Revenue and Financial Performance - Revenue for the three months ended September 30, 2025, was $0, consistent with the same period in 2024, primarily derived from the PURE EP™ Platform and related services [267]. - Revenue for the nine months ended September 30, 2025, was $0, down from $27 in the same period of 2024 [275]. - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $15,586 compared to a net loss of $1,940 for the same period in 2024 [274]. - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $38,774 compared to a net loss of $9,395 for the same period in 2024 [283]. Expenses - Research and development expenses for the three months ended September 30, 2025, were $6, a decrease of $150, or 96%, from $156 in the same period of 2024 [268]. - General and administrative expenses for the three months ended September 30, 2025, were $4,619, an increase of $1,856 or 67% from $2,763 in the prior year [269]. - Depreciation and amortization expense for the three months ended September 30, 2025, totaled $1,488, an increase of $1,457, or 4700%, over the expense of $31 in the same period of 2024 [270]. - Research and development expenses for the nine months ended September 30, 2025, were $31, a decrease of $705, or 96%, from $736 in the prior year [276]. - General and administrative expenses for the nine months ended September 30, 2025, were $27,365, an increase of $16,806 or 159% from $10,559 in the same period of 2024 [277]. Capital and Financing - As of September 30, 2025, the company had a working capital deficit of approximately $111 million and cash of $11.0 million [284]. - The company entered into a Secured Convertible Debenture Purchase Agreement allowing for up to $100 million in secured convertible debentures, with the first closing resulting in a $25 million issuance [290]. - A public offering completed on August 15, 2025, generated gross proceeds of approximately $15 million from the sale of 3,852,149 shares at a price of $3.90 per share [302]. - For the nine months ended September 30, 2025, the company sold 4,403,166 At The Market Offering Shares at an average price of $0.91 per share, generating net proceeds of approximately $3.88 million [303]. Internal Controls and Compliance - The company has identified material weaknesses in internal controls over financial reporting, including inadequate segregation of duties and ineffective review processes [320]. - Management plans to add sufficient staff and oversight in 2026 to address identified deficiencies in internal controls [323]. - The company identified a material weakness related to ineffective review controls over accounting for business combinations and related financial instruments [326]. - Management plans to implement remediation plans in 2025 to address the identified material weakness [326]. - There have been no changes in internal control over financial reporting that materially negatively affected the company during the last completed fiscal quarter [326]. Legal Proceedings - The company believes that ongoing legal proceedings will not have a material adverse effect on its financial position, results of operations, or liquidity [327]. - No material changes in legal proceedings have occurred since the last quarterly report filed on August 15, 2025 [328]. Future Outlook - The company expects to incur operating losses and negative cash flows until its products achieve sustained commercial success, with initial revenue anticipated from the launch of a tokenized gold financing product currently under development [287]. - The liquidity forecast indicates that delays in product commercialization or capital raising could materially impact the company's ability to continue as a going concern [300]. - As of September 30, 2025, the aggregate stated value of the Series C Preferred Stock was $105 million, with triggering events that may require redemption at the option of the holders [291]. - The fair value of the derivative liability associated with Exchangeable Shares was $115.7 million as of September 30, 2025, with a change of $10.2 million recognized in other income [308].

Portfolio Performance - As of September 30, 2025, approximately 60% of the portfolio's annualized base rent (ABR) was derived from tenants with an investment grade credit rating of "BBB-" or better[147] - The portfolio is 98.6% leased and occupied, indicating strong demand for the properties[147] - Average effective annual rental per square foot is $16.30, reflecting the rental income potential of the portfolio[147] - Approximately 92% of the leases in the current portfolio provide for increases in contractual base rent during future years[147] - The largest tenants contributing to the portfolio's ABR include the General Service Administration, Dollar General, and Kohl's Corporation, with the City of San Antonio contributing approximately 59% of the ABR[147] Financial Performance - Total revenue for the three months ended September 30, 2025, was $2,470,109, an increase of $69,827 (approximately 2.9%) compared to $2,400,282 for the same period in 2024[165] - Total revenue for the nine months ended September 30, 2025, was $7,283,974, an increase of $191,284 (approximately 2.7%) compared to $7,092,690 for the same period in 2024[165] - Total operating expenses for the three months ended September 30, 2025, were $4,169,441, an increase of $399,726 (approximately 10.6%) compared to $3,769,715 for the same period in 2024[166] - Total operating expenses for the nine months ended September 30, 2025, were $12,832,102, an increase of $1,698,716 (approximately 15.3%) compared to $11,133,386 for the same period in 2024[166] - Net loss attributable to common shareholders for the three months ended September 30, 2025, was $2,826,960, compared to a net loss of $2,969,596 for the same period in 2024[169] - Net loss attributable to common shareholders for the nine months ended September 30, 2025, was $9,981,447, compared to a net loss of $8,151,538 for the same period in 2024[169] Cash and Debt Management - As of September 30, 2025, the company had total cash of $281,788 and outstanding mortgage loans with a principal balance of $55,762,746[170] - The company entered into a loan agreement for $21.0 million on August 10, 2023, to finance the acquisition of the Modiv Portfolio, with a fixed interest rate of 7.47% per annum[173] - The company incurred interest expense, net of $4,429,454 for the nine months ended September 30, 2025, an increase of $1,286,965 (approximately 41%) compared to $3,142,489 for the same period in 2024[166] - As of September 30, 2025, the company had outstanding mortgage loans payable totaling $71,599,000, with various interest rates and maturity dates[185] - The company recorded a related party payable of $2,912,300 upon execution of a Redemption Agreement, which was paid in full by September 30, 2025[180] Equity and Financing Activities - The company completed an underwritten public offering of 1,665,000 units at $10 per unit, generating net proceeds of $13.8 million[145] - The company primarily obtains capital through equity offerings, debt financings, and undistributed operational funds[182] - The company has the right to extend the Mandatory Redemption Date for the Preferred Interest for two consecutive 12-month periods, with an extension fee of 0.01% of the outstanding amount[191] Concerns and Compliance - The company expressed substantial doubt about its ability to continue as a going concern due to recurring losses and liquidity concerns[183] - The company’s projected cash needs are less than the principal balance of its obligations, indicating potential liquidity challenges[183] - The company maintained compliance with all covenants related to mortgage loans, including a debt service coverage ratio (DSCR) requirement of 1.50[188] Operational Metrics - Net cash provided by operating activities was $415,553 for the nine months ended September 30, 2025, compared to $783,511 for the same period in 2024[198] - Net cash provided by investing activities was $10,333,595 for the nine months ended September 30, 2025, contrasting with a cash outflow of ($5,960,892) in 2024[199] - Net cash used in financing activities was ($11,114,799) for the nine months ended September 30, 2025, compared to a cash inflow of $3,607,045 in 2024[200] Funds From Operations - Funds From Operations (FFO) for Q3 2025 was $(419,486), a decline from $(301,352) in Q3 2024, indicating a 39.2% increase in losses[208] - Core Funds From Operations (Core FFO) for Q3 2025 was $47,548, compared to $(145,885) in Q3 2024, showing a significant recovery[208] - Adjusted Funds From Operations (AFFO) for Q3 2025 was $(117,838), a decrease from $5,509 in Q3 2024, reflecting a 2,174.5% decline[208] - Core Adjusted Funds From Operations for Q3 2025 was $175,647, up from $100,444 in Q3 2024, indicating a 74.7% increase[208] Other Financial Metrics - Depreciation and amortization expenses increased to $1,287,112 in Q3 2025 from $1,068,081 in Q3 2024, a rise of 20.5%[208] - Loss on derivative valuation for Q3 2025 was $11,256, compared to a gain of $734,116 in Q3 2024, indicating a significant shift in valuation[208] - Total adjustments to net loss amounted to $1,600,016 in Q3 2025, compared to $2,109,058 in Q3 2024, a decrease of 24.1%[208] - Non-cash stock compensation for Q3 2025 was $0, down from $94,935 in Q3 2024, reflecting a complete elimination of this expense[208] - The company reported a loss on extinguishment of debt of $926,398 for the nine months ended September 30, 2025, with no such loss reported in the same period of 2024[208]

Revenue Performance - Total revenues for the three months ended September 30, 2025, were $6.9 million, a decrease from $8.8 million in the same period of 2024, while total revenues for the nine months ended September 30, 2025, were $21.4 million, down from $24.0 million in 2024[158]. - Recurring treatment revenue for the three months ended September 30, 2025, was $5.5 million, representing approximately 67,000 XTRAC treatments, compared to $5.4 million for approximately 64,000 treatments in the same period of 2024[159]. - Dermatology procedures equipment revenues for Q3 2025 were $1.4 million, a decrease from $3.4 million in Q3 2024, representing a 58.8% decline[164]. - Dermatology recurring procedures revenues for Q3 2025 were $5.5 million, slightly up from $5.4 million in Q3 2024, with a gross profit percentage of 61.6% compared to 65.4%[170]. Device Placement and Usage - The number of XTRAC systems placed in dermatologists' offices decreased from 864 as of December 31, 2024, to 838 as of September 30, 2025[146]. - As of September 30, 2025, there were 161 TheraClear devices placed in dermatologists' offices, an increase from 135 devices in the same period of 2024[161]. - International sales included 8 systems in Q3 2025 (6 XTRAC and 2 VTRAC) compared to 20 systems in Q3 2024 (20 XTRAC)[165]. Financial Performance - Gross profit for Q3 2025 decreased to $4.2 million from $5.3 million in Q3 2024, with a gross profit percentage of 60.4% compared to 60.1%[168]. - For the nine months ended September 30, 2025, gross profit was $12.3 million, down from $13.5 million in the same period in 2024, with a gross profit percentage increase to 57.3% from 56.1%[169]. - As of September 30, 2025, the company reported a net loss of $1.622 million, an improvement from a net loss of $2.074 million for the same period in 2024[182]. - The company had negative working capital of $0.8 million as of September 30, 2025, compared to positive working capital of $3.2 million as of December 31, 2024[183]. - Cash and cash equivalents decreased to $7.1 million as of September 30, 2025, down from $8.6 million as of December 31, 2024[183]. - Net cash used in operating activities increased to $2.6 million for the nine months ended September 30, 2025, compared to $0.5 million for the same period in 2024[191]. Expenses and Gains - Selling and marketing expenses increased to $3.2 million in Q3 2025 from $3.0 million in Q3 2024, driven by higher employee-related expenses and advertising campaigns[175]. - General and administrative expenses decreased to $2.7 million in Q3 2025 from $3.6 million in Q3 2024, primarily due to an increase in sales tax accrual in 2024[177]. - Settlement gains for Q3 2025 were $0.7 million, compared to no settlement gains in Q3 2024, due to supplier obligation settlements[178]. - Engineering and product development expenses for the nine months ended September 30, 2025, were $0.4 million, down from $0.7 million in the same period in 2024[174]. - Interest expense remained stable at $0.5 million for Q3 2025 and Q3 2024, with a total of $1.5 million for the nine months ended September 30, 2025, compared to $1.6 million in the same period in 2024[179]. Market and Operational Challenges - The impact of the COVID-19 pandemic has led to the suspension of elective procedures and the temporary closure of many physician practices, affecting operational and financial performance[150]. - The company has faced supply chain challenges due to the Russia-Ukraine war, impacting the availability and price of essential gases for laser operations[151]. - The U.S. introduced trade policy actions in 2025 that increased import tariffs, potentially affecting product costs and demand in the dermatology procedures equipment segment[153]. Future Plans and Financing - The company plans to increase direct-to-patient advertising for XTRAC treatments targeting psoriasis and vitiligo patients through various media, including social media platforms[162]. - The company expects to write off a product technology intangible asset with a net carrying value of $0.7 million and derecognize a liability for contingent consideration of $1.2 million in Q4 2025[187]. - Net cash provided by financing activities was $2.2 million for the nine months ended September 30, 2025, compared to $1.9 million for the same period in 2024[193]. - The company amended its credit facility in November 2025, pausing the measurement of net revenue for financial covenant compliance through September 30, 2026[186]. - The company has the potential to incur a royalty of 5% on sales of TheraClear® X devices starting January 1, 2027, contingent on achieving certain revenue milestones[188]. - The company may sell up to an additional $6.5 million of its common stock under an existing equity distribution agreement as of September 30, 2025[189].

Financial Performance - Net sales for the three months ended September 30, 2025, were $1,336,963, a decrease of 72.5% compared to $4,846,795 for the same period in 2024[187]. - For the nine months ended September 30, 2025, net sales were $12,211,402, down 36.4% from $19,174,369 in 2024[189]. - Net sales for the three months ended September 30, 2025, were $1,336,963, a decrease of 84% compared to $4,846,795 for the same period in 2024[192]. - Year-to-date net sales for the nine months ended September 30, 2025, were $12,211,402, down 36% from $19,174,369 in the prior year[192]. Cost and Expenses - Cost of goods sold for the three months ended September 30, 2025, was $2,387,726, compared to $4,750,839 for the same period in 2024, reflecting a decrease of 49.8%[189]. - Cost of goods sold for the three months ended September 30, 2025, was $2,387,726, a decrease of 50% from $4,750,839 in the same period in 2024[194]. - Operating expenses increased to $1,502,038 for the three months ended September 30, 2025, up 17.2% from $1,281,108 in 2024[190]. - Other expense for the three months ended September 30, 2025, was $1,237,883, a decrease of 62% from $3,260,108 in the same period in 2024[198]. - The cost of goods sold as a percentage of net sales was 179% for the three months ended September 30, 2025, compared to 98% for the same period in 2024[196]. Net Loss and Financial Health - The company reported a net loss of $3,790,684 for the three months ended September 30, 2025, compared to a net loss of $4,445,260 for the same period in 2024, representing a 14.7% improvement[191]. - The accumulated net losses from inception through September 30, 2025, totaled $33,301,117, raising concerns about the company's ability to continue as a going concern[184]. - Net loss for the three months ended September 30, 2025, was $3,790,684, or a loss of $0.17 per share, compared to a net loss of $4,445,260, or $0.25 per share, for the same period in 2024[201]. - The net loss for the nine months ended September 30, 2025, was $9,333,028, with favorable working capital changes of $4,551,167[210]. Assets and Liabilities - Total current assets decreased by $2,344,920 to $2,652,453 as of September 30, 2025, primarily due to a decrease in inventory and accounts receivable[203]. - Total assets decreased by $6,095,340 to $20,851,903 as of September 30, 2025, driven by reductions in current assets and property, plant, and equipment[204]. - As of September 30, 2025, current liabilities increased by $156,490, while total liabilities decreased by $57,764, primarily due to an increase in accounts payable of $387,630 and notes payable of $835,260[205]. - The increase in liabilities and decrease in cash and assets are attributed to operational losses, necessitating significant capital raising efforts[206]. Cash Flow and Financing - Cash on hand as of September 30, 2025, was $362,517, with ongoing operational and capital needs requiring additional cash[209]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $1,982,648, compared to $4,616,746 for the same period in 2024, reflecting a decrease in cash used[210]. - Cash flow used in investing activities for the nine months ended September 30, 2025, was $124,859, a decrease of $1,774,353 from $1,899,212 in 2024[211]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $316,230, down from $5,023,764 in 2024, indicating a significant decrease in financing[212]. - The company launched a Regulation Crowdfunding offering to raise up to $1.235 million, but as of September 30, 2025, no commitments had been raised[208]. - The company anticipates satisfying cash flow needs through debt issuance or equity sales until operational cash flows improve[209]. - The company is committed to securing necessary resources to meet financial obligations and execute long-term objectives[209]. Strategic Initiatives - The company aims to increase revenues by securing greater volumes of crude oil for its Foreland refinery to enhance contribution margins[184]. - The company plans to retrofit the PR Spring Facility to recycle waste asphalt shingles and produce oil and asphalt paving aggregate[180]. - The acquisition of Foreland Refining Corporation is expected to be strategically beneficial, providing a strong base for growth and vertical integration in oil production and refining[183]. - The company expects production to resume in January 2026 after disruptions due to crude supplier issues and maintenance delays[193].

Financial Performance - Revenue for Q3 2025 was $3,618, slightly down from $3,907 in Q3 2024, indicating minimal change year-over-year[9] - Basic and diluted loss per common share from continuing operations for Q3 2025 was $(107.24), compared to $(4.99) for Q3 2024[9] - The net loss for the company was $82,165,178, compared to a net loss of $10,494,794 in the prior period[18] - Loss from continuing operations was $77,646,737, significantly higher than the loss of $2,129,880 reported previously[18] - Loss per common share, basic and diluted, was $136.12, compared to $31.20 in the previous period[18] - The company reported a total operating loss of $8,226,779, compared to $8,207,133 in the prior period[18] Expenses - General and administrative expenses increased by $1.1 million to $2.6 million in Q3 2025, primarily due to higher legal fees and stock-based compensation[9] - Total operating expenses for the period were $8,271,694, a slight increase from $8,235,685 in the previous period[18] - General and administrative expenses amounted to $6,316,930, up from $5,696,109 in the previous period[18] - Research and development expenses were $1,548,678, a decrease from $1,724,013 in the prior period[18] - Sales and marketing expenses increased to $406,086 from $815,563 in the previous period[18] - Sales and marketing expenses increased to $133,494 in Q3 2025 from $72,667 in Q3 2024, attributed to higher digital marketing consultant fees[9] Digital Asset Strategy - The company recorded a derivative liability of $74.4 million related to the initiation of its digital asset treasury strategy focused on the ATH token[9] - The company initiated a digital asset treasury strategy focused on ATH, receiving approximately $50.8 million in cash gross proceeds and in-kind contributions valued at approximately $292.7 million[4] - The company held approximately 5.70 billion ATH with a market value of approximately $152.8 million as of November 10, 2025[4] - The company experienced a significant loss on derivative instruments amounting to $74,366,000[18] Corporate Developments - The company appointed Shawn Matthews, CEO of DNA Holdings, to its Board of Directors[4] - The company announced a strategic collaboration with Every Cure to identify and prioritize drugs for repurposing to improve patient outcomes[4]

Financial Performance - The company reported a net loss of $43.5 million for the nine months ended September 30, 2025, with an accumulated deficit of $461.3 million as of the same date [111]. - The net loss for the nine months ended September 30, 2025, was $43.5 million, compared to a net loss of $56.0 million in the same period of 2024 [175][176]. - The net income for the three months ended September 30, 2025, was $3.3 million, compared to a net loss of $34.4 million for the same period in 2024, reflecting a change of $37.7 million [147]. - The company has incurred significant operating losses since inception, with net losses of $84.7 million and $93.8 million for the years ended December 31, 2024 and 2023, respectively [111]. Revenue and Licensing - The company recognized $11.6 million in revenue during Q3 2025 from the exclusive worldwide license agreement with Debiopharm for lunresertib, which included a $10 million upfront payment [107][120]. - Revenue for the three months ended September 30, 2025, was $11.6 million, an increase of $11.6 million compared to nil for the same period in 2024, attributed to revenue recognized under the Debiopharm Agreement [148]. - Revenue for the nine months ended September 30, 2025, was $11.9 million, a decrease of $41.6 million compared to $53.5 million for the same period in 2024 [158]. - The company entered into a collaboration and license agreement with Bristol-Myers Squibb, recognizing $0.3 million in revenue for the nine months ended September 30, 2025 [123]. Expenses and Cost Management - Research and development expenses for the three months ended September 30, 2025, were $7.5 million, a decrease of $20.9 million from $28.4 million for the same period in 2024 [149]. - General and administrative expenses for the three months ended September 30, 2025, were $4.5 million, down $1.9 million from $6.4 million for the same period in 2024 [149]. - Research and development expenses for the nine months ended September 30, 2025, were $42.1 million, down $49.4 million from $91.5 million in 2024 [158]. - General and administrative expenses decreased to $18.2 million for the nine months ended September 30, 2025, from $23.4 million in 2024, a reduction of $5.2 million [159]. - The company incurred approximately $1.8 million in restructuring costs for the three months ended September 30, 2025, compared to $1.5 million for the same period in 2024 [144]. - Restructuring expenses increased to $8.5 million for the nine months ended September 30, 2025, compared to $1.5 million in 2024 [159]. Cash and Liquidity - As of September 30, 2025, the company had cash and cash equivalents of $112.6 million, expected to fund operations through 2027 [110]. - As of September 30, 2025, cash and cash equivalents and marketable securities totaled $112.6 million [170]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $42.8 million, a decrease of $6.3 million compared to $49.1 million in 2024 [175][176]. - Net cash provided by investing activities increased to $30.7 million in 2025 from $17.9 million in 2024, primarily due to proceeds from maturities of marketable securities [178][179]. - The net decrease in cash and cash equivalents was $11.9 million for the nine months ended September 30, 2025, an improvement from a decrease of $30.7 million in 2024 [174]. Strategic Initiatives - The company plans to reduce its workforce by approximately 75% by Q4 2025 to focus on advancing its Phase 1 clinical programs [105]. - The company expects to incur significant expenses and operating losses for the foreseeable future, with funding anticipated through equity offerings and collaborations [171]. - The company anticipates an increase in general and administrative expenses in the future as it explores partnering alternatives for its portfolio [141]. Clinical Trials and Research - The company completed enrollment of 26 patients in the Phase 1 clinical trial of RP-3467 and 29 patients in the Phase 1 LIONS clinical trial for RP-1664, with initial positive data presented at a major conference [113]. - The company recognized $2.7 million in net research and development costs related to the Debiopharm collaboration for the nine months ended September 30, 2025 [128]. Other Financial Metrics - A gain of $3.3 million was recorded on the termination of the Debio Collaboration Agreement in the third quarter of 2025 [130]. - A gain of $5.8 million was recognized on the sale of technology and other assets for the nine months ended September 30, 2025 [160]. - Other income, net decreased to $5.1 million for the nine months ended September 30, 2025, from $8.3 million in 2024, a decrease of $3.2 million [162]. - Income tax expense was $0.8 million for the nine months ended September 30, 2025, down from $1.4 million in 2024, a decrease of $0.6 million [163].

Revenue Performance - Revenues for the three months ended September 30, 2025, increased to $385 from $150 in 2024, representing a growth of 156.67%[152] - For the nine months ended September 30, 2025, revenues decreased to $551 from $585 in 2024, a decline of 5.81%[157] Operating Expenses - Operating expenses surged to $10,595,334 in Q3 2025 from $442,847 in Q3 2024, marking an increase of 2,292.55%[154] - Operating expenses for the nine months ended September 30, 2025, rose to $13,990,290 from $1,300,292 in 2024, an increase of 975.93%[159] Net Loss - Net loss attributable to common stockholders for Q3 2025 was $10,452,579, compared to $464,837 in Q3 2024, an increase of 2,148.55%[156] - Net loss attributable to common stockholders for the nine months ended September 30, 2025, was $13,800,895, compared to $1,346,269 in 2024, an increase of 925.12%[162] Cash Position - As of September 30, 2025, the company had cash of $44,080,451, significantly up from $4,680,840 as of December 31, 2024[162] - Net cash used in operating activities for the nine months ended September 30, 2025, was $4,959,872, compared to $1,053,175 in 2024[164] - The company invested $6,761,950 in net cash used in investing activities for the nine months ended September 30, 2025, compared to $177,017 in 2024[165] Financing Activities - The Company raised $805,000 in a Series B Preferred offering, with each share costing $50 and convertible into 10 shares of common stock[174] - The Series B Preferred pays a quarterly dividend of 10%, amounting to $1.25 per share[178] - Upon up-listing to Nasdaq, the conversion price for Series B Preferred was set at $4.00 per share, eliminating downside price protections[176] - The Series C Preferred Stock was designated with 200,000 shares at a stated value of $60.00 each, convertible into 10 shares of common stock[182] - The Company sold 108,333 shares of Series C Preferred Stock for gross proceeds of approximately $6.5 million, netting about $6.04 million after fees[186] - The August 2025 Offering raised approximately $50 million from the sale of 5,000,000 shares of common stock[189] - The Company incurred a 7% cash fee and a 1% fee for non-accountable expenses related to the August 2025 Offering[190] Risks and Uncertainties - The Company is subject to risks from geopolitical conflicts and market volatility, which could adversely impact operations[196] - The Company has no assurance of obtaining additional financing if future operational funds are insufficient[193] Accumulated Deficit - The accumulated deficit increased to $(23,492,603) as of September 30, 2025, from $(9,691,708) as of December 31, 2024[163] Loan Agreements - The Company entered into a Master Loan Agreement with Coinbase for loans of digital assets or cash, with terms to be mutually agreed upon[191]

Financial Position - The company had an accumulated deficit of $85.5 million as of September 30, 2025, with operating losses incurred each year since inception [104]. - As of September 30, 2025, the company had cash and cash equivalents of $4.8 million and stockholders' equity of $4.2 million [104]. - The company has no products approved for commercial sale and has not generated any revenue from product sales to date [104]. - The company believes there is substantial doubt about its ability to continue its current and planned clinical programs for more than 12 months from the date of the filing [106]. - As of the report date, the company has approximately $13.3 million in cash and cash equivalents, sufficient to fund operations through Q1 2027 [166]. - The company may need to raise additional capital to fund product development and operations, which could adversely affect its financial condition if not achieved [167]. Capital Raising Activities - During the nine months ended September 30, 2025, the company sold 461,501 shares in an ATM offering for gross proceeds of $2.8 million and 387,006 shares under the ELOC agreement for gross proceeds of $4.5 million [104]. - The company entered into a public offering on November 11, 2025, issuing 2,514,335 shares of common stock and various warrants, with a combined public offering price of $1.50 per share [111]. - The net proceeds from the November 2025 Offering were approximately $6.3 million after deducting underwriting discounts and commissions [113]. - The company plans to use the net proceeds primarily to advance clinical development, pay off outstanding promissory notes, and for general corporate purposes [114]. - The company raised approximately $6.3 million in net proceeds from the November 2025 Offering, which included the sale of 2,514,335 shares of common stock and various warrants [165]. Expenses and Losses - Research and development expenses decreased to $61,826 in Q3 2025 from $137,234 in Q3 2024, a reduction of $75,408 [150]. - General and administrative expenses were $833,304 in Q3 2025, down from $869,237 in Q3 2024, a decrease of $35,933 [150]. - The net loss for Q3 2025 was $873,467, compared to a net loss of $972,121 in Q3 2024, a reduction of $98,654 [150]. - The company anticipates higher research and development expenses post-merger as it advances clinical development of acquired assets [151]. - The company expects higher general and administrative expenses after the merger as it incorporates Decoy's business [153]. Merger and Corporate Changes - The company completed a merger with Decoy Therapeutics on November 12, 2025, resulting in Decoy becoming a wholly owned subsidiary [109]. - The company issued 877.709 shares of Series A Non-Voting Convertible Preferred Stock and 796.306 shares of Series B Non-Voting Convertible Preferred Stock in connection with the merger [110]. - Management changes include the appointment of Mr. Frederick E. Pierce as CEO and Dr. Barbara Hibner as Chief Scientific Officer on November 12, 2025 [132][133]. - A transaction bonus of $225,000 was approved for the then-acting CEO, to be paid following the closing of the Merger [134]. Stock and Warrants - The Series A and Series B warrants have an exercise price of $1.50 per share and $0.0001 per share respectively, with Series A warrants expiring in five years and Series B in one year [115][116]. - The Company issued warrants to purchase up to 266,620 shares of common stock at an exercise price of $2.325, which are exercisable until November 11, 2030 [121]. - The Series A Preferred Stock has a conversion ratio set at 2,800-1 due to a post-closing anti-dilution provision triggered by a financing price below the Initial Issuance Price of $10.50 [124]. - Holders of Series B Preferred Stock are entitled to dividends equal to those paid on common stock, with a similar anti-dilution provision resulting in a conversion ratio of 2,800-1 [129]. - The Company is required to use 50% of net proceeds from certain sales to redeem outstanding shares of Series B Preferred Stock until fully redeemed [128]. Compliance and Reporting - Salarius regained compliance with Nasdaq's minimum bid price requirement on September 4, 2025, and with the equity standard on October 10, 2025 [146][148]. - The company has not made any material changes to its critical accounting policies since the last annual report [173]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [174]. Cash Flow Activities - The company reported a net cash used in operating activities of $3.7 million for the nine months ended September 30, 2025, a decrease of approximately $0.1 million from the same period in 2024 [169]. - Net cash used in investing activities was $0.2 million, primarily related to a short-term promissory note, with no such activity in the prior period [170]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $6.3 million, mainly from the sale of common shares under the ATM and ELOC program [171]. - The company experienced a net increase in cash and cash equivalents of $2.4 million for the nine months ended September 30, 2025, compared to a decrease of $2.6 million in the same period in 2024 [168].

Revenue Growth - Total revenues for the three months ended September 30, 2025, increased to $20,425, representing a 24.0% growth compared to $16,686 in the same period of 2024[19] - SaaS revenue for the nine months ended September 30, 2025, reached $57,583, up from $45,872 in 2024, indicating a 25.6% increase[19] - Total revenues for the nine months ended September 30, 2025, reached $57,701, up 25% from $45,998 in the prior year[65] - Subscription services revenue from Lofty for the three months ended September 30, 2025, was $8,709, a 3% increase from $8,442 in 2024[65] - The Lofty segment generated revenues of $10,056,000 for the three months ended September 30, 2025, compared to $9,216,000 for the same period in 2024, representing an increase of 9.1%[120] - The Trucker Path segment reported revenues of $10,332,000 for the three months ended September 30, 2025, up from $7,425,000 in the prior year, marking a significant growth of 39.5%[120] Profit and Loss - Gross profit for the three months ended September 30, 2025, was $15,143, compared to $12,633 in 2024, reflecting a 19.8% growth[19] - The company reported a comprehensive loss of $(1,629) for the three months ended September 30, 2025, compared to a comprehensive income of $1,187 in the same period of 2024[20] - The Company reported a loss from operations of $1,452,000 for the three months ended September 30, 2025, compared to a loss of $571,000 for the same period in 2024, indicating a worsening of operational performance[120] - The company reported a loss from operations of $1.980 billion for the nine months ended September 30, 2025, compared to a loss of $2.791 billion in 2024, showing an improvement of 29.0%[122] Expenses - Operating expenses for the three months ended September 30, 2025, totaled $16,595, up from $13,204 in 2024, marking a 25.0% increase[19] - Research and development expenses totaled $6,663,000 for the three months ended September 30, 2025, compared to $4,779,000 in the same period of 2024, representing an increase of 39.5%[120] - Selling and marketing expenses were $5,476,000 for the three months ended September 30, 2025, compared to $4,964,000 in the same period of 2024, reflecting an increase of 10.3%[120] - Operating expenses totaled $44.830 billion for the nine months ended September 30, 2025, compared to $37.920 billion in 2024, representing an increase of 18.2%[122] Assets and Liabilities - Total current assets as of September 30, 2025, were $40,850, an increase from $43,942 as of December 31, 2024[16] - Total liabilities decreased to $38,090 as of September 30, 2025, from $24,707 as of December 31, 2024[17] - Cash and cash equivalents increased to $22,049 as of September 30, 2025, compared to $26,642 as of December 31, 2024[16] - The total assets of the VIE decreased from $4,774 as of December 31, 2024, to $3,192 as of September 30, 2025, a decline of 33.2%[35] Shareholder Information - The number of Class A ordinary shares outstanding increased from 632,894,266 as of December 31, 2024, to 653,561,413 as of September 30, 2025[17] - The total number of Class A ordinary shares outstanding as of September 30, 2025, was 726,595,513[22] - The company repurchased 7,991,370 Class A ordinary shares for $155,000 during the period[22] - The company repurchased approximately 85.066 million Class A ordinary shares for about $5.7 million, representing 13.0% of the outstanding Class A shares[129] Cash Flow - Cash flows from operating activities for the nine months ended September 30, 2025 showed a net cash used of $2,032, a significant decline from the net cash provided of $1,704 in 2024[25] - The company reported a net cash used in investing activities of $3,185 for the nine months ended September 30, 2025, compared to a net cash used of $2,975 in 2024, indicating a 7.0% increase in cash outflow[25] - The company experienced a decrease in cash and cash equivalents and restricted cash, ending the period with $31,994 compared to $38,378 at the end of September 2024, reflecting a 16.5% decline[25] Acquisitions and Investments - The Company acquired Truckers Best Insurance LLC for a total purchase consideration of $2,826, which includes $1,000 in cash and $1,826 in contingent consideration[74] - TBI generated net revenue of $50 and a net loss of $735 for the three months ended September 30, 2025, since the acquisition[80] - The fair value of intangible assets acquired from TBI includes $582 for licenses and carrier appointments and $241 for customer relationships[79] - Goodwill from the TBI acquisition amounted to $1,997, attributed to expected synergies and future market development[82] Stock-Based Compensation - Stock-based compensation for the quarter ending June 30, 2025, amounted to $28,000[22] - The total share-based compensation expense for the three months ended September 30, 2025, is $165, down from $274 in the same period of 2024[112] - For the nine months ended September 30, 2025, the total share-based compensation expense is $539, compared to $1,599 for the same period in 2024[112] - The total unrecognized share-based compensation expense related to share options as of September 30, 2025, is $109, expected to be recognized over a weighted-average vesting period of 2.67 years[102] International Operations - The United States contributed $52.573 billion to total operating revenues for the nine months ended September 30, 2025, up from $43.330 billion in 2024, a growth of 21.5%[124] - International revenues increased to $5.128 billion for the nine months ended September 30, 2025, from $2.668 billion in 2024, marking a significant growth of 92.0%[124] Accounting and Compliance - The Company is evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2025-05 and ASU 2025-06[71][72] - The company has a full valuation allowance against U.S. federal and state net operating losses, which may be subject to annual limitations under IRC Section 382[127]

Financial Performance - Total revenue for Q2 FY 2026 was $12.4 million, a 3% decrease from $12.7 million in the prior-year quarter[4] - Net loss attributable to common stockholders was $(5.7) million, or $(0.31) per share, compared to a net loss of $(1.4) million, or $(0.09) per share, in the prior-year quarter[7] - Total revenues for the three months ended September 30, 2025, were $12,357,000, a decrease of 3% compared to $12,739,000 for the same period in 2024[31] - Operating loss for the three months ended September 30, 2025, was $(5,410,000), compared to $(861,000) for the same period in 2024, reflecting a significant increase in losses[31] - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $(5,678,000), compared to $(1,376,000) for the same period in 2024, indicating a worsening financial performance[31] - Adjusted EBITDA for the three months ended September 30, 2025, was $(3,685,000), compared to $532,000 for the same period in 2024, showing a decline in operational performance[36] - The company reported a net loss before income taxes of $(5,525,000) for the three months ended September 30, 2025, compared to $(1,197,000) for the same period in 2024, reflecting deteriorating profitability[31] Operating Expenses - SG&A expenses rose by $5.0 million, or 79%, to $11.4 million, driven by increased marketing costs and compensation[5] - Selling, general and administrative expenses for the three months ended September 30, 2025, were $11,407,000, a substantial increase from $6,364,000 for the same period in 2024, indicating rising operational costs[31] Assets and Liabilities - Total current assets decreased to $23,258,000 as of September 30, 2025, from $38,081,000 as of March 31, 2025, indicating a liquidity challenge[29] - Total liabilities decreased to $24,784,000 as of September 30, 2025, from $34,724,000 as of March 31, 2025, reflecting a reduction in financial obligations[29] - Cash and cash equivalents significantly decreased to $2,336,000 as of September 30, 2025, from $13,941,000 as of March 31, 2025, highlighting cash flow issues[29] - Total stockholders' equity decreased to $37,163,000 as of September 30, 2025, from $37,792,000 as of March 31, 2025, indicating a decline in shareholder value[29] Revenue Streams - Streaming and digital revenues decreased by 5% to $9.6 million from $10.1 million in the prior year[6] Strategic Initiatives - Cineverse announced a new venture, MicroCo, projected to tap into a $10 billion market by 2027[10] - The company plans to reissue the 20th anniversary edition of Pan's Labyrinth in Fall 2026, with a marketing campaign starting at the Cannes Film Festival[3] - Cineverse's Matchpoint™ platform added over 20 new customers in the last 100 days, indicating strong momentum in technology partnerships[17] Content Valuation - The company's content library, valued at $45 million, significantly exceeds its book value of $3.2 million[16] - The Toxic Avenger Unrated is projected to generate an internal rate of return (IRR) of over 40% despite underperforming at the box office[2]