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

NeOnc’s lead product candidate is NEO100. NEO100 is administered to patients via intranasal delivery. We have completed human safety testing in a Phase 1 clinical trial and arehave currentlycompleted conductingpatient preliminaryenrollment efficacyin, testingand inthe acollection of clinical data from, our Phase 2a trial in patients with recurrent malignant glioma (Grade IV IDH1 mutant and Grade III Astrocytoma IDH1 mutant). patients.Based on the data generated to date, we intend to meet with the FDA to discuss the design of a potential Phase 3 clinical trial of NEO100. NeOnc is also developing a second product candidate, NEO212, which has completed preclinical testing,testing and, following the filing and acceptance of an investigational new drug (IND) application has been filed and accepted with the United States Food and Drug Administration (FDA). The Company, has startedcompleted its Phase 1 clinical trialstrial within patients harbouringharboring primary and secondary malignant brain cancer types. We have met with the FDA regarding the NEO212 program, and the FDA provided chemistry, manufacturing and controls (CMC) clearance to advance NEO212 into a Phase 2 clinical trial and indicated that the NEO212 program may proceed under the FDA’s accelerated approval pathway. We have since modified the design of the planned Phase 2 trial to focus on recurrent IDH1 wildtype glioblastoma multiforme (GBM). Several additional drug candidates are in the pipeline and are undergoing preclinical development.

Liquidity and Going Concern

Since our inception, we have incurred significant operating losses. OurFor the three and six months ended June 30, 2026, the Company incurred a net loss wasof $8,819,932$14,240,044 and $32,326,016 for the three months ended March 31, 2026 and 2025,$23,059,976, respectively. We had an accumulated deficit of $121,574,587$135,814,631 as of MarchJune 31,30, 2026, compared to $112,754,655 as of December 31, 2025. We expect to continue to incur operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

WeThese havefactors concluded that there israise substantial doubt aboutregarding ourthe Company’s ability to continue as a going concern for at least one year from the issuance date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025:

No revenue was generated for fees for a “right to try” humanitarian program during the three months ended MarchJune 31,30, 2026.2026 Revenueand ofJune $39,99030, was generated during the three months ended March 31, 2025 from fees related to a “right to try” humanitarian program.2025.

Research and development expenses were $1,286,336$2,649,673 and $998,222$677,332 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. A portion of these expenses amounting to approximately $38,409$0 and $103,224$82,225 for the three months ended MarchJune 31,30, 2026 and 2025, respectively are from the University of Southern California (USC), where Dr. Chen is a member of the faculty. The total increase of $288,114$1,972,341 was primarily due to:

Legal and professional expenses were $1,188,220$1,286,167 and $957,545$520,364 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase of $230,675$765,803 was primarily attributable to investment banking feesassociated andwith the Company’s capital raising activities, incremental legal fees associated with the Second Addendum to the Company’s advisory agreement with AFH Holding & Advisory, LLC, the Series A Convertible Preferred Stock issuance, and other corporate and securities matters, and increased audit fees incurred in connectionassociated with the preparationCompany’s andexpanded filingreporting ofrequirements ouras Annuala Reportpublic on Form 10-K for the year ended December 31, 2025, our Registration Statement on Form S-3, and related prospectus supplement.company.

General and administrative expenses were $488,709$895,559 and $849,485$984,262 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The decrease of $360,776$88,703 was primarily drivendue byto a reduction in marketingD&O andinsurance advertising expense in connection with the direct public listing,premiums, as well as a reduction ofin rent,advertising, travel,marketing, and othertravel costsexpenses incurred during the three months ended June 30, 2025 in Q1connection 2025with a marketing campaign and in pursuit of a strategic partnership in the Middle EastEast, deal.for which a letter of intent was executed subsequent to June 30, 2025. This decrease was partially offset by an increase in business development costs during the three months ended June 30, 2026.

Stock-based compensation expense, which is a non-cash expense, for the three months ended MarchJune 31,30, 2026 primarily resulted from the acceleration of vesting of certain outstanding restricted stock awards approved by the Board of Directors in April 2026, which resulted in the recognition of previously unrecognized compensation expense associated with those awards, in addition to the ongoing recognition of the grant date fair value of restricted stock over the applicable service periods.periods for awards not subject to the acceleration. Stock-based compensation expense for the three months ended MarchJune 31,30, 2025 included the recognition of expense from the original grant dates of certain restricted stock through the Listing Date that occurred on March 26, 2025, reflecting a cumulative catch-up upon removal of the listing contingency, in addition to amortization of the grant date fair value of those shares of restricted stock over their respective service periods following the Listing Date. Since stock-based compensation is a non-cash item, it does not affect our cash position or our cash used in operating activities.

Advisory fee expense, primarily to a related party, was $1,360,000$3,586,575 and $11,737,806$0 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Advisory fee expense for the three months ended MarchJune 31,30, 2026 consisted of fees incurred for advisory services related to our capital financing arrangements pursuant to a letter of intent with AFH (see Note 4). In addition, on June 11, 2026, the Company and AFH entered into a Second Addendum to the Letter of Intent and Advisory Services Agreement, which amends and clarifies the methodology for determining AFH’s annual advisory fee. Under the Second Addendum, AFH is entitled to an annual advisory fee expenseequal forto the three months ended March 31, 2025 was substantially comprised2.5% of the $11,328,565Company’s fully diluted market capitalization as of December 31 of each fiscal year. As of June 30, 2026, the Company had an outstanding accrued advisory fee earned– uponrelated party balance of approximately $1,600,000 payable to AFH pursuant to the ListingSecond Date on March 26, 2025 in accordance with the AFH advisory agreement.Addendum.

Interest expense was $982,624$234,370 and $308,922$48,750 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. InterestThe expenseincrease forof the$185,620 threewas months ended March 31, 2026primarily related to interest accrued on the short-termCompany’s loanunremitted restricted stock tax withholding obligations and accrued interest for a litigation matter.

Interest and other GrantOther Income

Interest and grant income was $52,319$5,530 and $51,699$80,424 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Interest and other grant income for the threesix months ended MarchJune 31,30, 2026 related primarily to interest earned on our money market account and grant income pursuant to the two NIH grants which commenced in late 2025. Interest and other income for the three months ended March 31, 2025 related primarily to interest earned onin our money market account.

Amortization of debt issuance costs was $192,165$360,116 and $167,951$360,200 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Amortization of debt issuance costs in both periods primarily reflected the ongoing amortization of debt issuance costs associated with (i) the warrants issued in connection with the line of credit with HCWG and (ii) the offering costs related to the equity purchase agreement with Mast Hill Fund, LP.HCWG.

Gain on change in fair value of derivative liability was $2,801 and $0 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The derivative liability is created from the settlement feature embedded in the Company’s equity line of credit agreement with Mast Hill Fund, LP. Under the agreement, shares of common stock are purchased at a discount due to the five-day settlement period between the commitment date and the issuance date. This discount feature creates a variable settlement mechanism that is required to be accounted for as a derivative liability. The gain represents the change in fair value of this derivative liability from each draw under the agreement through the corresponding settlement date. There were no draws under the equity purchase agreement during the threesix months ended MarchJune 31,30, 2025, and no related loss was recognized in that period.

During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $6,991,773$11,756,954, consisting primarily of our net loss of $8,819,932,$23,059,976, offset by stock basedstock-based compensation of $2,732,397,$8,384,311, accretion of original issue discount on the convertible promissory notes of $714,600, amortization of debt issuance costs of $192,165,$360,116, amortization of right of use asset of $20,406,$38,996, amortization of intangible asset of $11,574,$18,519, andtransaction costs expensed on the issuance of Series A Convertible Preferred Stock of $127,478, loss on change in fair value of derivative liability related to Series A Convertible Preferred Stock of $61,321, an increase in accrued expense of $1,437,582.$2,261,282, and an increase in accounts payable of $582,222. These were offset by decreases in accrued advisory fee of $1,757,141,$100,566, accounts payable of $390,550, accounts payable and accrued expenses - – related parties of $463,513,$197,762, and lease liability of $15,760,$33,596, an increase in prepaid expenses and other of $650,800,$824,168, an increase in deferred offering costs of $86,930, and a gain on change in fair value of derivative liability of $2,801.

During the threesix months ended MarchJune 31,30, 2025, net cash used in operating activities was $5,650,055$10,964,226, consisting primarily of our net loss of $32,326,016,$38,006,186, offset by stock basedstock-based compensation of $17,397,774,$20,923,850, accretion of original issue discount on related-partythe advancesbridge loan – related party of $300,000, amortization of debt issuance costs of $577,192,$769,441, amortization of right of use asset of $18,153, an increase in accrued advisory fee of $8,828,565,$5,882,710, and an increase in accounts payable – related parties of $628,276.$45,350. These were offset by an increase in prepaid expenses and other of $765,738$350,134, anda decrease in other assets of $47,177, a decrease in accrued compensation of $290,108.$479,775, and a decrease in lease liability of $20,458.

During the threesix months ended MarchJune 31,30, 2026, cash provided by financing activities was $7,071,645$13,671,645, consisting primarily of proceeds from the issuance of common stock and warrants in connection with our PIPE financing of $13,071,783$15,071,783, proceeds from the issuance of Series A Convertible Preferred Stock of $5,000,000, and proceeds from the sales of common stock under the equity linepurchase of creditagreement of $666,528, offset by the repayment of the OID convertible promissory notesloan of $6,666,667.$6,666,667 and payment of issuance costs related to the Series A Convertible Preferred Stock of $400,000.

During the threesix months ended MarchJune 31,30, 2025, cash provided by financing activities was $11,024,372 consisting primarily of proceeds from the sale of common stock of $11,324,372 and proceeds from related party loans of $300,000, offset by repayment of related party loans of $600,000.

Since our inception, we have funded our operations through the sale and issuance of common stock and debt financings from related and third parties. Our historical sources of liquidity, including the issuances of common stock under our private placements, sales under the Equity Purchase Agreement with Mast Hill Fund, LP, the line of credit with HCWG, and our convertible debt financings, are described in the “Liquidity and Capital Resources” section of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to these arrangements during the threesix months ended MarchJune 31,30, 2026 except as described below.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Since our inception, we have not generated any revenue from product sales or any other sources, except humanitarian use, and we have incurred significant operating losses. We have not yet commercialized any products, and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever. As reflected in the accompanying condensed consolidated financial statements, we have incurred recurring net losses since our inception. For the threesix months ended MarchJune 31,30, 2026, we incurred a net loss of $8,819,932,$23,059,976, and we had an accumulated deficit of $121,574,587$135,814,631 at MarchJune 31,30, 2026. At MarchJune 31,30, 2026, we had cash totaling $138,601.$1,973,420. These factors raise substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Our ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our strategies, such as executing additional licensing contracts. The condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

In January 2026, the Company entered into the first of a series of related Securities Purchase Agreements providing for the issuance, in one or more closings, of up to an aggregate of 2,222,222 shares of common stock and warrants to purchase up to 2,222,222 shares of common stock at an exercise price of $9.00 per share, for aggregate gross proceeds of up to approximately $16,000,000. During the threesix months ended MarchJune 31,30, 2026, we completed closings under three Securities Purchase Agreements for an aggregate of 1,815,5282,093,305 shares of common stock and warrants to purchase 1,815,5282,093,305 shares of common stock, resulting in gross proceeds of $13,071,808. Subsequent to March 31, 2026, on April 20, 2026, we entered into a fourth Securities Purchase Agreement and completed an additional closing thereunder for an aggregate of 277,777 shares of common stock and warrants to purchase 277,777 shares of common stock, resulting in gross proceeds of approximately $2,000,000.$15,071,783. The offering of securities under the PIPE Financing terminated on April 30, 2026.