NOTE 2 – RESEARCH AND DEVELOPMENT ACTIVITY

According to Australian tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in Australia for expenses incurred in R&D subject to certain requirements. The Company’s Australian subsidiary submits R&D tax credit requests annually for research and development expenses incurred. At June 30, 2026 and December 31, 2025, the Company recorded a research and development tax credit receivable of $4,080,000 and $3,897,000, respectively, for R&D expenses incurred in Australia. During the six months ended June 30, 2026, the Company received approximately $3.6 million in tax credit reimbursements from Australia. During July 2026, the Company received an additional $4.2 million in tax credit reimbursements from Australia.

According to UK tax law, the Company is allowed an R&D tax credit that reduces a company’s tax bill in the UK for expenses incurred in R&D subject to certain requirements. At June 30, 2026 and December 31, 2025, the Company had a research and development tax credit receivable of $333,000 and $387,000, respectively, for R&D expenses incurred in the UK. During the six months ended June 30, 2026, the Company received approximately $0.8 million in tax credit reimbursements from the UK.

CORDStrom License Agreement 

During February 2025, the Company and Great Ormond Street Hospital for Children NHS Foundation Trust (“GOSH”) entered into a license agreement for the exclusive commercial use to clinical trial data associated with a GOSH study investigating the potential of CORDStrom to treat RDEB in pediatric patients (the “MissionEB study”). The Company owns the intellectual property covering CORDStrom, the investigational medicinal product used in the MissionEB study. In addition, the Company owns intellectual property and maintains trade secret protections covering the manufacturing of CORDStrom. With this license to the clinical trial data, the Company intends to prepare applications seeking regulatory approval of CORDStrom for treatment of pediatric RDEB from the FDA, EMA, and MHRA. Terms of the license agreement include a milestone payment of up to £6,000,000 (approximately $8.0 million as of June 30, 2026) due on the first to occur marketing authorization to be granted by the FDA, EMA or MHRA, which had not occurred as of June 30, 2026.

Under the license agreement, the Company was previously obligated to provide CORDStrom for use in the MissionEB clinical study at no cost. During February 2026, the MissionEB study was formally closed, and the Company’s obligation to supply CORDStrom in connection with that study has terminated in accordance with the terms of the license agreement. As a result, the Company has no remaining contractual product supply obligations related to the MissionEB study under the license agreement.

Xencor, Inc. License Agreement

During October 2017, the Company entered into a license agreement with Xencor, Inc., as amended. Under the agreement, the Company obtained an exclusive, worldwide, royalty-bearing license to develop and commercialize products incorporating Xencor’s XPro protein technology targeting soluble tumor necrosis factor.

The Company is obligated to pay a 5% royalty on net sales of licensed products on a country-by-country and product-by-product basis for the later of the patent term or ten years following first commercial sale.

INKmune License Agreement

The Company is party to a license agreement with Immune Ventures, LLC (“Immune Ventures”), a related party, under which it obtained exclusive worldwide rights to certain intellectual property. The agreement provides for milestone payments upon the achievement of specified development and regulatory events and a 1% royalty on future net sales. No sales have occurred under the license.

As of June 30, 2026 and December 31, 2025, the Company recorded a $25,000 milestone payable to Immune Ventures, which is included in accounts payable and accrued liabilities – related parties.