Summary of Significant Accounting Policies

Use of Estimates

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.

Segment Information

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 operating segment. The Company’s chief operating decision maker (“CODM”) is the 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.

Significant Accounting Policies

Significant Accounting Policies

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.

Impairment of Definite Lived Intangible Assets

Impairment of Definite Lived Intangible Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds its estimated undiscounted net cash flows, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in an estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the asset. No impairment losses were recorded for the three and six months ended June 30, 2026 or 2025.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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:

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

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

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

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.

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


	Fair value measurement at reporting date using
June 30, 2026	(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents - money market funds	$	3,905,000	$	-	$	-
Liabilities:
Warrant liabilities - Series A Warrants	$	-	$	-	$	44,000

December 31, 2025
Assets:
Cash and cash equivalents - money market funds	$	2,927,000	$	-	$	-
Liabilities:
Warrant liabilities - Series A Warrants	$	-	$	-	$	100,000

On December 29, 2024, the Company entered into a Securities Purchase Agreement with several investors 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:


	June 30, 2026	December 31, 2025
Expected term of warrants (years)	1.5 years	2 years
Risk-free interest rate	3.7%	3.5%
Expected volatility	132.1%	121.8%
Dividend yield	$ -	$ -

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, 2026, is as follows:


Balance, December 31, 2025	$	100,000
Change in fair value of Series A Warrants		159,000
Balance, March 31, 2026		259,000
Change in fair value of Series A Warrants		(215,000)
Balance, June 30, 2026	$	44,000

Net (loss) income per share

Net (loss) income per share

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. (Losses) income 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 (loss) income 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.

For the three and six months ended June 30, 2026, and 2025, the components of basic and diluted net (loss) income per share were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Numerator:
Net (loss) income	$	(3,054,000)	$	(915,000)	$	(10,161,000)	$	20,575,000

Net (loss) income attributable to common stockholders	$	(2,611,000)	$	(625,000)	$	(8,446,000)	$	14,860,000
Net (loss) income attributable to Series C Preferred stockholders	$	(443,000)	$	(290,000)	$	(1,715,000)	$	5,715,000

Denominator:
Weighted-average shares of common stock outstanding, basic		15,864,041		5,820,903		13,266,763		7,359,825
Restricted stock units		-		-		-		2,825
Stock options		-		-		-		251,675
Weighted-average shares of common stock outstanding, diluted		15,864,041		5,820,903		13,266,763		7,614,325

Net (loss) income per share of common stock, basic	$	(0.16)	$	(0.11)	$	(0.64)	$	2.02
Net (loss) income per share of common stock, diluted	$	(0.16)	$	(0.11)	$	(0.64)	$	1.95

Weighted-average shares of Series C Preferred outstanding, basic and diluted		6,737		6,759		6,737		7,077
Net (loss) income per share of Series C Preferred, basic and diluted	$	(65.76)	$	(42.91)	$	(254.56)	$	807.55

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:


	June 30,
	2026	2025
Warrants	33,833,844	3,919,589
Stock Options	2,037,911	299,784
Unvested restricted stock units	146,450	22,690
Series C Preferred (assumed conversion to common stock)	2,694,900	2,694,900
	38,713,105	6,936,963