SEC Form 10-K filed by Hepion Pharmaceuticals Inc.

3/11/26 9:43:19 PM ET

$HEPA

Biotechnology: Pharmaceutical Preparations

Health Care

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission File Number 001-36856

HEPION PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

46-2783806

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

55 Madison Ave, Suite 400- PMB# 4362, Morristown, New Jersey 07960

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (732) 902-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		HEPA		OTC QB

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (? 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to ?240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2025, the aggregate market value of the registrant’s voting stock held by non-affiliates was approximately $0.9 million based on the last reported sale price of the registrant’s common stock.

The number of shares of the registrant’s Common Stock outstanding as of March 11, 2026 was 11,620,317.

Documents Incorporated by Reference:

Parts of the registrant’s Proxy Statement for the Registrant’s 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2025.

TABLE OF CONTENTS

		Page
Cautionary Note Regarding Forward-Looking Statements		3

PART I

Item 1.	Business	5
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	43
Item 1C.	Cybersecurity	43
Item 2.	Properties	44
Item 3.	Legal Proceedings	44
Item 4.	Mine Safety Disclosures	44

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	[Reserved]	45
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 8.	Financial Statements and Supplementary Data	51
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	75
Item 9A.	Controls and Procedures	75
Item 9B.	Other Information	76
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	76

PART III

	Certain information called for by Part III (Items 10, 11, 12, 13 and 14) has been omitted as Registrant intends to file with the Securities and Exchange Commission not later than 120 days after the close of its fiscal year a definitive Proxy Statement pursuant to Regulation 14A.	77

PART IV

Item 15.	Exhibits and Financial Statement Schedules	78
Item 16.	Form 10-K Summary	79

SIGNATURES		80

●	our ability to raise substantial additional capital to continue as a going concern and fund our planned operations in the near term;

●	estimates regarding our expenses, use of cash, timing of future cash needs and anticipated capital requirements;

●	success in retaining, or changes required in, our officers, key employees or directors;

●	our public securities’ potential liquidity and trading;

●	our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations or warnings in the label of any of our product candidates, if approved;

●	our plans to pursue research and development of other future product candidates;

●	the potential advantages of our product candidates and those being developed;

●	the rate and degree of market acceptance and clinical utility of our product candidates;

●	the success of our collaborations and partnerships with third parties;

●	our estimates regarding the potential market opportunity for our product candidates;

●	our sales, marketing and distribution capabilities and strategy;

●	our ability to establish and maintain arrangements for manufacture of our product candidates;

●	our ability to compete with companies currently marketing or engaged in the development of treatments for indications that our product candidates are designed to target; and

●	our intellectual property position, including the strength and enforceability of our intellectual property rights.

	a)	a payment of US$500,000 on the regulatory approval by the US Food and Drug Administration of the first new drug application for Rencofilstat (formerly CRV431)
	b)	a further payment of US$1,000,000 on first instance of net sales of an approved drug product containing Rencofilstat (a “Licensed Product”) exceeding US$350,000,000; and
	c)	a further payment of US$3,000,000 on first instance of net sales of a Licensed Product exceeding US$750,000,000.

	●	Class I: general controls, such as labeling and adherence to quality system regulations;

	●	Class II: special controls, premarket notification (often referred to as a 510(k)), specific controls such as performance standards, patient registries, post-market surveillance, additional controls such as labeling and adherence to quality system regulations; and

	●	Class III: special controls and requires a premarket approval (“PMA”).

	●	establishment registration and device listing with the FDA;

	●	QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

	●	labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products;

	●	requirements related to promotional activities;

	●	clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;

	●	medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;

	●	correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;

	●	the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and

	●	post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

	●	untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

	●	unanticipated expenditures to address or defend such actions;

	●	customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;

	●	operating restrictions, partial suspension or total shutdown of production;

	●	refusing or delaying our requests for regulatory approvals or clearances of new products or modified products;

	●	refusal to grant export approval for our products; or

	●	criminal prosecution.

	●	communications with the FDA, or similar regulatory authorities in different countries, regarding the scope or design of a trial or trials;

	●	regulatory authorities (including an Institutional Review Board or Ethical Committee) or IRB or EC, not authorizing us to commence or conduct a clinical trial at a prospective trial site;

	●	enrollment in our clinical trials being delayed, or proceeding at a slower pace than we expected, because we have difficulty recruiting patients or participants dropping out of our clinical trials at a higher rate than we anticipated;

	●	our third-party contractors, upon whom we rely for conducting preclinical studies, clinical trials and manufacturing of our trial materials, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner;

	●	having to suspend or ultimately terminate our clinical trials if participants are being exposed to unacceptable health or safety risks;

	●	IRBs, ECs or regulators requiring that we hold, suspend or terminate our preclinical studies and clinical trials for various reasons, including non-compliance with regulatory requirements; and

	●	the supply or quality of drug material necessary to conduct our preclinical studies or clinical trials being insufficient, inadequate or unavailable.

	●	adversely impact our ability to raise sufficient capital to fund the development of our product candidate;

	●	adversely affect our ability to further develop or commercialize our product candidate;

	●	diminish any competitive advantages that we or our collaborators may have or attain; and

	●	adversely affect the receipt of potential milestone payments and royalties from the sale of our products or product revenues.

	●	delays, suspension or termination of clinical trials related to our products;

	●	refusal by regulatory authorities to review pending applications or supplements to approved applications;

	●	product recalls or seizures;

	●	suspension of manufacturing;

	●	withdrawals of previously approved marketing applications; and

	●	fines, civil penalties and criminal prosecutions.

	●	the progress of the development of our product candidates;

	●	the number of product candidates we pursue;

	●	the time and costs involved in obtaining regulatory approvals;

	●	the costs involved in filing and prosecuting patent applications and enforcing or defending patent claims;

	●	our plans to establish sales, marketing and/or manufacturing capabilities;

	●	the effect of competing technological and market developments;

	●	the terms and timing of any collaborative, licensing and other arrangements that we may establish;

	●	general market conditions for offerings from biopharmaceutical companies;

	●	our ability to establish, enforce and maintain selected strategic alliances and activities required for product commercialization; and

	●	our revenues, if any, from successful development and commercialization of our product candidates.

	●	the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

	●	we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

	●	the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

	●	the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

	●	the data collected from clinical trials of our product candidate may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere;

	●	the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

	●	the FDA or comparable foreign regulatory authorities may fail to approve the companion diagnostics we contemplate developing with partners; and

	●	the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

	●	the federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

	●	federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, and which may apply to entities like us which provide coding and billing information to customers;

	●	the federal Health Insurance Portability and Accountability Act of 1996, which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

	●	the Federal Food, Drug, and Cosmetic Act, which among other things, strictly regulates drug manufacturing and product marketing, prohibits manufacturers from marketing drug products for off-label use and regulates the distribution of drug samples; and

	●	state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.

	●	demonstration of safety and efficacy;

	●	changes in the practice guidelines and the standard of care for the targeted indication;

	●	relative convenience and ease of administration;

	●	the prevalence and severity of any adverse side effects;

	●	budget impact of adoption of our product on relevant drug formularies and the availability, cost and potential advantages of alternative treatments, including less expensive generic drugs;

	●	pricing, reimbursement and cost effectiveness, which may be subject to regulatory control;

	●	effectiveness of our or any of our partners’ sales and marketing strategies;

	●	the product labeling or product insert required by the FDA or regulatory authority in other countries; and

	●	the availability of adequate third-party insurance coverage or reimbursement.

	●	our third-party contractors failing to develop an acceptable formulation to support later-stage clinical trials for, or the commercialization of, our product candidate;

	●	our contract manufacturers failing to manufacture our product candidates according to their own standards, our specifications, cGMPs, or otherwise manufacturing material that we or the FDA may deem to be unsuitable in our clinical trials;

	●	our contract manufacturers being unable to increase the scale of, increase the capacity for, or reformulate the form of our product candidates. We may experience a shortage in supply, or the cost to manufacture our products may increase to the point where it adversely affects the cost of our product candidate. We cannot assure you that our contract manufacturers will be able to manufacture our products at a suitable scale, or we will be able to find alternative manufacturers acceptable to us that can do so;

	●	our contract manufacturers placing a priority on the manufacture of their own products, or other customers’ products;

	●	our contract manufacturers failing to perform as agreed or not remain in the contract manufacturing business; and

	●	our contract manufacturers’ plants being closed as a result of regulatory sanctions or a natural disaster.

	●	the therapeutic efficacy or perceived benefit of the product relative to existing therapies, if they exist;

	●	the timing of market approval and existing market for competitive drugs;

	●	the level of reimbursement provided by payers to cover the cost of the product to patients;

	●	the net cost of the product to the user or payer;

	●	the convenience and ease of administration of our product;

	●	the product’s potential advantages over existing or alternative therapies;

	●	the actual or perceived safety of similar classes of products;

	●	the actual or perceived existence, prevalence and severity of negative side effects;

	●	the effectiveness of sales, marketing and distribution capabilities; and

	●	the scope of the product label approved by the FDA.

	●	do not allocate the necessary resources due to internal constraints, such as limited personnel with the requisite scientific expertise, limited capital resources, or the belief that other product candidates or other internal programs may have a higher likelihood of obtaining regulatory approval or may potentially generate a greater return on investment;

	●	do not have sufficient resources necessary to fully support the product candidates through clinical development, regulatory approval and commercialization;

	●	are unable to obtain the necessary regulatory approvals; or

	●	may re-evaluate the importance and their support for developing our product candidate pipeline due to a change in management, business operations or financial strategy.

	●	we or our licensors may not have been the first to discover the inventions covered by each of our or our licensors’ pending patent applications and issued patents, and we may have to engage in expensive and protracted interference proceedings to determine priority of invention;

	●	our or our licensors’ pending patent applications may not result in issued patents;

	●	our or our licensors’ issued patents may not provide a basis for commercially viable products, may not provide us with any competitive advantages, or may be challenged by third parties; and

	●	third parties may develop intellectual property around our or our licensors’ patent claims to design competitive intellectual property and ultimately product candidates that fall outside the scope of our or our licensors’ patents.

	●	disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies;

	●	incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

	●	higher than expected acquisition and integration costs;

	●	difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel;

	●	increased amortization expenses;

	●	impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

	●	inability to motivate key employees of any acquired businesses; and

	●	assumption of known and unknown liabilities.

●	laboratory testing, including CLIA and state laboratory licensing laws;

●	the development, testing, use, distribution, promotion and advertising of research services, kits, clinical diagnostics and pharmaceutical therapies, including certain LDTs, and related services, which are regulated by the FDA under the FDCA and the FTC;

●	test ordering, documentation of tests ordered, billing practices and claims payment under CMS and the HHS OIG enforcing those laws and regulations;

●	cellular therapies, medical device and in vitro diagnostic clearance, marketing authorization or approval;

●	laboratory anti-mark-up laws;

●	the handling and disposal of medical and hazardous waste;

●	fraud and abuse laws such as the False Claims Act, the AKS, EKRA, and the Stark Law;

●	Occupational Safety and Health Administration rules and regulations;

●	HIPAA and other federal and state data privacy and security laws;

●	federal and state genetic information laws, such as the Genetic Information Nondiscrimination Act (“GINA”) and similar state laws; and

●	coverage and restrictions on coverage and reimbursement for clinical diagnostics and pharmaceutical therapies and Medicare, Medicaid, other governmental payors and private insurers reimbursement levels.

●	the inability to demonstrate to the satisfaction of the FDA that the products are safe or effective for their intended uses;

●	the disagreement of the FDA with the design, conduct or implementation of the clinical trials or the analysis or interpretation of data from preclinical studies, analytical studies or clinical trials;

●	serious and unexpected adverse device effects experienced by participants in clinical trials;

●	the data from preclinical studies, analytical studies and clinical trials may be insufficient to support clearance, authorization or approval, where required;

●	the inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

●	an advisory committee, if convened by the FDA, may recommend against approval of a PMA or other application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions, or even if an advisory committee makes a favorable recommendation, the FDA may still not approve the product;

●	the FDA may identify deficiencies in our marketing application;

●	the FDA may identify deficiencies in our or our collaborators’ manufacturing processes, facilities or analytical methods;

●	the potential for policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering clinical data or regulatory filings insufficient for clearance, authorization or approval; and

●	the FDA or foreign regulatory authorities may audit clinical trial data and conclude that the data is not sufficiently reliable to support a PMA.

SEC Form 10-K filed by Hepion Pharmaceuticals Inc.

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●	initiate an inspection of our or our collaborators’ facilities;

●	issue an untitled or warning letter asserting that we or our collaborators are in violation of law;

●	seek an injunction or impose civil or criminal penalties or monetary fines;

●	suspend or withdraw regulatory clearance, authorization or approval, or revoke a license or accreditation;

●	suspend any ongoing clinical studies;

●	delay or refuse clearance, authorization or approval of a pending regulatory submission or supplement submitted by us or our collaborators;

●	impose restrictions on our or our collaborators’ cleared, authorized, approved, accredited or licensed products or services;

●	seize or recall the product or service;

●	partially suspend or entirely shut down our or our collaborators’ manufacturing or laboratory operations;

●	issue advisories or other field actions;

●	impose operating restrictions;

●	refuse to allow us or our collaborators to enter into supply contracts, including government contracts; or

●	refer matters to the DOJ or other enforcement or regulatory bodies.

	●	manage development efforts effectively;

	●	manage our clinical trials effectively;

	●	integrate additional management, administrative, manufacturing and sales and marketing personnel;

	●	maintain sufficient administrative, accounting and management information systems and controls; and

	●	hire and train additional qualified personnel.

	●	our ability to integrate operations, technology, products and services;

	●	our ability to execute our business plan;

	●	operating results below expectations;

	●	our issuance of additional securities, including debt or equity or a combination thereof, which will be necessary to fund our operating expenses;

	●	announcements of technological innovations or new products by us or our competitors;

	●	loss of any strategic relationship;

	●	industry developments, including, without limitation, changes in healthcare policies or practices or third-party reimbursement policies;

	●	economic and other external factors;

	●	period-to-period fluctuations in our financial results;

	●	catastrophic weather and/or global disease outbreaks, such as the COVID-19 pandemic; and

	●	whether an active trading market in our common stock is maintained.

	●	the inability of our stockholders to call a special meeting;

	●	rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;

	●	the right of our board to issue preferred stock without stockholder approval;

	●	the ability of our directors, and not stockholders, to fill vacancies on our board of directors.

	Year Ended December 31,
	2025			2024			Change
Revenues	$	—		$	—		$	—
Costs and Expenses:
Research and development		445,512			11,847,348			(11,401,836	)
General and administrative		3,315,433			7,499,230			(4,183,797	)
Asset impairment loss		402,746			—			402,746
Loss from operations		(4,163,691	)		(19,346,578	)		(15,182,887	)

Other income (expense):
Interest expense		(24,406	)		(1,247,313	)		1,222,907
Write-off related party note receivable		—			(600,000	)		600,000
Change in fair value of contingent consideration and derivative financial instruments		(4,089,753	)		7,599,263	)		(11,689,016	)
Inducement expense		—			(2,567,044	)		2,567,044
Loss before income taxes		(8,277,850	)		(16,161,672	)		7,883,822
Income tax benefit		—			2,969,252			(2,969,252	)
Net loss	$	(8,277,850	)	$	(13,192,420	)	$	(4,914,570	)

	●	the scope, progress, results and costs of researching and developing our current and future product candidate and programs, and of conducting preclinical studies and clinical trials;

	●	the number and development requirements of other product candidates that we may pursue, and other indications for our current product candidate that we may pursue;

	●	the stability, scale and yields during the manufacturing process as we scale-up production and formulation of our product candidate for later stages of development and commercialization;

	●	the timing of, and the costs involved in, obtaining regulatory and marketing approvals and developing our ability to establish sales and marketing capabilities, if any, for our current and future product candidates we develop if clinical trials are successful;

	●	our ability to establish and maintain collaborations, strategic licensing or other arrangements and the financial terms of such agreements;

	●	the cost of commercialization activities for our current and future product candidates that we may develop, whether alone or with a collaborator;

	●	the costs involved in preparing, filing, prosecuting, maintaining, expanding, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;

	●	the timing, receipt and amount of sales of, or royalties on, our future products, if any; and

	Year Ended December 31,
	2025			2024
Net cash provided by (used in):
Operating activities	$	(3,271,520	)	$	(18,216,303	)
Investing activities		(132,117	)		(600,000	)
Financing activities		4,825,291			4,349,707

	Page
Report of Independent Registered Public Accounting Firm (Grassi & Co., CPAs, P.C.; Jericho, New York; PCAOB ID#606)	52
Consolidated Balance Sheets	53
Consolidated Statements of Operations	54
Consolidated Statements of Comprehensive Loss	55
Consolidated Statements of Changes in Stockholders’ Equity	56
Consolidated Statements of Cash Flows	57
Notes to the Consolidated Financial Statements	58

	●	We evaluated the appropriateness of management’s accounting conclusions related to the treatment of the warrants as liability or equity instruments.
	●	We involved our fair value specialist who assisted in evaluating the reasonableness of management’s valuation methodology and the significant assumptions used in the valuation models, including the discount for lack of marketability and dilution adjustments.
	●	We evaluated the competency and objectivity of management’s expert engaged to perform the valuation.

	2025			2024
	December 31,
	2025			2024
Assets
Current assets:
Cash	$	1,828,062		$	406,408
Prepaid expenses		1,241,890			1,207,329
Total current assets		3,069,952			1,613,737
Total assets	$	3,069,952		$	1,613,737

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	167,810		$	220,202
Accrued expenses		77,507			23,684
Notes payable, current		54,066			2,900,000
Total current liabilities		299,383			3,143,886

Derivative financial instruments—warrants		103,022			333,189
Total liabilities		402,405			3,477,075
Commitments and contingencies (see Note 12)		-			-
Stockholders’ equity:
Series A convertible preferred stock, stated value $10 per share, 85,581 shares issued and outstanding at December 31, 2025 and 2024, respectively.		855,808			855,808
Series C convertible preferred stock, stated value $1,000 per share, 1,688 shares issued and outstanding at December 31, 2025 and 2024.		839,320			839,320
Convertible preferred stock		839,320			839,320
Common stock—$0.0001 par value per share; 120,000,000 shares authorized, 11,620,317 and 139,168 shares issued and outstanding at December 31, 2025 and 2024, respectively.		1,162			14
Additional paid-in capital		247,060,568			234,252,981
Accumulated other comprehensive income (loss)		8,345			8,345
Accumulated deficit		(246,097,656	)		(237,819,806	)
Total stockholders’ equity		2,667,547			(1,863,338	)
Total liabilities and stockholders’ equity	$	3,069,952		$	1,613,737