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

We may seek additional capital capital through a combination of public and private equitysecurities offerings, including our Equityat-the-market Lineoffering of Creditprogram, as well as other debt financings, strategic collaborations and alliances and licensing arrangements. The terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborators or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or current or future product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We will need to raise substantial additional capital to fund our future operations and remain a going concern. However, we cannot guarantee that we will be able to obtain sufficient additional funding or that such funding, if available, will be obtainable on termsacceptable favorableterms. to us. In the event thatIf we are unable to obtainraise sufficient additional funding,capital or otherwise address our liquidity needs, we may be required to significantly delay, scale back or discontinue the development of our product candidates, including OST-HER2, or otherwise curtail our operations. In such case, there can be no assurance that we will be able to continue as a going concern. In addition, the inclusion of a going concern explanatory paragraph in our auditor’s report may adversely affect our ability to obtain financing on acceptable terms, or at all, and could negatively impact the market price of our common stock.

We currently have no productproducts candidates approved for sale and may never be able tosuccessfully develop marketable product candidates. Our business depends heavily on the successful development, development, regulatory approvalapproval, and commercialization of theour current orand future immunotherapy product candidates for Osteosarcoma product candidates,Osteosarcoma, of which our lead product candidate, OST-HER2, is in Phase IIb clinical development. OST-tADC willremains requirein additional preclinical development and will require substantial additional preclinical and clinical development,testing, testingas andwell as regulatory approvalapprovals, before we aremay permittedcommercialize to commence its commercialization.it. The preclinical studies and clinical trials of our current or future product candidatescandidates, are,as andwell as the manufacturing and marketing of ourany currentapproved orproduct, future product candidates will be,are subject to extensive and rigorous review and regulation by numerous government authorities in the United StatesStates, the European Economic Area (EEA), and other jurisdictions in other countries wherewhich we intend to test or, if approved,or market any of our current or future product candidates. Before obtaining regulatory approvals for the commercial sale of any of our current or future product candidates,approvals, we must demonstrate through preclinical studies and clinical trials that each product candidate is safe and effective for use inits each targetintended indication. Drug development is a long,lengthy, expensiveexpensive, and uncertain process, and delay or failure can occur at any stage ofstage. anyEven ofwith oursufficient clinicalfunding, trials. This processthere can take many years and may include post-marketing studies and surveillance, which will require the expenditure of substantial resources beyond the proceeds we raise in this offering. Of the large number of drugs in development in the United States, only a small percentage will successfully complete the FDA regulatory approval process and will be commercialized, withno similarly low rates of success for drugs in development in the European Union obtaining regulatory approval from the European Medicines Agency (EMA). Accordingly, even if we are able to obtain the requisite financing to continue to fund our development and preclinical studies and clinical trials, we cannot assure youassurance that any of our current or future product candidates will be successfully developed anddeveloped, approved, or commercialized.

We are not permitted tocannot market our current or future product candidates in the United States until we receivewithout approval of a BLA from the FDA CBER,FDA, in the European EconomicEEA Area (EEA) until we receivewithout approval of a marketing authorization applications (MAA) from the EMA, or in anyother foreign jurisdictions without the requisite approvals. Obtaining regulatory approval is complex, time-consuming, costly, and uncertain, and the FDA, EMA, or other foreign countries until we receive the requisite approval from such countries. Obtaining approval of a BLA or MAA is a complex, lengthy, expensive and uncertain process, and the FDA or EMAauthorities may delay, limitlimit, or deny approval of any of our current or future product candidates for many reasons, including, amongincluding othersbut not limited to:

AnyMany of these factors, many of whichfactors are beyond our control,control and could jeopardizeprevent ouror ability to obtaindelay regulatory approvalapproval, limit the indications for andwhich successfully market our current or futurea product candidates.may be approved, or impose significant post-approval obligations. Any such setback incould materially and adversely affect our pursuitbusiness, ofprospects, regulatory approval would have a material adverse effect on our business and prospects.ability to generate revenue.

If we experience delaysDelays or difficulties in the enrollment ofenrolling patients in clinical trials,trials ourcould receiptprevent ofor necessarydelay regulatory approvalsapproval couldand beincrease delayeddevelopment or prevented.costs.

We may not be able to initiate or continue clinical trials for our current or future product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States. InThis particular,challenge is particularly significant because we are focused on patients with rare Osteosarcoma, ourwhich abilityhas toa enrollrelatively eligiblelow prevalence, with an incident rate of approximately 1,000 individuals affected per year in the United States. Identifying patients who meet our eligibility criteria, including those with specific molecular or driver gene profiles, may be limiteddifficult orand maycould resultlead to slower-than-expected in slower enrollment than we anticipate.enrollment. Some of our competitors have ongoing clinical trials for current or future product candidates that treat the same patient populations as our current or future product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ current or future product candidates.

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for both for our current or future product candidates, we will not be able to commercialize, or will be delayed in commercializing, our current or future product candidates, and our ability to generate revenue will be materially impaired.

The process of obtaining regulatory approvals, both in the United States and abroad, is expensive, may take many years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the current or future product candidates involved. Changes in marketing approval requirements or policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted NDA or BLA. The FDA and comparable authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that our data areis insufficient for approval and require additional preclinical, clinical or other studies. Our current or future product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following:

We may not be able to obtain or maintain orphan drug designation or exclusivity for any product candidates and, even if we do, that exclusivity may not prevent the FDAFDA, EMA or other EMA regulatory authorities from approving other competing products.

OST-HER2 received orphan drug designation for Osteosarcoma in the United States, and we may seek orphan drug designation (“ODD”) for other current or future product candidates. We arehave currentlysubmitted preparing to submitthe required information to the FDA in order to re-establish ODD for OST-HER2 in the first half of 2025.2026. Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act of 1983, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States.

Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product ismay be entitled to a period of marketing exclusivity, during which precludes the FDA or EMA fromgenerally approvingcannot approve another marketing application application for the same drugactive ingredient for thatthe timesame period.indication. The applicable period is seven years in the United States and ten years in the European Union. The exclusivity period in the European UnionUnion, canalthough EU exclusivity may be reduced to six years if a drug no longer meets the criteria for orphan drug designationcriteria or if the drug is considered sufficiently profitable so that market exclusivity is no longer justified.profitable. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantitydrug of the drugsupply to meet thepatient needs of patients with the rare disease or condition.needs.

Even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competitioncompetition. becauseDrugs competing drugs containing awith different active ingredient ingredients can be approved for the same condition.condition, In addition, even after an orphan drug is approved,and the FDA can subsequentlyor EMA may approve the same drug for the same condition if the FDA concludes that thea later drugproduct isdemonstrates clinical clinicallysuperiority, superiorsuch inas that it is shown to bebeing safer, more effectiveeffective, or makesmaking a major contribution to patient care. Further,In addition, we may not be the first to obtain marketing approval for anya particular orphan indicationindication. due to the uncertainties associated with developing pharmaceutical products, and thus, for example, approvalApproval of ouranother product candidates could be blocked for seven years if another company previously obtained approval and orphan drug exclusivity in the United States for the same active ingredient and indication could prevent or delay our ability to obtain orphan drug andexclusivity, samematerially condition.affecting our competitive position.

Although we have obtained rare pediatric disease designation for OST-HER2 for Osteosarcoma patients, we may not be eligible to receive a priority review voucher in the event that FDA approval does not occur priorwithin tothe Septembertimeframe 30,required 2026.by the applicable statutory provisions or if future law changes eliminate or further modify the PRV Program.

The Rare Pediatric Disease Priority Review Voucher Program (“PRV Program”) is intended to incentivize pharmaceutical sponsors to develop drugs for rare diseases. A sponsor who obtains approval of an NDA or BLA for a rare disease may be eligible for a Priority Review Voucher (“PRV”) under this program, which may be redeemed by the owner of such PRV to obtain priority review for a marketing application. A PRV is fully transferrable and can be sold to any sponsor, who in turn can redeem the PRV for priority review of a marketing application in six months, compared to the standard timeframe of approximately ten months. Under current law, as amended by the 21stConsolidated CenturyAppropriations Act, Cures2026, Act,the PRV Program is authorized through September 30, 2029. The FDA may not award PRVs under this program after that date. Eligibility for a drugPRV thatgenerally receives requires both rare pediatric disease designation beforeand Septemberapproval 30,of 2024,a willmarketing continue to be eligibleapplication for the designated rare pediatric disease. Even if OST-HER2 receives rare pediatric disease designation and is ultimately approved, we may not receive a PRV if the drugBLA is isnot approved before September 30, 2026. If we do not obtain approval of a BLA for OST-HER2 in patientstime withto Osteosarcoma,meet andstatutory requirements or if the PRV Program is notsubsequently extendedmodified or allowed to expire. In addition, byeven Congressional action,if we mayare noteligible receivefor and obtain a PRV.PRV, there can be no assurance that we will be able to realize significant value from the voucher, as the market for PRVs and their perceived value may vary over time and may be affected by changes in regulatory policies, business conditions or the supply of available PRVs.

If the FDA or a comparable foreign regulatory authority approves any of our current or future product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the drug will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs and Good Clinical Practices, or GCPs,GCPs for any clinical trials that we conduct post-approval. Any regulatory approvals that we receive for our current or future product candidates may also be subject to limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase IV clinical trials, and surveillance to monitor the safety and efficacy of the drug. Later discovery of previously unknown problems with a drug, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

Positive results from our preclinical studies of our current or future product candidates, and any positive results we may obtain from our early clinical trials of our current or future product candidates, may not necessarily be predictive of the results from required later preclinical studies and clinical trials. Similarly, even if we are able to complete our planned preclinical studies or clinical trials of our current or future product candidates according to our current development timeline, the positive results from our preclinical studies and clinical trials of our current or future product candidates may not be replicated in subsequent preclinical studies or clinical trial results. For example, our later-stage clinical trials could differ in significant ways from our ongoing Phase IIb clinical trial of OST-HER2, which could could cause the outcome of these later-stage trials to differ from our earlier-stage clinical trials. For example, these differences may include include changes to inclusion and exclusion criteria, final dosage formulation, efficacy endpoints and statistical design.

Because we have limited financial and management resources, we focus on a limited number of research programs and product candidates and are currently focused on our corelead programs, including our lead core product candidate OST-HER2 for the treatment of Osteosarcoma and our other core product candidate OST-tADCOST-tADC, for both targeting the treatment of Osteosarcoma. As a result, we may forego or delay pursuit of opportunities with other current or future product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and current or future product candidates for specific indications may not yield any commercially viable drugs. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate candidate through future collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

InAlthough lighta larger number of the larger population of Osteosarcoma patients with Osteosarcoma who reside inoutside foreignthe countries,United States, our ability to generate meaningful revenues in those jurisdictions may be limited due to thepricing controls, strictreimbursement price controlslimitations, and reimbursementother limitationsmarket imposedaccess by governments outside of the United States. There is additionally a remote possibility that price controls may be enacted in the United States.challenges.

The development and commercialization of new drugs is highly competitive.competitive and constantly evolving. We face competition with respect to our current product candidates and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future from major pharmaceutical companies, specialty pharmaceutical companies, specialty pharmaceuticalbiotechnology companiescompanies, academic institutions, government agencies and biotechnologyother companiespublic and private research organizations worldwide. There are a numberSome of largethese pharmaceutical and biotechnology companies thatcompetitors currently market and sell drugs or are pursuingactively the development ofdeveloping therapies for rare diseases and cancers, including Osteosarcoma. Some of these competitive drugsOsteosarcoma, and therapiessome areprograms may be based on scientific approaches that are similar to ourours, approach, andwhile others are basedmay onemploy entirely different approaches. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Specifically, there are a large number of companies developing or marketing treatments for rare diseases and cancers, including many major pharmaceutical and biotechnology companies. Ifif OST-HER2 receives marketing approval for the treatment of Osteosarcoma, it may face competition from other product candidates in development for these indications, including product candidates in developmentprograms from AstraZeneca, Y-mAbs Therapeutics andTherapeutics, MD Anderson Cancer Center,Center amongand others. The competitive landscape is dynamic: competitors’ programs may advance or be discontinued, and new entrants may emerge, which could materially affect our ability to capture or maintain market share.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financialfinancial, technical, regulatory and commercial resources than andwe do, including greater expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and reimbursementreimbursement, and marketing approved drugs than we do.drugs. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in evenfurther more consolidation and concentration of resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors may also compete with us in recruiting and retaining qualified scientific, sales, marketingmarketing, and management personnel and personnel, establishing clinical trial sites and patient registrationenrolling forpatients in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

The regulations that govern regulatory approvals, pricingpricing, and reimbursement for new drugs vary widely from country to country. Some countries require approval of the sale price of a drug before it can be marketed.marketed, Inand in many countries, the pricing review period begins after marketing approval is granted. granted. In some foreigncertain markets, including the European Union, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.approval. As a result, we mightmay obtain marketing approval for a product candidate in a particular country,country but then be subject to price regulations that delay our commercial launch ofor the product candidate, possibly for lengthy time periods, and negatively impactlimit the revenues we are able to generate from the sale of the product candidate in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more current or future product candidates, even if our current or future product candidates obtain marketing approval.approved.

Our ability to successfully commercialize any current or future product candidates successfully also will depend in part on the extent to which coverage and reimbursement for these current or future product candidates and related treatments will beare available from government authorities, private health insurersinsurers, and other organizations. Government authorities and other third-party payors,payors such as private health insurers and health maintenance organizations, decide which medications they will pay for (i.e., cover) and establish reimbursement levels. Factors payors consider in determining reimbursement are based oninclude whether the product is: a covered benefit, safe and effective, medically necessary, appropriate for the patient, and cost-effective, and whether it is considered experimental or investigational.

A primary trend in the U.S. healthcare healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attemptedsought to control costs by limiting coveragecoverage, setting reimbursement levels, requiring rebates and the amount of reimbursement for particular drugs. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list pricesdiscounts, and are challenging the prices charged for drugs. We cannot be sure that coverage will be available for any product candidate that we commercialize and,or, if coverage is available, the level of reimbursement. Reimbursement Reimbursement levels may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.

There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similarcomparable foreign regulatory authorities outside the United States.authorities. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costsmanufacturing, and may not be made permanent.distribution. Reimbursement rates may vary accordingbased toon the use of the drug anddrug, the clinical settingsetting, inand whichcomparisons itto islower-cost used, may be based on reimbursement levels already set for lower cost drugstherapies, and may be incorporated into existing bundled payments for other services. Net prices for drugs may also be reduced by mandatory discounts or rebates required by government healthcare programs or private payorspayors. and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than inIn the United States. In the United States, decisions as to coverage and reimbursement bydecisions thefor Medicare program are typically made by the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, or HHS. CMS decides whether andprivate to what extent a new medicine will be covered and reimbursed under Medicare. Third-party payors often rely uponfollow Medicare coverage policy policies and payment limitations in setting their own reimbursement policies.practices. Our inability to obtain promptlytimely obtainand adequate coverage and profitable payment rates from both government-funded and private payorsreimbursement for any approved drugs that we developproducts could have a material adverse effect on our business, operatingfinancial results, our ability to raise capital needed to commercialize drugscondition, and ourresults overallof financial condition.operations.

The United States and many many foreign jurisdictions have enacted orand proposedcontinue to consider legislative and regulatory changes affecting the healthcare system that could prevent prevent or delay marketing approval of our current or future product candidates or any future product candidates, restrict or regulate post-approval activities activities, and affect our ability to profitably sellcommercialize aany productproducts for which we obtain marketing approval. Changes in regulations, statutes statutes, or the interpretation of existing regulationsrequirements could impactrequire, ouramong businessother in the future by requiring, for examplethings: (i) changes to our manufacturing arrangements; (ii) additions or modifications to product labeling; (iii) the recall or discontinuation of our products; or (iv) additional record-keepingrecordkeeping, requirements.reporting, Ifor compliance anyobligations. Any such changes were to be imposed, they could adversely affect the operationour ofoperations and increase our business.costs.

Our revenue prospects couldmay also be affected by changes in healthcare spending and policy in the United States and abroad. We operate in a highly regulated industryindustry, and new laws, regulationsregulations, or judicial decisions, or new interpretations of existing laws, regulationsregulations, or decisions, related to healthcare availability, thepricing, method of deliverycoverage, or paymentreimbursement for healthcare products and services couldmay negatively impact our business, operations financial condition, and financialresults condition.of operations. We cannot predict the likelihood, naturenature, or extent of government regulation that may arise from future legislation orhealthcare administrativereform action in the United Statesmeasures or anytheir otherpotential jurisdiction.impact Iton isour possible that additional governmental action is taken to address the Covid-19 pandemic.business. If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not ablefail to maintain regulatory compliance, our product candidateswe may lose any regulatory approvalapprovals that may have been obtained and we may obtain and may not achieve or sustain profitability.

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes notes appearing elsewhere in this annual report. Some of the information contained in this discussion and analysis or set forth elsewhere in in this annual report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this annual report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a clinical stage biopharmaceutical company focused on the identification, development and commercialization of treatments for Osteosarcoma (OS) and other solid tumors. Our mission is to address the significant need for new treatments in cancers of the bone in children and young adults. Osteosarcoma is an extremely challenging and often aggressive cancer that has particular treatment challenges due to its location, changing genotypes and high metastases rates. We are currently seeking to answer the call for new treatments that will prevent metastasis and the recurrence of metastases with our lead core product candidate OST-HER2 (also known as OST31-164), a cancer immunotherapy product candidate that produces a cellular immune response against the cancer antigen HER2. In 2021, we opened a clinical study to produce data for the U.S. Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023. We expect topline results from all 41 patients enrolled by the fourth quarter of 2024 and, if successful, intend to seek regulatory approval for OST-HER2 for the prevention of metastases in Osteosarcoma in 2025. Upon success in gaining regulatory approval from the FDA with OST-HER2 in Osteosarcoma, we intend to evaluate OST-HER2’s potential use, both alone and in combination with HER2 targeting antibodies such as Herceptin®, in other solid tumors including breast, esophageal and lung cancers. OST-HER2 has potential uses in both the prevention of metastases in solid tumors, and therapeutically against HER2-expressing solid tumors treated with HER targeting antibodies.

We also own rights to OST-Tunablean OST-tADC Drug Conjugate (OST-tADC) platform, a next generation antibody-drug conjugate (ADC) silicone dioxide linker technology. “Tunable” is a term used in drug development that refers to the properties that can be influenced by chemical modifications, and “antibody-drug conjugate” or ADC is a term used to describe a drug made up of a monoclonal antibody attached to a cytotoxic payload, or a highly active and toxic pharmaceutical molecule, through chemical linkers. The ADC links an antibody that can home in on a targeted tumor to deploy the cytotoxic payload or toxic agent against the tumor. Furthering our founding mission, we intend to investigate clinical indications for OST-tADC in Osteosarcoma and other solid tumors.

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that, in management’s view, are most important to the portrayal of a company’s financial condition and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this annual report, we believe that the following accounting policies policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

The Series A Warrants issued in connection with the PurchasePIPE Agreement Financing in December 2024 and January 2025 are recognized as a derivative liability in accordance with ASC 815. We recognize the warrant instruments as a liability at fair value and adjust the instruments to fair value at each reporting period. The liability is subject to re-measurement at each balance sheet date until exercised or reclassified, and any change in fair value is recognized in our consolidated statements of operations. The fair value of the Series A Warrants was measured using a Binomial simulation model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available, and,and accordingly, the actual results could differ significantly. As theThe fair value of thederivative warrant liability is basedclassified as onnon-current aliabilities Binomialas simulationtheir model,liquidation weis determinednot reasonably expected to require the fair valueuse of current assets or require the warrantcreation of liability wascurrent aliabilities criticalin accounting estimate.2024.

General and Administrative Expenses. General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation, for personnel in executive, finance and administrative functions. General and administrative expenses also include professional fees for legal, patent, consulting, investor and public relations and accounting and audit services.

Cumulative Series A Preferred Stock Dividend. The Series A preferred stock dividend requirement represents the coupon dividends on our preferred stock that has since been converted and is identified as a separate component of our statement of operations to compute net income (loss) available to common stockholders. The coupon dividends are computed at 5% of the principal per annum and are recorded monthly. The cumulative accrued dividend atas of December 31, 20242025 and 20232024 was $375,000 and $343,750,$375,000, respectively. The Series A preferred stock was converted into common stock on a 1:1 basis in February 2024, and the last coupon dividend was issued in the quarter ended March 31, 2024.

Income Taxes. Since our inception, we have not recordedrecognized income tax benefits for the net operating losses (“NOLs”) incurred or the research and development development(“R&D”) tax credits generated in each year,year due to uncertainty regarding the uncertaintyrealization of realizingthese a benefit from those items.benefits.

Deferred Offering Costs. Deferred Deferred offering costs consisted of legal, accounting, printing and filing fees that we capitalized, which will bewere offset against the gross proceeds from our initial public offering.

InFor the years ended December 31, 2025 and 2024, theour direct research and development expenses related to OST-HER2 were $2.2 million. In 2023, such expenses were primarily labconsisted of laboratory fees, vendor expensescosts, and staff payroll. Additionally, inIn 20242025, these expenses included approximately $1.6 million for laboratory fees and 2023,clinical wesupport related incurred expenses for ourto Phase IIb clinical trial.trial OST-tADCpreparation, related direct research and development expenses were approximately $0.05$12.7 million for advisor fees, and $0.2 million for legal costs associated with the completion of IND-enabling studies. Direct research and development expenses related to our OST-tADC platform were approximately $0.0 million for both the years ended December 31, 20242025 and 2023, respectively.2024.

General and Administrative Expenses. General and administrative expenses for the year ended December 31, 2024 were approximately $4.0 million compared to $1.1$12.3 million for the year ended December 31, 2023.2025, Thiscompared to approximately $4.0 million for the year ended December 31, 2024. The increase was primarily attributeddue to increasedhigher marketing and investor relations paymentscosts toof consultants,$2.4 alongmillion, withas staffwell relatedas payrolladvisory fees of $3.3 million and legal fees.fees of $1.6 million incurred in connection with the PIPE Financing and equity line of credit that was terminated.

Interest Expense. Interest expense was approximately $0.0 million for the year ended December 31, 2024 was approximately $2.1 million2025, compared to $3.5approximately $2.0 million for the year ended ended December 31, 2023.2024.

Since our inception, we have have incurred significant operating losses. Our ability to generate sufficient product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the years ended December 31, 20242025 and 2023,2024, we reported a net losslosses of approximately $8.9$28.7 million and $7.8$8.6 million, respectively, and had an accumulated deficitdeficits of approximately $41$67.2 million and $29.5$38.0 million, respectively. We expect to incurcontinue incurring significant expenses at an increasing rate and increasing operating losses for the foreseeable future.

As of December 31, 20242025 and 2023, 2024, we had cash of approximately $5.5$0.3 million and $0.04$5.5 million, respectively. WeTo date, we have primarily funded our operations to date primarily from the sale of our convertible notes and Series A securities in our private placements, as well asthrough the sale of our common stocksecurities in our initial public offering,offerings whichand haveprivate providedplacements and warrant exercise inducement and exchange transactions, generating total gross proceeds of $34.6approximately $41.1 million as of March 28, 2025.26, 2026. We believe that the net proceeds from ourthese private placements and initial public offering,transactions, together with our existing cash, will enablebe ussufficient to fund our operating expenses and capital expenditure requirementsexpenditures for at least the next nine to 12twelve months.

DuringFor the years ended December 31, 20242025 and 2023,2024, net cash used in operating activities used was approximately $7.3$14.2 million and $3.0$7.3 millionmillion, ofrespectively. cash,This respectively, resulting from ourprimarily reflected net losslosses of approximately $8.9$28.8 million and $7.8 $8.9 million, respectively,partially offset by net non-cash charges of approximately $1.7$5.4 million and $2.8$1.7 million, respectively, partially offset byand net cash provided by changes in our operating assets and liabilities of approximately $0$9.1 million and $2.0 $(0.1) million, respectively.

Net cash provided byThe changes in our operating assets and liabilities for the years ended December 31, 20242025 and 20232024 primarily consisted primarily of an increase (decrease) in accounts payable of approximately $ (1.1) million and $1.3 million, respectively,: an increase (decrease) in accounts payable of approximately $8.3 million and $(1.1) million, respectively; an increase in accrued interest of approximately $0.6 $0.0 million and $0.8$0.6 million, respectively, respectively; and a changechanges in accrued payrollexpenses of approximately $0$0.9 million and $(0.3)$0.4 million, respectively.

Non-cash charges forFor the years ended December 31, 20242025 and 20232024, non-cash charges were primarily due to changes in the resultfair value of theour warrant liability of $(1.4) million and $0.0 million, respectively, as well as common stock issued for services and stock-based compensation of approximately $4.87 million and $0.3 million, respectively, and amortization of debtnon-cash discount on our convertible debtprepaids of approximately $1.4$1.0 million and $2.6$0.0 million, respectively. Changes in accounts payable, accrued expenses and other current liabilitiesliabilities, and prepaid expenses and other current assets in alleach periodsperiod were generallyprimarily duereflected tothe growth in of our business, the advancement of our research programsprograms, and the timing of vendor invoicing and payments.

DuringFor the years ended December 31, 20242025 and 2023,2024, net cash providedused byin investing activities was approximately $0$0.5 million and $1,145,$0.0 million, respectively.

For the years ended December 31, 2024 2025 and 2023,2024, net cash provided by financing activities was approximately $12.8$9.4 million and $2.9$12.8 million, respectively. During 2025, cash inflows included approximately $1.1 million from our PIPE Financing and approximately $8.4 million from our warrant exercise inducement and related exchange and sale of common stock.

License Obligations and Research Services

In connection with the license agreement, we also agreed to issue the BlinkBio Convertible Note. See “Financing Activities— Convertible NotesBlinkBio” above for more information on the BlinkBio Convertible Note.

Sales of a substantial number of shares of our common stock, including shares issued or issuable pursuant to our ATM program and upon the conversion or exercise of our outstanding convertible or exercisable securities, could cause the market price of our common stock to decline.

The sale of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could cause the market price of our common stock to decline. We had 44,538,10646,125,825 shares of common stock outstanding as of MayAugust 14,12, 2026 (excluding any shares issuable upon the conversion or exercise, as applicable, of of our outstanding Series A senior convertible preferred stock, Secured Notes, warrants or stock options). A substantial majority of the outstanding shares of our common stock are freely tradable without restriction or further registration under the Securities Act, unless such shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act.

In addition, as of MayAugust 14,12, 2026, there were outstanding (i) 392,500 shares of Series A senior convertible preferred stockstock, convertible into an aggregate of 1,401,786 shares of common stock, (ii) Secured Notes in the aggregate principal amount of $5,405,405.42, convertible at a conversion price of $2.05 per share, (iii) warrants to purchase up to an aggregate of 11,683,47615,234,585 shares of common stock, (iv) pre-funded warrants to purchase up to an aggregate of 3,324,108 shares of common stock, and (iiiv) stock options to purchase up to an aggregate of 8,357,5008,422,500 shares of our common stock, of which options to purchase 2,400,000 shares of our common stock were then exercisable. The shares of our common stock issuable upon conversion or exercise, as applicable, of such securities may be immediately eligible for resale in the open market. We may also utilize our “at the market” equity offering program pursuant to our at market issuance sales agreement with B. Riley Securities, Inc. and JonesTrading Institutional Services LLC. Any such sales, or the perception that such sales could occur, could cause the market price of our common stock to decline and may make it more difficult for us to raise capital in the future.

In 2021, we opened a clinical study to produce data for the U.S. Food and Drug Administration (FDA) to evaluate the safety and efficacy of OST-HER2 in patients after resection of recurrent Osteosarcoma, which achieved full enrollment of 41 patients in October 2023. In the first quarter of 2025, we announced that our Phase IIb clinical trial achieved its primary endpoint with statistical significance. In October 2025, we announced final two-year overall survival data from the Phase IIb trial, in which 75% (27 of 36 evaluable patients) of OST-HER2-treated patients achieved two-year overall survival from the most recent pulmonary resection, compared with 40%60% in historical control patients (p <= 0.00010.034). OST-HER2 was observed to be well-tolerated in the study. In January 2026, we announced positive immune biomarker data from the Phase IIb trial indicating that activation of immune blood biomarkers in the interferon gamma pathway correlated with, and was predictive of, overall survival, distinguishing long-term survivors (≥ two years) from short-term survivors (< one year). These biomarker findings are based on exploratory analyses and have not been validated as surrogate endpoints for clinical benefit. In May 2026, we announced that the Phase IIb trial demonstrated a statistically significant overall survival benefit at the 2.5-year timepoint, with 75% overall survival in OST-HER2-treated patients compared with 47% in pooled historical control patients (p = 0.003). No new patient deaths were reported in the OST-HER2-treated group between the two-year and 2.5-year analyses.

We have engaged in ongoing regulatory interactions with the FDA, the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA), and the European Medicines Agency (EMA) regarding the clinical and biomarker data for OST-HER2 in recurrent, fully resected pulmonary metastatic Osteosarcoma. We anticipate submitting the clinical Biologics License Application (BLA) module following an expected Type B C meeting with the FDA in the second quarter ofSeptember 2026 and completing conditional Marketing Authorization Application (MAA) submissions to both the MHRA and the EMA in the second first quarter of 2026.2027. We also anticipate releasing additional biomarker data in the second quarter ofOctober 2026 to further characterize immune pathway activation and its relationship to clinical outcomes. We expect to initiate confirmatory clinical studies in the third quarter ofOctober 2026 in support of conditional approval pathways. If OST-HER2 receives approval under the FDA’s Accelerated Approval Program prior to September 30, 2029, we would become eligible to receive a Priority Review Voucher under the Rare Pediatric Disease Designation Program.

In connection with the 2026 Registered Direct Offering, Ceros Financial Services, Inc. (“Ceros”) acted as our exclusive placement agent. We paid Ceros a cash fee equal to 7.0% of the gross proceeds raised in the 2026 Registered Direct Offering. We also reimbursed Ceros up to $70,000 for its reasonable and documented out-of-pocket accountable expenses and up to $20,000 for its non-accountable expenses. We also issued to Ceros’s designees warrants to purchase up to an aggregate of 187,798 shares of our common stock. The placement agent warrants have an exercise price of $1.54 per share, are exercisable beginning September 2, 2026 and expire five years from April 2, 2026.

Critical accounting policies are those that, in management’s view, are most important to the portrayal of a company’s financial condition and results of operations and most demanding on their calls on judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this annual report. There were no critical accounting policies and estimates as of MarchJune 31,30, 2026.

Revenue. We We did not recognize revenues for the threesix months ended MarchJune 31,30, 2026 and 2025.

Income Taxes. Since our inception, we have not recognized income tax benefits for the net operating losses (“NOLs”) incurred or the research and development (“R&D”) tax credits generated each year due to uncertainty regarding the realization of these benefits.

Three and Six Months Ended MarchJune 31,30, 2026 Compared to Three and Six Months Ended MarchJune 31,30, 2025

The following table summarizes our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Research and Development Expenses. Research and development expenses were approximately $7.4$13.4 million for the threesix months ended March 31,June 202630, 2026, compared to approximately $1.3$3.8 million for the threesix months ended MarchJune 31,30, 2025. This increase was primarily due to an increase in vendor expenses associated with our Phase IIb clinical trial, as we compiled data to submit to various governmental agencies,agencies. The increase was partially andoffset by the recognition of a decrease$1.96 million VAT receivable in vendorthe expensessecond quarter of 2026. We determined that the input VAT associated with our OST-tADCUK platformsubsidiary technology.was realizable and, upon obtaining our VAT number and becoming eligible to file VAT returns, recognized the accumulated VAT as a receivable, resulting in a corresponding reduction in R&D expenses.

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2026 were approximately $2.8 million compared to $3.7$5.3 million for the threesix months ended MarchJune 31,30, 2026, compared to approximately $6.0 million for the six months ended June 30, 2025. These expenses were primarily attributedattributable to marketing and investor relations costs, advisory fees and other compensation relatedcompensation-related expenses.

Interest Expense. Interest expense for the three months ended March 31, 2026 was approximately $0.1 million for the six months ended June 30, 2026, compared to $0.0 million for the threesix months ended March 31,June 30, 2025. Interest expense in 2026 primarily related to the amortization of debt issuance costs and accretion of interest on theour March Bridge2026 Convertiblebridge Notes.convertible notes.

Non-Operating Expense. Non-operatingInterest expense was approximately $0.1 million for the three months ended MarchJune 31,30, 2026 was approximately $0.2 million2026, compared to $0.0 million for the three months ended MarchJune 31,30, 20252025. andInterest expense in 2026 primarily related to lossesthe amortization of debt issuance costs and accretion of interest on foreignour currencyMarch transactions.2026 bridge convertible notes.

Change in Fair Value of Warrant. The Series A warrants issued in connection with our PIPE financing in December 2024 and January 2025 were reclassified from liability to equity in April 2025. TheAs adjustmenta ofresult, there was no change in the fair value of the warrant liability wasfor $0.0the millionsix months andended $1.1June 30, 2026, compared to a $1.4 million adjustment to the fair value of the warrant liability for the six months ended June 30, 2025. For the three months ended MarchJune 31,30, 2026 and 2025, there was no change in the fair value of the warrant liability and a $0.3 million adjustment to the fair value of the warrant liability, respectively.

Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of our product candidates. For the threesix months ended MarchJune 31,30, 2026 and 2025, we reported a net loss of approximately $10.4 $19.0 million and $3.9$8.4 million, respectively, and had an accumulated deficit of approximately $77.4 $86.2 million and $67.2 million, respectively. We expect to incur significant expenses at an increasing rate and increasing operating losses for the foreseeable future.

As of MarchJune 31,30, 2026 and December 31, 2025, we had cash of approximately $0.9$0.2 million and $0.3 million, respectively. To date, we have primarily funded our operations through the sale of our securities in public offerings and private placements and through warrant exercise inducement and exchange transactions, generating total gross proceeds of approximately $52.3 million as of MayJune 15,30, 2026. WeOn believeAugust that10, 2026, we issued certain of our securities and received net proceeds of approximately $4.7 million in the netAugust Private Placement, with the potential to receive an additional $5.0 proceedsmillion, if needed. However, our recurring losses and negative cash flows from theseoperations transactions,since inception, together with ourcash existingof cash,approximately $0.2 willmillion beas of June 30, 2026, were not sufficient to fund our operatingoperations expenses and capital expenditures for at least 12 months from the nextdate twelvethese months.consolidated financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern. Management’s plans to address these conditions include the August Private Placement, other equity or debt financings and managing operating expenditures.