KAPA

Kairos Pharma, LTD. (KAPA) - 10-Q Summary

Business Context and Reporting Period

Kairos Pharma, LTD. is a clinical-stage biopharmaceutical company focused on developing immunotherapy and cell therapy treatments for oncology. The company operates as a single reportable segment. This report covers the quarterly period ended June 30, 2026, and the six-month period ended on the same date. The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company.

Key Financial Metrics (Six Months Ended June 30, 2026)

Material Changes vs. Prior Period

• Net Loss: Increased from $(2,684) thousand in the prior year period to $(3,042) thousand, driven primarily by higher R&D costs.
• R&D Expenses: Rose from $989 thousand to $1,303 thousand. Management attributes this increase to the progression of the Phase 2 trial in prostate cancer.
• G&A Expenses: Increased slightly from $1,733 thousand to $1,804 thousand. Notable changes included a decrease in vendor advance amortization ($505k to $232k) offset by increases in stock-related expenses ($136k to $288k) and professional service fees ($136k to $312k).
• Liquidity: Cash and cash equivalents decreased by $1,865 thousand to $2,626 thousand, compared to an increase of $1,762 thousand in the prior year period.
• Financing: Net cash from financing dropped significantly from $3,281 thousand to $183 thousand. The prior year included $3,058 thousand from pre-funded warrant exercises, whereas the current period relied on $392 thousand from the At-the-Market (ATM) offering.

Outlook, Risks, and Management Commentary

• Going Concern: The company has incurred recurring losses and used cash in operations of $2,048 thousand for the six months ended June 30, 2026. These factors, along with an accumulated deficit of $17,304 thousand, raise substantial doubt about the company's ability to continue as a going concern. Management states existing cash may not be adequate to fund operations for the next 12 months.
• Capital Strategy: The company expects to finance future needs through public/private equity offerings, debt financings, or collaborations. It maintains an Equity Line of Credit (ELOC) and an ATM offering, though proceeds are not guaranteed.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to a material weakness regarding segregation of duties and lack of sufficient review procedures.
• Delisting Risk: The company faces risks regarding continued listing on NYSE American if it fails to meet minimum financial or corporate governance requirements.
• Subsequent Events: Following the period end, the company raised an additional $911 thousand through the ATM offering.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $2.6 million cash balance against the stated burn rate and upcoming clinical trial milestones (Phase 2 prostate/lung trials).
• Financing Capability: Assess the likelihood of raising additional capital given the "substantial doubt" going concern warning and the dilution risks associated with the ATM and ELOC.
• Internal Controls: Review the remediation plan for the material weakness in internal controls over financial reporting.
• Clinical Progress: Monitor the status of the ENV-105 Phase 2 trials and the impact of the Lonza and Brammer Bio manufacturing agreements on timelines and costs.
• Listing Compliance: Confirm compliance with NYSE American listing standards to avoid potential delisting.