Note 2 - Significant Accounting Policies (Policies) |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Accounting Policies [Abstract] | |
| Reverse stock split |
(a)
Reverse stock split
On February 26, 2025, the Company effected a 1-for-30 reverse stock split of the shares of its Common Shares (the “Reverse Stock Split”). The par value and the authorized shares of the Common Shares were not adjusted as a result of the Reverse Stock Split. All of the Company’s issued and outstanding common shares (the “Common Shares”), stock options and warrants have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. |
| Basis of presentation - going concern |
(b)
Basis of presentation - going concern
These consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States and the rules and regulations of the Securities and Exchange Commission (“SEC”), related to annual reports filed on Form 10-K, assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists. As of the filing date, the Company does not have sufficient cash to fund operations and relies on advances made by Hanmi (as defined below). Since the Company's inception, the Company has financed its operations and technology acquisitions primarily through equity financing, proceeds from the exercise of warrants and stock options, advances made by Hanmi (as defined below) and interest income on funds held for future investment. Cash used for operating activities has primarily consisted of salaries and wages for the Company's management and employees, facility and facility-related costs for the Company's offices, fees paid in connection with preclinical and clinical studies, licensing fees, drug manufacturing costs, laboratory supplies and materials, and professional fees. Given the early stage of the Company's clinical trials, the Company does not expect to generate positive cash flow from operations in the foreseeable future. Negative cash flows are expected to continue until the Company receives regulatory approval to commercialize any of its products under development and/or when royalty or milestone revenue from such products exceeds expenses. The Company incurred net losses of $25.5 million for the year ended December 31, 2025 and $25.4 million for the year ended December 31, 2024. As of December 31, 2025, the Company had an accumulated deficit of $566.4 million (December 31, 2024 - deficit of $541.0 million); cash, cash equivalents, restricted cash and restricted cash equivalents of $4.1 million (December 31, 2024 - $6.7 million); current assets less current liabilities of negative $2.9 million (December 31, 2024 - positive $5.1 million); and shareholders’ deficit of $27.2 million (December 31, 2024 - shareholders’ deficit of $4.5 million). The Company's cash needs for the twelve months subsequent to the issuance of these financial statements include estimates of the number of patients and rate of enrollment in its clinical trials, the amount of drug product the Company will require to support its clinical trials and general corporate overhead costs to support its operations. The Company has based these estimates on assumptions and plans that may change and could impact the magnitude and/or timing of operating expenses and its cash runway. Management recognizes that in order to meet capital requirements and to continue operations, additional financing will be necessary. The Company plans to raise additional funds to fund its business operations through debt or other financing activities (see also Note 12, Note 13 and Note 14). Management continues considering other options for raising capital including debt, through collaborations or reorganization to reduce operational expenses. However, given the decrease in the share price, the Company's delisting from Nasdaq, as well as the difficulty for micro-cap market capitalization companies to raise significant capital, the Company may be unable to access financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all. The Company's ability to raise additional funds has been affected by adverse market conditions, the status of its product pipeline, delays in enrollment in its trial, and various other factors, and the Company may be unable to raise capital when needed, or on terms favorable to the Company. In the event that debt or equity financing is unable to be secured, the Company may need to resort to other means of protecting its assets in the best interests of its shareholders, including foreclosure or forced liquidation and/or seeking creditors’ protection. The aforementioned conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not reflect any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may be necessary if the Company is unable to continue as a going concern; these types of adjustments could be material. |
| Basis of presentation - functional currency, presentation currency and consolidation |
(c)
Basis of presentation - functional currency, presentation currency and consolidation
The functional and presentation currency of the Company is the U.S. dollar. These consolidated financial statements include the accounts of its subsidiaries. All intercompany transactions, balances, revenue and expenses are eliminated on consolidation. |
| Significant accounting policies, estimates and judgments |
(d) Significant accounting policies, estimates and judgments The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. Actual outcomes could differ from those estimates. The consolidated financial statements contain estimates, which, by their nature, are uncertain, including estimates surrounding accrued research and development expenses. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. The estimates and underlying assumptions are reviewed on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. |
| Leases |
(i) Leases The Company’s operating leases of tangible property with terms greater than twelve months are recognized as right-of-use assets, which represents the lessee’s right to use, or control the use of, a specified asset for the lease term, and a corresponding lease liability, which represents the lessee’s obligation to make lease payments under a lease, measured on a discounted basis. Landlord inducements in the form of free rent periods are netted against lease payments to the landlord in measuring right-of-use assets and lease liabilities. |
| Cash and cash equivalents |
(e) Cash and cash equivalents Cash and cash equivalents are short-term highly liquid investments with original maturities of 90 days or less as of the date of purchase. Cash equivalents are accounted for at amortized cost basis, which approximates their fair value due to their short-term maturities. |
| Restricted cash and restricted cash equivalents |
(f) Restricted cash and restricted cash equivalents Restricted cash and restricted cash equivalents reflect the balance of unspent proceeds associated with the loan payable to related party. Restricted cash consists of deposits in operating accounts, and restricted cash equivalents consist of deposits in high interest savings accounts, money market funds and accounts with original maturities of less than 90 days. Restricted cash equivalents are accounted for at amortized cost basis, which approximates their fair value due to their short-term maturities. |
| Concentration of risk |
(g) Concentration of risk The Company is subject to credit risk from its cash, cash equivalents, restricted cash and restricted cash equivalents. The carrying amount of the financial assets represents the maximum credit exposure. The Company manages credit risk associated with its cash, cash equivalents, restricted cash and restricted cash equivalents by maintaining minimum standards of R1‑low or A‑low investments. The Company invests only in highly rated corporations and treasury bills, which are capable of prompt liquidation. The Company has cash accounts in Canada and the U.S. The Canada Deposit Insurance Corporation (“CDIC”) and the U.S. Federal Deposit Insurance Corporation ("FDIC") provide insurance to protect depositors against the loss of their deposits in case of a bank failure. However, the maximum amount of coverage varies by jurisdiction and account type. In Canada, the CDIC insures eligible deposits up to $100,000 (CAD) per depositor, per insured category, per member institution. In the United States, the FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. It is important to note that not all deposits are eligible for insurance coverage. For example, deposits in foreign currency, deposits held in trust, and investments such as mutual funds, stocks and bonds are not insured by either the FDIC or the CDIC. |
| Property and equipment |
(h) Property and equipment Property and equipment, which consist of office furniture, computer hardware and software, and leasehold improvements, are stated at historical cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the estimated useful lives of the related assets, which are generally to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the asset. |
| Research and development |
(j)
Research and development
Research and development costs are expensed as incurred. Research and development costs consist primarily of salaries and benefits, stock-based compensation, manufacturing, contract services, clinical trials and research-related overhead. Non-refundable advance payments for goods and services that will be used in future research are recorded in prepaid and other assets and are expensed when the services are performed. The Company records expenses for research and development activities based on management’s estimates of services received and efforts expended pursuant to contracts with vendors that conduct research and development on the Company’s behalf. The financial terms vary from contract to contract and may result in uneven payment flows as compared with services performed or products delivered. As a result, the Company is required to estimate research and development expenses incurred during the period, which impacts the amount of accrued expenses and prepaid balances related to such costs as of the date of each consolidated statement of financial position. Management estimates the amount of work completed through discussions with internal personnel and the contract research and contract manufacturing organizations as to the progress or stage of completion of the services, as well as to identify services that have been performed on our behalf and estimating the level of services performed and the associated cost incurred for the service when we have not been invoiced or otherwise notified of the actual cost.. The Company’s estimates are based on a number of factors, including the Company’s knowledge of the status of each of the research and development project milestones and contract terms together with related executed change orders. Management makes significant judgments and estimates in determining the accrued balance at the end of each reporting period. |
| Fair value |
(k)
Fair value
The Company measures its financial assets and liabilities at fair value. The carrying amounts for the Company’s financial instruments, including cash, cash equivalents, restricted cash and restricted cash equivalents, accounts payable and accrued liabilities approximate their fair value due to their short maturities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. |
| Warrants |
(l)
Warrants
The Company accounts for share purchase warrants issued in connection with financing activities in accordance with the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own shares. The registered warrants require the issuance of registered securities upon exercise and in no event require the Company to net cash settle an exercise of warrants. All of the warrants issued in connection with financing activities (see Note 13: Share capital) have been classified as equity at each year end, with the grant date fair value of the instruments allocated between Common Shares and additional paid-in capital based on the relative fair values of the base instrument and the warrants. The Company uses the Black-Scholes pricing model to value the warrants. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment. A small change in the estimates used may cause a relatively large change in the estimated valuation. The estimated volatility of the Company’s Common Shares at the date of issuance, and at each subsequent reporting period, is based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the zero-coupon rate for bonds with a maturity similar to the expected remaining life of the warrants at the valuation date. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. |
| Stock-based compensation |
(m)
Stock-based compensation
Stock-based compensation expense represents the grant date fair value of stock options recognized over the vesting period, which approximates the requisite service period of the awards. The Company calculates the fair value of each stock option grant using the Black‑Scholes option pricing model at the grant date. This method requires certain assumptions be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend (see Note 15). Options granted have a maximum contractual term of ten years. |
| Segment reporting |
(n)
Segment reporting
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or CODM. The Company’s serves as its CODM. The Company views its operations and manages its business as one segment, which is the discovery and development of personalized therapies addressing unmet medical needs in oncology. The Company operates primarily in the U.S. |
| Loss per share |
(o)
Loss per share
Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the year. Diluted loss per share is computed similarly to basic loss per share except that the weighted average share outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises were used to acquire Common Shares at the average market price during the year. The inclusion of the Company’s stock options and warrants in the computation of diluted loss per share has an anti‑dilutive effect on the loss per share and, therefore, they have been excluded from the calculation of diluted loss per share. |
| Income taxes |
(p)
Income taxes
The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled. Valuation allowances are provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions and other issues. Reserves are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filing is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. Potential interest and penalties, if any, associated with such uncertain tax positions are recorded as components of income tax expense. |
| Recent accounting pronouncements |
(q) Recent accounting pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The Company adopted the new guidance as of December 31, 2025, and the required disclosures have been included in the notes to the consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which is intended to improve disclosures by requiring additional information about specific expense categories in the notes to the financial statements on an annual and interim basis. The standard will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The standard updates may be applied on either a prospective or retrospective basis. The Company is currently evaluating the disclosure requirements related to this new standard. |