9. Financing

June 2026 Private Placement

In June 2026, the Company issued in a private placement offering (the “June 2026 Private Placement") pursuant to a securities purchase agreement (i) pre-funded warrants (the "June 2026 Pre-Funded Warrants") to purchase up to 3,883,496 shares of common stock of the Company, (ii) Series A-1 preferred investment options (the “Series A-1 Investment Options”) to purchase up to a total of 3,883,496 shares of common stock, and (iii) Series A-2 preferred investment options (the “Series A-2 Investment Options” and together with the Series A-1 Investment Options, the “June 2026 Options”) to purchase up to a total of 3,883,496 shares of common stock, and raised total gross proceeds of $4.0 million. Each Pre-Funded Warrant sold in the June 2026 Private Placement is exercisable for one share of common stock at an exercise price of $0.0001 per share, is immediately exercisable, and will not expire until fully exercised. The Series A-1 Investment Options have an exercise price of $0.91 per share, will be exercisable on and after the Stockholder Approval Date and will expire five years after the Stockholder Approval Date. The Series A-2 Investment Options are exercisable immediately upon issuance, will expire 24 months following the effective date of the registration statement filed by the Company to register the resale of the common stock issuable upon exercise of the June 2026 Pre-Funded Warrants and June 2026 Options, which was declared effective on July 8, 2026, and have an exercise price of $0.91 per share. In addition, the Company granted to a placement agent preferred investment options (the “June 2026 Placement Agent Options”) to purchase 271,845 shares of common stock. The June 2026 Placement Agent Options have substantially the same terms as the Series A-1 Investment Options with the exception of an exercise price of $1.2875.

Under the terms of the Pre-Funded Warrants, Investment Options and Placement Agent Investment Options, a holder (together with its affiliates) may not exercise any portion of the Pre-Funded Warrant, Investment Option or Placement Agent Investment Option (as applicable) to the extent that the holder would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding common stock immediately after exercise, which percentage may be changed at the holder’s election to a lower percentage at any time or to a higher percentage not to exceed 9.99%, provided that any such increase shall be effective upon 61 days’ prior notice to the Company.

The June 2026 Options and June 2026 Placement Agent Options are classified as liabilities within Level 3 due to certain early settlement provisions that preclude them from equity classification. The Company utilized the Black-Scholes Model on June 12, 2026, the closing date of the June 2026 Private Placement, with the following assumptions for the Series A-1 Investment Options: volatility of 93.74%, stock price of $1.03 and risk-free rate of 4.23%. The following assumptions were utilized for the Series A-2 Investment Options: volatility of 103.68%, stock price of $1.03 and risk-free rate of 4.09%. The estimated fair value of the liability-classified June 2026 Options issued was $5.4 million. The estimated fair value of June 2026 Options was subsequently remeasured at June 30, 2026 with the changes recorded on the Company’s condensed consolidated statements of operations and comprehensive loss.

The estimated fair value of the June 2026 Pre-Funded Warrants was $4.0 million. The total estimated fair value of the June 2026 Pre-Funded Warrants and June 2026 Options as of June 12, 2026 exceeded the gross proceeds of the June 2026 Private Placement by $5.4 million and this amount was recognized in Valuation loss on June 2026 PIPE on the condensed consolidated statements of operations and comprehensive loss.

The June 2026 Placement Agent Options were issued for services performed by the placement agent as part of the June 2026 Private Placement and were treated as offering costs. The value of the June 2026 Placement Agent Options was $201,000, calculated using the Black-Scholes Model. The Company incurred additional offering costs totaling $450,000 that consist of direct incremental legal, advisory, accounting and filing fees relating to the June 2026 Private Placement. All offering costs were allocated to the liability classified options and expensed.

January 2026 Inducement Offer

In January 2026, the Company entered into inducement offer letter agreements (the “Inducement Letters”) with certain investors (the “Participating Holders”) pursuant to which such Participating Holders agreed to exercise certain outstanding warrants and preferred investment options covering an aggregate of 808,595 shares of the Company’s common stock and/or Abeyance Shares (the transactions contemplated by the Inducement Letters, the “Inducement Offer”). The warrants and preferred investment options subject to the Inducement Letters had an exercise price of $9.00 per share and were originally issued in December 2020, January 2021, August 2022, and March 2023 (the “Existing Warrants and Options”). Pursuant to the terms of the Existing Warrants and Options, if exercise of the Existing Warrants and Options would have otherwise caused a Participating Holder to exceed the beneficial ownership limitations set forth in the Participating Holder's Existing Warrants and Options (4.99% or 9.99%, as applicable), as determined by the holder, the Company agreed to hold such holder's balance of exercised shares in abeyance (the "Abeyance Shares") until the Company received notice from the holder that the balance of shares may be issued in compliance with such beneficial ownership limitations (with such Abeyance Shares evidenced through the holder's existing warrants and options, and deemed prepaid).

Pursuant to the Inducement Letters, the Participating Holders agreed to exercise for cash the Existing Warrants and Options at a reduced exercise price of $2.575 per share, in consideration for the Company’s agreement to issue new unregistered preferred investment options (the “New Options”) to purchase up to 1,617,190 shares of common stock. The New Options have an exercise price of $2.325 per share, are exercisable immediately upon issuance, and expire on the date that is 30 months following the effective date of the Resale Registration Statement described below (the “Option Termination Date”). In addition, the Company granted to a placement agent preferred investment options (the “January 2026 Placement Agent Options”) to purchase 56,602 shares of common stock. The January 2026 Placement Agent Options have substantially the same terms as the New Options with the exception of an exercise price of $3.2188 per share, and have a term expiring on the Option Termination Date. The modification of the Existing Warrants and Options resulted in an increase in fair value of $555,000, of which $540,000 of the increase in fair value was related to the March 2023 and August 2022 liability classified options. The increase in fair value related to the modification of the Existing Warrants and Options was recognized in Loss on January 2026 Inducement Offer on the condensed consolidated statements of operations and comprehensive loss.

The New Options and January 2026 Placement Agent Options are classified as liabilities within Level 3 due to certain early settlement provisions that preclude them from equity classification. The Company utilized the Black-Scholes Model with the following assumptions to determine initial fair value: volatility of 98.04%, stock price of $2.43, risk-free rate of 3.57%, expected term of 2.5 years. The fair value of the New Options of $2.3 million was recognized in Loss on January 2026 Inducement Offer on the condensed consolidated statements of operations and comprehensive loss given that it was issued in connection with the induced exercise of the Existing Warrants and Options.

The January 2026 Placement Agent Options were issued for services performed by the placement agent as part of the January 2026 Inducement Offer and were treated as offering costs. The value of the January 2026 Placement Agent Options was $71,000, calculated using the Black-Scholes Model. The Company incurred additional offering costs totaling $350,000 that consist of direct incremental legal, advisory, accounting and filing fees relating to the January 2026 Inducement Offer. All offering costs were expensed as of the issuance date.