Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Part I, Item 1A. “Risk Factors.” Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Summary Overview

We are a pre-revenue, development-stage biopharmaceutical company with a pipeline focused on developing new medicines to treat pain and neuropathy. Our Halneuron® Nav1.7 modulation program is intended to treat chronic neuropathic pain and acute pain disorders. Our recently licensed SP16 program is centered on a cell signaling molecule that has shown early promise in treating neuropathy and nerve damage.

Nav 1.7 Non-Opioid Analgesic Program

Our lead product candidate, Halneuron®, is in late-stage clinical development for the treatment of CINP. The active pharmaceutical ingredient is highly purified TTX, a potent sodium channel modulator found in puffer fish and several other marine animals. Halneuron® works as an analgesic by modulating the activity of Nav1.7, a key sodium channel involved in pain signal transmission. By reducing the activity of the Nav1.7 channel, Halneuron® has the potential to reduce pain associated with conditions involving neuropathic pain.

In the first quarter of 2025, we commenced a HAL-CINP-203 clinical trial in the United States. HAL-CINP-203 is a double-blind, placebo controlled clinical trial to access the efficacy and safety of Halneuron® in approximately 240 patients with moderate to severe neuropathic pain caused by previous platinum and/or taxane chemotherapy. The primary efficacy endpoint is the change from baseline at week 4 in the weekly average of daily 24-hour recall pain intensity scores, comparing Halneuron® to placebo. The secondary endpoints are patient global impression of change, PROMIS regarding fatigue, PROMIS related to sleep, PROMIS-29, pain interference, hospital anxiety and depression scale and neuropathic pain symptom inventory. We released interim data from HAL-CINP-203 in December 2025 and expect to have top-line results available during the third quarter of 2026.

SP16 Program

SP16 is currently at the Phase 1 stage with studies in breast cancer patients scheduled to begin in mid-2026. These initial investigational studies are supported by a National Cancer Institute grant to investigate the potential for SP16 to reduce neuropathy secondary to treatment with chemotherapeutic agents that are also neurotoxic. SP16 is the focus of a planned Phase 1b study that is fully funded through a research grant supplied by the National Cancer Institute, with patient enrollment projected to start in mid-2026.

Share Exchange Agreement

On October 7, 2024, the Company, entered into the Exchange Agreement with Sealbond, pursuant to which the Company acquired 100% of the issued and outstanding common shares of Pharmagesic and the parent company of Wex Pharmaceuticals, Inc. in the Combination. Prior to the Combination, Pharmagesic was a wholly-owned subsidiary of Sealbond and an indirect wholly-owned subsidiary of CKLS, a listed entity on the Main Board of the Hong Kong Stock Exchange.

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Loan Agreement

On March 12, 2025, we entered into the Exchange and Cancellation Agreement with the Lender. Pursuant to the Exchange and Cancellation Agreement, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through March 12, 2025, was deemed repaid and all of the Company’s obligations satisfied in full and cancelled in exchange for 284.2638 shares of the Company’s Series A-1 Non-Voting Convertible Preferred Stock, par value $0.0001 per share.

Contingent Value Rights Agreement

Concurrently with the closing of the Combination, the Company entered into a contingent value rights agreement (the “CVR Agreement”) with a rights agent (the “Rights Agent”), pursuant to which each holder of Common Stock as of October 17, 2024, including those holders receiving shares of Common Stock in connection with the Combination, is entitled to one contractual contingent value right (each, a “CVR”) issued by the Company, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of Common Stock held by such holder as of 5:00 p.m. Eastern Daylight Time on October 17, 2024. The CVR Agreement has a term of seven years.

Each contingent value right entitles the holders (the “Holders”) thereof, in the aggregate, to 87.75% of any Upfront Payment (as defined in the CVR Agreement) or Milestone Payment (as defined in the CVR Agreement) received by the Company in a given calendar quarter.

The distributions in respect of the CVRs that become payable will be made on a quarterly basis and will be subject to a number of deductions, subject to certain exceptions or limitations, including but not limited to for certain taxes and certain out-of-pocket expenses incurred by the Company.

Under the CVR Agreement, the Rights Agent has, and Holders of at least 30% of the CVRs then-outstanding have, certain rights to audit and enforcement on behalf of all Holders of the CVRs. The CVRs may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of, in whole or in part, other than as permitted pursuant to the CVR Agreement. The Holders of the CVRs do not have the rights of a shareholder and do not have the ability to vote, rights to dividends, or other interests. The CVRs also establish certain restrictions of mergers and change in control activities, as defined in the agreement.

Name Change

On October 7, 2024, the Company changed its name from “Virios Therapeutics, Inc.” to “Dogwood Therapeutics, Inc.” In addition, effective at the open of market trading on October 9, 2024, the Company’s Common Stock ceased trading under the ticker symbol “VIRI” and began trading on the Nasdaq Stock Market under the ticker symbol “DWTX”.

Reverse Stock Split

On October 7, 2024, the Company effected the Reverse Stock Split, pursuant to which every 25 shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock. The Reverse Stock Split affected all stockholders uniformly and did not by itself alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the

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Reverse Stock Split would result in a stockholder owning a fractional share. No fractional shares were issued in connection with the Reverse Stock Split and any stockholder who would have received any fractional shares instead received a cash payment equal to the fair market value of such fractional share.

Registered Direct Offering

On March 12, 2025, we entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a registered direct offering of 578,950 shares of our Common Stock at a price of $8.26 per share, pursuant to an effective shelf registration statement on Form S-3 (File No. 333-263700) (the “March 2025 Offering”). The March 2025 Offering closed on March 14, 2025, and the gross proceeds were approximately $4.78 million. The net proceeds of the March 2025 Offering were approximately $4.25 million after deducting placement agent fees and offering expenses payable by the Company.

Serpin License Agreement

On September 29, 2025, the Company entered into the Licensing Agreement with Serpin, pursuant to which Serpin granted the Company an exclusive royalty-free, sublicensable global license to develop Serpin Pharma’s intravenous formulation of SP16. SP16 is a first-in-class low density LRP1 agonist which has demonstrated both anti-inflammatory, immunomodulatory and neural repair activity that has the potential to treat chemotherapy-induced peripheral neuropathy. In consideration of the Licensing Agreement, the Company issued shares of common stock and Series A-2 Non-Voting Convertible Preferred Stock to Serpin Pharma and Rejuvenation.

Conversion of Preferred Stock to Common Stock

On November 21, 2025, we held a Special Meeting of our stockholders. At the Special Meeting, our stockholders approved for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the potential issuance of our Common Stock upon the conversion of the Company’s Series A Preferred Stock, Series A-1 Preferred Stock, and Series A-2 Preferred Stock. As a result, on November 21, 2025, all outstanding shares of Series A Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock converted into Common Stock at a ratio of one preferred stock to 10,000 shares of Common Stock.

Equity Distribution Agreement

On November 28, 2025, the Company entered into an Equity Distribution Agreement (the “Northland Agreement”) with Northland Securities, Inc., as sales agent, relating to the issuance and sale from time to time by the Company (the “ATM Program”) of shares of the Company’s common stock having an aggregate offering price of up to $8,558,712. We have sold shares of Common Stock for gross proceeds of $89,762 pursuant to the Northland Agreement during the fourth quarter of 2025.

Recent Developments

On January 9, 2026, the Company provided notice of its termination, effective January 9, 2026, of the Northland Agreement. The Company is not subject to any termination penalties related to the termination of the Northland Agreement.

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combined offering price of $2.85 per share of Common Stock and accompanying Common Stock Warrant and $2.8499 per Pre-funded Warrant and accompanying Common Stock Warrant. The January 2026 Offering closed on January 13, 2026, and the gross proceeds to the Company were approximately $12.5 million. The net proceeds of the January 2026 Offering were approximately $11.4 million after deducting placement agent fees and offering expenses payable by the Company.

On January 15, 2026, the Company filed a Form S-3 Registration Statement for the resale of up to 6,433,126 shares of the Company’s Common Stock consisting of (i) 2,047,089 shares of Common Stock underlying the Pre-Funded Warrants at an exercise price of $0.0001 per share; and (ii) 4,386,037 shares of Common Stock underlying the Common Stock Warrants to purchase shares of Common Stock at an exercise price of $3.28 per share. The Form S-3 Registration Statement was declared effective by the SEC on January 29, 2026.

Subsequent to year end, the Company received notification and payment for the exercise of 1,319,089 Pre-Funded Warrants at an exercise price of $0.0001 per share and 1,319,089 shares of Common Stock were issued. As of March 10, 2026, there are 728,000 Pre-Funded Warrants outstanding.

Financial Operations Overview

The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.

Research and Development Expenses

Our research and development expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including:

● payments to third-party contract research organizations, or CROs;

● payments to contract laboratories and independent consultants.

We expense all research and development costs as incurred. Clinical development expenses for our product candidates are a significant component of our current research and development expenses. Products in later stage clinical development generally have higher research and development expenses than those in earlier stages of development, primarily due to increased size and duration of the clinical trials. We track and record information regarding research and development expenses for each study or trial we conduct. We use third-party CROs, CMOs, contractor laboratories and independent contractors. We recognize the expenses associated with third parties performing services for us in our clinical studies based on the percentage of each study completed at the end of each reporting period.

Our research and development expenses in 2025 included approximately $12.0 million of acquired In-Process Research and Development (“IPR&D”) related to the Licensing Agreement with Serpin and approximately $9.8 million on the development of Halneuron® including costs associated with the HAL-CINP-203 clinical trial and development related activities associated with the synthetic manufacture of Halneuron®.

As we advance the HAL-CINP-203 clinical trial, we expect our research and development expenses related to the development of Halneuron® to increase. These expenditures are subject to numerous uncertainties regarding timing and cost to completion. Completion of our clinical development and clinical trials may take several years or more. Because of the numerous risks and uncertainties associated with product development,

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we cannot determine with certainty the duration and completion costs of the current or future studies and clinical trials or if, when, or to what extent we will generate revenues from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for our product candidates. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:

● successful enrollment in, and completion of, clinical trials;

● successful completion of Investigational New Drug-enabling activities;

● receipt of marketing approvals from applicable regulatory authorities;

● effectively competing with other therapies and treatment options;

● a continued acceptable safety profile following approval;

● achieving desirable medicinal properties for the intended indications.

A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future product candidates. For example, if the FDA or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. We expect our research and development expenses to increase for the foreseeable future as we continue the development of our product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries, benefits and other related personnel costs, including equity and stock-based compensation, for personnel serving in our executive, finance and administrative functions. General and administrative expenses also include public company costs, directors’ and officers’ insurance, professional fees for legal, including patent related expenses, consulting, auditing and tax services.

We anticipate that our general and administrative expenses will increase in the future to support continued research and development activities and potential commercialization of our product candidates and increased costs of operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, lawyers and accountants, among other expenses.

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Other Income/Expense

Other income/expense consists of a $6.1 million loss on debt conversion with a related party related to the Exchange and Cancellation Agreement with the Lender offset by interest income of $0.1 million earned on cash in a money market account.

Related Parties

The Company uses Gendreau Consulting, LLC, a consulting firm (“Gendreau”), for drug development, clinical trial design and the planning, implementation and execution of contracted activities with the clinical research organization. Gendreau’s managing member is the Company’s Chief Medical Officer (“CMO”). From time to time, the Company contracts the services of immediate family members of the Company’s CMO through Gendreau to perform certain activities in connection with the Company’s ongoing clinical development of its product candidates. Such services have included service as the Company’s Medical Monitor and currently include service by immediate family members of the CMO as the Company’s Chief Safety Officer for the HAL-CINP-203 clinical trial and as an assistant in connection with various clinical site related activities.

On October 7, 2024, in connection with the Exchange Agreement, the Company entered into the Loan Agreement with Lender, who is an affiliate of CKLS. Pursuant to the Loan Agreement, the Lender agreed to make a loan to the Company in the aggregate principal amount of $19,500,000, of which (i) $16,500,000 was disbursed on October 7, 2024 and (ii) $3,000,000 was disbursed on February 18, 2025. The Loan Agreement bore interest at SOFR plus 2.00%. On March 12, 2025, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through such date was deemed repaid and all of the Company’s obligations with respect to the principal amount and accrued interest was satisfied in full and cancelled in connection with the Debt Exchange and Cancellation Transaction.

For a full discussion of related party transactions see Note 11 to the Financial Statements included in this Annual Report on Form 10-K.

Income Taxes

As of December 31, 2025, the Company has U.S. federal net operating loss carryforwards of approximately $45,410,000, which have an indefinite carryforward and Georgia and Florida state net operating loss carryforwards of approximately $58,689,000 and $1,750,000, respectively, which have a twenty-year carryforward and begin expiring in 2037. As of December 31, 2025, the Company also had Canadian non-capital loss carryforwards of approximately $22,024,000, which have a twenty-year carryforward and begin expiring in 2026 and Hong Kong tax losses carryforwards of approximately $58,026,000, which have no expiry. These net operating losses can be carried forward and applied against future taxable income, if any. As the Company was incorporated in December 2020, all tax years of the Company remain open to examination by tax authorities.

At December 31, 2024, the Company evaluated the realizability of its deferred tax assets and determined that the valuation allowance should be adjusted for the consideration of the acquired in-process research and development intangible assets. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible.

Critical Accounting Policies and Use of Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles. We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as critical because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates — which also would have been reasonable — could have been used. On an ongoing basis, we

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evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets consist of IPR&D. The fair values of IPR&D project assets acquired in business combinations are capitalized. The Company generally utilizes the Multi-Period Excess Earning Method to determine the estimated fair value of the IPR&D assets acquired in a business combination and for subsequent annual impairment testing. The projections used in this valuation approach are based on many factors, such as relevant market size, the estimated probability of regulatory success rates, anticipated patent protection, expected pricing, expected treated population, and estimated payments. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate.

Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of our intangible assets with indefinite lives may not be recoverable, including, but not limited to, recent clinical data, expected growth rates, the cost of equity and debt capital, general economic conditions, outlook and market performance of the Company’s industry and recent and forecasted financial performance.

The Company evaluates indefinite-lived intangible assets for impairment at least annually on October 1 and whenever facts and circumstances indicate that their carrying amounts may not be recoverable. For the years ended December 31, 2025 and 2024, the Company determined that there was no impairment to IPR&D.

Goodwill

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. The intangible assets acquired represented the fair value of IPR&D which has been recorded on the accompanying consolidated balance sheet as indefinite-lived intangible assets. A deferred tax liability was recorded for the difference between the fair value of the acquired IPR&D and its tax basis which was recognized as goodwill in applying the purchase method of accounting. Goodwill is not amortized and is subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting units is less than its carrying amount.

The Company evaluates goodwill for impairment at least annually on October 1 and whenever facts and circumstances indicate that its carrying amount may not be recoverable. When conducting our annual

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impairment test, we elected to perform a quantitative assessment. As the Company consists of one reporting unit, we compare the estimated fair value of our reporting unit to its carrying value. If the fair value exceeds the carrying value, no further evaluation is required, and no impairment exists. If the carrying amount exceeds the fair value, the difference between the carrying value and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill. We determined the fair value of our reporting unit based upon the quoted market price and related market capitalization of the Company’s common stock, adjusted for an estimated control premium. For the years ended December 31, 2025 and 2024, the Company determined that there was no impairment to goodwill.

Redeemable and Convertible Preferred Stock

The Company applies ASC 480, Distinguishing Liabilities from Equity, when determining the classification and measurement of its preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as stockholders’ equity (deficit).

Research and Development

Research and development costs are expensed as incurred. The Company arranges and contracts with third-party contract research organizations (“CROs”), contract development and manufacturing organizations (“CMOs”), contractor laboratories and independent consultants. As part of the process of preparing its financial statements, the Company may be required to estimate some of its expenses resulting from its obligations under these arrangements and contracts. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided. The Company’s objective is to reflect the appropriate expenses in its financial statements by matching those expenses with the period in which services are rendered. The Company determines any accrual estimates based on account discussions with applicable personnel and outside service providers as to the progress or state of completion. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s estimates are dependent upon the timely and accurate reporting of CROs, CMOs and other third-party vendors. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved, and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record prepaid or accrued expenses related to these costs.

Equity and Share-Based Compensation

The Company recognizes compensation expense relating to equity-based payments based on the fair value of the equity or liability instrument issued. For equity-based instruments, the expense is based upon the grant date fair value and recognized over the service period. For awards with a performance condition, compensation expense is recognized over the requisite service period if it is probable that the performance condition will be satisfied. Expense is recognized within both research and development and general and administrative expenses and forfeitures are recognized as they are incurred. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the Company had paid cash for the goods or services. The Company estimates the fair value of options and warrants granted using an options pricing model.

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Results of Operations

Operating expenses and other expense were comprised of the following:

Year Ended

December 31,

Operating expenses:

Other expense:

Loss on debt conversion with related party (6,134,120) —

Loss on fixed asset disposal (2,731) —

Interest income (expense), net 96,938 (92,192)

Years Ended December 31, 2025 and 2024

Research and Development Expenses

Research and development expenses increased by $18.3 million to $21.8 million for the year ended December 31, 2025 from $3.5 million for the year ended December 31, 2024. The increase was primarily due to $12.0 million of acquired In-Process Research and Development (“IPR&D”) related to the Licensing Agreement with Serpin and the impact of the Combination, including increases in expenses for clinical trials of $6.1 million related to the HAL-CINP-203 study, drug development and manufacturing costs of $0.3 million and salaries and related personnel costs of $0.3 million offset by a decrease in research and preclinical costs of $0.4 million.

General and Administrative Expenses

General and administrative expenses decreased by $2.6 million to $6.1 million for the year ended December 31, 2025 from $8.7 million for the year ended December 31, 2024. This decrease was primarily due to a decrease in nonrecurring transaction costs of $3.9 million related to the Combination with Pharmagesic in October 2024 and a decrease in expenses associated with being a pubic company of $0.2 million offset by increases in salaries and related personnel costs of $0.5 million, legal and professional fees of $0.6 million, franchise tax fees of $0.2 million and other general and administrative costs of $0.2 million.

Other Expense

Other expense increased by $6.0 million to $6.1 million in expense for the year ended December 31, 2025 from $0.1 million in expense for the year ended December 31, 2024. The increase in other expense was primarily due to a $6.1 million loss on debt conversion with a related party related to the Exchange and Cancellation Agreement with the Lender offset by interest income of $0.1 million.

Liquidity and Capital Resources

Since our inception, we have financed our operations through public offerings of common stock and proceeds from private placements of membership interests and convertible promissory notes. To date, we have not generated any revenue from the sale of products, and we do not anticipate generating any revenue from

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the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of December 31, 2025, our principal source of liquidity was our cash, which totaled $6.5 million.

Equity Financings

Subsequent to year end, on January 11, 2026, the Company entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a registered direct offering of 2,338,948 shares of its Common Stock (the “Registered Offering”), pursuant to an effective shelf registration statement on Form S-3 (File No. 333-287575). In a concurrent private placement (together with the Registered Offering, the “January 2026 Offering”), the Company agreed to sell (i) unregistered pre-funded warrants to purchase up to 2,047,089 shares of Common Stock (the “Pre-funded Warrants”) and (ii) unregistered common stock warrants to purchase up to 4,386,037 shares of Common Stock (the “Common Stock Warrants”) at a combined offering price of $2.85 per share of Common Stock and accompanying Common Stock Warrant and $2.8499 per Pre-funded Warrant and accompanying Common Stock Warrant. The January 2026 Offering closed on January 13, 2026, and the gross proceeds to the Company were approximately $12.5 million. The net proceeds of the January 2026 Offering were approximately $11.4 million after deducting placement agent fees and offering expenses payable by the Company.

On March 12, 2025, we entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a registered direct offering of 578,950 shares of our Common Stock at a price of $8.26 per share (the “March 2025 Offering”), pursuant to an effective shelf registration statement on Form S-3 (File No. 333-263700). The March 2025 Offering closed on March 14, 2025, and the gross proceeds from the March 2025 Offering were approximately $4.78 million. The net proceeds of the March 2025 Offering were approximately $4.25 million after deducting placement agent fees and offering expenses payable by the Company.

On May 19, 2024, the Company entered into an agreement with Maxim Group LLC as placement agent in connection with the issuance and sale by the Company in a public offering of 340,000 shares of its Common Stock at a public offering price of $5.00 per share (the “May 2024 Offering”), pursuant to an effective shelf registration statement on Form S-3 (File No. 333-263700). The May 2024 Offering closed on May 22, 2024, and the gross proceeds from the May 2024 Offering were $1.7 million. The net proceeds of the May 2024 Offering were approximately $1.4 million after deducting placement agent fees and offering expenses payable by the Company.

Debt Financings

Concurrent with the Combination with Pharmagesic, on October 7, 2024, the Company entered into the Loan Agreement with Lender and an affiliate of CKLS. Pursuant to the Loan Agreement, the Lender agreed to make a loan to the Company in the aggregate principal amount of $19,500,000, of which (i) $16,500,000 was disbursed on October 7, 2024 and (ii) $3,000,000 was disbursed on February 18, 2025. Pursuant to the terms of the Loan Agreement, the proceeds are to be used for the purpose of (1) funding operations and (2) performing clinical and research & development activities related to Halneuron®. The Loan Agreement bears interest at SOFR plus 2.00%, that increases by 1.00% in the event of default that resets on an annual basis on October 1st. On March 12, 2025, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through such date was deemed repaid and all of the Company’s obligations with respect to the principal amount and accrued interest was satisfied in full and cancelled in connection with the Debt Exchange and Cancellation Transaction. For more information, please see “Recent Developments” above.

There was no debt outstanding at December 31, 2025.

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Future Capital Requirements

We anticipate our cash and cash equivalents on hand at December 31, 2025 of approximately $6.5 million, plus the additional net proceeds of approximately $11.4 million received from the January 2026 Offering, will fund operations through the third quarter of 2026. The Company will need to secure additional financing to fund its ongoing clinical trials and operations beyond the third quarter of 2026 to continue to execute its strategy. We will need to finance our cash needs through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. To the extent that we raise additional funds by issuing equity or equity-linked securities, our shareholders will experience dilution. We can give no assurances that we will be able to secure such additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. As a result, substantial doubt exists regarding our ability to continue as a going concern 12 months from the issuance of the Annual Report on Form 10-K. Failure to secure the necessary financing in a timely manner and on favorable terms could have a material adverse effect on the Company’s strategy and value and could require the delay of product development and clinical trial plans.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities.

Years Ended

December 31,

Statement of Cash Flows Data:

Net cash (used in) provided by:

Investing activities — 3,761,936

Years ended December 31, 2025 and 2024

Operating Activities

For the year ended December 31, 2025, net cash used in operations was $15.7 million and consisted of a net loss of $34.3 million and a net change in operating assets and liabilities of $0.2 million attributable to an increase in prepaid expenses of $0.2 million offset by non-cash items of $11.9 million for non-cash costs related to the Serpin License Agreement, $6.1 million loss on debt conversion with Conjoint, $0.4 million attributable to share-based compensation, $0.2 million related to deferred tax expense and $0.2 million of depreciation, amortization, loss on foreign exchange, reduction in carrying amount of right-of-use asset and loss on fixed asset disposal.

For the year ended December 31, 2024, net cash used in operations was $8.8 million and consisted of a net loss of $12.3 million and a net change in operating assets and liabilities of $3.5 million attributable to a net decrease in accounts payable and accrued expenses of $0.1 million and an increase in prepaid expenses of $0.5 million offset by non-cash items of $3.5 million for non-cash transaction costs, $0.5 million attributable to share-based compensation and $0.1 million of depreciation, amortization and loss on foreign exchange.

Investing Activities

There were no investing activities for the year ended December 31, 2025. Net cash provided by investing activities for the year ended December 31, 2024 consisted of $3.8 million in cash acquired in connection with the Combination.

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Financing Activities

Net cash provided by financing activities during the year ended December 31, 2025 was $7.3 million and was attributable to cash proceeds from the Loan Agreement of $3.0 million, cash proceeds from our registered direct offering in March 2025, net of placement agent fees and offering costs, of $4.2 million, and cash proceeds from the sale of Common Stock under the ATM program, net of fees, of $0.1 million.

Net cash provided by financing activities during the year ended December 31, 2024 was $16.7 million and was attributable to loan proceeds, net of fees, of $15.3 million and cash proceeds from our public offering in May 2024, net of placement agent fees and offering costs, of $1.4 million.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Recent Accounting Pronouncements

See Note 2 – Summary of Significant Accounting Policies in the accompanying notes to the financial statements elsewhere in this report for details of recently issued accounting pronouncements and their expected impact on our financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

This item is not required.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm 89

Consolidated Balance Sheets as of December 31, 2025 and 2024 92

Notes to Consolidated Financial Statements 96

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Report of Independent Registered Public Accounting Firm

To the Shareholders, Board of Directors, and Audit Committee

Dogwood Therapeutics, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated] balance sheets of Dogwood Therapeutics, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in Series A non-voting convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2025 and 2024 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred an accumulated deficit since inception, has not generated revenue from operations and does not expect to experience positive cash flows from operating activities in the near term. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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Critical Audit Matter – Impairment of indefinite-lived assets

As disclosed in Note 2, indefinite-lived intangible assets consist of In-Process Research and Development (“IPR&D”) The fair values of IPR&D project assets acquired in business combinations are capitalized. The Company generally utilizes the Multi-Period Excess Earning Method to determine the estimated fair value of the IPR&D assets. The projections used in this valuation approach are based upon the relevant market size, the estimated probability of regulatory success rates, anticipated patent protection, expected pricing, expected treated population, and estimated payments. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate.

We identified the quantitative impairment test of intangible assets as a critical audit matter. The principal considerations for that determination included the judgment involved in assessing management’s impairment test of intangibles due to the measurement uncertainty involved in determining the fair value of the identified-lived assets, specifically as it relates to evaluating the appropriateness of the model used and the sensitivity to changes in key assumptions such as the relevant market size and estimated probability of regulatory success rates. This required a high degree of auditor effort, including specialized skills and knowledge, and significant auditor judgment.

The primary procedures we performed to address this critical audit matter included:

Critical Audit Matter – The Classification and Valuation of the Convertible Preferred Stock

As disclosed in Notes 2 and 10, preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as stockholders’ (deficit) equity.

As disclosed in Notes 6 and 10, the Company issued shares of common stock and Series A-2 Non-Voting Convertible Preferred Stock to acquire a Licensing Agreement, which was treated as an asset acquisition and expensed in research and development expense during the year. The fair value assigned to the asset was the fair value of the common stock, preferred stock, and direction transaction costs incurred.

We identified the classification and the valuation of the preferred stock as a critical audit matter. The principal considerations for that determination included the complexity and audit effort required in identifying and evaluating embedded features for the instruments against the criteria for classification, specifically as it relates to evaluating the redemption features and the determination of whether such features meet the criteria for permanent or mezzanine equity presentation. In addition, the valuation of the preferred stock issued included judgment involved in assessing the reasonableness of management’s model for determining the fair value. These procedures required a high degree of auditor effort, including specialized skills and knowledge, and significant auditor judgment in evaluating the appropriateness of the model used.

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The primary procedures we performed to address this critical audit matter included:

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2020.

Atlanta, Georgia

March 18, 2026

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DOGWOOD THERAPEUTICS, INC.

CONSOLIDATED BALANCE SHEETS

Assets

Current assets:

Deferred issuance costs 158,956 —

Current liabilities:

Lease liability, current portion 56,841 49,696

Debt with related party, net of issuance costs — 15,381,077

Commitments and contingencies (Note 12)

Stockholders' equity (deficit):

Accumulated other comprehensive loss (587,039) (3,862,987)

See accompanying notes to the consolidated financial statements.

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DOGWOOD THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Year Ended

December 31, December 31,

Revenue $ — $ —

Operating expenses:

Other expense:

Loss on debt conversion with related party (6,134,120) —

Loss on fixed asset disposal (2,731) —

Deferred income tax (expense) benefit (221,096) 503

Net loss per common share, basic and diluted $ (7.13) $ (12.52)

Comprehensive loss

See accompanying notes to the consolidated financial statements.

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DOGWOOD THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

See accompanying notes to the consolidated financial statements.

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DOGWOOD THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended

December 31,

Cash flows from operating activities

Loss on fixed asset disposal 2,731 —

Reduction in carrying amount of right-of-use asset 66,115 —

Loss on debt conversion with related party 6,134,120 —

Acquisition of license for research and development 11,909,667 —

Non-cash transaction costs — 3,563,273

Deferred tax expense (benefit) 221,096 (503)

Changes in operating assets and liabilities:

Increase in prepaid expenses and other current assets (208,687) (498,717)

(Decrease) increase in accounts payable (532,607) 219,888

Cash flows from investing activities

Cash acquired through the acquisition of Pharmagesic — 3,761,936

Net cash provided by investing activities — 3,761,936

Cash flows from financing activities

Proceeds from loan with related party, net of fees 3,000,000 15,322,645

Payout of fractional shares with reverse stock split — (351)

Proceeds from issuance of shares on ATM, net of cash fees paid 86,366 —

Cash payment of issuance costs (53,805) —

Preferred stock issued in connection with License Agreement $ 9,800,839 $ —

Common stock issued in connection with License Agreement $ 2,108,828 $ —

Conversion of preferred stock into common stock $ 110,457,324 $ —

See accompanying notes to the consolidated financial statements.

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DOGWOOD THERAPEUTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Background and Organization

Dogwood Therapeutics, Inc. (the “Company”), formerly known as Virios Therapeutics, Inc., was incorporated under the laws of the State of Delaware on December 16, 2020 through a corporate conversion (the “Corporate Conversion”) just prior to the Company’s initial public offering (“IPO”). The Company was originally formed on February 28, 2012 as a limited liability company (“LLC”) under the laws of the State of Alabama as Innovative Med Concepts, LLC. On July 23, 2020, the Company changed its name from Innovative Med Concepts, LLC to Virios Therapeutics, LLC. On October 7, 2024, the Company acquired Pharmagesic (Holdings) Inc., a Canadian corporation (“Pharmagesic”) and the parent company of Wex Pharmaceuticals, Inc. (“Wex”), and changed its name from Virios Therapeutics, Inc. to Dogwood Therapeutics, Inc. (the “Name Change”) on October 9, 2024. Prior to the business combination, Pharmagesic was a wholly-owned subsidiary of Sealbond Limited and an indirect wholly-owned subsidiary of CK Life Sciences Int’l., (Holdings) Inc. (“CKLS”), a listed entity on the Main Board of the Hong Kong Stock Exchange.

The Company operates in one segment and is a pre-revenue, development-stage biopharmaceutical company focused on developing new medicines to treat pain and peripheral neuropathy associated with cancer. The Company’s drug candidates include Halneuron® and SP16. Halneuron® is a voltage gated sodium channel inhibitor (Nav 1.7 modulation) presently in Phase 2b development to treat the chronic pain resulting from cancer chemotherapy (“CINP”), with potential to expand into non-neuropathic cancer pain and acute post-surgical pain. Halneuron® has demonstrated effectiveness in reducing both cancer related pain, as well as CINP in prior phase 2 clinical. The Halneuron® Phase 2b CINP study (“HAL-CINP-203”) commenced in the first quarter of 2025. Interim data from HAL-CINP-203 was released in December 2025 and top-line results are expected during the third quarter of 2026. SP16 is a proprietary peptide drug that exhibits immunomodulatory and anti-inflammatory properties and is expected to enter Phase 1 development to treat peripheral neuropathy resulting from cancer chemotherapy (“CIPN”). The neurotrophic effects of SP16 as demonstrated in preclinical research shows potential neuroprotective effects by activating neurite survival and growth in the presence of paclitaxel, highlighting potential to preserve a patient’s full chemotherapy regimen.

Additionally, our pipeline includes IMC-1, a novel, proprietary, fixed dose combination of a nucleoside analog and the anti-inflammatory agent celecoxib for the treatment of fibromyalgia.

Going Concern

Since its founding, the Company has been engaged in research and development activities, as well as organizational activities, including raising capital. The Company has not generated any revenues to date. As such, the Company is subject to all of the risks associated with any development-stage biotechnology company that has substantial expenditures for research and development. Since inception, the Company has incurred losses and negative cash flows from operating activities. The Company has funded its losses primarily through issuance of members’ interests, convertible debt instruments and issuances of equity securities. For the years ended December 31, 2025 and 2024, the Company incurred consolidated net losses of $34,257,370 and $12,349,724, respectively, and had consolidated net cash outflows used in operating activities for the years ended December 31, 2025 and 2024 of $15,618,651 and $8,790,805, respectively. As of December 31, 2025, the Company had a consolidated accumulated deficit of $108,076,316 and is expected to incur losses in the future as it continues its development activities.

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stock warrants to purchase up to 4,386,037 shares of Common Stock (the “Common Stock Warrants”) at a combined offering price of $2.85 per share of Common Stock and accompanying Common Stock Warrant and $2.8499 per Pre-funded Warrant and accompanying Common Stock Warrant. The January 2026 Offering closed on January 13, 2026, and the gross proceeds to the Company were approximately $12.5 million. The net proceeds of the January 2026 Offering were approximately $11.4 million after deducting placement agent fees and offering expenses payable by the Company.

Management anticipates the cash and cash equivalents on hand at December 31, 2025 of approximately $6.5 million plus the additional net proceeds of approximately $11.4 million received from the January 2026 Offering, will fund operations through the third quarter of 2026. The Company will need to secure additional financing to fund its ongoing clinical trials and operations beyond the third quarter of 2026 to continue to execute its strategy. Management plans to explore various dilutive and non-dilutive sources of funding, including equity financings, debt financings, collaboration and licensing arrangements or other financing alternatives. There can be no assurance that management will be successful in raising additional funds or on terms acceptable to the Company. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of these consolidated financial statements. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to reflect this uncertainty.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Pharmagesic, including Pharmagesic’s wholly owned subsidiary, Wex, and Wex’s wholly owned subsidiaries, IWT Bio, Inc. (“IWT”), Wex Medical Corporation (“WMC”), and Wex Medical Limited (“WML”). All intercompany accounts and transactions have been eliminated in consolidation. The Company has determined the functional currency of Pharmagesic, Wex, IWT and WMC and WML to be the Canadian dollar. The Company translates assets and liabilities of Pharmagesic, Wex, IWT, WMC and WML at exchange rates in effect at the balance sheet date with the resulting translation adjustments directly recorded as a separate component of accumulated other comprehensive income. Income and expense accounts are translated at average exchange rates for the period. Transactions which are not in the functional currency are remeasured into the functional currency and gains and losses resulting from the remeasurement are recorded in foreign currency exchange and other gain (loss), net.

Reverse Stock Split

On October 9, 2024, we effected a reverse stock split of 25 shares for 1 share of Common Stock (the “Reverse Stock Split”). The Reverse Stock Split reduced the number of shares of Common Stock issued (which includes outstanding shares and treasury shares) from 27,950,888 shares to 1,118,035 shares, and reduced shares outstanding from 27,757,937 shares to 1,110,317 shares. There was no change to the total number of shares of Common Stock that the Company is authorized to issue and there was no change in the par value of the Common Stock, and no fractional shares were issued. All share and per share amounts in the financial statements and footnotes have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split. As a result of the Reverse Stock Split, the exercise prices and number of shares to be issued under each of our outstanding option and warrant agreements were proportionately adjusted. The cash settlement of fractional shares that occurred in October 2024 was less than $1,000.

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Use of Estimates

The preparation of these consolidated financial statements and accompanying notes in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. In addition, management’s assessment of the Company’s ability to continue as a going concern involves the estimation of the amount and timing of future cash inflows and outflows. The Company's significant estimates and assumptions include estimated work performed but not yet billed by contract manufacturers and clinical research organizations, the valuation of equity and stock-based related instruments, the valuation allowance related to deferred taxes, the estimated fair value of the net assets acquired in connection with the business combination of Pharmagesic, including impairment of In-Process Research and Development and discount for lack of marketability, the estimated fair value of the contingent value rights (“CVRs”) given to common stockholders at the time of the business combination and recurring reporting period assessments, impairment considerations of intangible assets, the fair value of the preferred stock modification, and the fair value of the consideration provided in connection with the license agreement with Serpin Pharma. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance. The Company has one reportable segment. The segment consists of the development of clinical and preclinical product candidates focused on advancing novel therapeutics for pain and fatigue illness. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the segment based on net loss, which is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the balance sheet as total consolidated assets.

To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. As such, the CODM uses cash forecast models in deciding how to invest into the segment. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results is used in assessing performance of the segment and in establishing management’s compensation, along with cash forecast models.

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The table below summarizes the significant expense categories regularly reviewed by the CODM for the years ended December 31, 2025 and 2024:

Year Ended

December 31, December 31,

Operating expenses:

Acquired in-process research and development $ 12,030,389 $ —

Loss on debt conversion with related party 6,134,120 —

Interest (income) expense, net (96,938) 92,192

Loss on fixed asset disposal 2,731 —

Concentrations of Credit Risk

Cash and cash equivalents are potentially subject to concentrations of credit risk. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash and cash equivalents are held.

Fair Value Measurements

ASC Topic 820, Fair Value Measurement, provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

● Level 1 — Quoted prices in active markets for identical assets or liabilities.

The carrying amount of the Company’s consolidated financial instruments, including cash and cash equivalents, accounts payable and accrued expenses approximate their fair values. The Company determined that the fair value of the CVRs were immaterial on the date of issuance as well as at December 31, 2025 and

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December 31, 2024, as there were no imminent transactions to indicate value. The fair values of the Company’s debt at December 31, 2024 were estimated using market rates the Company believes would be available for similar types of financial instruments and represent level 2 measurements. See Note 9 below.

Business Combinations

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting as indicated in ASU 2017-01, Business Combinations (ASC 805), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, Business Combinations, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. If determined to be an asset acquisition, the Company accounts for the transaction in accordance with ASC 805, Business Combinations, and ASC Subtopic 730-10, Research and Development. If the assets acquired are in-process research and development assets that are to be used in a particular research and development project and have no alternative future use, under ASC Subtopic, 730-10, Research and Development, these costs along with direct transaction costs are expensed immediately.

Cash and Cash Equivalents

Cash and cash equivalents are maintained in bank deposit accounts and money market funds that are readily convertible into cash, which exceed the federally insured limits of $250,000.

Property and Equipment

Property and equipment are carried at acquisition cost less accumulated depreciation, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable as described further under the heading "Impairment of Long-Lived Assets" below.

Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the related assets. Leasehold improvements are amortized over the term of the lease. Office equipment and furniture are depreciated over five years and computer software and equipment are depreciated over two years.

When an asset is disposed of, the associated cost and accumulated depreciation is removed from the related accounts on the Company’s consolidated balance sheet with any resulting gain or loss included in the Company's consolidated statement of operations.

Indefinite-Lived Intangible Assets

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cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate.

Goodwill

The Company evaluates goodwill for impairment at least annually on October 1 and whenever facts and circumstances indicate that its carrying amount may not be recoverable. When conducting our annual impairment test, we elected to perform a quantitative assessment. As the Company consists of one reporting unit, the Company compares the estimated fair value of our reporting unit to its carrying value. If the fair value exceeds the carrying value, no further evaluation is required, and no impairment exists. If the carrying amount exceeds the fair value, the difference between the carrying value and the fair value is recorded as an impairment loss, the amount of which may not exceed the total amount of goodwill. The Company determined the fair value of the reporting unit based upon the quoted market price and related market capitalization of the Company’s common stock, adjusted for an estimated control premium. For the years ended December 31, 2025 and 2024, the Company determined that there was no impairment to goodwill.

Operating Lease Right-of-use Asset and Lease Liability

The Company accounts for leases under ASC 842, Leases. Operating leases are included in “Right-of-use assets” within the Company’s consolidated balance sheets and represent the Company’s right to use an underlying asset for the lease term. The Company’s related obligation to make lease payments are included in “Lease liability” and “Lease liability, net of current portion” within the Company’s consolidated balance sheets. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis

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over a similar term, an amount equal to the lease payments in a similar economic environment. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The ROU assets are tested for impairment according to ASC 360, Property, Plant, and Equipment (“ASC 360”). Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term.

As of December 31, 2025 and 2024, the Company’s operating lease ROU assets and corresponding short-term and long-term lease liabilities primarily relate to the operating lease for an office in Vancouver, British Columbia, that was acquired as part of the Business Combination with Pharmagesic. The office lease expires on August 31, 2028.

Impairment of Long-Lived Assets

In accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable (i.e., impaired). Once an impairment is determined, the actual impairment recognized is the difference between the carrying amount and the fair value (less costs to sell for assets to be disposed of) as estimated using one of the following approaches: income, cost, and/or market. Fair value using the income approach is determined primarily using a discounted cash flow model that uses the estimated cash flows associated with the asset or asset group under review, discounted at a rate commensurate with the risk involved. Fair value utilizing the cost approach is determined based on the replacement cost of the asset reduced for, among other things, depreciation and obsolescence. Fair value, utilizing the market approach, benchmarks the fair value against the carrying amount.

Redeemable and Convertible Preferred Stock

Income Taxes

The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company operated as an Alabama limited liability company until its Corporate Conversion. Therefore, the Company passed through all income and losses to its members until this point.

The Company is subject to the provisions of ASC 740, Income Taxes (“ASC 740”). Under ASC 740, consideration is given to the recognition and measurement of tax positions that meet a “more-likely-than-not” threshold. A tax position is a position taken in a previously filed tax return or a position expected to be taken in a future that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions include the Company’s status as a pass-through entity until December 16, 2020 and as a corporation thereafter. The recognition and measurement of tax positions taken for various jurisdictions consider the amounts and probabilities of outcomes that could be realized upon settlement using the facts, circumstances, and information available at the reporting date. The Company has determined that it has tax expense of $221,096 and a tax benefit of $503 as of December 31, 2025 and 2024, respectively, and does not have any material unrecognized tax benefits or obligations as of December 31, 2025 and 2024. The Company recognizes interest and penalties

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related to uncertain tax positions, if any, in income tax expense. The Company is not currently under examination by the Internal Revenue Service or by state tax authorities and the Company’s tax year remains subject to examination by the tax authorities.

Net Income (Loss) per Common Share Applicable to Common Stockholders

The Company uses the two-class method to compute net income per common share during periods the Company realizes net income and has securities outstanding that entitle the holder to participate in dividends and earnings of the Company. In addition, the Company analyzes the potential dilutive effect of outstanding participating securities under the "if-converted" method when calculating diluted earnings per share and reports the more dilutive of the approaches (two class or "if-converted"). The two-class method is not applicable during periods with a net loss, as the holders of participating securities have no obligation to fund losses.

Basic and Diluted Net Income (Loss) per Share

Basic net loss per common share (“EPS”) is computed in accordance with U.S. GAAP. Basic EPS is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted EPS reflects potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if all potential common shares had been issued and were dilutive. However, potentially dilutive securities are excluded from the computation of diluted EPS to the extent that their effect is anti-dilutive. For the years ended December 31, 2025 and 2024, the Company had options to purchase 1,117,278 and 92,777 shares of Common Stock, respectively, warrants to purchase 855 and 7,755 shares of Common Stock, respectively, and preferred stock which was convertible into 0 and 22,138,044 shares of Common Stock, respectively, that were anti-dilutive.

Research and Development

Share-Based Compensation

The Company recognizes compensation expense relating to share-based awards to employees and directors with a performance condition over the requisite service period if it is probable that the performance condition will be satisfied. For awards to non-employees, the Company recognizes compensation expense in the same manner as if the Company had paid cash for the goods or services. The Company estimates the fair value of options and warrants granted using an options pricing model, see Note 13. Expense is recognized

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within both research and development and general and administrative expenses and forfeitures are recognized as they are incurred.

Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. The guidance is to be applied on either a prospective or a retrospective basis to annual financial statements for periods beginning after the effective date. The Company adopted ASU 2023-09 on a prospective basis for the fiscal year ended December 31, 2025. See added disclosures in Note 14.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024. See Segment Information above.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which improves disclosures about an entity’s expenses and addresses requests from investors for more detailed information about types of expenses including purchases of inventory, employee compensation, depreciation, amortization, and depletion, commonly presented in cost of sales, research and development and general and administrative expenses. In January 2025, the FASB issued ASU 2025-01 which revises the effective date of ASU 2024-03. Adoption of these new disclosure requirements are effective for public entities for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027 and early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, to improve the requirements for identifying the accounting acquirer in Topic 805, Business Combinations. The amendments in ASU 2025-03 revise current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions. Entities will be required to apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date. Adoption of this guidance is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods and early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.

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Subsequent Events

On January 15, 2026 the Company filed a Form S-3 Registration Statement for the resale of up to 6,433,126 shares of the Company’s Common Stock consisting of (i) 2,047,089 shares of Common Stock underlying the Pre-Funded Warrants at an exercise price of $0.0001 per share; and (ii) 4,386,037 shares of Common Stock underlying the Common Stock Warrants to purchase shares of Common Stock at an exercise price of $3.28 per share. The Form S-3 Registration Statement was declared effective on January 29, 2026.

3. Business Combination

On October 7, 2024, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Sealbond Limited, a British Virgin Islands corporation (“Sealbond”), pursuant to which the Company acquired 100% of the issued and outstanding common shares of Pharmagesic (Holdings) Inc., a Canadian corporation (“Pharmagesic”) (such transaction, the “Combination”). Prior to the Combination, Pharmagesic was a wholly-owned subsidiary of Sealbond and an indirect wholly-owned subsidiary of CK Life Sciences Int’l., (Holdings) Inc. (“CKLS”), a listed entity on the Main Board of the Hong Kong Stock Exchange.

Under the terms of the Exchange Agreement, on October 7, 2024 (the “Closing”), in exchange for all of the outstanding common shares of Pharmagesic immediately prior to the Effective Time, the Company issued to Sealbond, as sole shareholder of Pharmagesic, an aggregate of (A) 211,383 shares of the Company’s unregistered Common Stock, which shares shall represent a number of shares equal to no more than 19.99% of the outstanding shares of Common Stock as of immediately before the Effective Time and (B) 2,108.3854 shares of the Company’s unregistered Series A Non-Voting Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”) (as described below). The issuance of the shares of Common Stock and Series A Preferred Stock to Sealbond occurred on October 9, 2024. Each share of Series A Preferred Stock is convertible into 10,000 shares of Common Stock, subject to certain conditions described in the Exchange Agreement.

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The Board of Directors of the Company (the “Board”) approved the Exchange Agreement and the related transactions, and the consummation of the Combination was not subject to approval of Company stockholders. Pursuant to the Exchange Agreement, the Company agreed to hold a stockholders’ meeting to submit the certain matters to its stockholders for their consideration, including: (i) the approval of the conversion of shares of Series A Preferred Stock into shares of Common Stock in accordance with the rules of the Nasdaq Stock Market LLC (the “Conversion Proposal”) and (ii) the approval of a “change of control” under Nasdaq Listing Rules 5110 and 5635(b) (the “Change of Control Proposal”); and together with the Conversion Proposal, the “Meeting Proposals”). At a special meeting of stockholders on November 21, 2025, the Meeting Proposals were approved.

The Company’s transaction costs of $4.9 million were expensed as incurred and included in the General and Administration expenses in the Company’s consolidated statement of operations.

The transaction was accounted for under the acquisition method of accounting. Under the acquisition method, the total purchase price of the acquisition is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on the fair values as of the date of the acquisition. Consideration paid is comprised of the estimated fair value of various securities issued including the Series A Preferred Stock and Common Stock issued to Sealbond, the sole shareholder of Pharmagesic. In the fourth quarter of fiscal 2024, the preliminary purchase price allocation was updated, including the related determination of fair value of these securities issued as consideration, the allocation of consideration to the specific in-process research and development programs acquired and the related tax implications for the updates to the purchase price allocation.

The fair value of the consideration totaled approximately $71.3 million, summarized as follows:

Fair value of common stock issued $ 893,093

Fair value of preferred stock issued 70,372,634

The Company recorded the assets acquired and liabilities assumed as of the date of the Combination based on the information available at that date. The following table presents the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the Combination date:

Assets acquired:

Prepaid expenses and other current assets 380,000

Property and equipment 19,000

In-process research and development assets 69,500,000

Right-of-use asset - operating leases 230,000

Liabilities assumed:

Accrued expenses and other current liabilities 2,017,000

Operating lease liabilities 230,000

The fair value of IPR&D was capitalized as of the Combination date and accounted for as indefinite-lived intangible assets until completion or disposition of the assets or abandonment of the associated research and development efforts. Upon successful completion of the development efforts, the useful lives of the IPR&D

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assets will be determined based on the anticipated period of regulatory exclusivity and will be amortized within operating expenses. Until that time, the IPR&D assets will be subject to impairment testing and will not be amortized. The goodwill recorded related to the acquisition is the excess of the fair value of the consideration transferred by the acquirer over the fair value of the net identifiable assets acquired and liabilities assumed at the date of the Combination. The goodwill recorded is not deductible for tax purposes.

The following summarizes the Company’s intangible assets and goodwill acquired in connection with the Combination and their carrying value as of December 31, 2025 and 2024.

Carrying Value Carrying Value

as of as of

Combination Date December 31, December 31,

Intangible asset fair values for the two IPR&D programs were determined using the Multi-Period Excess Earnings Method (“MPEEM”) which is a form of the income approach. Under the MPEEM, the fair value of an intangible asset is equal to the present value of the asset's incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life. To calculate fair value of acquired IPR&D programs under the MPEEM, the Company uses probability-weighted cash flows discounted at a rate considered appropriate given the significant inherent risks associated with drug development by development-stage companies. Cash flows were calculated based on estimated projections of revenues and expenses related to each program and then reduced by a contributory charge on requisite assets employed. Contributory assets included debt-free working capital, net fixed assets and assembled workforce. Rates of return on the contributory assets were based on rates used for comparable market participants. Cash flows were assumed to extend through the market exclusivity period estimated to be provided by trade-secrets and patents for the synthetic manufacture of drug product. The resultant cash flows were then discounted to present value using a weighted-average cost of equity capital for companies with profiles substantially similar to that of each acquired IPR&D program, which the Company believes represents the rate that market participants would use to value the assets. The Company compensated for the phase of development of each program by probability-adjusting its estimation of the expected future cash flows. The projected cash flows were based on significant assumptions, such as the time and resources needed to complete the development and approval of each IPR&D program, estimates of revenue and operating profit related to the program considering its stage of development, the life of the potential commercialized product and associated risks, including the inherent difficulties and uncertainties in drug development, such as obtaining marketing approval from the FDA and other regulatory agencies, and risks related to the viability of and potential alternative treatments in any future target markets.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company as if the Combination had taken place on January 1, 2024. The unaudited pro forma financial

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information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date.

December 31,

(In thousands) 2024

Net revenues $ —

Net loss before taxes $ (19,649)

Nonrecurring pro forma transaction costs directly attributable to the Combination were $4.9 million for the year ended December 31, 2024. The costs deducted included success fees of $3.6 million in the aggregate incurred with financial advisors in connection with the Combination.

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

December 31, December 31,

Prepaid franchise taxes 161,400 —

Other miscellaneous current assets 4,876 28,006

Long-term

Security deposit on leased premises 19,037 18,133

5. Property and Equipment

In connection with the Combination, the Company acquired certain property and equipment that was revalued at the date of the Combination. Net property and equipment at cost consist of the following:

December 31, December 31,

Computer equipment $ — $ 5,952

Office furniture and equipment 12,754 12,435

Total property and equipment, at cost 12,754 18,387

Less: Accumulated depreciation and amortization — (1,576)

6. License Agreements

On September 29, 2025, the Company entered into an Exclusive Licensing Agreement (the “Licensing Agreement”) with Serpin Pharma Inc. (“Serpin Pharma”) and Rejuvenation Labs, Inc. (“Rejuvenation” and, together with Serpin Pharma, “Serpin”), pursuant to which Serpin granted the Company a royalty-free, sublicensable global license to develop Serpin Pharma’s intravenous formulation of SP16. SP16 is a first-in-class low density lipoprotein receptor-related protein-1 (LRP1) agonist which has demonstrated both anti-inflammatory, immunomodulatory and neural repair activity that has the potential to treat chemotherapy-induced peripheral neuropathy. In consideration of the Licensing Agreement, the Company issued shares of common

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stock and Series A-2 Non-Voting Convertible Preferred Stock to Serpin Pharma and Rejuvenation. The Licensing Agreement was treated as an asset acquisition and expensed in research and development expense during the current period as acquired IPR&D. Consideration paid is comprised of the estimated fair value of various securities issued including the Series A-2 Preferred Stock and Common Stock issued to Serpin Pharma and Rejuvenation. See Note 10 – “Stockholders’ Equity.”

The fair value of the consideration totaled approximately $12.0 million, summarized as follows:

Fair value of common stock issued $ 2,108,828

Fair value of preferred stock issued 9,800,839

Direct transaction costs 120,722

The Company entered into a Know-How License Agreement (the “Agreement”) with the University of Alabama (“UA”) in 2012. In consideration for the Agreement, UA received a 10% non-voting membership interest in the Company. Upon the adoption of the May 1, 2020 Second Amended and Restated Operating Agreement, the non-voting membership interest converted to a voting membership interest. Upon the Corporate Conversion, voting membership interest was converted into shares of common stock. The Agreement is in effect for 25 years and will terminate on June 1, 2037.

7. Accrued Expenses

Accrued expenses consist of the following:

December 31, December 31,

Other miscellaneous accrued expenses 26,244 1,127

8. Leases

In connection with the Combination, the Company acquired a right-of-use asset which was revalued at the date of the Combination. Pharmagesic has obtained the right to control the use of office premises for a period of time through a lease arrangement. The lease arrangement was negotiated on an individual basis and contains a wide range of different terms and conditions including lease payments and remaining lease terms to August 31, 2028. The lease arrangement does not impose any covenants other than the security interests in the leased asset that is held by the lessor. The Company maintains a security deposit totaling $19,037 as of December 31, 2025.

There were no additions or extensions to the right-of-use asset during the year ended December 31, 2025 or during the period from the Combination date to December 31, 2024. Total cash outflows for the lease were $121,351 for the year ended December 31, 2025 and were $31,939 for the period from the Combination date to December 31, 2024. These costs were included in net cash used in operating activities.

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The following table presents the components of the lease costs included in general and administrative expenses in the statements of operations for the years ended December 31, 2025 and 2024:

Year Ended

December 31, December 31,

Component of lease cost 2025 2024

Future minimum annual commitments under the operating leases are as follows:

Year ending December 31:

Total lease payments 179,229

Less: amount representing interest (16,625)

Present value of net minimum lease payments $ 162,604

Less: current obligations (56,841)

Long-term obligations under leases $ 105,763

Other information related to this operating lease and the calculation of related right-of-use assets and operating lease liabilities consists of the following:

Weighted-average discount rate - operating leases 7.82% 7.82%

9. Promissory Note with Related Party

On October 7, 2024, in connection with the Exchange Agreement, the Company entered into a Loan Agreement (the “Loan Agreement”) with Conjoint Inc., a Delaware corporation (“Lender”) and an affiliate of CKLS. Pursuant to the Loan Agreement, Lender agreed to make a loan to the Company in the aggregate principal amount of $19,500,000, of which (i) $16,500,000 was disbursed on October 7, 2024 and (ii) $3,000,000 was disbursed on February 18, 2025. Pursuant to the terms of the Loan Agreement, the proceeds were to be used for the purpose of (1) funding operations and (2) performing clinical and research & development activities related to Halneuron®. The Loan Agreement bore interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.00%, that increases by 1.00% in the event of default that resets on an annual basis on October 1st. The Loan Agreement was payable in full with principal and accrued interest on October 7, 2027. The promissory note was recorded net of issuance costs of $1,177,355. The issuance costs were being amortized to interest expense using an effective interest rate of 7.82%. For the year ended December 31, 2025, the Company recognized interest expense of $197,437 and amortization of issuance costs of $52,373 in the accompanying consolidated statement of operations and comprehensive loss. As of the year ended December 31, 2024, the Company recognized interest expense of $229,454 and amortization of issuance costs of $58,432 in the accompanying consolidated statements of operations.

On March 12, 2025, the Company entered into the Exchange and Cancellation Agreement with the Lender. Pursuant to the Exchange and Cancellation Agreement, the principal amount of all loans made to the Company under the Loan Agreement, along with accrued interest through March 12, 2025 (as of such date, an aggregate of $19,926,891), was deemed repaid and all of the Company’s obligations satisfied in full and cancelled in exchange for 284.2638 shares of the Company’s Series A-1 Non-Voting Convertible Preferred Stock, par value $0.0001 per share (the “Series A-1 Preferred Stock”), based on a price per underlying share of common stock

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of $7.01. The price was determined by reference to the average Nasdaq Official Closing Price of the Company’s common stock for the five trading days immediately prior to the signing of the Exchange and Cancellation Agreement. Each share of Series A-1 Preferred Stock was convertible into 10,000 shares of common stock, subject to certain conditions set forth in the Series A-1 Preferred Stock Certificate of Designation (“Series A-1 Certificate of Designation”), as discussed below.

The Company evaluated the transaction in accordance with ASC 470-50-40, Debt Modifications and Extinguishment. As such, the Company recognized a loss on the debt extinguishment of $6,134,120 that was charged to other expense in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2025. The loss was determined by the difference between the closing price of the Company’s common stock of $11.13 on the transaction date to the price per share used to determine the conversion price of the debt, discounted for lack of marketability.

As of December 31, 2024, the Company evaluated the fair value of its related party note payable by analyzing the terms of the instrument in comparison to a synthetic credit rating and implied market cost of debt rate. Based on this evaluation, which included consideration of current rates and other terms available to the Company for similar debt instruments, the Company believes the fair value of the note was approximately $15.7 million.

There were no outstanding promissory notes as of December 31, 2025.

10.Stockholders’ Equity (Deficit)

Preferred Stock

The restated certificate of incorporation, as amended, of the Company permits its Board of Directors to issue up to 2,000,000 shares of preferred stock, par value of $0.0001 per share, in one or more series, to designate the number of shares constituting such series, and fix by resolution, the powers, privileges, preferences and relative, option or special rights thereof, including liquidation preferences and dividends, and conversion and redemption rights of each such series.

After giving effect to the designation of Series A Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock discussed below, the Company had 1,997,254 and 1,997,730 authorized and remaining to be issued shares of preferred stock at December 31, 2025 and 2024, respectively.

Series A Preferred Stock

In October 2024, the Board of Directors designated 2,270 of the 2,000,000 shares of preferred stock to be Series A Non-Voting Convertible Preferred Stock (“Series A Preferred Stock”). As of December 31, 2025, the Company had 2,270 authorized and 2,269.1494 issued and no shares outstanding of Series A Preferred Stock and as of December 31, 2024, the Company had 2,270 authorized and 2,213.8044 issued and outstanding shares of Series A Preferred Stock.

Following stockholder approval of the Conversion Proposal at a special meeting of stockholders held on November 21, 2025, each share of Series A Preferred Stock automatically converted into 10,000 shares of Common Stock. In accordance with ASC 805-50-25-4, the Company has the option to apply pushdown accounting to its financial statements related to the conversion of the Series A Preferred Stock but does not believe that such an election would be meaningful or informative to readers of the financial statements. The original issuance of the Series A Preferred Stock has been disclosed since the transaction was completed, including disclosures related to its expected conversion to shares of Common Stock at a future special meeting of stockholders, and the conversion followed the original terms of the Exchange Agreement. Accordingly, the conversion was treated as an exchange of securities by an investor with the conversion completed at the carrying amount of the Series A Preferred Stock.

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Except as otherwise required by law, the Series A Preferred Stock did not have voting rights. However, as long as any shares of Series A Preferred Stock were outstanding, the Company could not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series A Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Charter or Amended and Restated Bylaws of the Company, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of Preferred Stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Charter or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (ii) issue further shares of Series A Preferred Stock, or increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock (iii) prior to the Stockholder Approval (as defined in the Certificate of Designation) or at any time while at least 30% of the originally issued Series A Preferred Stock remains issued and outstanding, consummate either: (A) any Fundamental Transaction (as defined in the Certificate of Designation) or (B) any merger or consolidation of the Company with or into another entity or any stock sale to, or other business combination in which the stockholders of the Company immediately before such transaction do not hold at least a majority of the capital stock of the Company immediately after such transaction, or (iv) enter into any agreement with respect to any of the foregoing.

The Series A Preferred Stock ranked on parity with the Common Stock as to distributions of assets upon liquidation, dissolution or winding-up of the Company, whether voluntarily or involuntarily. The Series A Preferred Stock were entitled to receive on an as-converted basis dividends equal to and in the same form, and in the same manner, as dividends paid to shares of Common Stock. If, prior to conversion of the Series A Preferred Stock into Common Stock, the Company effected any Fundamental Transaction (as defined in the Series A Certificate of Designation) then upon conversion of the Series A Preferred Stock, the holders of the Series A Preferred Stock would have been entitled to receive, in lieu of shares of Common Stock, the consideration that would have been issuable upon such Common Stock had the conversion occurred prior to such Fundamental Transaction.

In accordance with ASC 480-10-S99-3A, the Company had classified the Series A Preferred Stock outside of permanent equity, in the mezzanine section of the consolidated balance sheet. In addition, this guidance requires that redeemable equity securities be accreted to their redemption value if it becomes probable that the security will become redeemable. The guidance further clarifies that accretion is required when redemption is likely to occur, and that the assessment of probability should be updated at each reporting period. The term “probable” is defined in ASC 450, Contingencies, subparagraph 450-20-20 as “the future event or events are likely to occur.” With this framework in mind, the Company has evaluated each conditional repurchase (as described below under “Form of Repurchase Agreement and Modification”) and redemption right embedded in the Series A Preferred Stock to determine whether exercise of any right is probable for purposes of accretion to redemption value. Based on the facts and circumstances, none of the conditional repurchase or redemption rights were considered probable prior to the conversion of the Series A Preferred Stock and there has been no accretion to redemption value included in the consolidated financial statements.

Per the Series A Certificate of Designation, holders of Series A Preferred Stock were entitled to receive a PIK dividend accruing at a rate equal to five percent (5.0%) per annum payable in shares of Series A Preferred Stock on the date that was 180 days after the original issue date of the Series A Preferred Stock. As of March 31, 2025, the Company had accrued the full value of the dividend payable of $1,770,767. On April 7, 2025, 180 days after the original issue date, the Company issued an aggregate of 55.345 shares of Series A Preferred stock as a PIK dividend to the holders of Series A Preferred Stock.

Form of Repurchase Agreement and Modifications

The terms of the Exchange Agreement provides that Sealbond had the right to exercise an option, but not an obligation, after the Closing and upon the occurrence of certain conditional events including continued listing requirements, to acquire all of the Company’s and its direct and indirect subsidiaries’ intellectual property, rights,

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title, regulatory submissions, assignment of contracts, data and interests, as of the time of such acquisition, in and to tetrodotoxin and Halneuron®, in accordance with the terms and conditions of the form of Repurchase Agreement for a cash settlement value as defined in the agreement.

In September 2025, holders of certain Series A Preferred Stock irrevocably waived the cash settlement and related repurchase rights for 166 shares of Series A Preferred Stock. As such, the Company reclassified approximately $5.5 million and 166 shares from temporary equity to permanent equity as the shares no longer qualified for temporary equity classification under ASC 480-10-S99-3A. In addition, the Company considered under ASC 470, Debt, whether or not the Series A Preferred Stock underlying the waivers should be treated as a modification or as an extinguishment for financial reporting purposes. The Company used the fair value method and determined that the fair value of the Series A Preferred Stock before the waiver was not significantly different (e.g. less than 10%) than the fair value of the Series A Preferred Stock immediately after the waiver and thus the waiver was considered a modification. Accordingly, there was no impact to net income or earnings per share, and any directly related fees were expensed as incurred.

Contingent Value Rights Agreement

Concurrently with the Closing of the Combination, the Company entered into a contingent value rights agreement (the “CVR Agreement”) with a rights agent (the “Rights Agent”), pursuant to which each holder of Common Stock as of October 17, 2024, including those holders receiving shares of Common Stock in connection with the Combination, was entitled to one contractual contingent value right (each, a “CVR”) issued by the Company, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of Common Stock held by such holder as of 5:00 p.m. Eastern Daylight Time on October 17, 2024. The CVR Agreement has a term of seven years.

The Company determined that the fair value of the CVRs were immaterial on the date of issuance as there were no imminent transactions to indicate value. The Company evaluates the fair value of the CVRs at each reporting period or whenever facts and circumstances indicate that their carrying amounts may have changed. The Company determined that the fair value of the CVRs were immaterial as of December 31, 2025 and 2024.

Series A-1 Preferred Stock

In March 2025, the Board of Directors designated 285 shares of the preferred stock to be Series A-1 Preferred Stock. As of December 31, 2025, the Company had 285 shares authorized, 284.2638 shares issued and no shares outstanding of Series A-1 Preferred Stock. There were no authorized, issued and outstanding shares of Series A-1 Preferred stock at December 31, 2024.

Following stockholder approval at a special meeting of stockholders held on November 21, 2025, each share of Series A-1 Preferred Stock automatically converted into 10,000 shares of Common Stock. The

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DWTX US Equity

DWTX · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

DWTX US Equity☆

DWTX · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

DWTX US Equity