{"url_path":"/sec/scyx/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements.","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-11","source_url":"https://www.sec.gov/Archives/edgar/data/1178253/0001178253-26-000011-index.html","accession_number":"0001178253-26-000011","cik":"0001178253","ticker":"SCYX","issuer_name":"SCYNEXIS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1178253/0001178253-26-000011-index.html","primary_entity_key":"0001178253","primary_entity_name":"SCYNEXIS INC"},"word_count":6791,"has_tables":true,"body_markdown":"Item 1. Financial Statements.\n\nSCYNEXIS, INC.\n\nUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS\n\n(in thousands, except share and per share data)\n\n \n\n \n\nMarch 31, 2026\n\n \n\n \n\nDecember 31, 2025\n\n \n\nAssets\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n36,671\n\n \n\n \n\n$\n\n21,259\n\n \n\nShort-term investments\n\n \n\n \n\n22,592\n\n \n\n \n\n \n\n18,772\n\n \n\nPrepaid expenses and other current assets\n\n \n\n \n\n919\n\n \n\n \n\n \n\n263\n\n \n\nRestricted cash\n\n \n\n \n\n80\n\n \n\n \n\n \n\n80\n\n \n\nDeferred offering costs\n\n \n\n \n\n2,429\n\n \n\n \n\n \n\n—\n\n \n\nTotal current assets\n\n \n\n \n\n62,691\n\n \n\n \n\n \n\n40,374\n\n \n\nInvestments\n\n \n\n \n\n13,153\n\n \n\n \n\n \n\n16,247\n\n \n\nDeferred offering costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n533\n\n \n\nRestricted cash\n\n \n\n \n\n109\n\n \n\n \n\n \n\n109\n\n \n\nOperating lease right-of-use asset\n\n \n\n \n\n1,673\n\n \n\n \n\n \n\n1,764\n\n \n\nTotal assets\n\n \n\n$\n\n77,626\n\n \n\n \n\n$\n\n59,027\n\n \n\nLiabilities and stockholders’ equity\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable\n\n \n\n$\n\n5,632\n\n \n\n \n\n$\n\n2,225\n\n \n\nAccrued expenses\n\n \n\n \n\n1,529\n\n \n\n \n\n \n\n2,791\n\n \n\nAsset Purchase Agreement payable (Note 10)\n\n \n\n \n\n8,000\n\n \n\n \n\n \n\n—\n\n \n\nDeferred revenue\n\n \n\n \n\n235\n\n \n\n \n\n \n\n235\n\n \n\nOperating lease liability, current portion\n\n \n\n \n\n504\n\n \n\n \n\n \n\n483\n\n \n\nTotal current liabilities\n\n \n\n \n\n15,900\n\n \n\n \n\n \n\n5,734\n\n \n\nWarrant liabilities\n\n \n\n \n\n18,862\n\n \n\n \n\n \n\n2,225\n\n \n\nOperating lease liability\n\n \n\n \n\n1,557\n\n \n\n \n\n \n\n1,692\n\n \n\nTotal liabilities\n\n \n\n \n\n36,319\n\n \n\n \n\n \n\n9,651\n\n \n\nCommitments and contingencies\n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders’ equity:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock, $0.001 par value, authorized 5,000,000 shares as of March 31, 2026 and December 31, 2025; 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nCommon stock, $0.001 par value, 150,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 62,051,330 and 43,541,510 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n\n \n\n \n\n64\n\n \n\n \n\n \n\n46\n\n \n\nAdditional paid-in capital\n\n \n\n \n\n447,686\n\n \n\n \n\n \n\n434,474\n\n \n\nAccumulated deficit\n\n \n\n \n\n(406,443\n\n)\n\n \n\n \n\n(385,144\n\n)\n\nTotal stockholders’ equity\n\n \n\n \n\n41,307\n\n \n\n \n\n \n\n49,376\n\n \n\nTotal liabilities and stockholders’ equity\n\n \n\n$\n\n77,626\n\n \n\n \n\n$\n\n59,027\n\n \n\nThe accompanying notes are an integral part of the financial statements.\n\n1\n\n[Table of Contents](#toc_page)\n\n \n\nSCYNEXIS, INC.\n\nUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS\n\n(in thousands, except share and per share data)\n\n \n\n \n\nThree Months Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nLicense agreement revenue\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n257\n\n \n\nOperating expenses:\n\n \n\n \n\n \n\n \n\n \n\n \n\nResearch and development\n\n \n\n \n\n12,351\n\n \n\n \n\n \n\n5,141\n\n \n\nSelling, general and administrative\n\n \n\n \n\n4,588\n\n \n\n \n\n \n\n3,726\n\n \n\nTotal operating expenses\n\n \n\n \n\n16,939\n\n \n\n \n\n \n\n8,867\n\n \n\nLoss from operations\n\n \n\n \n\n(16,939\n\n)\n\n \n\n \n\n(8,610\n\n)\n\nOther (income) expense:\n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of debt issuance costs and discount\n\n \n\n \n\n—\n\n \n\n \n\n \n\n312\n\n \n\nInterest income\n\n \n\n \n\n(535\n\n)\n\n \n\n \n\n(776\n\n)\n\nInterest expense\n\n \n\n \n\n—\n\n \n\n \n\n \n\n173\n\n \n\nOther income\n\n \n\n \n\n(354\n\n)\n\n \n\n \n\n—\n\n \n\nWarrant liabilities fair value adjustment\n\n \n\n \n\n5,249\n\n \n\n \n\n \n\n(2,928\n\n)\n\nTotal other expense (income)\n\n \n\n \n\n4,360\n\n \n\n \n\n \n\n(3,219\n\n)\n\nNet loss\n\n \n\n$\n\n(21,299\n\n)\n\n \n\n$\n\n(5,391\n\n)\n\nNet loss per share – basic and diluted\n\n \n\n$\n\n(0.42\n\n)\n\n \n\n$\n\n(0.11\n\n)\n\nWeighted average common shares outstanding – basic and diluted\n\n \n\n \n\n50,957,191\n\n \n\n \n\n \n\n49,435,500\n\n \n\nThe accompanying notes are an integral part of the financial statements.\n\n2\n\n[Table of Contents](#toc_page)\n\n \n\nSCYNEXIS, INC.\n\nUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(in thousands)\n\n \n\n \n\nThree Months Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nCash flows from operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nNet loss\n\n \n\n$\n\n(21,299\n\n)\n\n \n\n$\n\n(5,391\n\n)\n\nAdjustments to reconcile net loss to net cash used in operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nStock-based compensation expense\n\n \n\n \n\n580\n\n \n\n \n\n \n\n819\n\n \n\nAccretion of investments discount\n\n \n\n \n\n(41\n\n)\n\n \n\n \n\n(199\n\n)\n\nAmortization of debt issuance costs and discount\n\n \n\n \n\n—\n\n \n\n \n\n \n\n312\n\n \n\nChange in fair value of warrant liabilities\n\n \n\n \n\n5,249\n\n \n\n \n\n \n\n(2,928\n\n)\n\nNoncash operating lease expense for right-of-use asset\n\n \n\n \n\n91\n\n \n\n \n\n \n\n77\n\n \n\nOffering costs for March 2026 Private Placement warrant issuance\n\n \n\n \n\n755\n\n \n\n \n\n \n\n—\n\n \n\nChanges in operating assets and liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPrepaid expenses, other current assets, deferred costs, and other\n\n \n\n \n\n(816\n\n)\n\n \n\n \n\n765\n\n \n\nLicense agreement receivable\n\n \n\n \n\n—\n\n \n\n \n\n \n\n537\n\n \n\nAccounts payable\n\n \n\n \n\n906\n\n \n\n \n\n \n\n(199\n\n)\n\nAccrued expenses\n\n \n\n \n\n(1,412\n\n)\n\n \n\n \n\n(1,163\n\n)\n\nAsset Purchase Agreement payable\n\n \n\n \n\n8,000\n\n \n\n \n\n \n\n—\n\n \n\nOther liabilities\n\n \n\n \n\n(114\n\n)\n\n \n\n \n\n(95\n\n)\n\nNet cash used in operating activities\n\n \n\n \n\n(8,101\n\n)\n\n \n\n \n\n(7,465\n\n)\n\nCash flows from investing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchase of investments\n\n \n\n \n\n(3,275\n\n)\n\n \n\n \n\n—\n\n \n\nMaturity of investments\n\n \n\n \n\n2,750\n\n \n\n \n\n \n\n12,440\n\n \n\nNet cash (used in) provided by investing activities\n\n \n\n \n\n(525\n\n)\n\n \n\n \n\n12,440\n\n \n\nCash flows from financing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from common stock and prefunded warrants from March 2026 Private Placement (Note 12)\n\n \n\n \n\n24,020\n\n \n\n \n\n \n\n—\n\n \n\nProceeds from common stock issued for restricted stock units\n\n \n\n \n\n1\n\n \n\n \n\n \n\n—\n\n \n\nPayment of convertible debt\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(14,000\n\n)\n\nPayment of deferred offering costs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(110\n\n)\n\nProceeds from employee stock purchase plan issuances\n\n \n\n \n\n17\n\n \n\n \n\n \n\n26\n\n \n\nNet cash provided by (used in) financing activities\n\n \n\n \n\n24,038\n\n \n\n \n\n \n\n(14,084\n\n)\n\nNet increase (decrease) in cash, cash equivalents, and restricted cash\n\n \n\n \n\n15,412\n\n \n\n \n\n \n\n(9,109\n\n)\n\nCash, cash equivalents, and restricted cash at beginning of period\n\n \n\n \n\n21,448\n\n \n\n \n\n \n\n16,595\n\n \n\nCash, cash equivalents, and restricted cash at end of period\n\n \n\n$\n\n36,860\n\n \n\n \n\n$\n\n7,486\n\n \n\nSupplemental cash flow information:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash paid for interest\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n420\n\n \n\nCash received for interest\n\n \n\n$\n\n316\n\n \n\n \n\n$\n\n625\n\n \n\nNoncash financing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nDeferred offering costs included in accounts payable and accrued expenses\n\n \n\n$\n\n2,651\n\n \n\n \n\n$\n\n—\n\n \n\nWarrant liability recognized for March 2026 Private Placement\n\n \n\n$\n\n4,553\n\n \n\n \n\n$\n\n—\n\n \n\n \n\nThe accompanying notes are an integral part of the financial statements.\n\n3\n\n[Table of Contents](#toc_page)\n\n \n\nSCYNEXIS, INC.\n\nNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\n(unaudited)\n\n1. Description of Business and Basis of Preparation\n\nOrganization\n\nSCYNEXIS, Inc. (\"SCYNEXIS\" or the “Company”) is a clinical-stage biotech company dedicated to advancing innovative solutions for severe rare diseases. The Company has acquired SCY-770, a novel, highly selective, direct AMP-activated protein kinase (“AMPK”) activator, for the treatment of Autosomal Dominant Polycystic Kidney Disease (\"ADPKD\"), a progressive inherited kidney disorder characterized by the development and enlargement of fluid-filled renal cysts, progressive loss of kidney function and an increased risk of end-stage kidney disease. SCY-770 has been granted Orphan Drug Designation by the U.S. Food and Drug Administration (\"FDA\") and is designed to address many of the underlying drivers of ADPKD by reducing cyst growth and disease progression.\n\nThe Company's proprietary antifungal platform “fungerps” includes BREXAFEMME® (ibrexafungerp tablets), the first approved representative of this novel class, which was licensed to GlaxoSmithKline Intellectual Property (No. 3) Limited (\"GSK\") in May 2023, and SCY-247, currently in clinical stages of development. Ibrexafungerp was approved by the FDA as BREXAFEMME for the treatment of patients with vulvovaginal candidiasis in 2021 and for the reduction in the incidence of recurrent vulvovaginal candidiasis in 2022. The Company owns 100% of the rights to SCY-247, as well as additional fungerp compounds in preclinical and discovery stages of development. The FDA has granted Qualified Infectious Disease Product status, Fast Track, and Orphan Drug designations for the oral formulation of SCY-247.\n\nThe Company had an accumulated deficit of $406.4 million at March 31, 2026. The Company's capital resources primarily comprised cash and cash equivalents and investments of $72.4 million at March 31, 2026. While the Company believes its capital resources are sufficient to fund the Company’s on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements, the Company's liquidity could be materially affected over this period by: (1) its ability to raise additional capital through equity offerings, debt financings, or other non-dilutive third-party funding; (2) costs associated with new strategic alliances, or new and existing licensing and collaboration arrangements; (3) negative regulatory events or unanticipated costs related to its development of SCY-770 and SCY-247; and (4) any other unanticipated material negative events or costs. One or more of these events or costs could materially affect the Company’s liquidity. If the Company is unable to meet its obligations when they become due, the Company may have to delay expenditures, reduce the scope of its research and development programs, or make significant changes to its operating plan. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.\n\nThe unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany balances and transactions are eliminated in consolidation.\n\nNasdaq Minimum Bid Price Notification\n\nOn June 20, 2025, the Company received a letter from the Listing Qualifications Department staff (the \"Staff\") of the Nasdaq notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company's common stock was below the $1.00 per share minimum required for continued listing on the Nasdaq Global Market as set forth in Nasdaq Listing Rule 5450(a)(1). The letter from Nasdaq had no immediate effect on the listing of the Company's common stock on the Nasdaq Global Market.\n\nIn accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days from June 20, 2025, or until December 17, 2025, to regain compliance with the minimum bid price rule. In December 2025, the Company announced that it had received an additional 180-calendar-day extension from the Nasdaq to regain compliance with the minimum bid price requirement, as outlined in Nasdaq Listing Rule 5550(a)(2).\n\nThe Company now has until June 15, 2026, to meet the requirement for the Company's shares of common stock to maintain a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days, subject to Nasdaq's discretion to require up to twenty consecutive business days. Nasdaq granted the extension after determining that the Company continues to meet all other continued listing criteria for the Nasdaq Capital Market, including the market value of publicly held shares, and the Company has provided written notice of its intention to cure the deficiency within the extension period, if necessary, through a reverse stock split.\n\n4\n\n[Table of Contents](#toc_page)\n\n \n\nUse of Estimates\n\nThe preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and judgments include: determination of the fair value of stock-based compensation grants; the estimate of services and effort expended by third-party research and development service providers used to recognize research and development expense; and the estimates and assumptions utilized in measuring the fair value of the warrant liabilities each reporting period.\n\nUnaudited Condensed Consolidated Financial Information\n\nThe accompanying unaudited condensed consolidated financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”), as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, and cash flows. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results for the full year or the results for any future periods. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes set forth in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 4, 2026.\n\n2. Summary of Significant Accounting Policies\n\nThe accompanying unaudited condensed consolidated financial statements and notes follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2025, except as described below.\n\nAcquired In-Process Research and Development\n\nAcquired in-process research and development (\"IPR&D\") includes upfront payments and development milestones incurred related to external IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use. Development milestones are milestone payment obligations that are incurred prior to regulatory approval of a compound and are expensed as research and development when the event triggering an obligation to pay the milestone occurs.\n\nBasic and Diluted Net Loss per Share of Common Stock\n\nThe Company calculates net loss per common share in accordance with ASC 260, Earnings Per Share. Basic net loss per common share for the three months ended March 31, 2026 and 2025 was determined by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Per ASC 260, Earnings Per Share, the weighted average number of common shares outstanding utilized for determining the basic net loss per common share for the three months ended March 31, 2026 and 2025 includes the outstanding pre-funded warrants to purchase 3,189,815 and 3,200,000 shares of common stock issued in the April 2022 public offering and December 2020 public offering, respectively. Additionally, the weighted average common shares outstanding for the three months ended March 31, 2026 includes 17,358,697 shares of the Company’s common stock and pre-funded warrants to purchase up to 8,750,000 shares of common stock sold in the March 2026 Private Placement (see Note 7 and Note 12).\n\nThe following potentially dilutive shares of common stock have not been included in the computation of diluted net loss per share for the three months ended March 31, 2026 and 2025, as the result would be anti-dilutive:\n\n \n\nThree Months Ended March 31,\n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nOutstanding stock options\n\n \n\n3,519,408\n\n \n\n \n\n \n\n3,542,328\n\n \n\nOutstanding restricted stock units\n\n \n\n3,732,599\n\n \n\n \n\n \n\n3,428,750\n\n \n\nWarrants to purchase common stock associated with the April 2022 public offering\n\n \n\n15,000,000\n\n \n\n \n\n \n\n15,000,000\n\n \n\nWarrants to purchase common stock associated with the March 2026 Private Placement\n\n \n\n43,500,000\n\n \n\n \n\n \n\n—\n\n \n\nWarrants to purchase common stock associated with loan agreement\n\n \n\n198,811\n\n \n\n \n\n \n\n198,811\n\n \n\nWarrants to purchase common stock associated with Danforth\n\n \n\n50,000\n\n \n\n \n\n \n\n50,000\n\n \n\nTotal\n\n \n\n66,000,818\n\n \n\n \n\n \n\n22,219,889\n\n \n\nRecently Issued Accounting Pronouncements\n\n5\n\n[Table of Contents](#toc_page)\n\n \n\nIn December 2025, the FASB issued ASU No. 2025-12, Codification Improvements, which introduced new guidance on improvements to several topics within the codification. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2026. The Company is currently evaluating the impact ASU 2025-12 will have on its consolidated financial statements.\n\nIn November 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which introduced new guidance on disclosures to provide clarity about the current requirements for interim reporting. This guidance is effective for the Company for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact ASU 2025-11 will have on its consolidated financial statements.\n\nIn October 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which introduced authoritative guidance on the accounting for government grants received by business entities. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact ASU 2025-10 will have on its consolidated financial statements.\n\nIn November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses, which introduced new guidance on disclosures for specified costs and expenses. This guidance is effective for the Company for annual reporting periods beginning January 1, 2027. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statements.\n\n3. Investments\n\nThe following table summarizes the investments at March 31, 2026 (in thousands):\n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nUnrealized\nGains\n\n \n\n \n\nUnrealized\nLosses\n\n \n\n \n\nFair Value\n\n \n\nAs of March 31, 2026\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMaturities < 1 Year\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bonds\n\n \n\n$\n\n21,607\n\n \n\n \n\n$\n\n3\n\n \n\n \n\n$\n\n(18\n\n)\n\n \n\n$\n\n21,592\n\n \n\nU.S. treasury bill\n\n \n\n \n\n985\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n985\n\n \n\nTotal short-term investments\n\n \n\n$\n\n22,592\n\n \n\n \n\n$\n\n3\n\n \n\n \n\n$\n\n(18\n\n)\n\n \n\n$\n\n22,577\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMaturities > 1 Year\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bonds\n\n \n\n$\n\n13,153\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(66\n\n)\n\n \n\n$\n\n13,087\n\n \n\nTotal investments\n\n \n\n$\n\n13,153\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n(66\n\n)\n\n \n\n$\n\n13,087\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAs of December 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMaturities < 1 Year\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bonds\n\n \n\n$\n\n18,772\n\n \n\n \n\n$\n\n19\n\n \n\n \n\n$\n\n(3\n\n)\n\n \n\n$\n\n18,788\n\n \n\nTotal short-term investments\n\n \n\n$\n\n18,772\n\n \n\n \n\n$\n\n19\n\n \n\n \n\n$\n\n(3\n\n)\n\n \n\n$\n\n18,788\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMaturities > 1 Year\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCorporate bonds\n\n \n\n$\n\n16,247\n\n \n\n \n\n$\n\n3\n\n \n\n \n\n$\n\n(11\n\n)\n\n \n\n$\n\n16,239\n\n \n\nTotal investments\n\n \n\n$\n\n16,247\n\n \n\n \n\n$\n\n3\n\n \n\n \n\n$\n\n(11\n\n)\n\n \n\n$\n\n16,239\n\n \n\nThe Company carries investments at amortized cost. As of March 31, 2026 and December 31, 2025, the fair value of the corporate bonds and U.S. treasury bill totals $35.7 million and $35.0 million, respectively, which is determined based on “Level 2” inputs, which consist of quoted prices for similar assets in active markets. The Company has evaluated the unrealized loss position in the corporate and agency bonds as of the balance sheet dates and did not consider it to be indicative of an other-than-temporary impairment as the securities are highly-rated and the Company expects to realize the full principal amount at maturity. As of March 31, 2026, the corporate bonds maintain credit ratings of A- and higher.\n\n4. Prepaid Expenses and Other Current Assets\n\nPrepaid expenses and other current assets consisted of the following (in thousands):\n\n \n\n \n\nMarch 31, 2026\n\n \n\n \n\nDecember 31, 2025\n\n \n\nPrepaid insurance\n\n \n\n$\n\n203\n\n \n\n \n\n$\n\n141\n\n \n\nOther prepaid expenses\n\n \n\n \n\n147\n\n \n\n \n\n \n\n105\n\n \n\nOther current assets\n\n \n\n \n\n569\n\n \n\n \n\n \n\n17\n\n \n\nTotal prepaid expenses and other current assets\n\n \n\n$\n\n919\n\n \n\n \n\n$\n\n263\n\n \n\n \n\n6\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n5. Accrued Expenses\n\nAccrued expenses consisted of the following (in thousands):\n\n \n\n \n\n \n\nMarch 31, 2026\n\n \n\n \n\nDecember 31, 2025\n\n \n\nAccrued research and development expenses\n\n \n\n$\n\n300\n\n \n\n \n\n$\n\n806\n\n \n\nAccrued employee bonus compensation\n\n \n\n \n\n420\n\n \n\n \n\n \n\n1,507\n\n \n\nOther accrued expenses\n\n \n\n \n\n809\n\n \n\n \n\n \n\n478\n\n \n\nTotal accrued expenses\n\n \n\n$\n\n1,529\n\n \n\n \n\n$\n\n2,791\n\n \n\n \n\n6. Borrowings\n\nMarch 2019 Note Purchase Agreement\n\nOn March 7, 2019, the Company entered into a Senior Convertible Note Purchase Agreement (the “March 2019 Note Purchase Agreement”) with Puissance Life Science Opportunities Fund VI (\"Puissance\"). Pursuant to the March 2019 Note Purchase Agreement, on March 7, 2019, the Company issued and sold to Puissance $16.0 million aggregate principal amount of its 6.0% Senior Convertible Notes due 2025 (“March 2019 Notes”), resulting in $14.7 million in net proceeds after deducting $1.3 million for an advisory fee and other issuance costs. In April 2019, Puissance converted $2.0 million of the March 2019 Notes for 162,600 shares of common stock. The March 2019 Notes matured on March 15, 2025 and the Company repaid the $14.0 million due to Puissance.\n\n7. Stockholders’ Equity\n\nAuthorized, Issued, and Outstanding Common Stock\n\nThe Company’s authorized common stock has a par value of $0.001 per share and consists of 150,000,000 shares as of March 31, 2026, and December 31, 2025; 62,051,330 and 43,541,510 shares were issued and outstanding at March 31, 2026 and December 31, 2025, respectively. See Note 12 for further details on the March 2026 Private Placement.\n\n7\n\n[Table of Contents](#toc_page)\n\n \n\nThe following table summarizes common stock share activity for the three months ended March 31, 2026 and 2025 (dollars in thousands):\n\n \n\n \n\nThree Months Ended March 31, 2026\n\n \n\n \n\n \n\nShares of\nCommon Stock\n\n \n\n \n\nCommon\nStock\n\n \n\n \n\nAdditional\nPaid-in\nCapital\n\n \n\n \n\nAccumulated\nDeficit\n\n \n\n \n\nTotal\nStockholders’ Equity\n\n \n\nBalance, December 31, 2025\n\n \n\n \n\n43,541,510\n\n \n\n \n\n$\n\n46\n\n \n\n \n\n$\n\n434,474\n\n \n\n \n\n$\n\n(385,144\n\n)\n\n \n\n$\n\n49,376\n\n \n\nNet loss\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(21,299\n\n)\n\n \n\n \n\n(21,299\n\n)\n\nStock-based compensation expense\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n580\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n580\n\n \n\nCommon stock issued through employee stock purchase plan\n\n \n\n \n\n28,801\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n17\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n17\n\n \n\nCommon stock issued for restricted stock units\n\n \n\n \n\n1,122,322\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1\n\n \n\nCommon stock issued for Shares\n\n \n\n \n\n17,358,697\n\n \n\n \n\n \n\n17\n\n \n\n \n\n \n\n11,410\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n11,427\n\n \n\nProceeds allocated for Pre-Funded Warrants\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n5,758\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n5,758\n\n \n\nProceeds allocated for Shares issued in April 2026\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n11,446\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n11,446\n\n \n\nReceivable for March 2026 Private Placement proceeds\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(15,999\n\n)\n\n \n\n \n\n—\n\n \n\n \n\n \n\n(15,999\n\n)\n\nBalance, March 31, 2026\n\n \n\n \n\n62,051,330\n\n \n\n \n\n$\n\n64\n\n \n\n \n\n$\n\n447,686\n\n \n\n \n\n$\n\n(406,443\n\n)\n\n \n\n$\n\n41,307\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nThree Months Ended March 31, 2025\n\n \n\n \n\n \n\nShares of\nCommon Stock\n\n \n\n \n\nCommon\nStock\n\n \n\n \n\nAdditional\nPaid-in\nCapital\n\n \n\n \n\nAccumulated\nDeficit\n\n \n\n \n\nTotal\nStockholders’ Equity\n\n \n\nBalance, December 31, 2024\n\n \n\n \n\n37,973,991\n\n \n\n \n\n$\n\n41\n\n \n\n \n\n$\n\n431,571\n\n \n\n \n\n$\n\n(376,535\n\n)\n\n \n\n$\n\n55,077\n\n \n\nNet loss\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n(5,391\n\n)\n\n \n\n \n\n(5,391\n\n)\n\nStock-based compensation expense\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n819\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n819\n\n \n\nCommon stock issued through employee stock purchase plan\n\n \n\n \n\n31,710\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n26\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n26\n\n \n\nCommon stock issued for vested restricted stock units\n\n \n\n \n\n1,014,573\n\n \n\n \n\n \n\n1\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n1\n\n \n\nBalance, March 31, 2025\n\n \n\n \n\n39,020,274\n\n \n\n \n\n$\n\n42\n\n \n\n \n\n$\n\n432,416\n\n \n\n \n\n$\n\n(381,926\n\n)\n\n \n\n$\n\n50,532\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nShares Reserved for Future Issuance\n\nThe Company had reserved shares of common stock for future issuance as follows:\n\n \n\n \n\n \n\nMarch 31, 2026\n\n \n\n \n\nDecember 31, 2025\n\n \n\nOutstanding stock options\n\n \n\n \n\n3,519,408\n\n \n\n \n\n \n\n3,549,612\n\n \n\nOutstanding restricted stock units\n\n \n\n \n\n3,732,599\n\n \n\n \n\n \n\n2,663,923\n\n \n\nPre-funded warrants to purchase common stock associated with the December 2020 public offering\n\n \n\n \n\n3,200,000\n\n \n\n \n\n \n\n3,200,000\n\n \n\nWarrants to purchase common stock associated with the April 2022 public offering\n\n \n\n \n\n15,000,000\n\n \n\n \n\n \n\n15,000,000\n\n \n\nPre-funded warrants to purchase common stock associated with the April 2022 public offering\n\n \n\n \n\n3,189,815\n\n \n\n \n\n \n\n3,189,815\n\n \n\nWarrants to purchase common stock associated with the March 2026 Private Placement\n\n \n\n \n\n43,500,000\n\n \n\n \n\n \n\n—\n\n \n\nPre-funded warrants to purchase common stock associated with March 2026 Private Placement\n\n \n\n \n\n8,750,000\n\n \n\n \n\n \n\n—\n\n \n\nWarrants to purchase common stock associated with loan agreement\n\n \n\n \n\n198,811\n\n \n\n \n\n \n\n198,811\n\n \n\nWarrant to purchase common stock associated with Danforth\n\n \n\n \n\n50,000\n\n \n\n \n\n \n\n50,000\n\n \n\nFor possible future issuance under 2024 Plan (Note 8)\n\n \n\n \n\n2,308,196\n\n \n\n \n\n \n\n4,469,906\n\n \n\nFor possible future issuance under employee stock purchase plan\n\n \n\n \n\n1,339,099\n\n \n\n \n\n \n\n1,367,900\n\n \n\nFor possible future issuance under 2015 Plan (Note 8)\n\n \n\n \n\n666,550\n\n \n\n \n\n \n\n665,634\n\n \n\nTotal common shares reserved for future issuance\n\n \n\n \n\n85,454,478\n\n \n\n \n\n \n\n34,355,601\n\n \n\n \n\n8\n\n[Table of Contents](#toc_page)\n\n \n\nWarrants Associated with the March 2026 Private Placement and April 2022 Public Offering\n\nThe fair value of the March 2026 Private Placement and April 2022 public offering outstanding common warrants has been determined using the Black-Scholes valuation model, and the changes in the fair value are recorded in the accompanying unaudited condensed consolidated statements of operations. The outstanding common warrants associated with the March 2026 Private Placement and April 2022 public offering meet the definition of a derivative pursuant to ASC 815, Derivatives and Hedging, and do not meet the derivative scope exception given the common warrants do not qualify under the indexation guidance. As a result, the March 2026 Private Placement and April 2022 public offering common warrants were initially recognized as liabilities and measured at fair value using the Black-Scholes valuation model. For the three months ended March 31, 2026 and 2025, the Company recognized a loss of $1.6 million and a gain of $2.9 million, respectively, on the warrant liability fair value adjustment for the April 2022 public offering common warrants. For the three months ended March 31, 2026, the Company recognized a loss of $3.6 million on the warrant liability fair value adjustment for the March 2026 Private Placement common warrants. As of March 31, 2026 and December 31, 2025, the fair value of the warrant liabilities was $18.9 million and $2.2 million, respectively.\n\n8. Stock-based Compensation\n\n2024 Equity Incentive Plan\n\nIn April 2024, the Company’s board of directors adopted the 2024 Equity Incentive Plan (“2024 Plan”), which was subsequently approved by the Company’s stockholders and became effective on June 19, 2024. The 2024 Plan is the successor to the 2014 Plan. The 2014 Plan terminated on February 11, 2024 and no new grants may be made under the 2014 Plan after that date, although all outstanding awards granted under the 2014 Plan will continue to be subject to the terms and conditions as set forth in the agreements evidencing such awards and the terms of the 2014 Plan. As of March 31, 2026, there were 2,308,196 shares of common stock available for future issuance under the 2024 Plan.\n\n2015 Inducement Award Plan\n\nAs of March 31, 2026, there were 666,550 shares of common stock available for future issuance under the Company’s 2015 Inducement Award Plan (“2015 Plan”). During both the three months ended March 31, 2026 and 2025, there were options to purchase zero shares of the Company’s common stock granted under the 2015 Plan.\n\nThe activity for the Company’s 2024 Plan, 2014 Plan, and 2015 Plan, for the three months ended March 31, 2026, is summarized as follows:\n\n \n\n \n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted-\nAverage\nExercise\nPrice\n\n \n\n \n\nWeighted-\nAverage\nRemaining\nContractual\nLife (in years)\n\n \n\n \n\nAggregate\nIntrinsic\nValue ($000)\n\n \n\nOutstanding — December 31, 2025\n\n \n\n \n\n3,549,612\n\n \n\n \n\n$\n\n4.67\n\n \n\n \n\n \n\n6.49\n\n \n\n \n\n$\n\n—\n\n \n\nForfeited/Cancelled\n\n \n\n \n\n(30,204\n\n)\n\n \n\n$\n\n40.49\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOutstanding — March 31, 2026\n\n \n\n \n\n3,519,408\n\n \n\n \n\n$\n\n4.37\n\n \n\n \n\n \n\n6.30\n\n \n\n \n\n$\n\n25\n\n \n\nExercisable — March 31, 2026\n\n \n\n \n\n2,390,407\n\n \n\n \n\n$\n\n5.78\n\n \n\n \n\n \n\n5.31\n\n \n\n \n\n$\n\n—\n\n \n\nVested or expected to vest — March 31, 2026\n\n \n\n \n\n3,519,408\n\n \n\n \n\n$\n\n4.37\n\n \n\n \n\n \n\n6.30\n\n \n\n \n\n$\n\n25\n\n \n\nRestricted stock unit (“RSU”) activity under the 2024 Plan, 2014 Plan, and 2015 Plan for the three months ended March 31, 2026, is summarized as follows:\n\n \n\n \n\nNumber of\nShares\n\n \n\n \n\nWeighted\nAverage\nGrant Date\nFair Value\nPer Share\n\n \n\nNon-vested at December 31, 2025\n\n \n\n \n\n2,663,923\n\n \n\n \n\n$\n\n1.46\n\n \n\nGranted\n\n \n\n \n\n2,190,998\n\n \n\n \n\n$\n\n0.74\n\n \n\nVested\n\n \n\n \n\n(1,122,322\n\n)\n\n \n\n$\n\n1.56\n\n \n\nNon-vested at March 31, 2026\n\n \n\n \n\n3,732,599\n\n \n\n \n\n$\n\n1.00\n\n \n\nThe fair value of RSUs is based on the market price of the Company’s common stock on the date of grant. RSUs generally vest 33% annually over a three-year period from the date of grant. Upon vesting, the RSUs generally are net share settled to cover the required withholding tax with the remaining shares issued to the holder. The Company recognizes compensation expense for such awards ratably over the corresponding vesting period.\n\n9\n\n[Table of Contents](#toc_page)\n\n \n\nDuring the three months ended March 31, 2026 and 2025, the Company granted 820,999 and zero performance-based RSUs, respectively. The Company recognizes stock-based compensation expense for RSUs with performance conditions when it is probable that the conditions will be met and the award will vest. During the three months ended March 31, 2026 and 2025, there was zero stock-based compensation expense recognized for performance-based RSUs.\n\nStock-based Compensation Cost\n\nThe stock-based compensation cost that has been charged against income for stock awards was $0.6 million and $0.8 million for the three months ended March 31, 2026 and 2025, respectively. The Company accounts for forfeitures as they occur, which may result in the reversal of stock-based compensation costs in subsequent periods as the forfeitures arise. Stock-based compensation expense related to stock awards is included in the following line items in the accompanying unaudited condensed consolidated statements of operations (in thousands):\n\n \n\n \n\n \n\nThree Months Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nResearch and development\n\n \n\n$\n\n95\n\n \n\n \n\n$\n\n215\n\n \n\nSelling, general and administrative\n\n \n\n \n\n485\n\n \n\n \n\n \n\n604\n\n \n\nTotal stock-based compensation expense\n\n \n\n$\n\n580\n\n \n\n \n\n$\n\n819\n\n \n\n \n\n10\n\n[Table of Contents](#toc_page)\n\n \n\n9. Fair Value Measurements\n\nThe carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, investments, accounts receivable, prepaid expenses and other current assets, accounts payable, Asset Purchase Agreement payable, and accrued expenses approximate their respective fair values due to the short-term nature of such instruments.\n\nAssets and Liabilities Measured at Fair Value on a Recurring Basis\n\nThe Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of March 31, 2026 and December 31, 2025 for financial instruments measured at fair value on a recurring basis (in thousands):\n\n \n\n \n\n \n\n \n\n \n\nFair Value Hierarchy Classification\n\n \n\n \n\n \n\nBalance\n\n \n\n \n\nQuoted\nPrices in\nActive\nMarkets for\nIdentical\nAssets\n(Level 1)\n\n \n\n \n\nSignificant\nOther\nObservable\nInputs\n(Level 2)\n\n \n\n \n\nSignificant\nUnobservable\nInputs (Level 3)\n\n \n\nMarch 31, 2026\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash\n\n \n\n$\n\n24,233\n\n \n\n \n\n$\n\n24,233\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nRestricted cash\n\n \n\n \n\n189\n\n \n\n \n\n \n\n189\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nMoney market funds\n\n \n\n \n\n12,438\n\n \n\n \n\n \n\n12,438\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal assets\n\n \n\n$\n\n36,860\n\n \n\n \n\n$\n\n36,860\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWarrant liabilities\n\n \n\n$\n\n18,862\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n$\n\n18,862\n\n \n\nTotal liabilities\n\n \n\n$\n\n18,862\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n$\n\n18,862\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash\n\n \n\n$\n\n1,736\n\n \n\n \n\n$\n\n1,736\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nRestricted cash\n\n \n\n \n\n189\n\n \n\n \n\n \n\n189\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nMoney market funds\n\n \n\n \n\n19,523\n\n \n\n \n\n \n\n19,523\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal assets\n\n \n\n$\n\n21,448\n\n \n\n \n\n$\n\n21,448\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWarrant liability\n\n \n\n$\n\n2,225\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n$\n\n2,225\n\n \n\nTotal liabilities\n\n \n\n$\n\n2,225\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n$\n\n2,225\n\n \n\nThe Company measures cash equivalents at fair value on a recurring basis. The fair value of cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. As of March 31, 2026, the cash and cash equivalents of $36.7 million and the restricted cash balances of $0.1 million within short term and $0.1 million in long term on the unaudited condensed consolidated balance sheet, sum to the total of $36.9 million as shown in the unaudited condensed consolidated statement of cash flows.\n\nLevel 3 financial liabilities consist of the warrant liabilities for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company uses the Black-Scholes option valuation model to value the Level 3 warrant liabilities at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility. The unobservable inputs for the Level 3 warrant liabilities include volatility and expected term. The historical and implied volatility of the Company, using its closing common stock prices and market data, is utilized to reflect future volatility over the expected term of the warrants.\n\nAt March 31, 2026, the range and weighted average of the Level 3 volatilities utilized in the Black-Scholes model to fair value the warrant liabilities were 72.9% to 86.2% and 76.7%, respectively. At December 31, 2025, the Level 3 volatility utilized in the Black-Scholes model to fair value the warrant liability was 86.1%. The Company utilizes a probability assessment to estimate the expected term for the Common Warrants associated with the March 2026 Private Placement. At March 31, 2026, the estimated expected term for the Common Warrants was 2.36 years.\n\n11\n\n[Table of Contents](#toc_page)\n\n \n\nA reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows (in thousands):\n\n \n\n \n\n \n\nWarrant Liabilities\n\n \n\nBalance – December 31, 2025\n\n \n\n \n\n$\n\n2,225\n\n \n\nLoss adjustment to fair value\n\n \n\n \n\n \n\n5,249\n\n \n\nCommon Warrants issued for March 2026 Private Placement\n\n \n\n \n\n \n\n11,388\n\n \n\nBalance – March 31, 2026\n\n \n\n \n\n$\n\n18,862\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n10. Asset Purchase Agreement\n\nOn March 30, 2026 (the \"Effective Date\"), the Company and Poxel SA, a French corporation (“Poxel”), entered into an asset purchase agreement (the “Asset Purchase Agreement”) pursuant to which the Company (i) acquired all of Poxel’s right, title and interest in Poxel’s direct AMP kinase activator research and development program assets, including all patents, know-how, regulatory filings, inventory, records, assumed contracts and other assets specifically related to compounds that directly activate AMP kinase, including the compound known as PXL-770 (now, SCY-770, collectively, the “Assets”); and (ii) assumed liabilities from Poxel related to the Assets arising after the effective date of the Asset Purchase Agreement (the “Transaction”).\n\nPursuant to the Asset Purchase Agreement, the Company is obligated to pay Poxel a one-time upfront payment of $8.0 million within thirty days after the Effective Date of the execution of the Asset Purchase Agreement. The Company recognized the $8.0 million upfront payment as an acquired in-process research and development (\"IPR&D\") expense in research and development in the three months ended March 31, 2026 and as an Asset Purchase Agreement payable as of March 31, 2026. The Company paid the $8.0 million upfront payment to Poxel in April 2026. In addition, the Company is obligated to pay Poxel milestone payments upon the first achievement of certain development and commercial milestone events related to products containing an acquired compound, for up to a total of $8.0 million in aggregate development milestone payments including a $2.0 million development milestone due on the initiation of the first phase 2 clinical trial, and up to $180.0 million in commercial milestones, of which $125.0 million is triggered by annual net sales at or above $1.0 billion.\n\nIn connection with the Transaction, Poxel also granted to the Company an exclusive, sublicensable, perpetual and irrevocable, worldwide license under certain licensed intellectual property controlled by Poxel to research, develop, manufacture, use, sell, offer for sale, import, commercialize and otherwise exploit compounds and products related to the AMP kinase activator program.\n\n11. Segments\n\nThe Company has one reportable segment which is drug development. The Company primarily derives revenue from its licensing of developed drugs in difficult-to-treat and drug-resistant infections and manages the business activities on a consolidated basis. The Company’s chief operating decision maker (\"CODM\") is the Chief Executive Officer. The CODM assesses performance for the drug development segment and decides how to allocate resources based on consolidated net (loss) income that also is reported on the consolidated statement of operations. The CODM uses budget, forecast, and actual results of the consolidated net (loss) income in deciding what drug development programs to further progress with its existing and planned capital resources. The measure of segment assets is reported on the balance sheet as consolidated assets.\n\nThe table below provides information about the Company's drug development segment and includes the reconciliation to consolidated net loss for the three months ended March 31, 2026 and 2025, respectively (in thousands):\n\n12\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n \n\nThree Months Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nRevenue\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n257\n\n \n\nLess:\n\n \n\n \n\n \n\n \n\n \n\n \n\nClinical expense\n\n \n\n \n\n2,015\n\n \n\n \n\n \n\n1,712\n\n \n\nPreclinical expense\n\n \n\n \n\n247\n\n \n\n \n\n \n\n937\n\n \n\nChemistry, manufacturing, and controls\n\n \n\n \n\n555\n\n \n\n \n\n \n\n500\n\n \n\nIPR&D expense (Note 10)\n\n \n\n \n\n8,000\n\n \n\n \n\n \n\n—\n\n \n\nSelling, general, and administrative\n\n \n\n \n\n4,588\n\n \n\n \n\n \n\n3,726\n\n \n\nInterest expense\n\n \n\n \n\n—\n\n \n\n \n\n \n\n173\n\n \n\nPlus:\n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest income\n\n \n\n \n\n(535\n\n)\n\n \n\n \n\n(776\n\n)\n\nOther segment expense (income) (1)\n\n \n\n \n\n6,429\n\n \n\n \n\n \n\n(624\n\n)\n\nSegment net loss\n\n \n\n \n\n(21,299\n\n)\n\n \n\n \n\n(5,391\n\n)\n\nReconciliation of segment net loss\n\n \n\n \n\n \n\n \n\n \n\n \n\nAdjustments and reconciling items\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nConsolidated net loss\n\n \n\n$\n\n(21,299\n\n)\n\n \n\n$\n\n(5,391\n\n)\n\n \n\n(1) Other segment expense (income) includes other research and development expense, amortization of debt issuance costs and discount, other income, and the warrant liabilities fair value adjustment.\n\n12. Securities Purchase Agreement\n\nOn March 30, 2026 (the \"SPA Effective Date\"), the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain new and existing institutional and accredited investors (the “Investors”) pursuant to which the Company, in a private placement (the “March 2026 Private Placement”), agreed to issue and sell to the Investors an aggregate of (i) 34,750,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 8,750,000 shares of Common Stock and (iii) accompanying common warrants (the “Common Warrants” and together with the Pre-Funded Warrants, the “Warrants”) to purchase up to an aggregate of 43,500,000 shares of Common Stock or Pre-Funded Warrants.\n\nEach Share or Pre-Funded Warrant will be accompanied by one Common Warrant. 34,750,000 Shares and accompanying Common Warrants were sold at a combined price of $0.92 per Share and accompanying Common Warrant, and 8,750,000 Pre-Funded Warrants and accompanying Common Warrants were sold at a combined price of $0.9199 per Pre-Funded Warrant and accompanying Common Warrant. The aggregate share issuance includes 108,695 Shares and accompanying Common Warrants that were sold to the Company’s President and Chief Executive Officer, Dr. David Angulo. CVI Investments, Inc., a holder of more than 5% of the Company's common stock, participated in the March 2026 Private Placement and purchased 2,086,960 Shares and accompanying Common Warrants at an aggregate purchase price of approximately $1.9 million.\n\nEach Pre-Funded Warrant has an initial exercise price per share of $0.0001, subject to certain adjustments. The Pre-Funded Warrants are exercisable immediately and may be exercised at any time until the Pre-Funded Warrants are exercised in full.\n\nEach Common Warrant is exercisable for one Share (or Pre-Funded Warrant in lieu thereof) at an exercise price of $1.20 per Share, or one Pre-Funded Warrant at an exercise price of $0.0001 per Pre-Funded Warrant in lieu thereof. The Common Warrants will be exercisable beginning on the effective date of the stockholder approval relating to the proposed increase in the Company’s authorized shares of Common Stock (the “Stockholder Approval”) and will expire on 5:00 p.m. (New York City time) on the earlier of (i) the fifth (5th) anniversary of its original issue date and (ii) the thirtieth (30th) day after the Company publicly releases topline data at Week 48 from the Company’s Phase 2 proof-of-concept clinical study evaluating SCY-770 in patients with autosomal dominant polycystic kidney disease. In connection with the March 2026 Private Placement, the Company has agreed to convene a stockholder meeting no later than 90 days following the closing of the March 2026 Private Placement to seek the Stockholder Approval.\n\nUnder the terms of the Pre-Funded Warrants, the Company may not effect the exercise of any Pre-Funded Warrant, and a holder will not be entitled to exercise any portion of any Pre-Funded Warrant (i) if immediately prior to the exercise, a holder (together with its affiliates), beneficially owns an aggregate number of shares of Common Stock greater than 4.99% or 9.99%, as applicable (the “Maximum Percentage”), of the total number of issued and outstanding shares of Common Stock of the Company without taking into account any shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares” and together with the Shares, the “Registrable Securities”), or (ii) to the extent that immediately following the exercise, the holder (together with its affiliates) would beneficially own in excess of the Maximum Percentage of the number of shares of\n\n13\n\n[Table of Contents](#toc_page)\n\n \n\nCommon Stock outstanding immediately after giving effect to the issuance of such shares of Common Stock, which such percentage may be changed at the holder’s election to a higher or lower percentage not in excess of 19.99% upon 61 days’ notice to the Company.\n\nIn connection with the March 2026 Private Placement, the Company also entered into a Registration Rights Agreement, dated March 30, 2026 (the “Registration Rights Agreement”), with the Investors. Pursuant to the Registration Rights Agreement, the Company filed a registration statement on Form S-3 (File No. 333-295493) (the \"Registration Statement\"), which was declared effective by the SEC on May 8, 2026, covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement). The Registration Statement covers the shares of common stock underlying the Common Warrants; however, the Common Warrants are not exercisable until the effective date of the stockholder approval relating to the proposed increase in our authorized shares of common stock, as more fully described in the Registration Statement. The Company also agreed to use reasonable best efforts to keep such Registration Statement effective until the earlier of the date the Registrable Securities covered by such Registration Statement have been sold or may be resold pursuant to Rule 144 under the Securities Act of 1933, as amended without restriction. The Registration Rights Agreement includes customary provisions regarding payment of fees and expenses and indemnification.\n\nThe March 2026 Private Placement closed on April 1, 2026 (the \"Closing Date\"). The total gross proceeds to the Company from the March 2026 Private Placement were $40.0 million, and after deducting placement agent fees and transaction-related expenses, net proceeds of approximately $37.2 million. The Company can receive up to an additional $52.2 million in gross proceeds if the Warrants are fully exercised for cash, subject to the Stockholder Approval. On March 31, 2026, the Company received $24.0 million of the total $40.0 million gross proceeds and recognized a receivable for the remaining $16.0 million as a reduction of stockholders' equity in the unaudited condensed consolidated balance sheet as of March 31, 2026.\n\nThe Company used the with-and-without method to allocate the total gross proceeds by first allocating the portion of the proceeds equal to the fair value of the Common Warrants on the SPA Effective Date with the remaining proceeds allocated to the Shares and Pre-Funded Warrants on a relative fair value basis.\n\nThe Company concluded that at the SPA Effective Date, the Common Warrants did not meet the criteria for equity classification under the guidance of ASC 815 as the Company did not have sufficient authorized and unissued shares to satisfy the warrants if exercised. The Common Warrants will only be exercisable beginning on the effective date of the Stockholder Approval which results in share settlement that is not in the Company's control. The Company recorded the Common Warrants as liabilities at their fair value. This liability is subject to remeasurement at each balance sheet date and any change in fair value is recognized in the Company’s unaudited condensed consolidated statements of operations. The Company concluded that at the SPA Effective Date, the Pre-Funded Warrants did not meet the characteristics of a liability or a derivative and are classified within stockholders' equity. The Company incurred $2.7 million of placement agent commissions and other offering costs in connection with the March 2026 Private Placement. The placement agent commissions and other offering costs were allocated between the Shares, Common Warrants, and Pre-Funded Warrants using relative fair value. The Company allocated $1.9 million to the Shares and Pre-funded Warrants and recognized within deferred offering costs and the remaining $0.8 million was allocated to the Common Warrants and recognized within selling, general and administrative expense in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2026. The offering costs allocated to the Common Warrants have been added back to net loss when deriving cash flows used in operations for the three months ended March 31, 2026.\n\nThe Company measured the fair value of the Shares and Pre-Funded Warrants based on the $0.79 closing common stock share price on the SPA Effective Date. The Company used the relative fair value method to allocate the gross proceeds received from the sales of Shares, Common Warrants, and Pre-Funded Warrants on the unaudited condensed consolidated balance sheet as follows (in thousands):\n\n \n\n \n\n \n\nProceeds Allocation\n\n \n\nShares\n\n \n\n \n\n$\n\n22,873\n\n \n\nPre-funded Warrants\n\n \n\n \n\n \n\n5,758\n\n \n\nCommon Warrants\n\n \n\n \n\n \n\n11,388\n\n \n\n     Total\n\n \n\n \n\n$\n\n40,019\n\n \n\n \n\n \n\n14\n\n[Table of Contents](#toc_page)"}