# EDGAR Filing Document

**Accession Number:** 0000908259
**File Stem:** 0001493152-26-023181
**Filing Date:** 2026-5
**Character Count:** 246056
**Document Hash:** 93b80b6102091fdff5a801b94a207708
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-023181.hdr.sgml**: 20260514

**ACCESSION NUMBER**: 0001493152-26-023181

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 81

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260514

**DATE AS OF CHANGE**: 20260514

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Oncotelic Therapeutics, Inc.
- **CENTRAL INDEX KEY:** 0000908259
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 133679168
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-21990
- **FILM NUMBER:** 26980454

**BUSINESS ADDRESS:**
- **STREET 1:** 29397 AGOURA RD.
- **STREET 2:** #107
- **CITY:** AGUORA HILLS
- **STATE:** CA
- **ZIP:** 91301
- **BUSINESS PHONE:** 650-635-7000

**MAIL ADDRESS:**
- **STREET 1:** 29397 AGOURA RD.
- **STREET 2:** #107
- **CITY:** AGUORA HILLS
- **STATE:** CA
- **ZIP:** 91301

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MATEON THERAPEUTICS INC
- **DATE OF NAME CHANGE:** 20160613

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** OXIGENE INC
- **DATE OF NAME CHANGE:** 19930628

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

**For the Quarterly Period Ended March 31, 2026**

**or**

**☐** **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: <u>000-21990</u>**

**Oncotelic Therapeutics, Inc.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **13-3679168** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **29397 Agoura Road Suite 107**<br> **Agoura Hills, CA** | **91301** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(650) 635-7000</u>**

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of exchange on which registered** |
| Common Stock | OTLC | N/A |

---

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," a "smaller reporting company" and an "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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 14, 2026, there were 444,497,302 shares of the registrant's common stock outstanding.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**FORM 10-Q**

**FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **[PART I. FINANCIAL INFORMATION](#sa_001)** | **[PART I. FINANCIAL INFORMATION](#sa_001)** | 3 |
| ITEM 1. | [Financial Statements (unaudited)](#sa_002) | 3 |
|  | [Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025](#sa_003) | 3 |
|  | [Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025](#sa_004) | 4 |
|  | [Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2026 and 2025](#sa_005) | 5 |
|  | [Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025](#sa_006) | 7 |
|  | [Notes to Consolidated Financial Statements](#sa_007) | 8 |
| ITEM 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#sh_001) | 42 |
| ITEM 3. | [Quantitative and Qualitative Disclosures about Market Risk](#sh_002) | 56 |
| ITEM 4. | [Controls and Procedures](#sh_003) | 56 |
| **[PART II. OTHER INFORMATION](#sh_004)** | **[PART II. OTHER INFORMATION](#sh_004)** | 58 |
| ITEM 1. | [Legal Proceedings](#sh_005) | 58 |
| ITEM 1A. | [Risk Factors](#sh_006) | 58 |
| ITEM 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#sh_007) | 58 |
| ITEM 3. | [Defaults Upon Senior Securities](#sh_008) | 58 |
| ITEM 4. | [Mine Safety Disclosures](#sh_009) | 58 |
| ITEM 5. | [Other Information](#sh_010) | 58 |
| ITEM 6. | [Exhibits, Financial Statement Schedules](#sh_011) | 58 |
| **[SIGNATURES](#sh_012)** | **[SIGNATURES](#sh_012)** | 60 |

---

**PART I – FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $63614 | $88857 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 20000 | $20000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 2058 | 51324 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid & other current assets | 1979377 | 1038071 |
| Total current assets | 2065049 | 1198252 |
| In process R&D | 1101760 | 1101760 |
| Goodwill, net of impairment | 2788230 | 2788230 |
| Investment in GMP Bio at fair value | 388000000 | 388000000 |
| Total assets | $393955039 | $393088242 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $2470889 | $2571123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to related party | 348625 | 348111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration | 2625000 | 2625000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative liability on notes | 440124 | 350044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible and short-term debt, net of costs | 8246199 | 8225669 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible debt and short-term debt, related party, net of costs | 4273152 | 4023331 |
| Total current liabilities | 18403989 | 18143278 |
| Convertible long-term debt, net of costs | 1789509 | 1663405 |
| Deferred income tax liability | 111550000 | 111550000 |
| &nbsp;&nbsp;&nbsp;Total liabilities | 131743498 | 131356683 |
| Commitments and contingencies (Note 13) |  |  |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible preferred stock, $0.01 par value, 15,000,000 shares authorized; 50,900 and 24,388 shares issued and outstanding, respectively | 509 | 244 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.01 par value; 750,000,000 shares authorized; 444,197,302 and 442,596,856 issued and outstanding, respectively | 4441970 | 4425968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 49798210 | 47095219 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated equity | 209045388 | 211239164 |
| Total Oncotelic Therapeutics, Inc. stockholders' equity | 263286077 | 262760595 |
| Non-controlling interests | (1074536) | (1029036) |
| Total stockholders' equity | 262211541 | 261731559 |
| Total liabilities and stockholders' equity | $393955039 | $393088242 |

---

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**For the Three MONTHS ended MARCH 31, 2026 and 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
|  | **2026** | **2025** |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $795 | $297 |
| &nbsp;&nbsp;&nbsp;General and administrative | 1852590 | $100803 |
| Total operating expenses | 1853385 | 101100 |
| Loss from operations | (1853385) | (101100) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (295811) | $(203797) |
| &nbsp;&nbsp;&nbsp;Change in fair value of derivative on debt | (90080) | $(59367) |
| Total other expense | (385891) | (263164) |
| Net loss before non-controlling interests | (2239276) | (364264) |
| Net loss attributable to non-controlling interests | (45500) | $(65548) |
| Net loss attributable to Oncotelic Therapeutics, Inc. | $(2193776) | $(298716) |
| Basic and diluted net loss per share attributable to common stock | $(0.00) | $(0.00) |
| Basic and diluted weighted average common stock outstanding | 443801416 | 407423329 |

---

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Non-**<br>**controlling**<br>**Interests** |<br>**Stockholders'**<br>**Equity** |
| **Balance at January 1, 2026** | **24388** | $**244** | **442596856** | $**4425968** | $**47095219** | $**211239164** | $**(1029036)** | $**261731559** |
| Preferred shares issued for services | 26512 | 265 |  |  | 2588227 |  |  | 2588492 |
| Shares and warrants issued in connection with debt |  |  | 1600446 | 16002 | 114764 |  |  | 130766 |
| Net loss | - | - | - | - | - | (2193776) | (45500) | (2239276) |
| **Balance at March 31, 2026** | **50900** | $**509** | **444197302** | $**4441970** | $**49798210**  | $**209045388**  | $**(1074536)** | $**262211541** |

---

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY**

**FOR THE THREE MONTHS ENDED MARCH 31, 2025**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Non-controlling**<br>**Interests** | **Stockholders'**<br>**Equity** |
| **Balance at January 1, 2025** |  | $**-** | **407289888** | $**4072899** | $**42219400** | $**(38040668)** | $**(774119)** | $**7477512** |
| Common shares issued upon partial conversion of debt |  |  | 1002832 | 10028 | 60170 |  |  | 70198 |
| &nbsp;&nbsp;&nbsp;Net loss |  | - | - | - | - | (298716) | (65548) | (364264) |
| **Balance at March 31, 2025** |  | $**-** | **408292720** | $**4082927** | $**42279570** | $**(38339384)** | $**(839667)** | $**7183446** |

---

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
|  | **2026** | **2025** |
| Cash flows from operating activities: |  |  |
| Net loss | $(2239276) | $(364264) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Amortization of debt discount and deferred financing costs | 145583 | 38906 |
| Stock compensation expense | 1641847 |  |
| Change in fair value of derivative | 90080 | 59367 |
| Common shares issued to investors | 130766 |  |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivables | 49266 |  |
| Prepaid expenses and other current assets | 5340 | 2263 |
| Accounts payable and accrued expenses | (166363) | 96260 |
| Accounts payable to related party | 514 | 513 |
| Net cash used in operating activities | (342243) | (166955) |
| Cash flows from financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from convertible debt | 350000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from short-term loan, related party | 17000 | 160000 |
| &nbsp;&nbsp;&nbsp;Repayment of short-term loans, others | (50000) | - |
| Net cash provided by financing activities | 317000 | 160000 |
| Net decrease in cash, cash equivalents and restricted cash | (25243) | (6955) |
| Cash, cash equivalents and restricted cash - beginning of period | 108857 | 106128 |
| Cash, cash equivalents and restricted cash - end of period | $83614 | $99173 |
| Supplemental cash flow information: |  |  |
| Cash paid for: |  |  |
| Interest paid | $118683 | $94773 |
| Income taxes paid | $- | $- |
| Common shares issued upon partial conversion of debt | $- | $70198 |
| Non-cash deferred compensation | $139638 | $- |
| Non-cash unamortized share based compensation | $1836629 | $- |

---

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

**ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION**

*Description of Business*

Oncotelic Therapeutics, Inc. ("Oncotelic" or the "Company") was originally incorporated in the State of New York in 1988 as OXiGENE, Inc. The Company reincorporated in the State of Delaware in 1992, changed its name to Mateon Therapeutics, Inc. ("Mateon") in 2016, and subsequently changed its name to Oncotelic Therapeutics, Inc. in November 2020. The Company conducts business through Oncotelic and its wholly owned subsidiaries, including Oncotelic, Inc., PointR Data, Inc. ("PointR"), Pet2DAO, Inc. ("Pet2DAO"), and EdgePoint AI, Inc. ("EdgePoint"), a consolidated subsidiary with non-controlling interests. (Collectively, "Oncotelic," "we," "our," or "the Company"). Further detail on prior mergers and corporate history is provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on April 15, 2026.

The Company is principally focused on the development of immuno-oncology therapeutics, including OT-101, a transforming growth factor-beta ("*TGF-β*") inhibitor being advanced for difficult-to-treat cancers and viral respiratory diseases. OT-101 is being developed through our joint venture ("*JV*") with Dragon Overseas Capital Limited ("*Dragon*") and GMP Biotechnology Limited ("*GMP Bio*"), affiliates of Golden Mountain Partners ("*GMP*").

The Company entered into a JV with Dragon to form GMP Bio in March 2022. The Company's ownership interest in GMP Bio is 45%, while that of Dragon is 55%. GMP Bio and the Company will focus to further expand the development of OT-101 for various oncology indications like pancreatic cancer, melanomas, gliomas etc. as also for viral infections like COVID-19. This path is being evaluated as a monotherapy, as well as combination therapies in conjunction with other drugs like checkpoint inhibitors. The JV is also developing 5 other nanoparticles for various cancer therapies. The pharmaceutical development of OT-101, our nano-particle platform and other artificial intelligence ("*AI*") development is being advanced through our JV. In addition, the JV has also set up a FDA certified cGMP development and manufacturing facility in San Diego, California which is capable of drug development and manufacture of Phase 1 clinical trial materials.

During the year ended December 31, 2025, GMP Bio completed an independent third-party valuation by an offshore independent valuation firm, which preliminarily estimated the potential value of the drug pipeline under development at approximately $2.3 billion. This valuation was non-binding, forward-looking, and based upon a number of assumptions including the successful achievement of clinical, regulatory, and commercial milestones. That valuation was interpreted not to be a current measure of fair value under the United States Good Accounting and Auditing Practices ("*U.S. GAAP*").

Oncotelic conducted an assessment of the change in fair value and hired the services of a separate, ASC-compliant valuation firm to perform a valuation of GMP Bio under U.S. GAAP standards. The results of this valuation that indicated a change in the value of the Company's holdings in GMP Bio have been incorporated into this, consistent with the Company's fair value reporting under U.S. GAAP. The valuation conducted by the independent valuation firm conducted a fair value of GMP Bio based on various methods compliant with US GAAP to derive the fair value. The Company then utilized the fair value of GMP Bio as assessed by the valuation firm, attributed the ownership of the Company in GMP Bio to ascertain the Company's interest in GMP Bio, and recorded the resulting gain to the investment in GMP Bio at fair value. The Company relied on the inputs by the JV valuation, however, certain parameters like lack of marketability, lack of control discounts and other standard discounts, specific to the Company, have been applied to the independent valuation done by the Company to derive the ASC-compliant valuation. As the circumstances related to the JV have not materially changed since December 31, 2025 till March 31, 2026, the Company assessed and determined that no additional fair value adjustment was required and hence, the Company has not recorded a change in value of the Company's interest in the JV. In the future, the Company will appropriately adjust the fair value of the Company's interest in the JV at the end of reporting periods and when key value inflection points are met.

The JV continues preparing for planned Phase 2 and Phase 3 trials for OT-101 in high-grade glioma, pancreatic cancer, and other indications. The JV is also sponsoring investigator-initiated clinical studies in additional oncology applications. In addition, the JV is developing five additional therapeutic candidates, which, if successfully developed and approved, are anticipated to contribute significant revenues, income and meaningful long-term value to both the JV and the Company.

In addition to the development of OT-101 (also referred to as Sapu-002), the JV is advancing the development of five additional therapies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Sapu-001 – A paclitaxel-based
 taxane therapy, which can address cancers like breast cancer, non small cell lung cancer, pancreatic cancer and ovarian cancer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Sapu-003 – An evorolimus
 formulation, which can address renal cell cancer, neuroendocrine tumors and tuberous sclerosis complex (renal angiomyolipoma and
 subependymal giant cell astrocytoma)

c. Sapu-004 – A carboplatin
 formulation, which can address small cell lung cancer, head and neck cancer and testicular cancer

d. Sapu-005 – A palbociclib
 formulation, which would address HR+, HER2- breast cancer

e. Sapu-006 – A docetaxel
 formulation, which can address prostate cancer and gastric cancer.

Each of these therapies, and the various cancers they address, have shown they are increasing in terms of incidences and that opens up the avenue to be able to generate revenues ranging from several millions of dollars to several hundreds of millions of dollars, if successfully developed and commercialized.

Although no assurances can be given, GMP Bio currently intends to conduct an initial public offering of the JV, at a future date, on either the Hong Kong Exchange or other stock exchange. For more information on the JV, refer to Note 6 of the unaudited Notes to the Consolidated Financial Statements.

The Company's core scientific focus is the development of its proprietary self-immunization protocol ("*SIP*™"), designed to stimulate a patient's immune system to recognize and target tumors without requiring tumor extraction or antigen identification. The SIP™ platform is supported by more than three decades of RNA-based research and is being applied initially to oncology, with potential expansion to Duchenne Muscular Dystrophy ("*DMD*") and other diseases driven by TGF-β overexpression.

Separately from the JV, the Company plans to develop OT-101 for select animal-health indications and is evaluating the use of digital assets and blockchain-based technologies to support that platform. The Company has also acquired apomorphine for potential uses in Parkinson's disease, erectile dysfunction, and female sexual dysfunction. The Company continues to evaluate advancement opportunities for OXi4503 (for acute myeloid leukemia and myelodysplastic syndromes) and CA4P (in combination with checkpoint inhibitors for metastatic melanoma). The development of all these products will be subject to the availability of resources to develop them.

In April 2026, the Company announced that it had entered into a strategic partnership with TechForce Robotics, Inc. ("*TechForce*") to advance the commercialization of its PDAOAI-enabled, GMP-compliant robotics platform. This milestone reflects the culmination of several years of research and development efforts, resulting in an integrated platform designed to combine Oncotelic's proprietary PDAOAI capabilities with TechForce's robotics hardware and manufacturing expertise. The system under development is designed to operate within GMP-regulated environments and is intended to enable automated material handling, real-time monitoring, and PDAOAI-enhanced compliance workflows across pharmaceutical manufacturing and related applications. The key highlights of the commercialization include:

&nbsp;&nbsp;&nbsp;&nbsp;1. Integrated AI + robotics
 platform, combining the Company's PDAOAI capabilities with TechForce's scalable robotics systems to automate critical
 operational workflows;

2. Form a GMP-Compliant Design,
 designed to support regulatory requirements, including data capture, audit readiness, and validation frameworks;

3. Improve operational efficiency
 and compliance, intended to reduce human intervention, minimize contamination risk, and enhance process consistency through real-time
 monitoring and intelligent automation; and

4. Achieve scalable manufacturing
 capability, intended to leverage TechForce's hardware expertise and manufacturing network to support commercial deployment
 and future growth.

*Fundraising*

 

Mast Hill January 2026 Note

In January 2026, the Company entered into a Securities Purchase Agreement with Mast Hill Fund, L.P. ("*Mast Hill*"), pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $398,333 and which note is convertible into shares of the Company's Common Stock. This funds from this note are to be utilized for corporate expenses. This note, the May 2022 Note and the July 2025 Note were securitized against all the assets of the Company, excluding the 45% ownership of the Company in the JV.

For more information on the debt financing of the Company, refer to Note 5 of the Notes to the Consolidated Financial Statements.

Mast Hill July 2025 Note

In July 2025, the Company entered into a Securities Purchase Agreement with Mast Hill, pursuant to which the Company issued convertible promissory notes in the aggregate principal amount of approximately $0.6 million, which note is convertible into shares of the Company's Common Stock. This note was utilized for corporate expenses. This note, and the May 2022 Note were securitized against all the assets of the Company, excluding the 45% ownership of the Company in the JV.

For more information on the debt financing of the Company, refer to Note 5 of the Notes to the Consolidated Financial Statements.

Mast Hill Equity Purchase Agreement

In August, 2025, the Company entered into an Equity Purchase Agreement (the "*Mast EPA*") and a Registration Rights Agreement (the "*Mast Registration Rights Agreement*") with Mast, pursuant to which the Company shall have the right, but not the obligation, to direct Mast, to purchase up to $25 million (the "*Maximum Commitment Amount*") in shares of the Company's Common Stock in multiple tranches. The Company plans to file a post-effective amendment to the registration statement with the SEC at the earliest.

For more information on the Mast EPA, refer to Note 10 of the Notes to the Consolidated Financial Statements.

Jefferson Capital Ventures, LLC and Valor Nation, Inc Independent Contractor Agreements

In August 2025, the Company entered into independent contractor agreements ("*ICA*") with Jefferson Capital Ventures, LLC ("*Jefferson*") and Valor Nation, Inc. ("*Valor*") for providing certain consulting and advisory services. The ICAs call for Jefferson and Valor to provide consulting and advisory services including strategic planning meetings, coordination non-legal support for SEC compliance, balance sheet and income statement optimization strategies, shareholder and investor communication planning, liaison with investment bankers, analysts, and institutional investors, operational efficiency and cost-saving recommendations and ancillary strategic services not requiring a license, corporate planning, operations and capital markets advisory services not requiring licenses. Such services shall be provided by Jefferson and Valor for a period of 18 months from the signing of the ICA, unless terminated earlier by either party under certain predefined conditions. Jefferson has agreed to be compensated $20,000 per month in cash and issued 20,322,930 forfeitable restricted stock awards ("*RSAs*") of shares of Common Stock and Valor agreed to be compensated with 4,064,586 shares of our Common Stock. While the Common Stock underlying the Jefferson and Valor RSAs will be issued as of the date of the Jefferson and Valor ICAs, Jefferson will earn the RSAs and Common Stock only when certain corporate milestones are achieved. The corporate milestones ("*Milestones*"), when Jefferson will earn the RSAs and Common Stock, are when the Company's market capitalization exceeds $100 million on any single trading day's close, the cumulative increase of at least $10 million in shareholder equity from the start of engagement and the successful uplisting to a U.S. national exchange (e.g., Nasdaq or NYSE American), with at least one full day of trading. For more information on the Jefferson and Valor ICAs, refer to our Current Report on Form 8-K filed with the SEC on August 12, 2025. Further on December 31, 2025 the Company reported modifying the threshold of the first milestone contained within the ICA with Jefferson, to earn certain RSAs of shares the Company's Common Stock upon the achievement certain corporate milestones. The amendment modified the Company's market capitalization exceeded $100 million requirement on any single trading day's close to $45 million on any single trading day's close. This amendment was to enable the Company to be able to continue to build on its progress to date including making effective it's equity line with Mast Hills, engagement of AGP for future financing, and engaging Sichenzia, Ross and Ferrell for uplisting the Corporation's stock to a nationally recognized stock exchange and to achieve its corporate goals contained within the said ICA. For more information on the modification, refer to our Current Report on Form 8-K filed with the SEC on January 6, 2026.

Private Placement 3 & JH Darbie Financing

In December 2025, the Company completed the conversion of the debt of forty-seven (47) accredited investors from the JH Darbie Financing from our prior private placement ("*PPM-2*") into the new subscription agreements under the new financing ("*PPM-3*") in three tranches, which resulted in conversion of approximately $2.2 million. JH Darbie and the Company are parties to a May 2024 placement agent agreement ("*Placement Agreement*"), pursuant to which JH Darbie had the right to sell/convert a minimum of 10 Units and a maximum of 200 Units on a best-efforts basis. Two of the investors did not participate in PPM-3 and their 7 units for a total of approximately $0.2 million were converted into short term loan to the Company, of which one investor was paid off during the quarter ended March 31, 2026. For more information on the PPM-3 Financing, refer to Note 8 of these Notes to the Consolidated Financial Statements.

March 2022 Notes

In March 2022, the Company entered into a Securities Purchase Agreement with Fourth Man, LLC ("*Fourth Man*"), pursuant to which the Company issued convertible promissory note in the aggregate principal amount of $250,000, which Note is convertible into shares of the Company's Common Stock. For more information on the debt financing of the Company, refer to Note 5 of the Notes to the Consolidated Financial Statements.

May 2022 Note

In May 2022, the Company entered into a Securities Purchase Agreement with Mast Hill, pursuant to which the Company issued convertible promissory notes in the aggregate principal amount of approximately $0.7 million, which note is convertible into shares of the Company's Common Stock. The May 2022 Note was extended till December 2026. For more information on the debt financing of the Company, refer to Note 5 of the Notes to the Consolidated Financial Statements.

Forever Prosperity (previously GMP) Note purchase agreements and unsecured notes

Between June 2020 and January 2022, the Company entered into various purchase agreements and promissory notes with GMP, cumulatively totaling $4.5 million. Such notes were assigned to Forever Prosperity, LLC, an affiliated entity of GMP. For more information on the GMP debt financing, refer to Note 5 of the Notes to the Consolidated Financial Statements.

Mosaic ImmunoEngineering, Inc. Term Sheet

In April 2024, the Company entered into a binding term sheet (the "*Term Sheet*") with Mosaic ImmunoEngineering, Inc. ("*Mosaic*"). For more information on the Term Sheet, refer to the Current Report on Form 8-K filed with the SEC on April 29, 2024. In August 2024, Mosaic and the Company mutually agreed to extend the date of the Term Sheet to expire at the earlier of (1) the signing of definitive agreements or (2) December 31, 2024. In December 2024, he Company and Mosaic further extended the term of the term-sheet to expire at the earlier of (1) the signing of definitive agreements or (2) June 30, 2025. Both Mosaic and the Company are in discussions as to the future of this Term Sheet and how to proceed on this front.

Joint Development, Manufacturing and Licensing Agreement with TechForce Robotics

On March 31, 2026, the Company entered into a Joint Development, Manufacturing, and Licensing Agreement (the "*TechForce Agreement*") with TechForce Robotics, Inc. ("*TechForce*"), a Nevada corporation. The TechForce Agreement establishes a framework for the joint development, and manufacturing of AI-enabled, GMP-compliant robotic systems for use in pharmaceutical and related manufacturing environments. The integrated product to be developed (the "*Product*") combines TechForce's robotic hardware with the Company's proprietary PDAOAI Platform.

*Principles of Consolidation*

The consolidated financial statements include the accounts of Oncotelic, its wholly owned subsidiaries, Oncotelic Inc. and PointR, and EdgePoint our consolidated non-controlled interest entity. Intercompany accounts and transactions have been eliminated in consolidation. The Company's investment in GMP Bio is recorded and reported as a minority investment in equity securities.

*Basis of Presentation*

The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission including Form 10-K and Regulation S-X.

*Liquidity and Going Concern*

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Since inception and till December 31, 2024, the Company had incurred net losses of approximately $38.0 million. During the year ended December 31, 2025, the Company earned a net profit of approximately $249.3 million, primarily due to the recording of an increase in fair value of the Company's ownership in GMP Bio of approximately $365.4 million, reduced by deferred taxes of approximately $111.6 million. During the three months ended March 31, 2026, the Company incurred a loss of approximately $2.2 million. The Company has a negative working capital of approximately $16.3 million at March 31, 2026, of which approximately $2.6 million contingent liability of issuance of common shares of the Company to PointR shareholders upon achievement of certain milestones in accordance with the PointR Merger Agreement. The Company has negative cash flows from operations for the three months ended March 31, 2026 of approximately $0.3 million. The Company has not been able to raise any substantial funding during the past few years. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the date of this filing. Management expects to incur lower costs and losses in the foreseeable future, as a majority of the costs related with the development of OT-101 will be incurred by the JV, but the Company also recognizes the need to raise capital to remain viable. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

The Company's long-term plans include continued development of its current pipeline of products, in addition to continue the development of OT-101 which is exclusively out-licensed to the JV and the JV will be responsible for the funding required to support the development in entirety, to generate sufficient revenues, through either technology transfer or product sales, or raise additional financing to cover its anticipated expenses. Until the Company is able to generate sufficient revenues from its current pipeline, the Company plans on funding its operations through the sale of equity and/or the issuance of debt, combined with or without warrants or other equity instruments. The Company obtained a convertible loan of approximately $0.4 million from Mast Hill during the three months ended March 31, 2026.

Although no assurances can be given as to the Company's ability to deliver on its revenue plans, or that unforeseen expenses may arise, management believes that the potential equity and debt financing or other potential financing will provide the necessary funding for the Company to continue as a going concern. Also, management cannot guarantee any potential debt or equity financing will be available on favorable terms or at all. As such, management does not believe the Company has sufficient cash for 12 months from the date of this report. If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease operations completely.

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Use of Estimates*

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity-based transactions and disclosure of contingent liabilities at the date of the financial statements and revenues and expense during the reporting period. Actual results could materially differ from those estimates.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of the financial statements. Significant estimates include the valuation of goodwill and intangible assets for impairment, deferred tax asset and valuation allowance, and fair value of financial instruments.

*Cash*

As of March 31, 2026 and December 31, 2025, respectively, the Company held all its cash in banks in the United States of America. The Company considers investments in highly liquid instruments with a maturity of three months or less to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2026 and December 31, 2025, respectively. Restricted cash consists of certificates of deposits held at banks as collateral for various purposes.

*Debt issuance Costs and Debt discount*

Issuance costs are specific incremental costs that are (1) paid to third parties and (2) directly attributable to the issuance of a debt or equity instrument. The issuance costs attributable to the initial sale of the instrument are offset against the associated proceeds in the determination of the instrument's initial net carrying amount.

Debt issuance costs and debt discounts are being amortized over the lives of the related financings on a basis that approximates the effective interest method. Costs and discounts are presented as a reduction of the related debt in the accompanying balance sheets if related to the issuance of debt or presented as a reduction of additional paid in capital if related to the issuance of an equity instrument. The Company applies the relative fair value to allocate the issuance costs among freestanding instruments that form part of the same transaction.

If the Company amends the terms of its convertible notes, the Company reviews and applies the guidance per ASC 470-60 *Troubled debt restructurings* and ASC 470-50 *Debt-Modifications and Extinguishments*, evaluates and concludes whether the terms of the agreements were or were not substantially different as of a particular reporting date and accounts the transaction as a debt modification or a troubled debt restructuring.

*Fair Value of Financial Instruments*

The carrying value of cash, accounts payable and accrued expense approximate their fair values based on the short-term maturity of these instruments. As defined in ASC 820, "Fair Value Measurements and Disclosures," 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 (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). This fair value measurement framework applies at both initial and subsequent measurement.

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

● Level 1 – Quoted
 prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in
 which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing
 basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed
 equities.

● Level 2 – Pricing
 inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as
 of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.
 These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities,
 time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant
 economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument,
 can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.
 Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options
 and collars.

● Level 3 – Pricing
 inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally
 developed methodologies that result in management's best estimate of fair value.

The Company did not have any Level 1 or Level 2 assets or liabilities at March 31, 2026 and December 31, 2025.

*Investment in equity securities*

The following table summarizes the cumulative gross unrealized gains and losses and fair values for long- term investments accounted for at fair value under the fair value option for the investment in GMP Bio, with the unrealized gains and losses reported within earnings on the Condensed Consolidated Statements of Operation as of March 31, 2026 and the Audited Consolidated Statements of Operations for the year ended December 31, 2025:

SCHEDULE OF UNREALIZED GAINS AND LOSSES

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Initial** <br> **Fair Value** | **Cumulative** <br> **Gross**<br> **Unrealized** <br> **Gains** | **Cumulative** <br> **Gross**<br> **Unrealized** <br> **Losses** | **Fair Value** |
| **March 31, 2026** |  |  |  |  |
| Investment in GMP Bio (equity securities) | $22653225 | $365346775 | $- | $388000000 |
| Total | $22653225 | $365446775 | $- | $388000000 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Initial** <br> **Fair Value** | **Cumulative** <br> **Gross**<br> **Unrealized** <br> **Gains** | **Cumulative** <br> **Gross**<br> **Unrealized** <br> **Losses** | **Fair Value** |
| **December 31, 2025** |  |  |  |  |
| Investment in GMP Bio (equity securities) | $22653225 | $365346775 | $- | $388000000 |
| Total | $22653225 | $365346775 | $- | $388000000 |

---

The table above sets forth a summary of the recording of the initial value of the long-term value of investment in equity securities of GMP Bio, based on a third-party valuation report, and changes in the fair value of such equity securities, if such change occurs, as a Level 3 fair value as of March 31, 2026 and December 31, 2025. During the year ended December 31, 2025, there was a change in the long-term value of the Company's investment in equity securities of GMP Bio and as such has been recorded as above. For more information, see Change in Fair Value of Equity Securities of GMP Bio below.

*Change in Fair Value of Equity Securities of GMP Bio*

On March 31, 2022, the Company entered into the JV with Dragon, contributing a license agreement for rights to OT-101for the territory within the United States of America with Sapu Holdings, LLC, a wholly owned subsidiary of GMP Bio and a license agreement for rights to OT-101 for the rest of the world with GMP Bio. For more information on the JV and the related agreements, refer to our 2022 Annual Report on Form 10-K/A filed with the SEC on April 19, 2023. As of the effective date of the formation of the JV, the Company received a 45% ownership interest in the JV. The combined enterprise value of GMP Bio, on the date of the formation of the JV, was approximately $50.4 million, comprising of the fair value of the Company's investment in GMP Bio of approximately $22.7 million and the total original capital contributions by Dragon Overseas of approximately $27.7 million. As of December 31, 2024, the carrying value of the Company's investment in GMP Bio was approximately $22.7 million, which was included in *Investment in GMP Bio at fair value* on the consolidated balance sheet.

The investment in GMP Bio has been accounted for under the fair value method of accounting. Similarly, during the year ended December 31, 2025, the Company determined that a remeasurement of its investment to fair value was appropriate. All the factors described below allowed the Company to form a basis for a triggering event of significant development for the JV and justified the JV, and consequently the Company, to reassess the fair value of the JV.

The JV's principal activities centered on the commercialization of OT-101 for certain oncology indications in the US and looking at other territories as well. In March 2025, the JV successfully completed a Phase 1 clinical trial evaluating OT-101, in combination with IL-2 for advanced or metastatic solid tumors. These results set the stage for new studies that combine OT-101, an antisense therapeutic targeting Transforming Growth Factor Beta 2 (TGFβ2), with checkpoint inhibitors ("CKIs") and recombinant IL-2 (aldesleukin) ("IL-2"). The Phase 1 trial (ClinicalTrials.gov ID: NCT04862767) investigated the safety and tolerability of OT-101 in combination with recombinant IL-2 in patients with advanced or metastatic solid tumors. The combination showed a tolerable safety profile at the planned dosing schedule, with no unexpected safety signals identified. Based on the favorable safety data, the JV plans to advance OT-101 plus IL-2 into further clinical studies, exploring synergies with CKIs such as PD-1 blockers. The JV is also sponsoring investigator-initiated studies for OT-101 for other oncology indications including lung cancer (non small cell lung cancer- NSCLC- and ugh Mesothelioma.- MPM) and has started clinical development for OT-101 for pancreatic cancer. Over ten patent family has been filed exploiting the central role of TGFB2 as prognostic indicator for cancer survival and one patent family for the intracranial delivery device of brain cancer with issued patent in China and Germany.

In addition to OT-101, the JV has developed a nanoparticle platform ("*Nano Platform*") that entails the formulation of products in new nanoparticle sizes. The JV anticipates that the Nano Platform may offer superior platform for the absorption of water insoluble drugs across a broad spectrum of cancers. The JV is working on improved formulations for OT-101 with new nanoparticle sizes. In addition, the JV has identified five additional compounds as product candidates on the Nano Platform, including the following:

● The JV has completed the formulation development of the first product, everolimus for injection. The JV has initiated a global clinical trial for that product, including open patient enrollment in Australia. The JV hopes to complete the Phase 1 trial and to move to a Phase 3 noninferiority trial against Affinitor. Phase 3 trial is slated to initiate within one year with completion and submission for marketing approval no less than three years thereafter.

● The JV is developing palbociclib for injection on the Nano Platform and expects to file the investigational new drug ()"*IND*") and to initiate a Phase 1 trial in 2026.

● The JV is developing docetaxel and paclitaxel for injection on the Nano Platform and expects to file the IND to initiate a Phase 1 trial for this product candidate in 2026. These are expected to go through the 505(b)2 bioequivalence pathway which should result in rapid entrance into the market

● In addition, the JV has also identified developing carboplatin and intends to begin the development as soon as the other products clinical trials are under way

The DeciparticleTM platform has proven robust and is being expand to other drug candidates through partnering. The platform is protected by more than 15 patent families covering chemical composition, manufacturing, and method of use.

The JV built a GMP manufacturing facility in San Diego, California (the "*San Diego Facility*"). In late 2024, the San Diego Facility was issued a Drug Manufacturing License by the State of California Department of Public Health and Food and Drug Branch. A significant portion of the manufacturing for the Nano Platform, including the development of Phase I clinical trial materials, is conducted at the San Diego Facility. Evaluation of larger commercial scale manufacturing is ongoing.

In early 2025, the Company entered into a strategic partnership with Shanghai Medicilon, Inc. ("*Medicilon*") to access its industry-leading rapid IND development platform to support up to 20 IND projects, including INDs developed by the JV. All six of the compounds that the JV is developing are planned to be initiated under these INDs, and are focused on next-generation anticancer agents.

During the year ended December 31, 2025, GMP Bio completed an independent third-party valuation by an offshore independent valuation firm, which preliminarily estimated the potential value of the drug pipeline under development at approximately $2.3 billion. This valuation was a non-binding, forward-looking, and based upon a number of assumptions including the successful achievement of clinical, regulatory, and commercial milestones. That valuation was interpreted not to be a current measure of fair value under U.S. GAAP. Although no assurances can be given, GMP Bio currently intends to conduct an initial public offering of the JV, at a future date, on either the Hong Kong Exchange or other stock exchange. For more information on the JV, refer to Note 6 of the unaudited Notes to the Consolidated Financial Statements.

The Company proceeded to conduct its own independent assessment of the valuation of the JV. The basis for the valuation was by placing reliance on the valuation report of the third party offshore valuation firm, the financial projection, risks and parameters of assessment as done by the offshore independent valuation firm, and then applying additional independent parameters, like discounts for lack of marketability and lack of control, and other standard discounts, required to adhere to the strict ASC-compliant standards as generally used in the United States. The Company hired the services of an independent, ASC-compliant valuation firm to review, perform and validate the assumptions considered by the Company and provide an ASC-compliant valuation of the JV under U.S. GAAP standards. The valuation conducted by the independent ASC-compliant valuation firm of the JV was based on various methods compliant with ASC and US GAAP to derive the fair value. The Company then utilized the fair value of GMP Bio, as assessed by the ASC-compliant valuation firm, attributed the ownership percentage of the Company in GMP Bio, to ascertain the Company's interest in GMP Bio and recorded the resulting gain to the investment in GMP Bio at fair value. As the circumstances related to the JV have not materially changed since December 31, 2025, the Company assessed and determined that no additional fair value adjustment was required during the three months ended March 31, 2026, and hence, the Company has not recorded a change in value of the Company's interest in the JV. The Company will appropriately adjust the fair value of the interest of the Company's interest in the JV at the end of future reporting periods and when key value inflection points are met.

As many of the inputs considered for the purpose of the valuation are unobservable inputs including, but not limited to, the potential revenue projections, the probability of success, the conduct of the clinical trials under accelerated timelines of approvals by the territorial regulatory bodies similar to the 505(b)(2) pathway under the US FDA regulations, the timing of completion of the clinical trials and approvals of the products, timing of product launches, estimates for working capital, additional research and development and general and administrative expenses, estimated tax rates, interest rates of potential debt and many others. The fair value of the Company's investment was determined in accordance with ASC 820 Fair Value Measurement and is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. The valuation was performed with the assistance of an independent third-party valuation specialist and utilized an income approach (discounted cash flow method) and market-based approach (guideline public company multiples) and recent transactions, where available, to corroborate the results of the income approach. The final value was then arrived at by calculating the average of the values under the two approaches. The income approach of valuation incorporates assumptions that market participants would use in pricing the asset, including estimates of future financial performance and the selection of an appropriate discount rate. As the circumstances related to the JV have not materially changed since the end of the year ending December 31, 2025, the Company assessed and determined that no additional fair value adjustment was required and hence, the Company has not recorded a change in value of the Company's interest in the JV.

**Fair Value Hierarchy**

The Company's investment in the JV is classified within Level 3 of the fair value hierarchy under ASC 820 Fair Value Measurement due to the use of significant unobservable inputs, including projected cash flows and discount rates.

The fair value measurement was determined on a recurring basis as of March 31, 2026 and December 31, 2025. There were no transfers between Levels 1, 2, or 3 during the period.

The following table presented the fair value of the Company's investment in the JV by level within the fair value hierarchy as of December 31, 2025:

SCHEDULE OF FAIR VALUE OF INVESTMENT HIERARCHY

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| | | | | |
|:---|:---|:---|:---|:---|
| (in million) | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Fair value of investment in JV | – |  | $388000000 | $388000000 |

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**Quantitative Information about significant unobservable inputs (Level 3)**

SCHEDULE OF QUANTITATIVE INFORMATION ABOUT SIGNIFICANT UNOBSERVABLE INPUTS

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| | | |
|:---|:---|:---|
| **Valuation Technique** | **Unobservable Input** | **Range** |
| Discounted Cash Flow | Revenue growth rate | -1% to 400% |
| Discounted Cash Flow | EBIT margin | -146% to 33% |
| Discounted Cash Flow | Discount rate (WACC) | 21.4% |
| Discounted Cash Flow | Terminal growth rate | 3% |
| Discounted Cash Flow | Product penetration rates | 1% to 35%, depending on the product |

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The projected revenue growth rates reflected an initial period of accelerated growth associated with the commercialization and market adoption of one product followed by additional products, subsequently followed by a gradual decline as the business matures and reaches a more stable and then stagnant growth phase as generics enter the market. The pharmaceutical industry often exhibits a financial profile characterized by initially negative EBIT margins, transitioning to high or blockbuster EBIT margins over financial projections. This J-curve trajectory is driven by extreme R&D costs, long development timelines and regulatory protection for a successful drug. The discount rate of 21.4% reflects management's estimate of the JV's weighted-average cost of capital, considering its early-stage nature, which to a great extent is mitigated by the expedited regulatory pathway to approval that the Company is planning under the 505(b)(2), for all the market risk, and company-specific risk factors. The significant unobservable inputs used in the fair value measurement are inherently uncertain and reflect management's judgment about the assumptions market participants would use in pricing the asset. The terminal growth rate reflects long-term expectations for the business beyond the projection period. Increases (decreases) in revenue growth rates, EBIT margins, or terminal growth rates could result in a higher (lower) fair value, while increases (decreases) in the discount rate would result in a lower (higher) fair value.

Sensitivity and Measurement Uncertainty

The fair value of the Company's investment in the JV is based on significant unobservable inputs and, as a result, is subject to substantial measurement uncertainty. Changes in key assumptions could result in a materially different fair value. For example, a 100 basis point increase in the discount rate could result in a decrease in the estimated fair value of approximately $120 million. The valuation is derived from projected future cash flows, which are inherently uncertain and subject to change due to, among other factors:

● The JV's ability to successfully execute its business strategy

● Market adoption of its products and services

● Competitive dynamics within the industry

● Changes in macroeconomic conditions and capital markets

Given the early-stage nature of the JV and the absence of an active market for its equity interests, the fair value measurement is particularly sensitive to changes in key assumptions, including projected revenue growth rates, profitability, and the discount rate. Accordingly, actual results could differ materially from those reflected in the valuation, and such differences could have a material impact on the Company's financial position and results of operations in future periods. The valuation does not represent a guaranteed realizable value and may differ significantly from amounts that could be realized in an actual transaction.

Restrictions on Transfer

The Company's ownership interest in the Joint Venture is subject to certain contractual restrictions on transfer under the JV Agreement. In accordance with ASU 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, such restrictions were considered in the determination of fair value.

Concentration of Credit Risk

The Company does not believe that it is exposed to significant concentrations of credit risk related to its investment in the Joint Venture.

Additional Considerations

The fair value of the Company's investment reflects its 45% ownership interest and may differ from a pro rata share of the JV's enterprise value due to factors such as lack of control and marketability. Discounts for lack of control and marketability were applied because the valuation was performed on a non-controlling, non-marketable basis, consistent with ASC 820 fair value. ASC 820 reflects a market participant perspective at the enterprise level. While the applied methods (discounted cash flow and Guideline Public Company) already incorporate risk and marketability assumptions, the Company conservatively applied the control and marketability discounts to the valuation. The valuation does not represent a guaranteed realizable value and may differ significantly from amounts that could be realized in an actual transaction.

*Derivative Liability Related to 2019 Bridge Financing*

The Company has certain derivative liabilities associated with its 2019 bridge financing Convertible Notes (see Note 5), consisting of conversion feature derivatives at March 31, 2026 and December 31, 2025, and are Level 3 fair value measurements. The table below sets forth a summary of the changes in the fair value of the Company's derivative liabilities classified as Level 3 as of March 31, 2026 and December 31, 2025:

SUMMARY OF CHANGES IN FAIR VALUE OF DERIVATIVE LIABILITIES

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| | | |
|:---|:---|:---|
|  | **March 31, 2026<br> Conversion Feature** | **December 31, 2025<br> Conversion Feature** |
| Balance at January 1, 2026 and 2025 | $350044 | $703617 |
| Change in fair value | 90080 | (353573) |
| Balance at March 31, 2026 and December 31, 2025 | $440124 | $350044 |

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As of March 31, 2026 and December 31, 2025, the Company estimated the fair value of the conversion feature derivatives embedded in the convertible debentures based on assumptions used in the Black-Scholes valuation model. The key valuation assumptions used consists, in part, of the price of the Company's Common Stock, a risk-free interest rate based on the yield of a Treasury note and expected volatility of the Company's Common Stock all as of the measurement dates. The Company used the following assumptions to estimate fair value of the derivatives as of March 31, 2026 and December 31, 2025:

SUMMARY OF ESTIMATE FAIR VALUE OF DERIVATIVE LIABILITIES

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| | | |
|:---|:---|:---|
|  | March 31, <br> 2026 | December 31, <br> 2025 |
| Risk free interest | 3.68% | 3.48% - 4.03 |
| Market price of share | $0.04 | $0.04 - 0.08 |
| Life of instrument in years | 0.01 | 0.01 |
| Volatility | 113.14% | 114.47%-139.5 |
| Dividend yield | 0% | 0% |

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A contingent consideration liability of $2,625,000 for shares of the Company, issuable to PointR shareholders recorded and associated with the PointR Merger, is also classified as Level 3 fair value measurements. The Company initially recorded the contingency based on a valuation conducted by a third-party valuation expert. The valuation was based on a probability of the completion of certain milestones by PointR for the shareholders to earn additional shares. The Company evaluated the probability of the earning of the milestones and concluded that the probability of achievement of the milestones had not changed, primarily due to the shifting of focus by the Company to develop AI technologies for the COVID-19 pandemic as well as other AI technologies. As such, the Company did not record any change to the valuation during the quarter and the year ended March 31, 2026 and December 31, 2025, respectively.

If and when the Company changes its valuation inputs for measuring financial liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended March 31, 2026 and March 31, 2025, there were no transfers of financial assets or financial liabilities between the hierarchy levels.

*Net Income (Loss) Per Share*

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share includes the effect of Common Stock equivalents (notes convertible into Common Stock, stock options and warrants) when, under either the treasury or if-converted method, such inclusion in the computation would be dilutive. For the three months ended March 31, 2026 and 2025, respectively, no equivalent shares of the Common Stock were excluded as the Company has incurred losses during the said periods, and addition of such stock equivalents in the computation would have been anti-dilutive.

*Stock-Based Compensation*

The Company applies the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and non-employees, including employee stock options, in the statements of operations.

For stock options issued, the Company estimates the grant date fair value of each option using the Black-Scholes option pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock. For awards subject to service-based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock-based compensation expense equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised.

For warrants issued in connection with fund raising activities, the Company estimates the grant date fair value of each warrant using the Black-Scholes pricing model. The use of the Black-Scholes option pricing model requires management to make assumptions with respect to the expected term of the warrant, the expected volatility of the Common Stock consistent with the expected life of the warrant, risk-free interest rates and expected dividend yields of the Common Stock. If the warrants are issued upon termination or cancellation of prior issued warrants, then the Company estimates the grant date fair value of the new warrants using the Black-Scholes pricing model and evaluates whether the new warrants are deemed as equity instruments or liability instruments. If the warrants are deemed to be equity instruments, the Company records stock compensation expense and an addition to additional paid in capital. If however, the warrants are deemed to be liability instruments, then the fair value is treated as a deemed dividend and credited to additional paid in capital.

For shares issued in connection with provision of services, the Company estimates the cost of the shares at the price of the Company's stock on the date of issuance and records that cost as a stock-based compensation cost.

*Impairment of Long-Lived Assets*

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. For the three months ended March 31, 2026 and 2025, there were no impairment losses recognized for long-lived assets.

*Intangible Assets*

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the new value. For the three months ended March 31, 2026 and 2025, there were no impairment losses recognized for intangible assets. When we sell or contribute properties to unconsolidated arrangements and retain a non-controlling ownership interest in such assets, we recognize the difference between the consideration received and the carrying amount of the asset sold or contributed.

*Goodwill*

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit's carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded. For the three months ended March 31, 2026, and 2025, respectively, no impairment was recognized towards goodwill. For more information on goodwill and impairment, refer to Note 3 to these Notes to the Consolidated Financial Statements.

*Derivative Financial Instruments Indexed to the Company's Common Stock*

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants based on the price of our Common Stock as of December 31 each year, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statements of Operations.

*Convertible Instruments*

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 "Derivatives and Hedging" ("*ASC 815*").

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as "The Meaning of Conventional Convertible Debt Instrument."

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 "Debt – Debt with Conversion and Other Options." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts ("*OID*") under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying Common Stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 "Derivatives and Hedging – Contracts in Entity's Own Equity" provides that, among other things, generally, if an event occurs that is not within the entity's control could or would require net cash settlement, then the contract shall be classified as an asset or a liability.

*Variable Interest Entity (VIE) Accounting*

The Company evaluates its ownership, contractual relationships and other interests in entities to determine the nature and extent of the interests, whether such interests are variable interests and whether the entities are VIEs in accordance with ASC 810, Consolidations. These evaluations can be complex and involve Management judgment as well as the use of estimates and assumptions based on available historical information, among other factors. Based on these evaluations, if the Company determines that it is the primary beneficiary of a VIE, the entity is consolidated into the financial statements. At March 31, 2026 and December 31, 2025, the Company identified EdgePoint to be the Company's sole VIE. At March 31, 2026 and December 31, 2025, the Company's ownership percentage of EdgePoint was 29%, respectively. The VIE's net assets were less than $0.1 million at March 31, 2026 and December 31, 2025, respectively.

*Investments - Equity Method*

The Company accounts for equity method investments at cost, adjusted for the Company's share of the investee's earnings or losses, which are reflected in the consolidated statements of operations. The Company periodically reviews the investments for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Investment in GMP Bio represents the investment into equity securities for which the Company elected the fair value option pursuant to ASC 825-10-15 and subsequent fair value changes in the GMP Bio shares shall be included in the result from other income. Refer to Note 6 to these Notes to the Consolidated Financial Statements.

*Joint Venture agreement*

We have equity interest in unconsolidated arrangement that is primarily engaged in the business of drug discovery, development, and commercialization, including but not limited to development and commercialization of TGF-beta therapeutics as well as establishing and operating contract development and manufacturing organization ("*CDMO*") facilities and capabilities. The Company first reviews the arrangement to determine if it meets the definition of an accounting joint venture pursuant to ASC 323-10-20. In order to meet the definition of a joint venture, the arrangement must have all of the following characteristics, (i) the arrangement is organized within a separate legal entity, (ii) the entity is under the joint control of the venturers, (iii) the venturers must be able to exercise joint control through their equity investments, (iv) the qualitative characteristics of the entity, including its purpose and design must be consistent with the definition of a joint venture.

We consolidate arrangements that are considered to be VIEs where we are the primary beneficiary. We analyze our investments in joint ventures to determine if the joint venture is considered a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity investment at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are limited partners (or similar owning entities) that lack substantive participating or kick out rights, guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination.

To the extent that we own interests in a VIE and we (i) have the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) have the obligation or rights to absorb losses or receive benefits that could potentially be significant to the VIE, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent that we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary.

To the extent that our arrangements do not qualify as VIEs, they are consolidated if we control them through majority ownership interests or if we are the managing entity (general partner or managing member) and our partner does not have substantive participating rights. Control is further demonstrated by our ability to unilaterally make significant operating decisions, refinance debt, and sell the assets of the joint venture without the consent of the non- managing entity and the inability of the non-managing entity to remove us from our role as the managing entity.

We use the equity method of accounting for those arrangements where we exercise significant influence but do not have control. Under the equity method of accounting, our investment in each arrangement is included on our consolidated balance sheet; however, the assets and liabilities of the joint ventures for which we use the equity method are not included on our consolidated balance sheet.

When we sell or contribute properties to unconsolidated arrangements and retain a non-controlling ownership interest in such assets, we recognize the difference between the consideration received and the carrying amount of the asset sold or contributed when its derecognition criteria are met. The equity method investment we retain in such partial sale transactions is noncash consideration and is measured at fair value. As a result, the accounting for a partial sale will result in the recognition of a full gain or loss.

When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we conclude it is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value.

The Company elected the fair value option under the fair value option Subsection of Section 825-10-15 to account for its equity-method investment as the Company believes that the fair value option is most appropriate for a company in the biotechnology industry, The fair value option is more appropriate for companies that are involved in extensive and usually very expensive research and development efforts, which are not appropriately reflected in the market value or reflective of the true value of the development activities of the Company.

*Revenue Recognition*

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

Under ASC 606, the Company recognizes revenue when its customers obtain control of the promised good or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company applies the following five-step process: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company identifies the performance obligation(s) in the contract by assessing whether the goods or services promised within each contract are distinct. The Company then recognizes revenue for the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company does not anticipate generating revenues from rendering services to other third party customers for the development of certain drug products and/or in connection with certain out-licensing agreements, as least in the near future. In the case of services rendered for development of the drugs, revenue is recognized upon the achievement of the performance obligations or over time on a straight-line basis over the extended service period. In the case of out-licensing contracts, the Company records revenues either (i) upon achievement of certain pre-defined milestones when there is no obligation of the Company achieve any performance obligations in connection with the said pre-defined milestones, or (ii) upon achievement of the performance obligations if the milestones require the Company to provide the performance obligations.

The Company occasionally collects advance payments from customers toward commitments to provide services or performance obligations, in which case the advance payment is recorded as a liability until the obligations are fulfilled and revenue is recognized.

*Research & Development Costs*

In accordance with ASC 730-10-25 "Research and Development", research and development costs are charged to expense as and when incurred.

*Recent Accounting Pronouncements*

All other newly issued, but not yet effective, accounting pronouncements have been deemed to be not applicable or immaterial to the Company.

**NOTE 3 - ACQUISITIONS, GOODWILL AND INTANGIBLE ASSETS**

*Goodwill from 2019 Reverse Merger with Oncotelic and Merger with PointR*

The Company completed the reverse merger with Oncotelic Inc. ("*Merger*") in April 2019. The Company completed the merger with PointR Data Inc ("*PointR Merger*") in November 2019. For more details on the two mergers, refer to our 2020 Annual Report on Form 10-K for the year ended December 31, 2020 filed by the Company on April 15, 2021.

The Oncotelic merger gave rise to Goodwill of approximately $4.9 million. Upon the non-financial sale of our asset as contribution to our equity method investment, we derecognized the balance of the carrying value of our goodwill of approximately $4.9 million from the Oncotelic Merger in accordance with our policy and authoritative accounting guidance.

Further, we added goodwill of approximately $16.2 million upon the completion of the Merger with PointR. Between the years 2022 and 2024, we recorded impairments of approximately $13.4 million, as we observed our market capitalization being negatively impacted as compared to the book value of our net assets.

We have one operating segment and reporting unit. Accordingly, our review of goodwill impairment indicators was performed at the entity-wide level. In performing our annual impairment assessment, we determined if we should qualitatively assess whether it was more likely than not the fair value of goodwill was less than its carrying amount (the qualitative impairment test). The factors we considered in the assessment included our market capitalization, general macroeconomic conditions, conditions specific to the industry and market and whether there had been sustained declines in our share price. If we concluded, it was more likely than not, the fair value of the reporting unit was less than its carrying amount, or elected not to use the qualitative impairment test, a quantitative impairment test would be performed.

We have used our market capitalization as an indicator of fair value. While we believe the fair value measurement need not be based solely on the quoted market price of an individual share of our Common Stock, and that we also could consider the impact of a control premium in measuring the fair value of its reporting unit. In the absence of any other valuation metrics, the Company believed using a control premium utilized would not be appropriate under the current circumstances. We also considered some other market comparables' trends in our stock price as well as the industry over a period of two successive quarters and prospective quarter to evaluate whether the fair value of our reporting unit was greater than our carrying amount. No impairment to goodwill was required to be recorded for the year ended December 31, 2025. The Company evaluated if it needed to record any goodwill impairment as of March 31, 2026, based solely on the market capitalization of the Company and concluded that no impairment was required to be recorded for the three months ended March 31, 2026.

A summary of our goodwill as of March 31, 2026 and December 31, 2025 is shown below:

SCHEDULE OF GOODWILL

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| | | |
|:---|:---|:---|
|  | March 31, <br> 2026 | December 31, <br> 2025 |
| Balance at January 1, 2026 and 2025 | $2788230 | $2788230 |
| Less: Goodwill impairment due to market capitalization | - | - |
| Balance at March 31, 2026 and December 31, 2025 | $2788230 | $2788230 |

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In general, the goodwill is tested on an annual impairment date of December 31, unless we observe any further deterioration in our market capitalization in any interim periods, in which case we may, depending on the materiality of the impairment, record an impairment at the end of other reporting periods.

*In-Process Research & Development ("IPR&D") Summary*

The IPR&D assets were acquired in the PointR Merger during the year ended December 31, 2019. Since January 2021, the Company has determined that the IPR&D should be reported as an indefinitely lived asset and therefore will evaluate, on an annual basis, for any impairment on the IPR&D and will record an impairment if identified. The balance of IPR&D as of March 31, 2026 and December 31, 2025, respectively, was $1,101,760. For more information on the IPR&D, please refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

**NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES**

Accounts payable and accrued expense consists of the following amounts:

SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,<br> 2025** |
| Accounts payable | $1695195 | $1638713 |
| Accrued expense | 775694 | 932410 |
| Accounts payable and accrued liabilities | $2470889 | $2571123 |

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| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,<br> 2025** |
| Accounts payable – related party | $348625 | $348111 |

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**NOTE 5 – CONVERTIBLE DEBENTURES, NOTES AND OTHER DEBT**

As of March 31, 2026 and December 31, 2025, special purchase agreements ("*SPAs*") with convertible debentures and notes, net of debt discount and including accrued interest, if any, consist of the following amounts:

SCHEDULE OF CONVERTIBLE DEBENTURES AND NOTES, NET OF DISCOUNT

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| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026** | **December 31,** <br> **2025** |
| **<u>Current Debt</u>** |  |  |
| **<u>Convertible debentures</u>** |  |  |
| 10% Convertible note payable, due April 23, 2022 – Bridge Investor | $35556 | $35556 |
| 10% Convertible note payable, due April 23, 2022 – Related Party | 164444 | 164444 |
| 10% Convertible note payable, due August 6, 2022 – Bridge Investor | 200000 | 200000 |
| Convertible note payable | 400000 | 400000 |
| **<u>Fall 2019 Notes</u>** |  |  |
| 5% Convertible note payable – Stephen Boesch | 140208 | 138958 |
| 5% Convertible note payable – Related Party | 329358 | 326233 |
| 5% Convertible note payable – Dr. Sanjay Jha (Through his family trust) | 328878 | 325753 |
| 5% Convertible note payable – CEO & CFO – Related Parties | 107784 | 106759 |
| 5% Convertible note payable – Bridge Investors | 220822 | 218722 |
| Convertible note payable | 1127050 | 1116425 |
| **<u>August 2021 Convertible Notes</u>** |  |  |
| 5% Convertible note – Autotelic Inc– Related Party | 308177 | 305052 |
| 5% Convertible note – Bridge investors | 460420 | 455751 |
| 5% Convertible note – CFO – Related Party | 92460 | 91522 |
| Convertible note payable | 861057 | 852325 |
| **<u>March 2022 Notes</u>** |  |  |
| 16% Convertible Notes – Accredited Investors | 59002 | 58531 |
| **<u>Debt for Clinical Trials – Forever Prosperity (Formerly GMP)</u>** |  |  |
| 2% Convertible Notes – Forever Prosperity | 4952439 | 4930247 |
| **<u>May 2022 Note</u>** |  |  |
| 16% Convertible Notes – Accredited Investors | 830122 | 809492 |
| **<u>J.H. Darbie PPM-2 Debt</u>** |  |  |
| Accrued and Unpaid Interest – PPM-2 | 19112 | 102795 |
| **<u>July 2025 Note</u>** |  |  |
| 10% Convertible Note – Accredited Investor | 530220 | 465261 |
| **<u>January 2026 Note</u>** |  |  |
| 10% Convertible Note - Accredited Investor | 259420 | - |
| **<u>Other Debt</u>** |  |  |
| Short term debt – Bridge investors | 210000 | 210000 |
| Short term debt from CFO – Related Party | 86050 | 86050 |
| Short term debt – Autotelic Inc. – Related Party | 3009879 | 2992874 |
| Short term Debt from CEO – Related Party | 175000 | 175000 |
| Short term loan from Accredited investor | - | 50000 |
| Short term debt | 3480929 | 3513924 |
| Total of short term convertible debentures & notes and other debt | $12519351 | 12249000 |

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| | | |
|:---|:---|:---|
|  | **March 31,** <br> **2026** | **December 31,** <br> **2025** |
| **<u>Long Term Debt</u>** |  |  |
| JH Darbie PPM-3 Debt |  |  |
| 12% Convertible Notes – Accredited Investors | $1789509 | 1663405 |

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*Convertible Debentures*

As of March 31, 2026, the Company had a derivative liability of approximately $440,000 and recorded a change in fair value of approximately $90,000 on the Convertible Debentures issued in 2019 to our CEO and a bridge investor. As of December 31, 2025, the Company had a derivative liability of approximately $350,000 and recorded a change in fair value of approximately $353,600 during the year ended December 31, 2025, on the Convertible Debentures issued in 2019 to our CEO and a bridge investor.

*Bridge Financings*

**Notes with Officer and Bridge Investor**

In April 2019, the Company entered into a Securities Purchase Agreement (the "*Bridge SPA*") with our CEO and the Bridge Investor with a commitment to purchase convertible notes in the aggregate of $400,000. For more information on the Bridge SPA, refer to our 2024 Annual Report on Form 10-K filed with the SEC on April 15, 2025. In April 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #1 ("*Tranche #1*") with the Bridge Investor. For more information on Tranche #1, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026. In August 2019, pursuant to the Bridge SPA the Company entered into Convertible Note Tranche #2 ("*Tranche #2*") with the Bridge Investor. For more information on Tranche #2, refer to 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

*Fall 2019 Debt Financing*

In December 2019, the Company closed its Fall 2019 Debt Financing, raising an additional $500,000 bringing the gross proceeds of all debt financings under the Fall 2019 Debt Financing to $1,000,000. The Company entered into those certain Note Purchase Agreements (the "*Fall 2019 Note Purchase Agreements*") with certain accredited investors and the officers of the Company for the sale of convertible promissory notes (the "*Fall 2019 Notes*"). The Company completed the initial closing under the Fall 2019 Note Purchase Agreements in November 2019. The Company issued Fall 2019 Notes in the principal amount of $250,000 to each of Dr. Vuong Trieu, the Company's Chief Executive Officer, and Stephen Boesch, in exchange for gross proceeds of $500,000. In connection with the second and final closing of the Fall 2019 Debt Financing, the Company issued Fall 2019 Notes to additional investors including $250,000 to Dr. Sanjay Jha, through his family trust, the former CEO of Motorola and COO/President of Qualcomm. The Company also offset certain amounts due to Dr. Vuong Trieu, the Company's Chief Executive Officer, Chulho Park, the Company's then Chief Technology Officer, and Amit Shah, the Company's Chief Financial Officer, all related parties as Officers of the Company, and converted such amounts due into the Fall 2019 Notes. $35,000 due to Dr. Vuong Trieu, $27,000 due to Chulho Park and $20,000 due to Amit Shah were converted into convertible debt under the Fall 2019 Notes. The Company also issued a total of the Fall 2019 Notes of $168,000 to two accredited investors.

All the Fall 2019 Notes provided for interest at the rate of 5% per annum and are unsecured. For more information on the Fall 2019 Debt Financing, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026. There was no activity during the three months ended March 31, 2026 and 2025. The total unamortized principal amount of the Fall 2019 Notes was $850,000 as of March 31, 2026, and December 31, 2025. Further, the Company recorded interest expense of $10,625 on these Fall 2019 Notes for the three months ended March 31, 2026, and 2025, respectively. The total amount outstanding under the Fall 2019 Notes, net of discounts and including accrued interest thereon, as of March 31, 2026, and December 31, 2025, was approximately $1.1 million for both periods, respectively.

*Forever Prosperity (Formerly GMP) Notes*

In June 2020, the Company secured $2 million in debt financing, evidenced by a one-year convertible note (the "*GMP Note*") from GMP, to conduct a clinical trial evaluating OT-101 against COVID-19 bearing 2% annual interest, and was personally guaranteed by Dr. Vuong Trieu, the Chief Executive Officer of the Company. In September 2021, the Company secured a further $1.5 million in debt financing, evidenced by a one-year convertible note (the "*GMP Note 2*") from GMP, to fund the same clinical trial evaluating OT-101 against COVID- 19 bearing 2% annual interest. In October 2021, the Company entered into an Unsecured Convertible Note Purchase Agreement (the "*October Purchase Agreement*") with GMP, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $0.5 million. Further, in January 2022, the Company entered into an Unsecured Convertible Note Purchase Agreement (the "*January Purchase Agreement*") with GMP, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $0.5 million. Cumulatively, these four Notes are referred to as the "*GMP Notes"*. The GMP Notes carry an interest rate of 2% per annum and mature on the earlier of (a) the one- year anniversary of the date of the Purchase Agreement, or (b) the acceleration of the maturity by GMP upon occurrence of an Event of Default (as defined below). All Notes contain a voluntary conversion mechanism whereby GMP may convert the outstanding principal and accrued interest under the terms of all the GMP Notes into shares of Common Stock (the "*Conversion Shares*"), at the consolidated closing bid price of the Company's Common Stock on the applicable OTC Market as of the date the Company receives a Notice of Conversion from GMP. Prepayment of the GMP Notes may be made at any time by payment of the outstanding principal amount plus accrued and unpaid interest. As of March 31, 2026, the GMP Notes are in default, however Forever Prosperity has not called for the repayment of the debt. The total principal outstanding on all the GMP notes, inclusive of accrued interest, was approximately $4.9 million as of March 31, 2026, and December 31, 2025, respectively. During the quarters ended March 31, 2026, and 2025, respectively, the Company incurred approximately $22,000 of interest expense, respectively, on all the 4 notes. For a more detailed discussion on the Forever Prosperity Notes, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

*August 2021 Notes*

In August 2021, the Company entered into Note Purchase Agreements with Autotelic - a related party, our CFO – a related party, and certain accredited investors (the "*August 2021 investors*"), whereby the Company issued four convertible notes in the aggregate principal amount of $698,500 convertible into shares of common stock of the Company for net proceeds of approximately $691,000. The convertible notes carry a five (5%) percent coupon and mature one year from issuance. The majority of the August 2021 investors have the right, but not the obligation, not more than five days following the maturity date, to convert all, but not less than all, the outstanding and unpaid principal plus accrued interest into the Company's common stock, at a conversion price of $0.18. The August 2021 Note Holders has waived the default in the maturity of the August 2021 Notes and as such there is no event of default and also agreed to extend the date of maturity of the August 2021 Notes to December 31, 2026. The Company determined that the economic characteristics and risks of the embedded conversion option are not clearly and closely related to the economic characteristics and risks of the debt host instrument. Further, the Company determined that the embedded conversion feature meets the definition of a derivative but met the scope exception to the derivative accounting required under ASC 815 for certain contracts involving a reporting entity's own equity.

As of March 31, 2026, and December 31, 2025, the August 2021 convertible notes, inclusive of accrued interest, consist of the following amounts:

SCHEDULE OF CONVERTIBLE NOTES, NET OF DISCOUNT

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| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2026** | **December 31,**<br>**2025** |
| Autotelic - Related party convertible note, 5% coupon December 2024 | $308177 | $305052 |
| CFO - Related party convertible note, 5% coupon December 2024 | 92460 | 91522 |
| Accredited investors convertible note, 5% coupon December 2024 | 460420 | 455751 |
| Convertible notes | $861057 | $852325 |

---

During the quarters ended March 31, 2026 and 2025, respectively, the Company recognized approximately $8,730 of interest expense on the August 2021 Investors notes, of which approximately $4,060 is attributable to related parties. At March 31, 2026, and December 31, 2025, accrued interests on these convertible notes totaled approximately $0.2 million, respectively.

*March 2022 Financing*

In March 2022, the Company entered into a Securities Purchase Agreement with Fourth Man, pursuant to which the Company issued convertible promissory note in the aggregate principal amount of $0.25 million, convertible into shares of common stock of the Company. The convertible notes carry a twelve (12%) percent coupon and a default coupon of 16% and mature at the earliest of one year from issuance or upon event of default. As of December 31, 2023, this note was in default and Fourth Man has the right at any time following issuance date to convert all or any part of the outstanding and unpaid amount of the note into the Company's Common Stock at an initial conversion price established at a fixed rate of $0.10, and subsequently corrected to $0.07 based on the terms of the Securities Purchase Agreement and Fourth Man Note. The Company granted a total number of 1,250,000 warrants convertible into an equivalent number of the Company common shares at a strike price of $0.20 up to five years after issuance. The Placement agent was also granted a total of 125,000 warrants convertible into an equivalent number of the Company Common Stock at a strike price of $0.20 up to five years after issuance, as part of a finder's fee agreement.

As of March 31, 2026, and December 31, 2025, the March 2022 Fourth Man convertible note, including accrued interest and net of debt discount, consist of the following amounts:

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2026** | **December 31, <br> 2025** |
| Fourth Man Convertible note, 16% coupon March 2023 inclusive of accrued interest and default provision | $59002 | $58351 |
| Unamortized debt discount | - | - |
| Convertible notes, net | $59002 | 58351 |

---

During the year ended December 31, 2025, the Company converted approximately $150,000 in principal and approximately $54,100 in accrued interest and legal fees into 2,991,270 shares of common stock. The note includes a default amount calculated at 125% of the unpaid principal and accrued interest. As the Company failed to repay the note at the original maturity date, The Company has recorded an estimated default penalty of approximately $70,000.

The Company recognized approximately $2,400 and $8,200 of interest during the three months ended March 31, 2026 and 2025, respectively.

*May 2022 Mast Financing*

In May 2022, the Company entered into a securities purchase agreement with Mast Hill, whereby the Company issued one convertible note in the aggregate principal amount of $605,000 convertible into shares of common stock of the Company ("*May 2022 Mast Note*"). The convertible notes carry a twelve (12%) percent coupon and a default coupon of 16% and mature at the earliest of one year from issuance or upon event of default. Investor has the right at any time following issuance date to convert all or any part of the outstanding and unpaid amount of the note into the Company's common stock at a conversion price established at a fixed rate of $0.10. The note is secured against the assets of the Company, excluding any assets assigned to the JV. The Company granted a total number of 3,025,000 warrants convertible into an equivalent number of the Company common shares at a strike price of $0.20 up to five years after issuance. The Placement agent was also granted a total amount of 302,500 as part of a finder's fee agreement. Portion of the proceeds were be used to retire some of the November/December 2021 notes.

As of March 31, 2026, and December 31, 2025, convertible note under the May 2022 Mast Financing, net of debt discount, consist of the following amounts:

---

| | | |
|:---|:---|:---|
|  | **March 31, <br> 2026** | **December 31, <br> 2025** |
| Mast Hill Convertible note, 12% coupon May 2025, inclusive of accrued interest and penalty | $830122 | $809492 |
| Convertible notes, net | $830122 | $809492 |

---

During the year ended December 31, 2025, the Company converted approximately $272,000 in accrued interest and legal fees into 3,860,000 shares of common stock. The May 2022 Mast Note had been extended through May 27, 2025 at a cost of approximately $82,000, and which is included in the amount outstanding and payable to Mast as of December 31, 2025. Mast Hill further extended the May 2022 Mast Note to December 31, 2026 in August 2025. Accrued interest was approximately $0.2 million as of March 31, 2026 and December 31, 2025, respectively.

*July 2025 Mast Financing*

In July, 2025, the Company entered into a securities purchase agreement with Mast, whereby the Company issued a secured convertible note in the aggregate principal amount of $560,000 convertible into shares of Common Stock of the Company ("*July 2025 Mast Note*"). The July 2025 Mast Note carries a twelve (12%) percent coupon and a default coupon of 18% and mature at the earliest of one year from issuance or upon event of default. Mast has the right at any time following issuance date to convert all or any part of the outstanding and unpaid amount of the note into the Company's Common Stock at a conversion price established at a fixed rate of $0.07. The note is secured against the assets of the Company, excluding any assets assigned to the JV. In connection with the July 2025 Mast Note, the Company granted a total number of 2,000,000 warrants convertible into an equivalent number of the Company Common Stock at a strike price of $0.15 up to five years after issuance. The Company also issued 2,250,000 of the Company's common stock as commitment shares to Mast. The July 2025 Mast Note, and the May 2022 Note were securitized against all the assets of the Company, excluding the 45% ownership of the Company in the JV.

As of March 31, 2026, and December 31, 2025, the July 2025 Mast Note, net of debt discount, consist of the following amounts:

SCHEDULE OF NET OF DEBT DISCOUNT

---

| | | |
|:---|:---|:---|
|  | **March** **31,** **2026** | **December 31,**<br> **2025** |
| Mast Hill Convertible note, inclusive of accrued interest 10% coupon due August 2026 | $597512 | $583512 |
| Convertible notes, gross | $583512 | $583512 |
| Less: debt discount recorded | (203833) | (203833) |
| Amortization of debt discount | 136541 | 85582 |
| Convertible notes, net | $530220 | $465261 |

---

The Company recognized approximately $14,000 and $0 of accrued interest during the quarter ended March 31, 2026, and 2025, respectively. The Company recognized approximately $51,000 and $0 of interest expense attributable to the amortization of the debt discount from the original debt discount, deferred financing costs and fair value allocated to the warrants and the commitment shares during the three months ended March 31, 2026.

*January 2026 Mast Financing*

 

On January 23, 2026, the Company entered into a securities purchase agreement with Mast, whereby the Company issued one convertible note in the aggregate principal amount of $398,333 convertible into shares of common stock of the Company ("*2026 Mast Note*"). The convertible notes carry a ten (10%) percent coupon and a default coupon of 18% and mature at the earliest of one year from issuance or upon event of default. Mast has the right at any time following issuance date to convert all or any part of the outstanding and unpaid amount of the note into the Company's common stock at a conversion price established at a fixed rate of $0.07. The note is secured against the assets of the Company, excluding any assets assigned to the JV. The Company granted a total number of 1,422,613 warrants convertible into an equivalent number of the Company common shares at a strike price of $0.15 up to five years after issuance. The Company also issued 1,600,446 of the Company's common stock as commitment shares to Mast.

As of March 31, 2026, and December 31, 2025, convertible note under the 2026 Mast Note, net of debt discount, consist of the following amounts:

---

| | | |
|:---|:---|:---|
|  | **March 31,<br> 2026** | **December 31,<br> 2025** |
| Mast Hill Convertible note, inclusive of accrued interest 10% coupon January 2027 | $405645 | $- |
| Convertible notes, gross | $405645 | $- |
| Less Debt discount recorded | (179102) |  |
| Amortization debt discount | 32877 | - |
| Convertible notes, net | $259420 | $- |

---

The Company recognized approximately $7,300 and $0 of accrued interest during the three months ended March 31, 2026, and 2025, respectively. The Company recognized approximately $32,900 and $0 of interest expense attributable to the amortization of the debt discount from the original debt discount, deferred financing costs and fair value allocated to the warrants and the commitment shares during the three months ended March 31, 2026.

*Other short-term advances*

As of March 31, 2026 compared to December 31, 2025, other short-term advances consist of the following amounts obtained from various employees and related parties:

SCHEDULE OF SHORT-TERM LOANS

---

| | | |
|:---|:---|:---|
| **Other Advances** | **March 31,<br> 2026** | **December 31,<br> 2025** |
| Short term advance from CFO – Related Party | $86050 | $86050 |
| Short term advances – bridge investors & others | 210000 | 210000 |
| Short term advances – Autotelic Inc. – Related Party | 3009879 | 2992874 |
| Short term advance – CEO – Related Party | 175000 | 125000 |
| Short term advance – Accredited investor | - | 50000 |
| Short term advance | $3480929 | $3513924 |

---

As of January 1, 2025, approximately $2 million was outstanding and payable to Autotelic. During the year ended December 31, 2025 Autotelic Inc. provided additional short-term funding of approximately $0.9 million to the Company. In the three months ended March 31, 2026 Autotelic Inc. provided additional short-term funding of $17,000 to the Company. As such, approximately $3 million was outstanding and payable to Autotelic at March 31, 2026.

As of January 1, 2025, approximately $76,000 was outstanding and payable to the Company's CFO. During the year ended December 31, 2025, the CFO provided additional short-term funding of $10,000. As such, approximately $86,000 was outstanding and payable to the Company's CFO at March 31, 2026. In December 2023, the Company received $50,000 from the Company's CEO. In December 2025, the amount due from PPM-2 payable to the CEO of $125,000 was converted into a short-term loan. As such, $175,000 was outstanding to the Company's CEO at March 31, 2026. As of March 31, 2026, approximately $210,000 was outstanding as short-term advances from certain bridge investors.

**NOTE 6 – JOINT VENTURE WITH GMP BIO AND AFFILIATES, EQUITY METHOD INVESTMENT**

On March 31, 2022, the Company entered into (i) an agreement to form the JV with Dragon, GMP Bio, both affiliates of GMP, (ii) a license agreement for rights to OT-101for the territory within the United States of America with Sapu Holdings, LLC, a wholly owned subsidiary of GMP Bio and (iii) a license agreement for rights to OT-101 for the rest of the world with GMP Bio. For more information on the JV and the related agreements, refer to our 2022 Annual Report on Form 10-K/A filed with the SEC on April 19, 2023.

As of the effective date of the formation of the JV, the Company received a 45% ownership interest in the JV. The combined enterprise value of GMP Bio was approximately $50.4 million, comprising of the fair value of the Company's investment in GMP Bio of approximately $22.7 million and the total original capital contributions by Dragon Overseas of approximately $27.7 million. The JV was initially funded by equity contributions from Dragon under the terms of the joint venture agreement. That equity funding commitment has been fully paid as of June 30, 2025. In May 2025, GMP Bio and Golden Mountain Partners, an affiliate of Dragon, entered into a note purchase agreement and promissory note pursuant to which Golden Mountain Partners agreed to loan funds to the JV sufficient to meet its operating expenses for 2025 and beyond. The loans are made as monthly advances, bear interest at the Wall Street Journal "Prime" rate, and mature on December 31, 2026. Amounts due under the promissory note are convertible into equity of the JV at the election of Golden Mountain Partners at a price equal to 80% of the price for shares issued in connection with an equity financing of $20 million or more, or otherwise at a mutually agreed price. As of March 31, 2026, the JV had approximately $23.5 million in assets, recorded approximately $14.1 million in liabilities, including loans of approximately $9.7 million from Golden Mountain Partners, and incurred approximately $4.1 million and $3.1 million in operational expenses for the quarters ended March 31, 2026 and March 31, 2025, respectively.

The JV has initiated phase 2 and 3 clinical trials for OT-101 in both high-grade glioma and pancreatic cancer. In late 2023, the JV initiated a plan to start evaluating various nanoparticles that could treat various cancers. In this regard, the JV identified a total of 4 compounds, in addition to OT-101, which had the potential of significant revenue generation for the JV. In the same year, the JV signed a lease agreement to set up a GMP manufacturing facility in San Diego ("*SD*"), California. The main purpose of this facility was to initially commence an aggressive formulation development of newly planned nanoparticle platform ("*Nano Platform*"). The GMP manufacturing facility was initiated in January 2024. Upon the initiation of this facility by the JV, the JV commenced the development work on two of the four identified compounds, as well as other activities, in tandem with the development of OT-101. The JV has since completed the formulation development of one of the products and is moving to complete the formulation development for the three additional products. The JV is also working on improved formulations for OT-101 with new nanoparticle sizes. The JV also has started clinical development for OT-101 for pancreatic cancer. Significant progress has been made in the development of the products and the JV anticipates to complete the formulation development work in 2026 and pushing to initiate clinical trials for the various compounds. In late 2024, the GMP facility in San Diego was issued a Drug Manufacturing License by the State of California Department of Public Health and Food and Drug Branch. Further, in late 2024, the JV identified a sixth candidate as a compound for development for the JV and has already started to work on the formulation development of that compound as well. All developmental and manufacturing, including for Phase 1 clinical trial materials, will be performed at the SD site.

In early 2025, the Company announced that it had entered into a strategic partnership with Shanghai Medicilon, Inc. ("*Medicilon*") to access its industry-leading rapid investigational new drug ("*IND*") development platform to support up to 20 IND projects, which the JV can also utilize to support their INDS. All six of our compounds the JV is developing are planned to be these INDs and are focused on becoming next-generation anticancer agents. The JV anticipates that all these six anticancer agents have the potential to become significant growth contributors to the JV, which in turn would add substantial value to the Company. The Company successfully completed a Phase 1 clinical trial evaluating OT-101, in combination with IL-2 for advanced or metastatic solid tumors. These results set the stage for new studies that combine OT-101, an antisense therapeutic targeting Transforming Growth Factor Beta 2 (TGFβ2), with checkpoint inhibitors ("CKIs") and recombinant IL-2 (aldesleukin) ("*IL-2*"). The Phase 1 trial (ClinicalTrials.gov ID: NCT04862767) investigated the safety and tolerability of OT-101 in combination with recombinant IL-2 in patients with advanced or metastatic solid tumors. The combination showed a tolerable safety profile at the planned dosing schedule, with no unexpected safety signals identified. Based on the favorable safety data, Oncotelic plans to advance OT-101 plus IL-2 into further clinical studies, exploring synergies with CKIs such as PD-1 blockers. The Company elected the fair value option under subsection of Section 825-10-15 to account for its equity-method investment as the Company believes that it the most appropriate method to properly value the Company and record a change in value when and upon conducting a fair value assessment. As of December 31, 2025, as the development and IPO operations of the JV are proceeding as planned, the Company assessed the fair value of its investment in the JV. The Company also utilized the services of an ASC-compliant third party valuation firm to validate the Company's assessment. Based on the Company's assessment and report, and considering the Company's 45% ownership in the JV, the Company proceeded to record an increase in fair value of the Company's ownership interest in GMP Bio of approximately $365.4 million. As the circumstances related to the JV have not materially changed since December 31, 2025, the Company assessed and determined that no additional fair value adjustment was required during the three months ended March 31, 2026, and hence, the Company has not recorded a change in value of the Company's interest in the JV.

A summary of the change in fair value of our investment in GMP Bio, as of March 31, 2026 and December 31, 2025 is shown below:

SCHEDULE OF CHANGE IN FAIR VALUE OF OUR INVESTMENT

---

| | | |
|:---|:---|:---|
|  | March 31, 2026 | December 31, 2025 |
| Balance at January 1, 2026 and 2025 | $388000000 | $22653225 |
| Add: change in fair value of investment in GMP Bio | - | 365346775 |
| Balance at March 31, 2026 and December 31, 2025 | $388000000 | $388000000 |

---

For detailed and more information on the fair value of our investment in GMP Bio, refer to Note 2 to the Consolidated Financial Statements: *Change in Fair Value of Equity Securities of GMP Bio*.

**NOTE 7 - PRIVATE PLACEMENT -2 (PPM-2) AND JH DARBIE FUNDING**

During the period between July 2023 to January 2024, the Company entered into a series of subscription agreements with forty-six accredited investors, whereby the Company issued and converted a total of 94 Units from a previous offering, which resulted in conversion of $2.35 million of old debt into new debt to the Company (the "*PPM-2 Financing*"). The Company did not receive any cash proceeds through the PPM-2 Financing. Each of the new units under the PPM-2 Financing consisted of:

● One 16 % convertible unsecured promissory note (the "*Note*") of $25,000 , convertible into up to 250,000 shares of the Company's common stock (par value of $0.01) based on a conversion price of $0.10 per share, subject to standard anti-dilution protection.

● 250,000 warrants to purchase an equivalent number of shares of the Company's common stock at a strike price of $0.12 per share.

In December 2025, the Company converted the debt of forty-seven accredited investors from PPM-2 into the new subscription agreements under the new financing ("*PPM-3*"- See Note 8 below) in three tranches, which resulted in conversion of approximately $2.2 million of the PPM-2 debt into the PPM-3 debt. Two PPM-2 investors did not participate in the PPM-3 financing and as such, their 7 units for a total of approximately $0.2 million was converted into short term loan to the Company. As of March 31, 2026, PPM 2 financing only consists of the returned and unpaid accrued interest and no principal. The short term loan of one of the investors was repaid, including accrued interest, during the three months ended March 31, 2026.

As of March 31, 2026, and December 31, 2025, the PPM2 - JH Darbie Financing, net of debt discounts, consisted of the following amounts:

SCHEDULE OF FUNDS RECEIVED UNDER THE SUBSCRIPTION AGREEMENT

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,**<br> **2025** |
| **Accrued interest** |  |  |
| Accrued, returned and unpaid interest | $19112 | $102795 |
| Total PPM-2 Darbie Financing, net of discounts | $19112 | $102795 |

---

As of December 31, 2025, the Company reviewed the guidance per ASC 470-60 *Troubled debt restructurings* and ASC 470-50 *Debt- Modifications and Extinguishments* and concluded that the terms of the agreements were substantially different and, accounted for the transaction as a debt extinguishment. The transaction related to the debt extinguishment during the year ended December 31, 2024 resulted in a loss from debt extinguishment of approximately $88,000, with a corresponding increase to additional paid-in capital. All warrants sold in this offering had an exercise price of $0.12 per share of the Company stock, subject to adjustment, are exercisable immediately and expire two years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values:

SCHEDULE OF FAIR VALUE WARRANTS

---

| | |
|:---|:---|
| Expected Term | 2 years |
| Expected volatility | 173% |
| Risk-free interest rates | 4.29% |
| Dividend | 0.00% |

---

The Company recorded approximately $318,000 as an initial debt discount related to the four tranches of PPM 2. The Company recognized amortization expense related to the debt discount and debt issuance costs of approximately $0 and $38,000 for the three months ended March 31, 2026 and 2025, respectively, which is included in interest expense in the statements of operations. During the three months ended years ended March 31, 2026 and 2025, the Company incurred approximately $0 and $93,000 of interest expense related to the convertible notes.

**NOTE 8 – PRIVATE PLACEMENT -3 ("*PPM-3*") AND JH DARBIE FUNDING**

In December 2025, the Company entered into a series of subscription agreements with certain accredited investors pursuant to the JH Darbie Financing, whereby the Company issued and converted a total of 87 Units from the previous PPM-2, into the current subscription agreements under the PPM-3, which resulted in conversion of approximately $2.2 million of the PPM-2 to PPM-3 the Company did not receive any cash proceeds through the December 2025 conversions, with each Unit consisting of:

● One 12 % unsecured convertible promissory note (the "*Note*") of principal amount of $25,000 and convertible into up to 250,000 shares of the Company's common stock (par value of $0.01) based on a conversion price of $0.10 per share.

● 250,000 warrants to purchase an equivalent number of shares of the Company's common stock at a strike price of $0.12 per share ("Oncotelic warrant") with a contractual term of two years.

In December 2025, in a series of three tranches, the Company converted the debt of forty-seven (47) accredited investors from PPM-2 (See Note 7 above) into the current subscription agreements under the PPM-3, which resulted in conversion of $2,175,000 of old debt into new debt to the Company. The Company did not receive any cash proceeds through the conversions. JH Darbie and the Company are parties to a May 2024 placement agent agreement ("*Agreement*") pursuant to which DH Darbie had the right to sell a minimum of 10 Units and a maximum of 200 Units on a best-efforts basis. Initial placement agent fees of $25,000 were paid to JH Darbie in June 2024. Subsequently, the Company paid JH Darbie an amount of $326,250 for processing the three tranches of the Financing. Based on the placement agent agreement, JH Darbie was entitled to a non-refundable $25,000 fee to start the due diligence process and 2% due diligence fees and 13% commissions on all subsequent conversions or new funding. In addition, the Company is to provide warrant coverage equal to 10 % of all of the units sold to JH Darbie. As the Company converted an aggregate of 87 units, JH Darbie was entitled to earn a total of 2,175,000 warrants. A total of 2 investors holding 7 units under the PPM-2 opted not to participate in the PPM-3 and approximately $0.2 million of notes were converted into short-term loan to the Company. Subsequently, one of the investors was repaid his loan of $50,000, including accrued interest, before the filing of this Report.

In connection with the consummation of the PPM-3 financing, the Company entered into Registration Rights Agreements granting certain registration rights with respect to the shares of the Company's Common Stock issued in connection with the financing, as well as the shares of the Company's Common Stock issuable upon exercise of the Warrants. The issuance of the Units is exempt from the registration requirements of the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule 506 of Regulation D promulgated thereunder. The shares of common stock and warrants and any shares of common stock issuable upon exercise of the warrants, have not been registered under the Securities Act or any other applicable securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.

As of March 31, 2026, and December 31, 2025, debt recorded under the December 2025 JH Darbie Financing, net of debt discounts, consist of the following amounts:

SCHEDULE OF DEBT RECORDED UNDER THE SUBSCRIPTION AGREEMENT

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br> **2026** | **December 31,**<br> **2025** |
| **<u>Convertible promissory notes</u>** |  |  |
| Subscription agreements - accredited investors | $1789509 | $1663405 |
| Total convertible promissory, net of discounts | $1789509 | $1663405 |

---

The Company incurred approximately $0.3 million of issuance costs, consisting of incremental costs directly related to the issuance of the various instruments bundled in the offering.

Concurrently with the sale of the Units, JH Darbie was granted a total of 2,175,000 stock warrants, exercisable over a two-year period.

The terms of convertible notes are summarized as follows:

● Term: through December 31, 2027

● Coupon: 12 %

● Convertible at the option of the holder at any time into the Company's common stock

● Conversion price is set at $0.10 per share subject to standard anti-dilution provision.

Management reviewed the guidance per ASC 470-60 *Troubled debt restructurings* and ASC 470-50 *Debt-Modifications and Extinguishments* and concluded that the terms of the agreements were substantially different and, accounted for the transaction as a debt extinguishment. The transaction resulted in a loss from debt extinguishment of approximately $1.2M, which is presented in other expense in the consolidated statements of operations for the year ended December 31, 2025.

The estimated volume weighted grant date fair value of approximately $0.053 per share associated with the warrants to purchase up to 21,750,000 shares of common stock issued in this offering, or a total of approximately $1.2M, was recorded to additional paid-in capital. All warrants sold in this offering have an exercise price of $0.12 per share of the Company stock, subject to adjustment, are exercisable immediately and expire two years from the date of issuance. The fair value of the warrants was estimated using a Black Scholes valuation models using the following input values:

SCHEDULE OF FAIR VALUE WARRANTS

---

| | |
|:---|:---|
| Expected Term | 2 years |
| Expected volatility | 127.9% - 132.2 |
| Risk-free interest rates | 3.47% - 3.52 |
| Dividend | 0.00% |

---

The Company recorded an initial debt discount of approximately $511,600 for the year ended December 31, 2025. The Company recognized amortization expense related to the debt discount and debt issuance costs of approximately $61,700 and $0 for the three months ended March 31, 2026 and 2025, respectively, which is included in interest expense in the statements of operations. During the three months ended years ended March 31, 2026 and 2025, the Company incurred approximately $64,000 and $0 of interest expense related to the convertible notes.

**NOTE 9 - RELATED PARTY TRANSACTIONS**

*Master Service Agreement with Autotelic Inc.*

In October 2015, Oncotelic entered into a Master Service Agreement (the "*MSA*") with Autotelic Inc., a related party that is partly-owned by the Company's CEO Vuong Trieu, Ph.D. Dr. Trieu, a related party, is a control person in Autotelic Inc. Autotelic Inc. currently owns less than 10% of the Company. The MSA stated that Autotelic Inc. would provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The MSA includes personnel costs allocated based on amount of time incurred and other services such as consultant fees, clinical studies, conferences and other operating expenses incurred on behalf of the Company. The MSA requires a 90-day written termination notice in the event either party requires to terminate such services.

Expenses related to the MSA were approximately $500 for the three months ended March 31, 2026 and 2025.

*License Agreement with Autotelic Inc.*

In September 2021, the Company entered into an exclusive License Agreement with Autotelic. For more information on the exclusive license Agreement with Autotelic, refer to our 2025 Annual Report on Form 10-K filed with SEC on April 15, 2026.

*Notes Payable and Short-Term Loan – Related Parties*

In April 2019, the Company issued a convertible note to Dr. Trieu totaling $164,444, including OID of $16,444, receiving net proceeds of $148,000, which was used by the Company for working capital and general corporate purposes. The Company issued a Fall 2019 Note to Dr. Trieu in the principal amount of $250,000. Dr. Trieu also offset certain amounts due to him in the amount of $35,000 and was converted into the Fall 2019 debt. As of January 1, 2025, Dr Trieu had provided a short term loan of $50,000 to the Company. During the year ended December 31, 2025, Dr. Trieu converted his holding in PPM-2 of $125,000 into a short term loan with the Company. As such, the balance due and payable to Dr. Trieu, as of March 31, 2026 and December 31, 2025 was $175,000.

In November 2025, the Company entered into a restricted stock agreement (the "*RSA-1*") with Dr. Trieu, to provide incentive compensation for his extra-ordinary efforts and time to raise capital and successful achievement of certain milestones. The RSA-1 provides for a grant of up to 24,387.516 shares of our unissued Series A Convertible preferred stock ("*Preferred Stock*"), subject to achievement of certain milestones. Each share of Preferred Stock is convertible into 1,000 shares of the Company's Common Stock, par value $0.01 per share of Common Stock upon conversion and votes with the Common Stock on an as converted basis. Dr. Trieu has achieved the first milestone and has earned 4,065 shares of Preferred Stock.

In January 2026, the Company entered into another restricted stock agreement (the "*RSA-2*") with Dr. Trieu, to provide incentive compensation for his extra-ordinary efforts and time to raise capital and successful achievement of certain milestones. The restricted stock agreement provides for a grant of up to 26,512 shares of our Preferred Stock, subject to achievement of certain milestones. Each share of Preferred Stock is convertible into 1,000 shares of the Company's Common Stock, par value $0.01 per share of Common Stock upon conversion and votes with the Common Stock on an as converted basis. Dr. Trieu has achieved the first milestone and has earned 4,426 shares of Preferred Stock.

As of January 1, 2025, approximately $2 million was outstanding and payable to Autotelic. During the year ended December 31, 2025 Autotelic Inc. provided additional short-term funding of approximately $0.9 million to the Company. In the three months ended March 31, 2026 Autotelic Inc. provided additional short-term funding of $17,000 to the Company. As such, approximately $3 million was outstanding and payable to Autotelic at March 31, 2026.

 

*Artius Consulting Agreement*

In March 2020, the Company and Artius Bioconsulting, LLC ("*Artius*"), for which Mr. King is the Managing Member, entered into an amendment to the Consulting Agreement dated December 1, 2018, under which Artius agreed to serve as a consultant to the Company for services related to the Company's business from time to time. For more information on this Agreement, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

No expense was recorded during the three months ended March 31, 2026 and 2025 related to this Agreement.

*<u>Mosaic ImmunoEngineering, Inc.</u>*

In April 2024, the Company entered into a Term Sheet with Mosaic. For more information on the Term Sheet, refer to Note 1 of this Quarterly Report. Steven King, our Board member, is the CEO of Mosaic. The Company had advanced $40 thousand to Mosaic in accordance with the terms of the Term Sheet, and Mosaic has repaid the amount, with interest to the Company as of December 31, 2024. In addition, the Company, on behalf of our JV, had entered into an agreement with Mosaic to provide consulting services related to CMC activities for the JV. The expenses for these services have been paid for by the JV. As such, the Company has not recorded any expenses or accounts payable in this regard during the three months ended March 31, 2026 or 2025, related to this Agreement.

*Maida Consulting Agreement*

Effective May 5, 2020, the Company and Dr. Maida entered into an independent consulting agreement, commencing April 1, 2020, under which Dr. Maida will assist the Company in providing medical expertise and advice from time to time in the design, conduct and oversight of the Company's existing and future clinical trials. For more information on this Agreement, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

Effective April 1, 2022, Dr. Maida's compensation has been borne by the JV. No expense was recorded during the three months ended March 31, 2026 and 2025 related to this Agreement.

**NOTE 10 - EQUITY PURCHASE AGREEMENT AND REGISTRATION RIGHTS AGREEMENT (MAST HILL)**

In August, 2025, the Company entered into an Equity Purchase Agreement ("*EPA*") and Registration Rights Agreement with Mast Hill. Under the terms of the EPA, the Company issued warrants to purchase 3,350,000 shares of Common Stock to Mast Hill. Further, under the terms of the EPA, Mast Hill agreed to purchase from the Company up to $25,000,000 of the Company's Common stock upon effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission and subject to certain limitations and conditions set forth in the Equity Purchase Agreement. The Registration Rights Agreement provided that the Company would (i) file the Registration Statement with the SEC by October 1, 2025: and (ii) use its best efforts to have the Registration Statement declared effective by the Commission at the earliest possible date (in any event, within 90 after days after the execution date of the definitive agreements). The Company filed the initial Form S-1 with the SEC on November 21, 2025 and the SEC declared the S-1 effective on December 23, 2025. The Company filed a prospectus on Form 424B3 with the SEC on December 23, 2025.

Following effectiveness of the Registration Statement, and subject to certain limitations and conditions set forth in the Equity Purchase Agreement, the Company shall have the discretion to deliver put notices to the Investor and the Investor will be obligated to purchase shares of the Company's Common Stock based on the investment amount specified in each put notice. The minimum amount that the Company shall be entitled to put to the Investor in each put notice is $5,000 and the maximum amount is up to the lesser of $0.5 million or twenty percent (20%) of the average daily trading value of the Company's Common stock. Pursuant to the Equity Purchase Agreement, the Investor will not be permitted to purchase, and the Company may not put shares of the Company's Common Stock to the Investor that would result in the Investor's beneficial ownership of the Company's outstanding Common Stock exceeding 4.99%. The price of each put share shall be equal to ninety seven percent (97%) of the market price, which is defined as the lesser of (i) closing bid price of the Common stock on the trading date immediately preceding the respective put date, or (ii) the lowest closing bid price of the Common Stock during the seven (7) trading days immediately following the clearing date associated with the applicable put notice.

In connection with the EPA, the Company issued 3,350,000 warrants to Mast Hill and recorded a fair value deferred finance cost of approximately $122,000.

**NOTE 11 - STOCKHOLDERS' EQUITY**

The following transactions affected the Company's Stockholders' Equity:

Issuance of Common Stock during the three months ended March 31, 2026

In January 2026, the Company issued 1,600,446 of the Company's Common Stock as commitment shares to Mast Hill in connection with a Note purchase agreement.

Issuance of Common Stock during the three months ended March 31, 2025

In March 2025, Fourth Man partially converted approximately $68,000 of their debt, including accrued interest. In connection with the partial Note conversion, the Company issued 1,002,832 shares of Common Stock to Fourth Man.

**NOTE 12 – PREFERRED STOCK**

The Company has authorized 15,000,000 shares of Convertible Preferred Stock, par value $0.01 per share, of which, 5,000,000 shares have been designated as Series A Convertible Preferred Stock. In November 2025, the Company entered into RSA-1 with Dr. Vuong Trieu, our CEO, and granted him 24,388 shares of our Preferred Stock, which were subject to a vesting schedule upon achievement of certain corporate milestones and subject to forfeiture if any or all the milestones were not achieved. As of December 31, 2025, 24,388 shares of the Company's Preferred Stock were issued to Dr. Trieu, but Dr. Trieu would earn the Preferred Shares as and when he achieved certain milestones. As of December 31, 2025, Dr. Trieu had earned 12,196 shares of Preferred Stock. As of March 31, 2026, Dr. Trieu earned an additional 8,131 shares of Preferred Stock. Each share of Preferred Stock is convertible into 1,000 shares of the Company's Common Stock, and votes with the Common Stock on an as converted basis.

In January 2026, the Company entered into RSA-2 with Dr. Trieu, to provide incentive compensation for his extra-ordinary efforts and time to raise capital and successful achievement of certain milestones. The restricted stock agreement provides for a grant of up to 26,512 shares of our Preferred Stock, subject to achievement of certain milestones. Each share of Preferred Stock is convertible into 1,000 shares of the Company's Common Stock upon conversion and votes with the Common Stock on an as converted basis. Dr. Trieu has achieved the first milestone and has earned 4,426 shares of Preferred Stock.

SCHEDULE OF PREFERRED STOCK

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Amount** |
| Balance at January 1, 2026 | 24388 | $244 |
| Issuance of preferred stock | 26512 | 265 |
| Balance at March 31, 2026 | **50900** | $**509** |

---

---

| | | |
|:---|:---|:---|
|  | **Shares** | **Amount** |
| Balance at January 1, 2025 |  | $- |
| Issuance of preferred stock | 24388 | 244 |
| Balance at December 31, 2025 | **24388** | $**244** |

---

For the January 2026 grant, The Company calculated the grant date fair value of the Preferred Stock for the RSA issued to Dr. Trieu as approximately $2.1 million, recorded stock-based compensation of approximately $0.7 million for the three months ended March 31, 2026 and had approximately $1.4 million of unamortized expense to be recognized in future periods as and when the milestones are achieved.

The Company calculated the grant date fair value of the Preferred Stock for the RSA issued to Dr. Trieu in 2025 as approximately $1.6 million, recorded stock-based compensation of approximately $1.1 million during the year ended December 31, 2025 and had approximately $0.5 million of unamortized expense to be recognized in future periods as and when the milestones are achieved. During the three months ended March 31, 2026, the Company recorded approximately $0.5 million of additional deferred compensation expense, recorded stock based compensation of approximately $0.8 million and had approximately $0.2 million of unamortized expense to be recognized in future periods as and when the milestones are achieved.

**NOTE 13 – STOCK-BASED COMPENSATION**

*Compensation for services*

In August 2025, the Company issued 20,322,930 shares of Common stock as service fees of approximately $1.2 million, as the grant date fair value of the Common Shares to Jefferson Capital, as part of the independent contractor agreement. Jefferson is due to earn certain shares out of the shares issued based on certain milestones, as described in Note 1 to this Report. The Company recognized approximately $0.1 million as stock based compensation during the three months ended March 31, 2026 and had approximately $0.2 million unamortized expense to be recognized in future periods as and when the milestones are achieved. The Company recognized approximately $1.0 million as stock based expense during the year ended December 31, 2025 and had approximately $0.20 million unamortized expense to be recognized in future periods as and when the milestones are achieved.

In August 2025, the Company issued 4,064,586 shares of Common stock as service fee of approximately $0.2 million to Valor Nation as part of the independent contractor agreement, as the grant date fair value of the Common Shares to Valor Nation. Valor Nation is due to earn the shares issued based over the service period of the agreement. The Company recognized approximately $0.2 million as stock based expense during the year ended December 31, 2025 and had approximately $0 unamortized expense to be recognized over the remainder of the period of the services.

In December 2025, the Company issued 1,818,182 shares of Common stock as service fee of approximately $0.2 million to Outside the Box Capital, Inc. as part of the service agreement, as the grant date fair value of the Common Shares to Outside the Box Capital Inc. Outside the Box Capital Inc. is due to earn the shares issued based over the service period of the Agreement. The Company recognized approximately $0.1 million as stock based compensation during the three months ended March 31, 2026 and had approximately $39,000 unamortized expense to be recognized in future periods as and when the milestones are achieved. The Company recognized approximately $62,000 as stock based expense during the year ended December 31, 2025 and had approximately $0.14 million unamortized expense to be recognized over the remainder of the period of the services.

*Options*

Pursuant to the Merger, the Company's Common Stock and corresponding outstanding options survived. The below information details the Company's associated option activity pre and post-merger.

As of March 31, 2026, the Company had options to purchase Common Stock that were outstanding under three stock option plans – the 2017 Equity Incentive Plan (the "*2017 Plan*"), the 2015 Equity Incentive Plan (the "*2015 Plan*") and the 2005 Stock Plan (the "*2005 Plan*"). No further awards may be granted under the 2005 Plan, although options previously granted remain outstanding in accordance with their terms. Under the 2017 Plan, up to 2,000,000 shares of the Company's Common Stock may be issued to directors, officers, employees or consultants pursuant to awards granted in the form of nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards. Under the 2015 and 2005 Plans, taken together, up to 27,250,000 shares of the Company's Common Stock may be issued pursuant to awards granted in the form of incentive stock options, nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards.

Compensation based stock option activity for qualified and unqualified stock options are summarized as follows:

SCHEDULE OF COMPENSATION BASED STOCK OPTION ACTIVITY

---

| | | |
|:---|:---|:---|
| <br>**For the three months ended March 31, 2026** |<br>**Shares** | **Weighted**<br>**Average**<br>**Exercise Price** |
| Outstanding at January 1, 2026 | 23802761 | $0.15 |
| Expired or cancelled | (500000) | - |
| Outstanding at March 31, 2026 | 23302761 | 0.14 |
| Options exercisable at March 31, 2026 | 13110261 | 0.16 |

---

The following table summarizes information about options to purchase shares of the Company's Common Stock outstanding and exercisable at March 31, 2026:

SCHEDULE OF OPTIONS TO PURCHASE SHARES OF COMMON STOCK OUTSTANDING AND EXERCISABLE

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Exercise prices** | **Outstanding**<br> **Options**  | **Weighted-**<br> **Average**<br> **Remaining Life**<br> **In Years**  | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price**  | **Number**<br> **Exercisable**  |
| $0.1 to $0.15 | 16250000 | 6.2 | $0.12 | 6057500 |
| 0.16 to $0.21 | 5502761 | 5.5 | 0.16 | 5502761 |
| 0.22 to $0.37 | 1550000 | 1.9 | 0.28 | 1550000 |
|  | 23302761 | 5.8 | $0.14 | 13110261 |

---

The compensation expense attributed to the issuance of the options is recognized as they are vested. The employee stock option plan stock options are generally exercisable for ten years from the grant date and vest over various terms from the grant date to three years.

As of March 31, 2026, there was no unamortized stock compensation cost related to the stock options granted during the year ended December 31, 2023. Of the approximately 10 million unvested stock options, the vesting criteria for 7.3 million options is still being evaluated as on the date of this Report, as those options are subject to individual milestone achievements. The Company amortized $0 stock compensation expense during the three months ended March 31, 2026 and 2025 on the 2021 and 2022 grants. For more information on the stock options, refer to 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

*Warrants*

The Company has issued warrants in connection with the various financings conducted by the Company. For more information on the warrant issuances, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

The issuance of warrants to purchase shares of the Company's Common Stock, including those attributed to debt issuances, for the three months ended March 31, 2026 and 2025, respectively are summarized as follows:

SCHEDULE OF WARRANTS ACTIVITY

---

| | | |
|:---|:---|:---|
| <br>**For the three months ended March 31, 2026** |<br>**Shares** | **Average**<br>**Exercise Price** |
| Outstanding at January 1, 2026 | 59415289 | $0.13 |
| Issued during the three months ended March 31, 2026 | 1422613 | 0.15 |
| Exercised / cancelled during the three months ended March 31, 2026 | - | - |
| Outstanding at March 31, 2026 | 60837902 | $0.13 |

---

---

| | | |
|:---|:---|:---|
| <br>**For the three months ended March 31, 2025** |<br>**Shares** | **Average**<br>**Exercise Price** |
| Outstanding at January 1, 2025 | 31890289 | $0.13 |
| Issued during the three months ended March 31, 2025 |  |  |
| Exercised / cancelled during the three months ended March 31, 2025 | - | - |
| Outstanding at March 31, 2025 | 31890289 | $0.13 |

---

The following table summarizes information about warrants outstanding and exercisable at March 31, 2026:

SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Outstanding and exercisable** | **Outstanding and exercisable** | **Outstanding and exercisable** | **Outstanding and exercisable** |
|<br>**Exercise Price** | **Number**<br> **Outstanding** | **Weighted-**<br> **Average**<br> **Remaining Life**<br> **in Years**  | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price**  | **Number**<br> **Exercisable**  |
| $0.13 | 961539 | 0.75 | 0.13 | 961539 |
| 0.20 | 4373750 | 1.0-1.23 | 0.20 | 4373750 |
| 0.12 | 46555000 | 1.75 | 0.12 | 46555000 |
| 0.12 | 2175000 | 4.76 | 0.12 | 2175000 |
| 0.15 | 6772613 | 4.50-4.76 | 0.15 | 6772613 |
|  | 60837902 | 2.09 | $0.13 | 60837902 |

---

**NOTE 14– COMMITMENTS AND CONTINGENCIES**

*Leases*

Currently, the Company is leasing the office located at 29397 Agoura Road, Suite 107, Agoura Hills, CA 91301 on a month-to-month basis until such time a new office is identified. The Company believes the office is sufficient for its current operations.

*PointR Merger Consideration*

The total purchase price in the PointR Merger of $17,831,427 included $2,625,000 of contingent consideration of shares issuable to PointR shareholders, upon achievement of certain milestones. For more information on the PointR Merger Contingent Consideration, refer to our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

*Other claims*

From time to time, the Company may become involved in certain claims arising in the ordinary course of business.

During the year ended December 2022, a former employee brought suit for breach of employment contract claim against the Company in Honorable Supreme Court of California. The Company filed a counter claim against the former employee. Both litigations were settled in October 2025, and the Company paid the ex-employee of approximately $0.2 million to settle this claim.

**NOTE 15 – SUBSEQUENT EVENTS**

*Shares issued to Fourth Man*

 ****

In April 2026, the Company issued 300,000 shares of Common Stock to Fourth Man to permit the Company to sell the Common Stock under the EPA at a price less than $0.07 per share.

*Intellectual Property Development and Services Agreement with Lunai Bioworks, Inc.*

On April 17, 2026, the Company and Lunai Bioworks, Inc., a Delaware corporation ("*Lunai*") entered into an intellectual property development and services agreement ("*IP Services Agreement*"), whereby the Company was to perform intellectual property development and business development services relating to a Nose-to-Brain ("*N2B*") delivery platform. This includes applications in biodefense, Alzheimer's disease ("*AD*"), and broader central nervous system ("*CNS*") indications and excludes Parkinson's disease and sexual dysfunction. The work shall focus on direct-to-CNS delivery to bypass the blood-brain barrier (BBB). The scope of services included scientific development, IP execution, technical data delivery, business development support and broadened biodefense focus. In connection with these services, Lunai agreed to compensate the Company a total compensation of $250,000, of which $62,500 was payable upon signing of the IP Services Agreement, $62,500 upon filing of provisional patents and $125,000 payable upon the execution of a biodefense and neurodegenerative platform IP acquisition agreement by Lunai, which was the agreement and plan for merger with Lunai, described below. The Company has completed all it's obligations under the IP Services Agreement, has invoiced Lunai for the services and will recognize the revenue under the IP Services Agreement during the three months ended June 30, 2026.

 

*Agreement and Plan of Merger With Lunai* 

 

On April 27, 2026, Oncotelic Inc., a wholly owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the "*Merger Agreement*") with Lunai, Lunai Bioworks IP, Inc., a Delaware corporation and a wholly owned subsidiary of Lunai ("*Merger Sub*"), Neurobridge IP Holdings Incorporated, a Delaware corporation ("*Holdings*"), and the holders of all of the issued and outstanding capital stock of Holdings, namely the Company and Pelerin Therapeutics Inc., a corporation existing under the laws of the Province of British Columbia, Canada ("*Pelerin*" and, together with Oncotelic Inc., the "*Holders*"). Pursuant to the Merger Agreement, Holdings merged with and into Merger Sub in a triangular merger (the "*Merger*"), with Merger Sub continuing as the surviving corporation and as a wholly owned subsidiary of Lunai. The Merger was completed on May 1, 2026. Immediately prior to the effective time of the Merger, all of the issued and outstanding capital stock of Holdings was owned 62.5% by Oncotelic Inc. and 37.5% by Pelerin. The sole assets of Holdings at the effective time of the Merger consisted of a multi-jurisdictional patent portfolio (collectively, and as further defined in the Merger Agreement, the "Patents"), which the Holders had contributed to Holdings prior to the effective time. In consideration for the Merger, on May 1, 2026 Lunai issued to the Holders an aggregate of eight (8) shares of a newly designated series of preferred stock of Lunai, designated as "Series B Convertible Preferred Stock" (the "*Series B Preferred Stock*"), having an aggregate stated value (the "*Stated Value*") of $20,000,000. The Series B Preferred Stock was allocated five (5) shares to Oncotelic Inc (representing 62.5% of the Series B Preferred Stock and an aggregate Stated Value of $12,500,000). For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*IP Assignment Agreement*

In connection with the Merger Agreement, on April 27, 2026, Oncotelic Inc. entered into an IP Assignment Agreement with Holdings, pursuant to which it agreed to contribute and assign certain assets relating to the intellectual property of the Company (collectively, the "*<u>Intellectual Property Assets</u>*") to Holdings. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*IP Grant-back Agreement*

Further, on April 27, 2026, the Company and Holdings entered into an Intellectual Property Assignment and Grant-back Agreement (the "*IP Grant-back Agreement*"). The IP Grant-back Agreement grants back to the Company a perpetual, irrevocable, royalty-free, exclusive, non-terminable, and non-cancellable license to make, have made, use, offer to sell, sell, and otherwise exploit the Intellectual Property Assets in all fields of use except the Biodefense Field and the Alzheimer's Disease Field as defined in the IP Grant-back Agreement, giving Holdings exclusive use of the Intellectual Property Assets in those fields. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*Asset Transfer Agreement*

Further, on April 30, 2026, Oncotelic Inc. and Autotelic Inc. ("Autotelic") entered into an asset transfer agreement (the "*Asset Transfer Agreement*") pursuant to which Autotelic agreed to transfer all the rights, title and interest to certain assets ("*Assets*"), described below and owned by Autotelic to Oncotelic Inc. This Asset Transfer Agreement was entered into by both parties to effectuate the Merger Agreement. Dr. Trieu, Chairman and CEO of the Company, is a partial owner and control person in Autotelic Inc. Autotelic Inc. currently owns less than 10% of the Company. The Assets transferred pursuant to the Asset Transfer Agreement include Peptide Y (including all variants, analogs, derivatives); Parathyroid Hormone ("*PTH*"), including PTH 1-34, PTH 1-84, and derivatives; Insulin (including intranasal and other formulations); Apomorphine (including intranasal and other formulations); Carbetocin (including intranasal and other formulations); any associated combination therapies, including multi-agent CNS, AD, metabolic, endocrine, or biodefense applications; and all delivery platforms, including nasal, injectable, and device-based systems and includes all patents, patent applications, know-how, trade secrets, data, formulations, manufacturing processes, regulatory filings, and all related rights associated with the Assets. In consideration for the transfer of the Assets, the Company shall issue equity of ten percent (10%) of the fully diluted outstanding shares of the Company, issuable on an uplisting of its capital stock to NYSE/NASDAQ. No cash was paid for the Asset Transfer Agreement. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

**ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*Note Regarding Forward-Looking Statements*

This Quarterly Report on Form 10-Q for the period ended March 31, 2026 (this "*Quarterly Report*" or "*Report*") contains statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "*Exchange Act*").

Any statements contained in or incorporated by reference into this Quarterly Report, that are not statements of historical fact are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "continue," "assumption" or the negative of these terms or other comparable terminology. Statements concerning: our expectations on the timing, success of the JV's product approvals, commercialization of the JVs products and results of operations of the JV: our expectations on the timing, success, or valuation our JV's planned initial public offering; the timing, success or continuing valuation of our equity interest in the JV; our ability to secure future debt or equity financing needed to meet operating costs; the timing, costs and other limitations involved in obtaining regulatory approval for any product candidate; the expected efficacy of our product candidates compared to competitive products; anticipated results of our research and development programs as well as preclinical and clinical trials; expected market size, market acceptance for our product candidates; our ability to enter into future partnerships, joint ventures or other corporate transactions, ability of us being able to obtain additional resources, including debt or equity funding, and the expected benefits to be derived from those transactions; the anticipated impact of regulatory and legislative changes in the United States and foreign countries on our product candidates and operations; anticipated trends in revenues, operating expenses or financial position and results of operations; and our estimates regarding anticipated operating income or losses, future performance, future revenues and projected expense; are all forward-looking statements.

Forward-looking statements reflect current views about future events and are based on our currently available financial, economic and competitive data and on current business plans. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed or implied in the forward-looking statements. Factors that might cause such differences include, but are not limited to, the factors included in "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on April 15, 2026 and the other registration statements and reports that we file with the Securities and Exchange Commission ("*SEC*").

The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. We undertake no obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Readers should consider the inherent limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements.

*Corporate History*

Oncotelic Therapeutics, Inc. ("*Oncotelic*"), was formed in the State of New York in 1988 as OXiGENE, Inc., was reincorporated in the State of Delaware in 1992, and changed its name to Mateon Therapeutics, Inc. in 2016, and Oncotelic Therapeutics, Inc. in November 2020. Oncotelic conducts business activities through Oncotelic and its wholly-owned subsidiaries, Oncotelic, Inc., a Delaware corporation, PointR Data, Inc. ("*PointR*"), a Delaware corporation, Pet2DAO Inc., a Delaware corporation and EdgePoint AI, Inc. ("*EdgePoint"*), a Delaware Corporation for which there are non-controlling interests, (Oncotelic, Oncotelic Inc., PointR, Pet2DAO and EdgePoint are collectively called the "*Company*" or "*We*"). The Company completed a reverse merger with Oncotelic Inc in April 2019, a merger with PointR in November 2019 and formed a subsidiary EdgePoint in February 2020. For more information on these mergers, 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026.

*Company Overview*

The Company is a clinical stage biopharmaceutical company developing drugs for the treatment of cancer. The Company's proprietary product candidates have shown promising clinical activity in phase 2 trials for the treatment of gliomas and pancreatic cancers. The Company aims to translate its unique insights, which span more than three decades of original work using RNA therapeutics, into the deployment of antisense as a RNA therapeutic for diseases which are caused by TGF-β overexpression, starting with cancer and expanding to Duchenne Muscular Dystrophy and others. OT-101, the Company's lead product candidate, is being developed as a broad-spectrum anti-cancer drug that can also be used in combination with other standard cancer therapies to establish an effective multi-modality treatment strategy for difficult-to-treat cancers.

Since April 2022, the Company has conducted the vast majority of its development efforts for OT-101 through a joint venture (the "*JV*"), namely GMP Biotechnology Limited ("*GMP Bio*"), with Dragon Overseas Capital ("*Dragon*"). In connection with the formation of the JV, the Company contributed license rights OT-101 for both U.S. and the rest of the world, in exchange for a 45% equity interest in GMP Bio, and Dragon agreed to provide approximately $27.6 million of research and development funding in exchange for a 55% ownership stake in GMP Bio. The Company accounts for its holdings in GMP Bio as an equity investment under the fair value option. Accordingly, the Company accounts for only its change in fair value in the Company's investment in GMP Bio, and the income and expenses of the JV are not consolidated in the Company's financial statements.

The Company announced in November 2025 that the JV obtained a preliminary independent third-party valuation of approximately $2.3 billion for its therapeutic pipeline, assuming and implying an illustrative value of approximately $1 billion based on the Company's 45% ownership interest in the JV. The Company had previously stated that this valuation was non-binding, forward-looking, and not determinative of fair value under U.S. GAAP, and that a separate ASC-compliant valuation process would be done. Under the fair value option, the Company periodically conducts a fair value assessment and records a change in the value when circumstances warrant reassessing the value of investment in GMP Bio. The Company conducted an ASC-compliant valuation, including through an independent valuation expert based on the same parameters and conditions envisioned in the valuation conducted by the JV. Based on the Company's evaluation, the Company proceeded to record a change in the value of the Company's interest in the JV of approximately $365.4 million. The Company relied on the inputs by the JV valuation, however, certain parameters like lack of marketability and lack of control discounts and other standard discounts, specific to the Company, have been applied to the independent valuation done by the Company to derive the ASC-compliant valuation. As the circumstances related to the JV have not materially changed since December 31, 2025, the Company assessed and determined that no additional fair value adjustment was required during the three months ended March 31, 2026, and hence, the Company has not recorded a change in value of the Company's interest in the JV. The Company will also appropriately adjust the fair value of the interest of the Company's interest in the JV at the end of reporting periods and when key value inflection points are met. As previously announced, GMP Bio is progressing with its strategic and operational plans, which include efforts to secure third-party financing and a possible initial public offering in Hong Kong during 2026. For more information on, refer to Recent Joint Venture Developments below.

 

 

*Recent Joint Venture Developments*

The JV's principal activities centered on the commercialization of OT-101 for certain oncology indications in the US and looking at other territories as well. In March 2025, the JV successfully completed a Phase 1 clinical trial evaluating OT-101, in combination with IL-2 for advanced or metastatic solid tumors. These results set the stage for new studies that combine OT-101, an antisense therapeutic targeting Transforming Growth Factor Beta 2 (TGFβ2), with checkpoint inhibitors ("CKIs") and recombinant IL-2 (aldesleukin) ("IL-2"). The Phase 1 trial (ClinicalTrials.gov ID: NCT04862767) investigated the safety and tolerability of OT-101 in combination with recombinant IL-2 in patients with advanced or metastatic solid tumors. The combination showed a tolerable safety profile at the planned dosing schedule, with no unexpected safety signals identified. Based on the favorable safety data, the JV plans to advance OT-101 plus IL-2 into further clinical studies, exploring synergies with CKIs such as PD-1 blockers. The JV is also sponsoring investigator-initiated studies for OT-101 for other oncology indications including lung cancer (non small cell lung cancer("NSCLC")and Mesothelioma.("MPM") and has started clinical development for OT-101 for pancreatic cancer. Over ten patent families have been filed exploiting the central role of TGFB2 as prognostic indicator for cancer survival and one patent family for the intracranial delivery device of brain cancer with issued patents in China and Germany.

In addition to OT-101, the JV has developed a nanoparticle platform ("*Nano Platform*") that entails the formulation of products in new nanoparticle sizes. The JV anticipates that the Nano Platform may offer superior platform for the absorption of water insoluble drugs across a broad spectrum of cancers. The JV is working on improved formulations for OT-101 with new nanoparticle sizes. In addition, the JV has identified five additional compounds as product candidates on the Nano Platform, including the following:

● The JV has completed the formulation development of the first product, everolimus for injection. The JV has initiated a global clinical trial for that product, including open patient enrollment in Australia. The JV hopes to complete the Phase 1 trial and to move to a Phase 3 noninferiority trial against Affinitor. Phase 3 trial is slated to initiate within one year with completion and submission for marketing approval no less than three years thereafter.

● The JV is developing palbociclib for injection on the Nano Platform and expects to file the investigational new drug ()"*IND*") and to initiate a Phase 1 trial in 2026.

● The JV is developing docetaxel and paclitaxel for injection on the Nano Platform and expects to file the IND to initiate a Phase 1 trial for this product candidate in 2026. These are expected to go through the 505(b)2 bioequivalence pathway for a more rapid entrance into the market

● In addition, the JV has also identified developing carboplatin and intends to begin the development as soon as the other products clinical trials are under way.

The Nano or Deciparticle<sup>TM</sup> platform has proven robust and is being expand to other drug candidates through partnering. The platform is protected by more than 15 patent families covering chemical composition, manufacturing, and method of use.

The JV built a GMP manufacturing facility in San Diego, California (the "*San Diego Facility*"). In late 2024, the San Diego Facility was issued a Drug Manufacturing License by the State of California Department of Public Health and Food and Drug Branch. A significant portion of the manufacturing for the Nano Platform, including the development of Phase I clinical trial materials, is conducted at the San Diego Facility. Evaluation of larger commercial scale manufacturing is ongoing.

In early 2025, the Company entered into a strategic partnership with Shanghai Medicilon, Inc. ("*Medicilon*") to access its industry-leading rapid IND development platform to support up to 20 IND projects, including INDs developed by the JV. All six of the compounds that the JV is developing are planned to be initiated under these INDs, and are focused on next-generation anticancer agents.

The JV was initially funded by equity contributions from Dragon under the terms of the joint venture agreement. That equity funding commitment has been fully paid as of June 30, 2025. In May 2025, GMP Bio and Golden Mountain Partners, an affiliate of Dragon, entered into a note purchase agreement and promissory note pursuant to which Golden Mountain Partners agreed to loan funds to the JV sufficient to meet its operating expenses for 2025 and beyond. The loans are made as monthly advances, bear interest at the Wall Street Journal "Prime" rate, and matures on December 31, 2026. Amounts due under the promissory note are convertible into equity of the JV at the election of Golden Mountain Partner at a price equal to 80% of the price for shares issued in connection with an equity financing of $20 million or more, or otherwise at a mutually agreed price.

The JV is planning to conduct an initial public offering on the Hong Kong Stock Exchange in approximately late 2026. In connection with the planned public offering, the JV venture has retained an investment banker and a big four accounting firm as its independent accounting firm to audit the financial statements that would be included in the public filings. The JV also hired a valuation consultant to provide guidance on the potential pricing for the planned IPO. GMP Bio completed an independent third-party valuation, which preliminarily estimated the potential value of the drug pipeline under development at approximately $2.3 billion. As of December 31, 2025, the Company owns 45% of GMP Bio.

The JV's planned public offering is subject to a number of risks and uncertainties, some involving the JV's ability to execute on its business plan, but others outside the JV's control including market forces. Consequently, there is no assurance that the planned Hong Kong public offering will take place in late 2026, or at all, and there is no assurance as to what enterprise value would be ascribed to the JV at that time.

Based on the JV's advances, including the development of the Nano Platform and pipeline and the planned Hong Kong public offering the Company believed that its ownership interest in the JV would be significantly higher than the reported value on its financial statements, which was based on the valuation at the time of its initial investment in the JV in 2022.

All these factors formed a basis for a triggering event of significant development for the JV and justified the JV, and consequently the Company, to reassess the fair value of the JV. After the business valuation exercise by GMP Bio, the Company proceeded to conduct its own independent assessment of the valuation of the JV. The basis for the valuation was utilizing the same conditions, financial projection, risks and parameters of assessment as done by the offshore independent valuation firm, and then applying additional independent parameters required to adhere to the strict ASC-compliant standards as generally used in the United States. The Company hired the services of an independent, ASC-compliant valuation firm to review, perform and validate the assumptions considered by the Company and provide an ASC-compliant valuation of the JV under U.S. GAAP standards. The valuation conducted by the independent ASC-compliant valuation firm of the JV was based on various methods compliant with ASC and US GAAP to derive the fair value. The Company then utilized the fair value of GMP Bio, as assessed by the ASC-compliant valuation firm, attributed the ownership percentage of the Company in GMP Bio, to ascertain the Company's interest in GMP Bio and recorded the resulting gain to the investment in GMP Bio at fair value of approximately $365.4 million. The Company relied on the inputs by the JV valuation, however, certain parameters like lack of marketability and lack of control discounts and other standard discounts, specific to the Company, have been applied to the independent valuation done by the Company to derive the ASC-compliant valuation. The Company will also appropriately adjust the fair value of the interest of the Company's interest in the JV at the end of reporting periods and when key value inflection points are met. As the circumstances related to the JV have not materially changed since December 31, 2025, the Company assessed and determined that no additional fair value adjustment was required during the three months ended March 31, 2026, and hence, the Company has not recorded a change in value of the Company's interest in the JV.

*PDAOAI*

PDAOAI is the Company's proprietary artificial intelligence–enabled knowledge platform, developed to support scientific, translational, and regulatory activities across its oncology pipeline. The platform was initially implemented by Oncotelic Therapeutics to streamline document search, synthesis, and analysis in knowledge-intensive environments, particularly within pharmaceutical research and development. Since its initial deployment, the Company has progressively expanded PDAOAI into a core infrastructure layer supporting research generation, biomarker discovery, and regulatory documentation across multiple programs. Unlike general-purpose artificial intelligence tools, PDAOAI has been designed specifically for pharmaceutical and biotechnology applications, with an emphasis on regulatory-grade documentation, scientific traceability, and reproducibility. The platform is intended to operate as an "evidence-interrogation" system rather than a black-box predictive engine, enabling structured ingestion, semantic indexing, and clustering of large biomedical corpora. This design allows users to query, retrieve, and synthesize information in a manner that is auditable and aligned with regulatory expectations for data provenance and scientific justification. During 2025, the Company significantly expanded the functional scope of PDAOAI and integrated it into its translational research workflow. This included the use of PDAOAI to support the preparation of peer-reviewed manuscripts, development reports, and regulatory documentation, as well as to enable interactive interrogation of scientific literature. The Company introduced interfaces that allow users to query individual publications and their associated reference networks, thereby facilitating deeper exploration of mechanistic hypotheses and clinical correlations within defined therapeutic areas. PDAOAI has also been applied to the assembly and interrogation of multi-omic and clinical datasets, particularly in the context of biomarker-driven oncology research. The platform has been used to identify, prioritize, and validate biomarkers associated with treatment response, disease progression, and survival outcomes. This capability has been most prominently demonstrated in the Company's work on TGFB2 signaling and tumor microenvironment biology, where PDAOAI has supported analyses across multiple tumor types, including ovarian cancer, breast cancer, pancreatic cancer, hepatocellular carcinoma, and glioblastoma.

As disclosed in Company press releases, PDAOAI contributed to the generation of at least seven peer-reviewed publications during 2025. These publications collectively span bioinformatic biomarker discovery, tumor microenvironment analysis, nanoparticle drug delivery, and clinical outcome correlations, and include studies demonstrating prognostic and predictive roles of TGFB2 methylation and expression across multiple cancers. The Company believes that this body of work provides validation of PDAOAI's utility as a research acceleration platform and supports its role in generating clinically relevant insights.

By late 2025, the Company had further evolved PDAOAI into a large-scale knowledge platform built around a comprehensive TGF-β–centric biomedical corpus, comprising over one hundred thousand curated abstracts and associated datasets. Within this framework, PDAOAI enables semantic retrieval, clustering of related concepts, and cross-referencing of molecular, clinical, and literature-derived data. The platform is designed to generate hypotheses that are not only computationally derived but also traceable to underlying evidence, thereby facilitating scientific validation and regulatory acceptance. The Company has now positioned PDAOAI as a cross-program decision-support system integrating molecular biology, pharmacology, clinical outcomes, and regulatory-grade literature. The platform is used to inform multiple aspects of the Company's operations, including target identification, biomarker strategy, clinical trial design, and regulatory positioning. In particular, PDAOAI is intended to complement the Company's nanomedicine and biomarker platforms by identifying patient subpopulations most likely to benefit from specific therapeutic approaches and by supporting the development of precision oncology strategies.

The Company believes that PDAOAI represents a differentiating capability within its integrated platform, enabling the convergence of artificial intelligence, molecular biology, and clinical data into a unified framework. By embedding PDAOAI across its discovery and development processes, the Company aims to accelerate insight generation, improve decision-making, and enhance the probability of clinical and commercial success across its pipeline.

On April 2, 2026, the Company announced that it had entered into a strategic partnership with TechForce Robotics, Inc. ("*TechForce*") to advance the commercialization of its PDAOAI-enabled, GMP-compliant robotics platform. This milestone reflects the culmination of several years of research and development efforts, resulting in an integrated platform designed to combine Oncotelic's proprietary PDAOAI capabilities with TechForce's robotics hardware and manufacturing expertise. The system under development is designed to operate within GMP-regulated environments and is intended to enable automated material handling, real-time monitoring, and PDAOAI-enhanced compliance workflows across pharmaceutical manufacturing and related applications. The key highlights of the commercialization include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Integrated
 AI + robotics platform, combining the Company's PDAOAI capabilities with TechForce's scalable robotics systems to automate
 critical operational workflows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Form
 a GMP-Compliant Design, designed to support regulatory requirements, including data capture, audit readiness, and validation frameworks;

3. Improve
 operational efficiency and compliance, intended to reduce human intervention, minimize contamination risk, and enhance process consistency
 through real-time monitoring and intelligent automation; and

4. Achieve
 scalable manufacturing capability, intended to leverage TechForce's hardware expertise and manufacturing network to support
 commercial deployment and future growth.

*Joint Development, Manufacturing and Licensing Agreement with TechForce Robotics*

 

On March 31, 2026, the Company entered into a Joint Development, Manufacturing, and Licensing Agreement (the "*Joint Development Agreement*") with TechForce Robotics, Inc. ("TechForce"), a Nevada corporation. The Joint Development Agreement establishes a framework for the joint development, and manufacturing of AI-enabled, GMP-compliant robotic systems for use in pharmaceutical and related manufacturing environments. The integrated product to be developed combines TechForce's robotic hardware with the Company's proprietary PDAOAI Platform.

*Intellectual Property Development and Services Agreement with Lunai Bioworks, Inc.*

On April 17, 2026, the Company and Lunai Bioworks, Inc., a Delaware corporation ("*Lunai*") entered into an intellectual property development and services agreement ("*IP Services Agreement*"), whereby the Company was to perform intellectual property development and business development services relating to a Nose-to-Brain ("*N2B*") delivery platform. This includes applications in biodefense, Alzheimer's disease ("*AD*"), and broader central nervous system ("*CNS*") indications and excludes Parkinson's disease and sexual dysfunction. The work shall focus on direct-to-CNS delivery to bypass the blood-brain barrier. The scope of services included scientific development, IP execution, technical data delivery, business development support and broadened biodefense focus. In connection with these services, Lunai agreed to compensate the Company a total compensation of $250,000, of which $62,500 was payable upon signing of the IP Services Agreement, $62,500 upon filing of provisional patents and $125,000 payable upon the execution of a biodefense and neurodegenerative platform IP acquisition agreement by Lunai, which was the agreement and plan for merger with Lunai, described below. The Company has completed all it's obligations under the IP Services Agreement, has invoiced Lunai for the services and will recognize the revenue under the IP Services Agreement during the three months ended June 30, 2026.

 

*Agreement and Plan of Merger With Lunai*

 

On April 27, 2026, Oncotelic Inc., a wholly owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the "*Merger Agreement*") with Lunai, Lunai Bioworks IP, Inc., a Delaware corporation and a wholly owned subsidiary of Lunai ("*Merger Sub*"), Neurobridge IP Holdings Incorporated, a Delaware corporation ("*Holdings*"), and the holders of all of the issued and outstanding capital stock of Holdings, namely Oncotelic Inc. and Pelerin Therapeutics Inc., a corporation existing under the laws of the Province of British Columbia, Canada ("*Pelerin*" and, together with Oncotelic Inc., the "*Holders*"). Pursuant to the Merger Agreement, Holdings merged with and into Merger Sub in a triangular merger (the "*Merger*"), with Merger Sub continuing as the surviving corporation and as a wholly owned subsidiary of Lunai. The Merger was completed on May 1, 2026. Immediately prior to the effective time of the Merger, all of the issued and outstanding capital stock of Holdings was owned 62.5% by Oncotelic Inc. and 37.5% by Pelerin. The sole assets of Holdings at the effective time of the Merger consisted of a multi-jurisdictional patent portfolio (collectively, and as further defined in the Merger Agreement, the "Patents"), which the Holders had contributed to Holdings prior to the effective time. In consideration for the Merger, on May 1, 2026 Lunai issued to the Holders an aggregate of eight (8) shares of a newly designated series of preferred stock of Lunai, designated as "Series B Convertible Preferred Stock" (the "*Series B Preferred Stock*"), having an aggregate stated value (the "*Stated Value*") of $20,000,000. The Series B Preferred Stock was allocated five (5) shares to Oncotelic Inc. (representing 62.5% of the Series B Preferred Stock and an aggregate Stated Value of $12,500,000). For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*IP Assignment Agreement*

In connection with the Merger Agreement, on April 27, 2026, Oncotelic Inc. entered into an IP Assignment Agreement with Holdings, pursuant to which it agreed to contribute and assign certain assets relating to the intellectual property of the Company (collectively, the "*<u>Intellectual Property Assets</u>*") to Holdings. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*IP Grant-back Agreement*

Further, on April 27, 2026, the Company and Holdings entered into an Intellectual Property Assignment and Grant-back Agreement (the "*IP Grant-back Agreement*"). The IP Grant-back Agreement grants back to the Company a perpetual, irrevocable, royalty-free, exclusive, non-terminable, and non-cancellable license to make, have made, use, offer to sell, sell, and otherwise exploit the Intellectual Property Assets in all fields of use except the Biodefense Field and the Alzheimer's Disease Field as defined in the IP Grant-back Agreement, giving Holdings exclusive use of the Intellectual Property Assets in those fields. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*Asset Transfer Agreement*

Further, on April 30, 2026, Oncotelic Inc. on behalf of the Company, and Autotelic Inc. ("Autotelic") entered into an asset transfer agreement (the "*Asset Transfer Agreement*") pursuant to which Autotelic agreed to transfer all the rights, title and interest to certain assets ("*Assets*"), described below and owned by Autotelic to Oncotelic Inc. This Asset Transfer Agreement was entered into by both parties to effectuate the Merger Agreement. Dr. Trieu, Chairman and CEO of Oncotelic Therapeutics, Inc., is a partial owner and control person in Autotelic Inc. Autotelic Inc. currently owns less than 10% of the Company. The Assets transferred pursuant to the Asset Transfer Agreement include Peptide Y (including all variants, analogs, derivatives); Parathyroid Hormone ("*PTH*"), including PTH 1-34, PTH 1-84, and derivatives; Insulin (including intranasal and other formulations); Apomorphine (including intranasal and other formulations); Carbetocin (including intranasal and other formulations); any associated combination therapies, including multi-agent CNS, AD, metabolic, endocrine, or biodefense applications; and all delivery platforms, including nasal, injectable, and device-based systems and includes all patents, patent applications, know-how, trade secrets, data, formulations, manufacturing processes, regulatory filings, and all related rights associated with the Assets. In consideration for the transfer of the Assets, the Company shall issue equity of ten percent (10%) of the fully diluted outstanding shares of the Company, issuable on an uplisting of its capital stock to NYSE/NASDAQ. No cash was paid for the Asset Transfer Agreement. For more information on the Merger Agreement, refer to our Current Report on Form 8-K filed with the SEC on May 5, 2026.

*Recent Financing Transactions*

*2026 Mast Hill Note*

In January 2026, the Company entered into a Securities Purchase Agreement (the "2026 *Mast Hill Purchase Agreement*"), with Mast Hill Fund, LP ("*Mast Hill*"), and the Company issued a convertible promissory note in the aggregate gross principal amount of approximately $398,333 (the "*2026 Mast Hill Note*"). The 2026 Mast Hill Note is convertible into shares of the Company's Common Stock. For more information on the 2026 Mast Hill Note, refer to Note 5 of the Notes to the Consolidated Financial Statements included in this report.

The 2026 Mast Hill Note has an original issue discount of 10%, carries an interest rate of 10% per annum and matures on the earlier of (a) the one-year anniversary of the date of the 2026 Mast Hill Purchase Agreement, or (b) the acceleration of the maturity of the 2026 Mast Hill Note by Mast Hill upon occurrence of an Event of Default (as defined below) or (c) on prepayment in full. The 2026 Mast Hill Note contains a voluntary conversion mechanism whereby Mast Hill may convert the outstanding principal and accrued interest under the terms of the 2026 Mast Hill Note into shares of Common Stock (the "*Conversion Shares*"), at a fixed price of $0.07 per share (the "*Conversion Price"*), subject to adjustments upon the occurrence of certain corporate events. The 2026 Mast Hill Note is secured against the assets of the Company, including all the assets owned by the Company's direct or indirect subsidiaries, but other than and excluding the equity interests and the assets of the Company licensed or assigned within our joint venture agreement with Dragon Overseas Capital Limited, namely GMP Biotechnology and its subsidiaries. These assets include OT-101, CA4P, Oxi4503, AI and AI CDMO technologies and the nanoparticle platform. The Company also issued 1,422,613 warrants to purchase shares (the "*Note Warrants*") of Common Stock of the Company at an exercise price of $0.15. Prepayment of the 2026 Mast Hill Note may be made at any time upon three trading days' prior written notice to the respective holder, by payment of the then outstanding principal amount plus accrued and unpaid interest and reimbursement of such holder's administrative fees. The 2026 Mast Hill Note contains customary events of default (each an "*Event of Default*"). If an Event of Default occurs, at the respective holder's election, the outstanding principal amount of the 2026 Mast Hill Note, plus accrued but unpaid interest, will become immediately due and payable in cash. The 2026 Mast Hill Purchase Agreement require the Company to use the proceeds for general working capital, and not for (i) the repayment of any indebtedness owed to officers, directors or employees of the Company or their affiliates, (iii) any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with the Company's currently existing operations), (iv) any loan, credit, or advance to any officers, directors, employees, or affiliates of the Company, or (v) in violation or contravention of any applicable law, rule or regulation. Further, on January 23, 2026, the Company entered into a Registration Rights Agreement with Mast Hill (the "*Mast Hills Registration Rights Agreement - Note*"), to register the shares of Common Stock issuable under and related to the 2026 Mast Hill Notes and the attached Note Warrants to purchase shares of the Company's Common Stock.

*Short-term loans from related parties / families*

As of January 1, 2025, approximately $2 million was outstanding and payable to Autotelic. During the year ended December 31, 2025 Autotelic Inc. provided additional short-term funding of approximately $0.9 million to the Company. In the three months ended March 31, 2026 Autotelic Inc. provided additional short-term funding of $17,000 to the Company. As such, approximately $3 million was outstanding and payable to Autotelic at March 31, 2026.

As of January 1, 2025, approximately $76,000 was outstanding and payable to the Company's CFO. During the year ended December 31, 2025, the CFO provided additional short-term funding of $10,000. As such, approximately $86,000 was outstanding and payable to the Company's CFO at March 31, 2026.

In December 2023, the Company received $50,000 from the Company's CEO. In December 2025, the amount due from PPM-2 payable to the CEO of $125,000 was converted into a short-term loan. As such, $175,000 was outstanding to the Company's CEO at March 31, 2026. As of March 31, 2026, approximately $210,000 was outstanding as short-term advances from certain bridge investors.

**<u>Critical Accounting Policies and Significant Judgments and Estimates</u>**

The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("*US GAAP*") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expense during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances at the time we make such estimates. Actual results and outcomes may differ materially from our estimates, judgments, and assumptions. We periodically review our estimates considering changes in circumstances, facts, and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Our significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Annual Report.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. We believe the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments are the following:

***Impairment of Long-Lived Assets***

The Company reviews long-lived assets, including definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then these assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets.

***Intangible Assets***

The Company records its intangible assets at cost in accordance with ASC 350, Intangibles – Goodwill and Other. The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors.

***Goodwill***

Goodwill represents the excess of the purchase price of acquired business over the estimated fair value of the identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least once annually, at the reporting unit level or more frequently if events or changes in circumstances indicate that the asset might be impaired. The goodwill impairment test is applied by performing a qualitative assessment before calculating the fair value of the reporting unit. If, on the basis of qualitative factors, it is considered not more likely than not that the fair value of the reporting unit is less than the carrying amount, further testing of goodwill for impairment would not be required. Otherwise, goodwill impairment is tested using a two-step approach.

The first step involves comparing the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit is determined to be greater than its carrying amount, there is no impairment. If the reporting unit's carrying amount is determined to be greater than the fair value, the second step must be completed to measure the amount of impairment, if any. The second step involves calculating the implied fair value of goodwill by deducting the fair value of all tangible and intangible assets, excluding goodwill, of the reporting unit from the fair value of the reporting unit as determined in step one. The implied fair value of the goodwill in this step is compared to the carrying value of goodwill. If the implied fair value of the goodwill is less than the carrying value of the goodwill, an impairment loss equivalent to the difference is recorded.

***Convertible Instruments***

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 "Derivatives and Hedging".

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards.

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20 "Debt – Debt with Conversion and Other Options." Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note.

ASC 815-40 "Derivatives and Hedging – Contracts in Entity's Own Equity" provides that, among other things, generally, if an event is not within the entity's control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

***Derivative Financial Instruments Indexed to the Company's Common Stock***

We have generally issued derivative financial instruments, such as warrants, in connection with our equity offerings. We evaluate the terms of these derivative financial instruments in order to determine their accounting treatment in our financial statements. Key considerations include whether the financial instruments are freestanding and whether they contain conditional obligations. If the warrants are freestanding, do not contain conditional obligations and meet other classification criteria, we account for the warrants as an equity instrument. However, if the warrants contain conditional obligations, then we account for the warrants as a liability until the conditional obligations are met or are no longer relevant. Because no established market prices exist for the warrants that we issue in connection with our equity offerings, we must estimate the fair value of the warrants, which is as inherently subjective as it is for stock options, and for similar reasons as noted in the stock-based compensation section above. For financial instruments which are accounted for as a liability, we report any changes in their estimated fair values as gains or losses in our Consolidated Statement of Income.

***Variable Interest Entity (VIE) Accounting***

We evaluate our ownership, contractual relationships and other interests in entities to determine the nature and extent of the interests, whether such interests are variable interests and whether the entities are VIEs in accordance with ASC 810, Consolidations. These evaluations can be complex and involve Management judgment as well as the use of estimates and assumptions based on available historical information, among other factors. Based on these evaluations, if the Company determines that it is the primary beneficiary of a VIE, the entity is consolidated into the financial statements.

 ****

***Investments - Equity Method***

The Company accounts for equity method investments at cost, adjusted for the Company's share of the investee's earnings or losses, which are reflected in the consolidated statements of operations. The Company periodically reviews the investments for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

The Investment in GMP Bio represents the investment into equity securities for which the Company elected the fair value option pursuant to ASC 825-10-15 and subsequent fair value changes in the GMP Bio shares are included in the result from continuing operations. Refer to Note 6 of these Notes to the Consolidated Financial Statements.

***Joint Venture agreement***

We have equity interest in unconsolidated arrangement that is primarily engaged in the business of drug discovery, development, and commercialization, including but not limited to development and commercialization of TGF-beta therapeutics as well as establishing and operating contract development and manufacturing organization (CDMO) facilities and capabilities. The Company first reviewed the arrangement to determine if it meets the definition of an accounting joint venture pursuant to ASC 323-10-20. In order to meet the definition of a joint venture, the arrangement must have all of the following characteristics, (i) the arrangement is organized within a separate legal entity, (ii) the entity is under the joint control of the venturers, (iii) the venturers must be able to exercise joint control through their equity investments, (iv) the qualitative characteristics of the entity, including its purpose and design must be consistent with the definition of a joint venture.

We consolidate arrangements that are considered to be VIEs where we are the primary beneficiary. We analyze our investments in joint ventures to determine if the joint venture is considered a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity investment at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are limited partners (or similar owning entities) that lack substantive participating or kick out rights, guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination. To the extent that we own interests in a VIE and we (i) have the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) have the obligation or rights to absorb losses or receive benefits that could potentially be significant to the VIE, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent that we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. To the extent that our arrangements do not qualify as VIEs, they are consolidated if we control them through majority ownership interests or if we are the managing entity (general partner or managing member) and our partner does not have substantive participating rights. Control is further demonstrated by our ability to unilaterally make significant operating decisions, refinance debt, and sell the assets of the joint venture without the consent of the non-managing entity and the inability of the non-managing entity to remove us from our role as the managing entity. We use the equity method of accounting for those arrangements where we exercise significant influence but do not have control. Under the equity method of accounting, our investment in each arrangement is included on our consolidated balance sheet; however, the assets and liabilities of the joint ventures for which we use the equity method are not included on our consolidated balance sheet.

When we sell or contribute properties to unconsolidated arrangements and retain a non-controlling ownership interest in such assets, we recognize the difference between the consideration received and the carrying amount of the asset sold or contributed when its derecognition criteria are met. The equity method investment we retain in such partial sale transactions is noncash consideration and is measured at fair value. As a result, the accounting for a partial sale will result in the recognition of a full gain or loss. When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we conclude it is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value. The Company elected the fair value option under the fair value option Subsection of Section 825-10-15 to account for its equity-method investment.

***Research and Development Expense***

Research and development expense consists of costs we incur for the development of our investigational drugs and, to a lesser extent, for preclinical research activities. Research and development costs are expensed as incurred. Research and development expense include clinical trial costs, salaries, and benefits of employees, including associated stock-based compensation, payments to clinical investigators, drug manufacturing costs, laboratory supplies and facility costs. Clinical trial costs are a significant component of our research and development expenses, and these can be difficult to accurately estimate. Included in clinical trial costs are fees paid to other entities that conduct certain research and development activities on our behalf, such as clinical research organizations, or CROs. We estimate clinical trial expense based on the services performed pursuant to contracts with research institutions such as CROs and the actual clinical investigators. These estimates are based on actual time and expenses incurred by the CRO and the clinical investigators. Also included in clinical trial expense are costs based on the level of patient enrollment into the clinical trial and the actual services performed under the related clinical trial agreement. Changes in clinical trial assumptions, such as the length of time estimated to enroll all patients, rate of screening failures, patient drop-out rates, number and nature of adverse event reports and the total number of patients enrolled can impact the average and expected cost per patient and the overall cost of the clinical trial. Based on patient enrollment reports and services provided, we may periodically adjust estimates for the clinical trial costs. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed, the length of time for these services or the costs of these services, our actual expenses could differ from our estimates.

***Share-Based Compensation***

We record the estimated fair value of all share-based payments issued to employees and other service providers. Our share-based payments consist primarily of stock options. The valuation of stock options is an inherently subjective process, since market values are not available for any stock options in our equity securities. Market values are also not available on long-term, non-transferable stock options in other equity securities. With no market values on options to trade in our common stock and no comparable market values on any long-term non-transferable stock options, the process of valuing our stock options is even more uncertain and subjective. Accordingly, we use a Black-Scholes option pricing model to derive an estimated fair value of the stock options which we issue. The Black-Scholes option pricing model requires certain input assumptions, including the expected term of the options and the expected volatility of our common stock. Changes in these assumptions could have a material impact on the estimated fair value that we record for share-based payments that we issue. We determine the term of the options based on the simplified method, which averages the vesting period and the contractual life of the stock option. We determine the expected volatility based on the historical volatility of our common stock over a period commensurate with the option's expected term. The Black-Scholes option pricing model also requires assumptions for risk-free interest rates and the expected dividend yield of our common stock, but we feel that these values are more objective and note that changes in these values do not have a significant impact on the estimated value of the options when compared to the volatility and term assumptions.

We are also required to estimate the level of award forfeitures expected to occur and record compensation expense only for those awards that are ultimately expected to vest. Accordingly, we perform a historical analysis of option awards that are forfeited prior to vesting, and record total stock option expense that reflects this estimated forfeiture rate.

The impacts of any of the critical accounting policies and significant judgments and estimates, if applicable, have been reflected in the Notes to the Consolidated Financial Statements in this Report.

 

*Results of Operations*

A comparison of the Company's operating results for the three months ended March 31, 2026 and 2025, respectively, is as follows.

---

| | | | |
|:---|:---|:---|:---|
|  | **March 31,**<br> **2026** | **March 31,** <br> **2025** | **Variance** |
| Operating expense: |  |  |  |
| Research and development | $795 | $297 | $498 |
| General and administrative | 1852590 | 100803 | 1751787 |
| Total operating expense | 1853385 | 101100 | 1752285 |
| Loss from operations | (1853385) | (101100) | (1752285) |
| Interest expense, net | (295811) | (203797) | (92014) |
| Change in fair value of derivative on debt | (90080) | (59367) | (30713) |
| Net loss before controlling interests | $(2239276) | $(364264) | $1875012 |

---

Net Loss

We recorded a net loss of approximately $2.2 million for the three months ended March 31, 2026 as compared to approximately $0.4 million for the three months ended March 31, 2025. The higher loss of approximately $1.9 million for the three months ended March 31, 2026 as compared to the same period of 2025 was primarily due to higher operating expenses of approximately $1.8 million, of which approximately $1.6 million relates to higher stock-based compensation, and higher interest expense of approximately $0.1 million incurred during the three months ended March 31, 2026 as compared to the same period of 2025.

Research and Development Expenses

Research and development ("*R&D*") expenses increased marginally by approximately $500 for the three months ended March 31, 2026 compared to the same period in 2025. The lower R&D cost was primarily related to lower operational costs, as these costs are now being borne by our JV since April 2022.

Now that we have formed a joint venture with GMP Bio, whereby we are able to transfer the responsibility of our drug development program related to OT-101 to the JV, we plan to increase research and development activities related to apomorphine, the initiation of new clinical trials for our other oncology indications as well continuing or expanding on the trials and development of AI based tools and applications for OT-101 and Artemisinin for COVID-19 and other epidemics, and therefore believe that research and development expense may increase in the future, subject to our continuing ability to secure sufficient funding to continue planned operations.

General and Administrative Expenses

General and administrative ("*G&A*") expenses increased by approximately $1.8 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to an increase in stock based compensation of approximately $1.6 million and approximately $0.2 million in other operating costs.

Now that we have formed a joint venture with GMP Bio, we may be able to transfer the responsibility of some or most of our G&A expenses to the joint venture, however, we may see an increase in G&A expenses, subject to our continuing ability to secure sufficient funding to continue planned operations.

Interest Expense, Net

We recorded interest expense, including amortization of debt costs, of approximately $0.3 million for the three months ended March 31, 2026 in connection with debt raised from various convertible notes, including the JH Darbie Financing and other debt financings, as compared to $0.2 million for the same period of 2025. For more information on debt raised from convertible notes and the JH Darbie Financing, see Note 5, Note 7 and Note 8 of the Unaudited Consolidated Financial Statements of this Quarterly Report.

Change in Value of Derivatives

During the three months ended March 31, 2026, we recorded a loss of approximately $90 thousand due to change in the value of the derivatives on the notes issued to our CEO and the bridge investors. Correspondingly, during the three months ended March 31, 2025, we recorded a loss of approximately $60 thousand due to change in the value of the derivatives on the notes issued to our CEO and the bridge investors.

*Liquidity, Financial Condition and Capital Resources ($s in '000's)*

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** <br> ***2026*** | ***December 31,***<br> ***2025*** |
| Cash | $84 | $109 |
| Working capital | (16330) | (16945) |
| Total Oncotelic Therapeutics, Inc. Stockholders' Equity | 263286 | 262761 |

---

Except the year ending December 31, 2025, the Company has experienced net losses every year since inception. Since inception, and at the end of the year ending December 31, 2024, the Company had an accumulated deficit of approximately $38 million. As of December 31, 2025, after giving effect to the re-valuation of the Company's interest in the JV, the Company recorded net income of approximately $249 million after recording deferred taxes of $111.6 million, and as such had positive total stockholders' equity, before non-controlling interests, of approximately $262.8 million. The Company incurred a loss of approximately $2.2 million during the year ended March 31, 2026.

As of March 31, 2026, the Company had positive total stockholders' equity, before non-controlling interests, of approximately $263.3 million, approximately $0.1 million in cash, approximately $2.0 million of prepaid and other current assets and current liabilities of approximately $18.4 million, of which approximately $1.3 million are net assumed liabilities of the Company as part of the Oncotelic Inc. reverse merger, $12.5 million of short term debt, including accrued interest, and $2.6 million is contingent liability to issue common shares of the Company to PointR shareholders upon achievement of certain milestones.

As of March 31, 2026 and December 31, 2025, the Company also had approximately $1.8 million and approximately $1.7 million, respectively, of long-term debt on account of the PPM-3 and $111.6 million of deferred income taxes. Management expects to incur significantly lower costs and losses, especially due to the transfer of costs over to the JV since April 2022, in the foreseeable future but also recognizes the need to raise capital to remain viable. The Company's limited capital resources, history of recurring losses and uncertainties as to whether the Company's operations will become profitable raise substantial doubt about its ability to continue as a going concern. The financial statements contained in this report do not include any adjustments related to the recoverability of assets or classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

The principal source of the Company's working capital deficit to date has been the issuance of convertible notes, a substantial part of which has been provided by officers and certain insiders, and sale of equity under the EPA with Peak One. The Company will need to raise additional capital in order to fund its operations and continue development of its product candidates. The Company is evaluating the options to further the development of the Company's product candidates, AL-101, Artemisinin for COVID-19, developing AI technologies to support the COVID-19 therapies; in addition to evaluating the development pathway of its product candidates; OXi4503 and/or CA4P. The Company is also independently planning to develop OT-101 for certain animal health indications and contemplating using crypto currencies for that platform. The Company has been developing OT-101 for various cancers, as well as a nanoparticle platform through the JV. Substantial development on that front has occurred during the past year and continues to occur.

The Company anticipates raising substantial additional capital through the sale of equity securities and/or debt, but no new financing arrangements are in place at this time.

If the Company is unable to access additional funds when needed, it may not be able to continue the development of these investigational drugs and the Company could be required to delay, scale back or eliminate some or all of its development programs and operations. Any additional equity financing, if available, would be dilutive to the current stockholders and may not be available on favorable terms. Additional debt financing, if available, may involve restrictive covenants and could also be dilutive. The Company's ability to access capital is not assured and, if access is not achieved on a timely basis, would materially harm the Company's financial condition, the value of its common stock and its business prospects.

**Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **Three month ended March 31,** | **Three month ended March 31,** |
|  | **2026** | **2025** |
| Net cash used in operating activities | $(342) | $(167) |
| Net cash provided by investing activities |  |  |
| Net cash provided by financing activities | 317 | 160 |
| Increase (decrease) in cash | $(25) | $(7) |

---

Operating Activities

Net cash used in operating activities was approximately $0.3 million for the three months ended March 31, 2026. This was due to the net loss of approximately $2.2 million and an increase in operating assets and liabilities of approximately $0.1 million, primarily offset by non-cash amortization of debt discounts and deferred financing costs of approximately $0.1 million, non-cash stock based compensation of approximately $1.6 million, loss due to change in fair value of derivative of approximately $0.1 million, non-cash cost of stock issued to shareholders of approximately $0.1 million.

Net cash used in operating activities was approximately $0.2 million for the three months ended March 31, 2025. This was due to the net loss of approximately $0.4 million, primarily offset by non-cash amortization of debt discounts and deferred financing costs of approximately $39 thousand, loss due to change in fair value of derivative of approximately $60 thousand and in operating assets and liabilities of approximately $0.1 million.

Financing Activities

For the three months ended March 31, 2026, net cash provided by financing activities was approximately $0.3 million, primarily due to convertible debt from Mast Hill of approximately $0.4 million and a short term debt of $17 thousand from a related party, and offset by a repayment of a short term loan of $50 thousand.

For the three months ended March 31, 2025, net cash provided by financing activities was approximately $0.2 million, primarily due to a short-term loan from Autotelic Inc. of $0.2 million.

*Off-Balance Sheet Arrangements*

We have no off-balance sheet arrangements.

*Effects of Inflation*

We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

***<u>Contractual Obligations</u>***

Our current drug development programs are based on a series of compounds called combretastatins, which we have exclusively licensed from Arizona State University, or ASU. If our current drug candidates are approved, we will be required to pay low to mid-single-digit royalties on future net sales of products associated with the ASU patent rights until these patent rights expire.

We also have an exclusive license from Bristol-Myers Squibb, or BMS, for certain patent rights to particular combretastatins, including CA4P. If CA4P is approved, we will be required to pay low-single-digit royalties on future net sales of products associated with the BMS patent rights until these patent rights expire.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

Our cash is maintained in U.S. dollar accounts. We have adopted a policy for the cash that we hold, and also for any cash equivalents and investments that we may hold, the primary objective of which is to preserve principal, while also maintaining liquidity to meet our operating needs and maximize yields to the extent possible. Although our investments can be subject to credit risk, we follow procedures to limit the amount of credit exposure in any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and would be likely to decrease in value if market interest rates increase. However, due to the generally conservative nature of our investments and relatively short duration, we believe that interest rate risk is mitigated.

Although we may from time-to-time manufacture drugs and conduct preclinical or clinical trials outside of the United States, we believe our exposure to foreign currency risk to be immaterial. We do not use any type of hedging arrangement to mitigate any foreign currency risk.

**Item 4. Controls and Procedures**

*Evaluation of Disclosure Controls and Procedures*

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "*Exchange Act*") our Chief Executive Officer ("*CEO*") and our Chief Financial Officer ("*CFO*") conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our CEO and our CFO each concluded that our disclosure controls and procedures are not effective at that time as a result of certain material weaknesses in our internal control over financial reporting discussed below.

*Material Weaknesses in Internal Control over Financial Reporting*

Management conducted an assessment of the effectiveness of our internal control over financial reporting as of March 31, 2026 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Registrant's internal control over financial reporting as of March 31, 2026 was not effective as a result of certain material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are observed in many small companies with a small number of accounting and financial reporting staff:

● Lack
 of adequate independent directors on the Company's board of directors and committees to oversee financial reporting responsibilities;

● Inadequate
 or lack of segregation of duties;

● Lack
 of dedicated resources and experienced personnel to design and implement internal control procedures to support financial reporting
 objectives;

● Lack
 of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner.

*Management's Plan to Remediate the Material Weaknesses*

Management continues to implement measures, subject to the availability of resources required to design and maintain such controls, designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The implementation and remediation measures are planned subject to the availability of financial and therefore human resources. The remediation actions planned include:

● Continue
 to search for, evaluate and recruit qualified independent outside directors;

● Once
 independent directors are on Board, to augment or replace the non-independent directors to the Audit Committee and other committees.

● Identify
 gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company;
 and

● Continue
 to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing
 controls and procedures.

*Changes in Internal Control over Financial Reporting*

During the three months ended March 31, 2026, we continued to work on our planned implementation and remediation actions which are all intended to strengthen our overall control environment, within the limited resources available to us. Due to lack of resources, we have not made any substantial progress in our planned remediation efforts, however, we are optimistic that the Company to complete its planned execution of internal controls over financial reporting upon the availability of resources.

We are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant improvements in our control environment. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings**

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Historically, the outcome of all such legal proceedings has not, in the aggregate, had a material adverse effect on our business, financial condition, results of operations or liquidity.

**Item 1A. Risk Factors**

For information about the risks and uncertainties related to our business, please see the risk factors described in our 2025 Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on April 15, 2026 and other SEC filings. The risks described below and in our 2025 Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

**Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds**

In January 2026, the Company issued 1,600,446 shares of Common Stock to Mast Hill as additional consideration in connection with the issuance of a $398,333 senior secured promissory note.

**Item 3. Defaults upon Senior Securities**

As of March 31, 2026, the Company was in default under the Forever Prosperity Notes (formerly GMP Notes) for failure to pay the outstanding principal and interest under the Forever Prosperity Notes at their maturity date. The total principal outstanding on all the Forever Prosperity Notes, inclusive of accrued interest, was approximately $4.95 million as of March 31, 2026. Forever Prosperity, the current holder of the notes, is an affiliate of Dragon, the other party in the Company's JV, and has not called for the repayment of the debt. For additional information on the Forever Prosperity Notes see Note 5 of the consolidated financial statements included in this report.

**Item 4. Mine Safety Disclosures**

Not Applicable.

**Item 5. Other Information**

None.

**ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

In reviewing the agreements included as exhibits to this Quarterly Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and:

● should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

● have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

● may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

● were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Quarterly Report and the Company's other public filings, which are available without charge through the SEC's website at http://www.sec.gov.

The following exhibits are included as part of this Quarterly Report, and should not be considered as a complete list of exhibits. A more complete list of previously filed Exhibits can be found with our 2025 Annual Report on Form 10-K filed with the SEC on April 15, 2026:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
| <br>**Exhibit Number** | <br>**Description** | **Form** | **Filing Date** | **Exhibit Number** | **Filed Herewith** |
| 10.1 | [Joint Development, Manufacturing and Licensing Agreement](https://www.sec.gov/Archives/edgar/data/908259/000149315226014831/ex10-1.htm) | 8-K | 04/02/2026 | 10.1 |  |
| 10.2 | [Agreement and Plan of Merger](https://www.sec.gov/Archives/edgar/data/908259/000149315226021306/ex2-1.htm) | 8-K | 05/05/2026 | 2.1 |  |
| 10.3 | [Intellectual Property Assignment](https://www.sec.gov/Archives/edgar/data/908259/000149315226021306/ex10-1.htm) | 8-K | 05/05/2026 | 10.1 |  |
| 10.4 | [Intellectual Property Assignment and Grant-back Agreement](https://www.sec.gov/Archives/edgar/data/908259/000149315226021306/ex10-2.htm) | 8-K | 05/05/2026 | 10.2 |  |
| 10.5 | [Asset Transfer Agreement](https://www.sec.gov/Archives/edgar/data/908259/000149315226021306/ex10-3.htm) | 8-K | 05/05/2026 | 10.3 |  |
| 14.1 | [Corporate Code of Conduct and Ethics.](https://www.sec.gov/Archives/edgar/data/908259/000119312515111261/d847033dex141.htm) | 10-K | 3/30/2015 | 14.1 |  |
| 31.1 | [Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a).](ex31-1.htm) |  |  |  | X |
| 31.2 | [Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a).](ex31-2.htm) |  |  |  | X |
| 32.1 | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.](ex32-1.htm) |  |  |  | X |
| 32.2 | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.](ex32-2.htm) |  |  |  | X |
| 101.1 | Interactive Data Files for the quarterly period ended March 31, 2026 and year ended December 31, 2025 |  |  |  | X |
| 101.INS | Inline XBRL Instance Document |  |  |  | X |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |  |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |  |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |  |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |  |  |  | X |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |  |  |  | X |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |  |  |  | X |

---

\* Confidential treatment has been granted for portions of this Exhibit. Redacted portions filed separately with the Securities and Exchange Commission. <br> + Management contract or compensatory plan or arrangement.

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| **ONCOTELIC THERAPEUTICS INC.** | **ONCOTELIC THERAPEUTICS INC.** |
| By: | */s/ Vuong Trieu* |
|  | Vuong Trieu, Ph.D. |
|  | Chief Executive Officer and Director (Principal Executive Officer) |
| Date: | May 14, 2026 |
| By: | */s/ Amit Shah* |
|  | Amit Shah |
|  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |
| Date: | May 14, 2026 |

---

## Exhibit 31.1

**Exhibit 31.1**

**ONCOTELIC THERAPEUTICS, INC.**

**CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Vuong Trieu, Ph.D., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Oncotelic Therapeutics, Inc. for the period ended March 31, 2026;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined
 in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal
 control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| By: | */s/ Vuong Trieu* |
|  | Vuong Trieu, Ph.D. |
|  | Chief Executive Officer (Principal Executive Officer) |
| Date: | May 14, 2026 |

---

## Exhibit 31.2

**Exhibit 31.2**

**ONCOTELIC THERAPEUTICS, INC.**

**CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Amit Shah, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I
 have reviewed this Quarterly Report on Form 10-Q of Oncotelic Therapeutics, Inc. for the period ended March 31, 2026;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined
 in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal
 control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The
 registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | |
|:---|:---|
| By: | */s/ Amit Shah* |
|  | Amit Shah |
|  | Chief Financial Officer (Principal Financial and Accounting Officer) |
| Date: | May 14, 2026 |

---

## Exhibit 32.1

**Exhibit 32.1**

**ONCOTELIC THERAPEUTICS, INC.**

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2026 of Oncotelic Therapeutics, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

---

| | |
|:---|:---|
| By: | */s/ Vuong Trieu* |
|  | Vuong Trieu, Ph.D. |
|  | Chief Executive Officer (Principal Executive Officer) |
| Date: | May 14, 2026 |

---

## Exhibit 32.2

**Exhibit 32.2**

**ONCOTELIC THERAPEUTICS, INC.**

**CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2026 of Oncotelic Therapeutics, Inc. (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

---

| | |
|:---|:---|
| By: | */s/ Amit Shah* |
|  | Amit Shah |
|  | Chief Financial Officer (Principal Financial and Accounting Officer) |
| Date: | May 14, 2026 |

---