Decoy Therapeutics Inc. Annual Report: A Plain-English Summary

I’ve put together this guide to help you understand how Decoy Therapeutics performed this year. My goal is to turn complex filing information into clear insights so you can decide if this company fits your investment goals.

1. What does this company do?

Decoy Therapeutics is a biotech company based in Houston, Texas, focused on treatments for cancer and inflammatory diseases. Their primary projects, SP2577 and SP3164, are currently in early-stage clinical trials for solid tumors and blood cancers. Because they are in the research phase, they do not generate revenue from product sales. Instead, they operate as a research-heavy organization, spending $42.8 million on development this year, compared to $38.2 million the previous year.

2. Financial performance and the "Survival" strategy

Because Decoy has no commercial products, they fund their operations by selling shares to investors. As of December 31, 2025, the company reported a $51.4 million loss, or $4.12 per share. They ended the year with $12.6 million in cash, down from $28.9 million the year prior. With a monthly "burn rate" of approximately $3.5 million, the company’s cash runway is limited.

To maintain their listing on the Nasdaq exchange, the company executed two reverse stock splits in less than a year:

• August 2025: A 1-for-15 reverse stock split.
• March 2026: A 1-for-12 reverse stock split.

These actions were taken to keep the share price above the $1.00 minimum required by the exchange. While this satisfies regulatory rules, it reflects a significant reduction in the company’s market valuation over the past year.

3. Major wins and challenges

• Nasdaq Compliance: As of March 20, 2026, the stock price was $7.47, meeting Nasdaq requirements. It is important to note that this price level is a result of the reduced share count following the two reverse splits rather than organic growth.
• The "Going Concern" Warning: Auditors have issued a warning regarding the company’s ability to continue as a going concern. Given the low cash balance, the company must raise additional capital soon to remain operational, which will likely involve issuing more shares.

4. Key risks

• Dilution: To fund ongoing research, the company issued 4.2 million new shares in 2025. Future capital raises will likely result in further dilution, reducing the ownership percentage of existing shareholders.
• Clinical Success: The company’s future value is tied entirely to the success of SP2577 and SP3164. If the trial results expected in late 2026 are unsuccessful, the company may lose its primary source of value.
• Unproven Technology: Decoy utilizes an AI-driven platform for drug discovery. While this approach is designed for speed, it remains unproven in late-stage human trials, and the company faces potential legal risks regarding the patents for their AI-generated designs.

5. Future outlook

Decoy is currently in a high-risk, survival-oriented phase. With only enough cash to last approximately 3.5 months, the company is under significant pressure to raise funds or reach a clinical milestone that would attract a pharmaceutical partner or buyer.

Decision-making tip: When considering this investment, ask yourself if you are comfortable with the high probability of further share dilution and the binary nature of their upcoming clinical trial results. This is a speculative play where the primary goal is to reach a successful trial outcome before the current cash reserves are exhausted.