise price of $39.20 per share, (ix) February 2025 Pre-Funded Warrants to purchase an aggregate of 10,787 shares of Common Stock at an exercise price of $0.002 per share, (x) Public Warrants and Private Placement Warrants to purchase an aggregate of 4,596 shares of Common Stock at an exercise price of $23,000.00 per share, (xi) 5,2925,192 shares of Series D Preferred Stock with a stated value of approximately $5.3 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $0.01 per share, (xii) 3,797.64 shares of Series E Preferred Stock with a stated value of approximately $3.8$5.2 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $0.01 per share, (xii) 3,632.46 shares of Series E Preferred Stock with a stated value of approximately $3.6 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a current effective conversion price of $0.01 per share and (xii) approximately 151,015,000844,400,000 shares of Common Stock issuable upon the conversion of the Convertible Notes issued to Keystone.note holders.

The impact of recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, unknown and may adversely affect our business model.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its research and development (“R&D”) activities activities and meet its obligations on a timely basis. As of MarchJune 31,30, 2026, the Company reported approximately $857,489$937,512 of cash, restricted cash, cash, and cash equivalents, a working capital deficit of approximately $9.8$30.9 million, and an accumulated deficit and stockholders’ deficit deficit of approximately $96.7$97.8 million and $9.3$30.5 million, respectively. Additionally, during the threesix months ended MarchJune 31,30, 2026, the Company used approximately $2.8$5.1 million of net cash in operating activities, has a net loss of $5.9$6.9 million and has no revenues. During the threesix months ended MarchJune 31,30, 2026, we received net proceeds from the sale of common stock in connection with ELOC fundings. Additional funds are necessary to maintain current operations and to continue R&D activities. However, there can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and planned regulatory filings with the FDA. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these unaudited condensed consolidated financial statements are issued. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

During the threesix months ended June March 31,30, 2026, we received net proceeds of $456,166$700,491 from the sale of our common stock from ELOC fundings. Furthermore, during the six onmonths Februaryended 9,June 2026 and on March 6,30, 2026, we issued and sold Convertibleconvertible Notes for an aggregate purchase price of $1,500,000 ($750,000 each),notes having an aggregate principal face value of $1,875,000$4,579,500, ($937,500and each)the toCompany received Keystone.net proceeds of $3,663,600. Additional funds are necessary to maintain current operations and to continue R&D activities. However, there can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and planned regulatory filings with the FDA. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the unaudited consolidated financial statements are issued. These unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

On April 8, 2026, we issued and sold a convertible promissory note for a purchase price of $350,000, having a principal face value of $437,500 (the “April 2026 Note”) to Lender.Keystone. Pursuant to the April 2026 Note, the Company may borrow, from time to time thereunder, up to a maximum aggregate amount not to exceed a sum of $1,000,000. The April 2026 Note bears interest at a rate of 10% per annum, matures on April 9, 2027, and is convertible into shares of the Company’s common stock. On April 27, 2026, we issued and sold a convertible promissory note for an purchase price of $400,000, having a principal face value of $500,000 (the “Second April Note”) to Lender. Pursuant to the Second April 2026 Note, the Company may borrow, from time to time thereunder, up to a maximum aggregate amount not to exceed a sum of $1,000,000. The April 2026 Note bears interest at a rate of 10% per annum, matures on April 9, 2027, and is convertible into shares of the Company’s common stock. On April 27, 2026, we issued and sold a convertible promissory note for a purchase price of $400,000, having a principal face value of $500,000 (the “Second April Note”) to Keystone. Pursuant to the Second April 2026 Note, the Company may borrow, from time to time thereunder, up to a maximum aggregate amount not to exceed a sum of $1,000,000. The Second April Note bears interest at a rate of 10% per annum, matures on April 27, 2027, and is convertible into shares of the Company’s common stock. At any time after the issuance of the ApriApril 2026 Note and the Second April Note, the Lender,Keystone, at its option, is entitled to convert all or any lesser portion of the outstanding principal amount and accrued but unpaid interest into common stock at a conversion price equal to the lesser of (i) $0.05 and (ii) 80% of the average of the 5 (five) lowest intraday trading prices during the 20 (twenty) days prior to the day that the LenderKeystone requests conversion, unless otherwise modified by mutual agreement between the parties, subject to certain adjustments and limitations, including a beneficial ownership limitation of 4.99%.

Other expenses, net consists predominantly of interest income from interest bearing bank accounts, interest expense, and gains or losses on the initial valuation and revaluation of earnoutearnout, derivative liabilities and derivativepreferred stock liabilities, which represents the initial fair value and change in fair fair value of conversion options related to our convertible notes payable between periods.

Results of Operations for the threeThree months Months ended MarchJune 31,30, 2026 and 2025

Results of operations for the three months ended MarchJune 31,30, 2026 and 2025 isare summarized as follows:

Research and development expenses were $2.3 million$1,736,000 for the three months ended MarchJune 31,30, 2026, compared to $2.9 million$2,754,000 for the three months ended March 31,June 30, 2025, reflecting a decrease of $0.6 million.$1,018,000. The decrease was related to decreased R&D activity in the 2026 period as compared to the 2025 period. During the 2025 period, the Company prepared and filed the IND for CER-1236, prepared for the clinical trials initiation, and began the clinical trial. The decrease in research and development expenses primarily reflected (i) a decrease in clinical expenses of $0.8 million,$643,000, (ii) a decrease in scientific consulting expenses of $0.2 million, and$292,000, (iii) a decrease in rent expense of $0.2 million$98,000 due to the receipt of subtenant rental income and a credit received from the landlord on common area charges paid.paid, These(iv) decreasesa were offset by an increasedecrease in drug manufacturing costs of $0.2 million$122,000 and (v) a decrease in other costs of $87,000, offset by an increase in stock-based stock option expense of approximately $0.4 million.$224,000.

The Company anticipates that its R&D expenses will significantlymay increase in the future asif the Company increases headcount, compensation expense, and contracted services for preclinical and clinical development of its product candidates, as well as for manufacturing of clinical product to be used in clinical development.

General and and administrative expenses were $2.5 million$2,110,000 for the three months ended MarchJune 31,30, 2026, compared to $2.0 million$1,970,000 for the three months ended MarchJune 31,30, 2025, reflecting an increase of $0.5 million.$141,000. The increase in the three months ended MarchJune 31,30, 2026 over the three months ended MarchJune 31,30, 2025 was partially due to an increase in stock-based stock options expense of approximately $0.9$714,000 million,and an increase in other compensation and benefits of $54,000, offset by a decrease in professional fees of $0.2 million$432,000 and a decrease in other general and administrative expenses of approximately $0.2 million.$195,000.

Other income (expenses), expenses, net was $(1.0) million$2,818,000 for the three months ended MarchJune 31,30, 2026, compared to other expenses, net of $0.2 million$(694,000) for the three months ended June March 31,30, 2025, reflecting a negativepositive change of $0.8 million.$3,511,000. The negativepositive change during the three months ended MarchJune 31, 30, 2026 as compared to the three months ended MarchJune 31,30, 2025 was primarily due to the recording of a gain on reevaluation of preferred stock liabilities of $6,610,000 and a reduction in stock-based inducement expense of $707,000, offset by the recording of derivative expense of $0.9$3,104,000 and million and interest expense of $0.2 million$690,000 related to the issuance of convertible notes payable during the 2026 period,period offset byand a reductiondecrease in interest stock-based inducement expenseincome of $0.2. million.$13,000.

For the three months ended June March 31,30, 2026 and 2025, net loss amounted to $5.9 million$1,029,000 and $5.1 million,$5,417,000, respectively, ana increasedecrease of $0.8 million,$4,388,000, or 15.3%.81.0%. During the three months ended MarchJune 31,30, 2026 and 2025, in connection with our Series AA, Series B, Series C, Series D and Series BE preferred stock conversions, and the redemption of Series C Preferred Stock, we recorded deemed dividends of $0.3 million,$28,427,000 and in$24,700,000, connection with the adjustment in the exercise price of Series C Common Warrants, we recorded deemed dividends of $0.1 million.respectively. Accordingly, for the three months ended March 31,June 30, 2026 and 2025, net loss attributable to common stockholders amounted to $5.9 million,$29,455,000, or $0.20$0.70 per common share and $5.4$30,118,000, million, or $31.82$61.71 per common share, respectively.

The Company, therefore, anticipates that substantial additional funding will be needed in connection with its continuing operations. As of March 31,June 30, 2026, the Company had approximately $857,000$937,500 in cash, restricted cash, and cash equivalents, a working capital deficit of approximately $9.8 $30.9 million, and an accumulated deficit of approximately $96.7$97.8 million. Additionally, during the threesix months ended MarchJune 31,30, 2026, the Company used approximately $5.1 $2.8million of net cash in operating activities. The Company intends to devote most of the available cash to the clinical development of its product candidates and public company compliance costs. Based on current business plans, the Company believes that the cash available as of MarchJune 31,30, 2026 will not fund its operations and capital requirements for 12 months after the filing of these unaudited consolidated financial statements for the threesix months ended MarchJune 31,30, 2026. During the threesix months ended MarchJune 31, 30, 2026, we received net proceeds of $456,166 $700,491 from ELOC fundings. Furthermore, onduring Februarythe 9,six 2026months andended onJune March 6,30, 2026, we issued and sold Convertible Notes for an aggregate purchase priceprincipal amount of $1,500,000$4,579,500 ($750,000and each),we havingreceived annet aggregate principal face valueproceeds of $1,875,000 ($937,500 each) to Keystone.$3,663,600. Additional funds are necessary to maintain current operations and to continue R&D activities. However, there can be no assurance that sufficient funding will be available to allow the Company to successfully continue its R&D activities and planned regulatory filings with the FDA. If the Company is unable to obtain the necessary funds, significant reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the unaudited consolidated financial statements are issued. These unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 primarily reflected a net loss of $5,886,000,$6,915,000, adjusted for the reconciliation of non-cash items such as depreciation expense of $62,000,$120,000, stock-based compensation of $1,617,000,$2,740,000, amortization of right-of-use asset of $214,000, $435,000, amortization of debt discount of $137,000,$747,000, gain on reevaluation of preferred stock liabilities of $6,610,000, and loss on initial and reevaluation of derivative liabilities of $897,000,$4,000,000, and changes in operating asset and liabilities primarily consisting of a decrease in prepaid expenses and other current assets of $355,000,$461,000, an increase in accounts payable of $106,000,$636,000, an increase in accrued liabilities of $137,000,$121,000, a decrease in insurance financing liability of $143,000,$323,000, and a decrease in operating lease liabilities of $238,000.$481,000.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 primarily reflected a net loss of $5,106,000,$10,523,000, adjusted for the reconciliation of non-cash items such as depreciation expense of $76,000,$146,000, stock-based compensation of $305,000,$488,000, stock-based inducement expense of $156,000,$864,000, and amortization of right-of-use asset of $193,000,$391,000, and changes in operating asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $290,000,$169,000, an increase in accounts payable of $728,000,$562,000, a decrease in accrued liabilities liabilities of $300,000,$404,000, and a decrease in operating lease liabilities of $209,000.$423,000.

We did not have any investing activities during the threesix months ended MarchJune 31,30, 2026 and 2025.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 amounted to $1,956,000$4,364,000 as compared to $6,322,000$9,044,000 for the threesix months ended MarchJune 31,30, 2025.

During the threesix months ended June March 31,30, 2026, net cash provided by financing activities of $1,956,000$4,364,000 was primarily attributable to the receipt of net proceeds of $456,000 $700,000 from the sale of Common Stock under the ELOC, and net proceeds of $1,500,000$3,664,000 from the sale of convertible notes payable.

During the threesix months ended June March 31,30, 2025, net cash provided by financing activities of $6,322,000$9,044,000 was primarily attributable to the receipt of net proceeds of $500,000 from the exercise of Series A Preferred Warrants, net proceeds of $1,227,000$2,426,000 from the sale of common stock under the ELOC, net proceeds of $717,000$2,240,000 from the collectionsale of stockSeries subscriptionsD receivablePreferred from previous sales of common stock under the ELOC,Stock, and net proceeds from sale of common stock and pre-funded warrants of $4,273,000, offset by the cash redemption of Series C Preferred Stock of $395,000.

During the threesix months ended June March 31,30, 2026, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K filed with the SEC on April 15, 2025.2026.

See the section titled in Note 2 to the Company’s unaudited consolidated financial statements for the threesix months ended March 31,June 30, 2026, appearing elsewhere herein.