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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2025

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

10.

SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date of issuance of these condensed consolidated financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the condensed consolidated financial statements.

Amended Loan and Security Agreement

On November 13, 2025, the Company and Avenue Capital Group entered into the First Amendment to Loan Documents (the “Amended Loan and Security Agreement”), amending the Company’s Loan and Security Agreement, dated June 28, 2024, as supplemented. The Amended Loan and Security Agreement provides for access to an additional aggregate $2.5 million (“Tranche 2a”) from Avenue Capital Group in November 2025 and for the extension of the interest only period from July 1, 2026 to December 31, 2026, followed by equal monthly installments of principal plus accrued and unpaid interest until maturity on July 1, 2027. The Company will have access to an additional aggregate $2.5 million (“Tranche 2b”) from Avenue Capital Group, subject to FDA approval of DrugSorb-ATR, between January 1, 2026 and December 31, 2026. Tranche 2a and Tranche 2b, in the aggregate, replace Tranche 2 of the Loan. The Amended Loan and Security Agreement requires that the Company maintain certain operating cash burn targets (as defined) prior to FDA approval of DrugSorb-ATR and provides for a further six-month extension of the interest only period to the July 1, 2027 maturity date upon FDA approval of DrugSorb-ATR.

Under the terms of the Amended Loan and Security Agreement, the Company issued additional warrants to Avenue Capital Group to purchase 1,428,571 shares of the Company’s common stock for cash at the exercise price of $0.70, which expire on November 13, 2030. The number of warrants and exercise price are fixed.

Workforce and Cost Reduction Plan

On November 13, 2025, the Company announced it initiated a strategic workforce and cost reduction plan (the “Strategic Workforce and Cost Reduction Plan”) to reduce costs, optimize operations, and accelerate a path to cash-flow profitability. This initiative follows a comprehensive review of the Company’s cost structure and operating model. As part of the strategic plan, the Company reduced its workforce by approximately 10%, and reduced and realigned operating and production expenses. The Company expects to record a charge of up to $0.9 million that will include severance and other cash and non-cash charges related to the restructuring. The estimated costs that the Company expects to incur, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially.

Continued Listing Requirements Notification

On October 2, 2025, the Company was notified by the Nasdaq Stock Market LLC (“Nasdaq”) that the Company was not in compliance with the Nasdaq’s continued listing requirements relating to the minimum average closing price per share of the Company’s common stock, because the average closing price of the Company’s common stock over a consecutive 30 trading-day period was below $1.00 per share (the “Minimum Bid Price Requirement”). The notice does not result in the immediate delisting of the Company’s common stock from the Nasdaq.

The Company has timely notified the Nasdaq of its intent to regain compliance with the minimum price condition within a 180-day cure period provided by Nasdaq rules, or until March 31, 2026 (the “Compliance Date”). The Company can regain compliance at any time within the cure period if, the closing bid price of the Company’s common stock meets or exceeds $1.00 per common share for a minimum of 10 consecutive business days prior to the Compliance Date, unless the Nasdaq staff exercises its discretion to require the Company to meet the Minimum Bid Price Requirement for a longer period pursuant to applicable Nasdaq rules. If the Company fails to regain compliance with the Nasdaq’s minimum price condition by the end of the cure period, the Company would be eligible for an additional compliance period of 180 days provided it presents an acceptable plan to Nasdaq to regain compliance.

The Company intends to actively monitor the closing bid price of its common stock and will consider its options to regain compliance with the Minimum Bid Price Requirement. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing standards. If the Company is unable to regain compliance with the Minimum Bid Price Requirement, the Company’s common stock will be subject to the Nasdaq’s suspension and delisting procedures.

During this time, the Company’s common stock will continue to be listed on the Nasdaq, subject to its compliance with other Nasdaq continued listing requirements. However, there can be no assurance about the Company’s ability to regain compliance with the Nasdaq’s minimum price condition within the applicable cure periods.