KAPAMEDIUM SIGNALOPERATIONAL10-K

KAPA completed a significant corporate restructuring by transferring licensing agreements from subsidiary Enviro to Kairos and terminating Tracon's equity ownership while substantially improving its balance sheet position.

The novation agreement transferring exclusive licenses from Enviro to Kairos represents a meaningful operational reorganization that consolidates key assets under Kairos's direct control. The elimination of Tracon's 7% equity stake in the subsidiary structure simplifies the ownership hierarchy and removes a potential complication for future strategic decisions.

Comparing 2026-03-31 vs 2025-04-15View on EDGAR →
FINANCIAL ANALYSIS

KAPA's balance sheet strengthened considerably with current liabilities declining nearly 80% and total liabilities falling by two-thirds, while stockholders' equity grew meaningfully to $6.3M. Current assets expanded modestly to $5.4M and operating cash flow improved slightly, though the company continues burning cash at approximately $3.4M annually. The overall financial picture shows a company that has cleaned up its balance sheet structure while maintaining reasonable liquidity, though ongoing cash consumption remains a monitoring point.

FINANCIAL STATEMENT CHANGES
Current Liabilities
Balance Sheet
-79.9%
$992K→$199K

Current liabilities reduced — improved short-term financial position and working capital health.

Total Liabilities
Balance Sheet
-67.4%
$3.0M→$992K

Liabilities reduced 67.4% — deleveraging improves balance sheet strength and financial flexibility.

Stockholders Equity
Balance Sheet
+32.8%
$4.8M→$6.3M

Equity base grew 32.8% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Current Assets
Balance Sheet
+29.2%
$4.2M→$5.4M

Current assets grew 29.2% — improving short-term liquidity or inventory/receivables build.

Total Assets
Balance Sheet
+13.4%
$5.8M→$6.5M

Asset base grew 13.4% — expansion through organic growth, acquisitions, or capital deployment.

Operating Cash Flow
Cash Flow
+13%
-$4.0M→-$3.4M

Operating cash flow grew 13% — strong conversion of earnings to cash, healthy business fundamentals.

LANGUAGE CHANGES
NEW — 2026-03-31
PRIOR — 2025-04-15
ADDED
This calculation of market value has been made for the purposes of this report only and should not be considered as an admission or conclusion by the Registrant that any person is in fact an affiliate of the Registrant.
As of March 31, 2026, the Registrant had 21,411,198 shares of Common Stock outstanding.
Effective April 17, 2025, Enviro, Kairos and Cedars entered into a novation agreement pursuant to which the exclusive license was transferred from Enviro to Kairos, after which time Kairos accepted and assumed all obligations and liabilities under the exclusive license agreements and Enviro was relived of any further liabilities or obligations under the license agreements.
On May 21, 2021, Enviro, the Company s formerly wholly-owned subsidiary, entered into an Enviro-Tracon license agreement with Tracon.
Prior to becoming a wholly-owned subsidiary of the Company, Enviro issued Tracon equity ownership in Enviro equal to a number of shares of restricted common stock of Enviro equal to 7% on a fully diluted and converted basis of all common and preferred shares of Enviro.
However, as of the date of this Annual Report, all Tracon shares in Kairos have been sold and Tracon no longer has an ownership interest in Kairos.
16 Pursuant to the Enviro-Tracon license agreement, which was assumed by Kairos effective April 17, 2025 pursuant to a novation agreement, we have exclusive licensing rights (which include the right to sublicense) to eight issued U.S.
Effective April 17, 2025, the Company entered into novation agreements with Enviro and Enviro s licensors, Tracon and Cedars-Sinai Medical Center, pursuant to which the Company assumed all responsibilities, liabilities and obligations of Enviro under such agreements and Enviro was released from all liability.
January 2026 At-the-Market Offering On January 12, 2026, we entered into an at-the-market ( ATM ) offering agreement (the ATM Agreement ) with H.C.
Wainwright Co., LLC (the Placement Agent ) for the sale, from time to time, of up to $4,524,949 shares of our common stock.
REMOVED
As of April 14, 2025, the Registrant had 16,693,306 shares of Common Stock outstanding.
The Proxy Statement will be filed with the Securities and Exchange Commission, or SEC, pursuant to Regulation 14A, within 120 days after the end of the fiscal year to which this report relates.
12 Complete pre-IND studies for the checkpoint inhibitor KROS 101.
On May 21, 2021, Enviro entered into an Enviro-Tracon license agreement with Tracon.
Enviro issued Tracon equity ownership in Enviro equal to a number of shares of restricted common stock of Enviro equal to 7% on a fully diluted and converted basis of all common and preferred shares of Enviro.
The returned portion of the Tracon-Enviro equity shall automatically be terminated, cancelled and of no further force and effect.
16 Pursuant to the Enviro-Tracon license agreement, we have exclusive licensing rights (which include the right to sublicense) to eight issued U.S.
Positive results from preclinical studies and early-stage clinical trials may not be predictive of future results.
Initial positive results in any of our clinical trials may not be indicative of results obtained when the trial is completed or in later stage trials.
The results of preclinical studies may not be predictive of the results of clinical trials.
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