2. Summary of Significant Accounting Policies

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Basis of Presentation

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The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, Trawsfynydd Therapeutics LLC, Trawsfynydd Therapeutics AU Ltd, Throxavir Therapeutics AU Pty Ltd and Onconova Europe GmbH. All significant intercompany transactions have been eliminated.

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Use of Estimates

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, and equity and the amount of revenues and expenses. Actual results could differ significantly from those estimates. The most significant estimates and assumptions that management considers in the preparation of the Company's financial statements relate to prepaid and accrued research and development costs; the valuation of consideration transferred in acquiring the assets of Trawsfynydd; and inputs used in the Black-Scholes model for stock-based compensation expense and Series A Warrants (as defined below) liability.

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Unaudited Interim Financial Information

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The accompanying condensed consolidated balance sheet as of June 30, 2025, the condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2025 and 2024, the consolidated statements of convertible preferred stock and stockholders’ equity (deficit) for the three and six months ended June 30, 2025 and 2024 and the condensed consolidated statements of cash flows for the three and six months ended June 30, 2025 and 2024 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2025, the results of its operations for the three and six months ended June 30, 2025 and 2024, and its cash flows for the six months ended June 30, 2025 and 2024. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2025 and 2024 are unaudited. The results for the three and six months ended June 30, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period.  These unaudited condensed consolidated financial statements

should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2024 included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2024 (“Annual Report”), filed with the SEC on March 31, 2025.

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Segment Information

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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 operating segment. The Company’s chief operating decision maker (“CODM”) is the interim chief executive officer. The Company’s CODM manages the Company’s operations on a consolidated basis for the purpose of allocating resources. All the Company’s long-lived assets are held in the United States.

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Concentrations of Credit Risk and Off-Balance Sheet Risk

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Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of money market accounts with financial institutions that management believes are creditworthy. The Company has no financial instruments with off-balance sheet risk of loss.

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At June 30, 2025, the Company had $12,066,000 of its cash and cash equivalents in money market funds that invest in a portfolio of liquid, high-quality debt securities issued by the U.S. government.

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Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company deposits its cash with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the Company’s cash balances may exceed the current insured amounts provided by the FDIC. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash and cash equivalents.

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Significant Accounting Policies

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These interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and SEC instructions for interim financial information, and should be read in conjunction with the Company's Annual Report. Significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed in the Company's Annual Report. The Company uses the same accounting policies in preparing quarterly and annual financial statements.

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Tax Incentive Receivable

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The Company is eligible to receive a cash refund from the Australian Taxation Office for eligible research and development (“R&D”) expenditures under the Australian Research and Development Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company’s Australian subsidiaries began operations in the second quarter of 2024, and the Company has recognized reductions to R&D expenses of $63,000 for the three and six months ended June 30, 2025. As the Company’s Australian subsidiaries began operations in the second quarter of 2024, the Company did not recognize reductions to R&D expense for the three and six months ended June 30, 2024.

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Fair Value of Financial Instruments

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The Company accounts for financial instruments under ASC 820, Fair Value Measurements (“ASC 820”). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value

measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

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Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;

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Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

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Level 3 — assets and liabilities whose significant value drivers are unobservable.

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The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts.

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The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

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On December 29, 2024, the Company entered into a Securities Purchase Agreement with several investors (the “December 2024 Purchase Agreement”) for the sale of (i) up to 3,630,205 Class A Units (“Class A Units”), each Class A Unit consisting of (a) one share of common stock or one pre-funded warrant to initially purchase one share of common stock and (b) one Series A Warrant to purchase one share of common stock (“Series A Warrants”), and (ii) 289,044 Class B Units (the “Class B Units,” and, together with the Class A Units, the “Units”), each Class B Unit consisting of one pre-funded warrant and one Series A Warrant. The fair value of the pre-funded warrants is the intrinsic value of the pre-funded warrants due to their nominal exercise price. The fair value of the Series A Warrants was calculated using the Black-Scholes option pricing model and is revalued to fair value at the end of each reporting period until the earlier of the exercise or expiration of the Series A Warrants. The fair value of the Series A Warrant liability was estimated using the Black-Scholes option pricing model using the following assumptions:

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The warrant liabilities were initially measured at fair value at the date of issuance and on a recurring basis. The changes in fair value of warrant liabilities will be recognized as part of the consolidated statements of operations. A summary of warrant liability activity for the three and six months ended June 30, 2025, is as follows:

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On February 18, 2025, the Company and certain of the purchasers entered into amendments to the Series A Warrants, pursuant to which the Series A Warrant liability attributable to the Series A Warrants held by such purchasers was reclassified to permanent equity. The change in fair value of the warrant liability related to the Series A Warrants was measured using the fair value of the amended Series A Warrants immediately prior to February 18, 2025.

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During the first quarter of 2025, certain purchasers exercised their pre-funded warrants for an aggregate of 1,382,559 shares of the Company’s common stock. On March 27, 2025, the Company and those purchasers holding all pre-funded warrants outstanding as of such date entered into amendments to the pre-funded warrants, pursuant to which the pre-funded warrant liability was reclassified to permanent equity.

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The change in warrant liability during the three months ended June 30, 2025 was due to the change in fair value of the outstanding liability classified warrants.

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Revenues and Deferred Revenues

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The Company’s revenue during the three and six months ended June 30, 2025, and 2024 was from the terminated license and collaboration agreement with Symbio Pharmaceuticals Limited (“Symbio”). Effective April 17, 2025, the Company and Symbio mutually terminated the license agreement originally entered into by and between the parties in 2011. No payments, compensation, reimbursements or settlements shall be due or owed by either party in connection with the termination of the license agreement. As a result, the Company recognized the $2,733,000 of deferred revenue as revenue on April 17, 2025.

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Deferred revenue is as follows:

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Research and Development Expenses

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R&D costs are charged to expense as incurred. These costs include, but are not limited to, license fees related to the acquisition of in-licensed products; employee-related expenses, including salaries, benefits and travel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and

preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies; and costs associated with preclinical activities and regulatory operations.

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Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued R&D expense, as the case may be.

Net (loss) income per share

During the current fiscal year, management identified an immaterial error related to the calculation and presentation of loss per share in prior periods. The Company had previously incorrectly concluded that the Company’s Series C Non-Voting Convertible Preferred (Series C Preferred”) shares had preferences over the Company’s common stock and were therefore excluded from the calculation of basic and diluted net loss per share pursuant to the two-class method. Net loss per share attributable to common stockholders for the three and six months ended June 30, 2024 as previously presented was $4.87 and $5.53, respectively, and as corrected is $20.52 and $37.45, respectively. Net loss per share attributable to holders of Series C Preferred was not previously presented. All related amounts have been updated to reflect the effects of the correction in the consolidated statement of operations and related notes, as applicable. The correction of this error had no impact on the previously reported net loss or cash flows.

For purposes of net (loss) income per share, the Company’s Series C Preferred shares have the same characteristics as common stock and have no liquidation or other material preferential rights over common stock and accordingly, have been considered as a second class of common stock in the computation of net (loss) income per share regardless of their legal form. Income (losses) are allocated between the common shares and the Series C Preferred on a pro rata basis, as they share equally in (losses) income and residual net assets on an as-converted basis.

Basic income (loss) per share of common stock is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during each period, including pre-funded warrants. The pre-funded warrants to purchase common stock with an exercise price of $0.01 per share are included in the calculation of basic and diluted net (loss) income per share as the exercise price is non-substantive and is virtually assured.

Diluted (loss) income per share of common stock includes the effect from the potential exercise or conversion of securities, such as stock options, unvested restricted stock units, and common stock warrants, which would result in the issuance of incremental shares of common stock, using the treasury stock method, and the potential shares of converted common stock associated with the Series C Preferred using the if-converted method. Potential common shares are excluded from the diluted per share calculation when their effect is anti-dilutive, including in periods of net loss or when inclusion does not result in a decrease in earnings per share.

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For the three and six months ended June 30, 2025, and 2024, the components of basic and diluted net (loss) income per share were as follows:

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The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

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The Series C Preferred were previously classified as redeemable convertible preferred stock due to certain redemption rights provided for by the Certificate of Designation for the Series C Preferred. The redemption rights expired in connection with the Company obtaining the affirmative stockholder vote on the Conversion Proposal (defined below) in September 2024. Immediately following the stockholder vote, any outstanding shares of Series C Preferred not converted were reclassified as permanent equity within the Company’s consolidated balance sheet.

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Recently Issued but not yet Adopted Accounting Pronouncements

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In December 2023, the Financial Accounting Standards Board (the “FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which expands the disclosure required for income taxes. This ASU is effective for fiscal years beginning after December 16, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this ASU on its disclosures.

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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 is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2)

retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.