2) LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred significant operating losses and has an accumulated deficit as a result of its efforts to develop product candidates and provide general and administrative support for operations. As of March 31, 2025, the Company had a cash balance of approximately $1.9 million and an accumulated deficit of approximately $239.7 million. For the three months ended March 31, 2025, the Company incurred a net loss of $8.2 million, which includes a $5.3 million non-cash expense upon entering into a forward sales contract, and the Company used cash of $2.1 million in operating activities.

In April 2023, the Company entered into a standby equity purchase agreement (the “SEPA”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $10.0 million of the Company’s common stock in an “equity line” financing arrangement. No shares were sold under the SEPA during the three months ended March 31, 2025, and the SEPA expired on May 1, 2025.

In September 2024, the Company entered into certain financing agreements for the private placement of $3.9 million in convertible notes (the “Bridge Notes”) and $1.1 million in shares of the Company’s common stock (the “Equity Financing”), as well as exchange agreements for the exchange of previously issued convertible notes and warrants into shares of common stock (the “Exchange Transaction,” and collectively, the “September 2024 Transactions”). The September 2024 Transactions were subject to shareholder approval, and on October 29, 2024, the shareholders approved the issuance of common stock under the Equity Financing and the conversion of the Bridge Notes and the convertible notes and warrants under the Exchange Transaction into shares of common stock, at which point, the Company had no convertible notes outstanding.

On March 11, 2025 and March 20, 2025, the Company received $1.5 million and $0.8 million, respectively, in exchange for the issuance of two promissory notes with aggregate principal amounts of $2.3 million to an investor. See Note 8 for more information on the promissory notes.

On April 2, 2025, the Company received $1.1 million in gross proceeds from the sale of shares of the Company’s common stock and prefunded warrants. See Note 12, Equity Transaction - Private Placement, for additional information regarding this financing.

In connection with preparing the accompanying condensed consolidated financial statements as of and for the three months ended March 31, 2025, the Company’s management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern because it does not expect to have sufficient cash or working capital resources to fund operations for the twelve-month period subsequent to the issuance date of these condensed consolidated financial statements. The Company will need to raise additional capital, which could be through public or private equity offerings, debt financings, out-licensing the Company’s intellectual property, strategic partnerships or other means. Other than the securities purchase agreement discussed further in Note 12, the Company currently has no arrangements for capital, and no assurances can be given that it will be able to raise capital when needed, on acceptable terms, or at all. The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.