Armata Pharmaceuticals, Inc.

Previous wording

We remain committed to our mission to evaluate phage-based therapeutics in randomized controlled clinical trials that evaluate safety and efficacy required to support potential regulatory approval and commercialization of our phage products as alternatives to traditional antibiotics, providing a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections. To date, we have completed three critical Phase 2 trials, utilizing two distinct phage cocktails against two different bacterial pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection, as well as acute systemic bacterial infection. We believe that we are uniquely advancing our two lead candidates, referred to as AP-PA02 and AP-SA02, to address both chronic and acute bacterial infections.

Current wording

We remain committed to our mission to evaluate phage-based therapeutics in randomized controlled clinical trials that evaluate safety and efficacy required to support potential regulatory approval and commercialization of our phage products as alternatives to traditional antibiotics, providing a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections. To date, we have completed three critical Phase 2 trials, utilizing two distinct phage cocktails against two different bacterial pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection, as well as acute systemic bacterial infection. In October 2025, we announced positive results from our Phase 2a diSArm study evaluating our intravenous bacteriophage cocktail candidate AP-SA02 for the treatment of complicated SAB, which demonstrated statistically significant improvement in clinical response rates and favorable tolerability. We believe these results support advancing AP-SA02 into a pivotal Phase 3 trial. We continue to advance our two lead candidates, referred to as AP-PA02 and AP-SA02, to address both chronic and acute bacterial infections.

Previous wording

On February 22, 2022, Armata announced that it had received from the FDA the approval to proceed for our IND application for AP-PA02, in a second indication, NCFB. On December 19, 2024, Armata announced encouraging results from the completed “Tailwind” study – a Phase 2 multicenter, double-blind, randomized, placebo-controlled study to evaluate the safety, phage kinetics, and efficacy of inhaled AP-PA02 in subjects with NCFB and chronic pulmonaryP. aeruginosa infection. Data indicated that inhaled AP-PA02 provides a durable reduction ofP. aeruginosa in the lung, with a favorable safety and tolerability profile. The Tailwind study was conducted in two cohorts running in parallel: subjects in one cohort (cohort A) received inhaled AP-PA02 as monotherapy, while subjects in another cohort (cohort B) received inhaled AP-PA02 in combination with inhaled anti-pseudomonal antibiotic treatment. Subjects in both cohorts were dosed at home by nebulization with study drug administered every 12 hours for 10 days and were followed for approximately four weeks after receiving their last dose of study drug. The primary efficacy endpoint was the reduction inP. aeruginosa colony forming units (“CFUs”) in lung sputum at one week following completion of dosing (day 17) compared to baseline. Per the statistical analysis plan, efficacy analysis of each independent cohort showed no significant difference between subjects treated with AP-PA02 and placebo due to small numbers of subjects in each cohort. Notably, a post-hoc intent-to-treat analysis (n=33 active and n=15 placebo; all subjects from both cohorts) demonstrated a statistically significant reduction ofP. aeruginosa CFUs in the lung at day 17 (AP-PA02 vs. placebo; P=0.05). The reduction inP. aeruginosa CFUs persisted two weeks following completion of dosing with AP-PA02 when compared with placebo at day 24 (AP-PA02 vs. placebo; P=0.015). Additionally, paired analysis ofP. aeruginosa CFU density at baseline compared to day 10 (P=0.03), day 11 (P=0.01), day 17 (P=0.003) and day 24

Current wording

On February 22, 2022, Armata announced that it had received from the FDA the approval to proceed for our IND application for AP-PA02, in a second indication, NCFB. On December 19, 2024, Armata announced encouraging results from the completed “Tailwind” study – a Phase 2 multicenter, double-blind, randomized, placebo-controlled study to evaluate the safety, phage kinetics, and efficacy of inhaled AP-PA02 in subjects with NCFB and chronic pulmonaryP. aeruginosa infection. Data indicated that inhaled AP-PA02 provides a durable reduction ofP. aeruginosa in the lung, with a favorable safety and tolerability profile. The Tailwind study was conducted in two cohorts running in parallel: subjects in one cohort (cohort A) received inhaled AP-PA02 as monotherapy, while subjects in another cohort (cohort B) received inhaled AP-PA02 in combination with inhaled anti-pseudomonal antibiotic treatment. Subjects in both cohorts were dosed at home by nebulization with study drug administered every 12 hours for 10 days and were followed for approximately four weeks after receiving their last dose of study drug. The primary efficacy endpoint was the reduction inP. aeruginosa colony forming units (“CFUs”) in lung sputum at one week following completion of dosing (day 17) compared to baseline. Per the statistical analysis plan, efficacy analysis of each independent cohort showed no significant difference between subjects treated with AP-PA02 and placebo due to small numbers of subjects in each cohort. Notably, a post-hoc intent-to-treat analysis (n=33 active and n=15 placebo; all subjects from both cohorts) demonstrated a statistically significant reduction ofP. aeruginosa CFUs in the lung at day 17 (AP-PA02 vs. placebo;

Previous wording

(P=0.018) was significant in the AP-PA02-treated cohort. We believe the data suggest that AP-PA02 alone is as effective as the combination therapy of phage and antibiotics in reducingP. aeruginosa CFUs in the lung. Additionally, approximately one-third of subjects treated with phage monotherapy exhibited at least a 2-log CFU reduction inP. aeruginosa compared to no reduction in placebo treated subjects. Safety data indicate that inhaled AP-PA02 was well-tolerated with treatment-emergent adverse events mild and self-limiting. There was one possibly related serious adverse event that was linked to an acute pulmonary event requiring hospitalization that was responsive to antibiotics. We believe the safety and tolerability of AP-PA02 offers a promising profile for treating chronically infected NCFB patients.

Current wording

P=0.05). The reduction inP. aeruginosa CFUs persisted two weeks following completion of dosing with AP-PA02 when compared with placebo at day 24 (AP-PA02 vs. placebo; P=0.015). Additionally, paired analysis ofP. aeruginosa CFU density at baseline compared to day 10 (P=0.03), day 11 (P=0.01), day 17 (P=0.003) and day 24 (P=0.018) was significant in the AP-PA02-treated cohort. We believe the data suggest that AP-PA02 alone is as effective as the combination therapy of phage and antibiotics in reducingP. aeruginosa CFUs in the lung. Additionally, approximately one-third of subjects treated with phage monotherapy exhibited at least a 2-log CFU reduction inP. aeruginosa compared to no reduction in placebo treated subjects. Safety data indicate that inhaled AP-PA02 was well-tolerated with treatment-emergent adverse events mild and self-limiting. There was one possibly related serious adverse event that was linked to an acute pulmonary event requiring hospitalization that was responsive to antibiotics. We believe the safety and tolerability of AP-PA02 offers a promising profile for treating chronically infected NCFB patients.

Previous wording

On May 19, 2025, we announced positive topline data from the Phase 1b/2a diSArm study of intravenously administered AP-SA02 in complicatedStaphylococcus aureus bacteremia. The diSArm study (NCT05184764) was a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP-SA02 in addition to best available antibiotic therapy (“BAT”) compared to BAT alone (placebo) for the treatment of adults with complicated SAB. All doses of AP-SA02 were dosed intravenously every six hours for five days. The primary clinical efficacy endpoint for the Phase 2a portion of the diSArm study was clinical outcome (responder rate) in subjects with complicated bacteremia, measured at (i) Test of Cure (“TOC”) for AP-SA02, defined as one week following the end of IV treatment with AP-SA02 (day 12), (ii) TOC for BAT, defined as one week following the end of IV BAT, and (iii) end of study (“EOS”), defined as four weeks following the end of IV BAT. Clinical outcome was evaluated by both the blinded investigators and a blinded Clinical Efficacy Adjudication Committee (the “CEAC”) in the intent-to-treat (“ITT”) population.

Current wording

On May 19, 2025, we announced positive topline data from the Phase 1b/2a diSArm study of intravenously administered AP-SA02 in complicatedS. aureus bacteremia. The diSArm study (NCT05184764) was a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled, multiple ascending dose escalation study of the safety, tolerability, and efficacy of intravenous AP-SA02 in addition to best available antibiotic therapy (“BAT”) compared to BAT alone (placebo) for the treatment of adults with complicated SAB. All doses of AP-SA02 were dosed intravenously every six hours for five days. The primary clinical efficacy endpoint for the Phase 2a portion of the diSArm study was clinical outcome (responder rate) in subjects with complicated bacteremia, measured at (i) Test of Cure (“TOC”) for AP-SA02, defined as one week following the end of IV treatment with AP-SA02 (day 12), (ii) TOC for BAT, defined as one week following the end of IV BAT, and (iii) end of study (“EOS”), defined as four weeks following the end of IV BAT.

Previous wording

Safety and efficacy were assessed in the ITT population, which included all subjects (n=50) who received at least one dose of AP-SA02 or placebo. AP-SA02 was well-tolerated with no serious adverse events related to the study drug. Two subjects had adverse events that were possibly related to the study drug: one with transient liver enzyme elevation and one with hypersensitivity that resolved with discontinuation of vancomycin.

Current wording

AP-SA02 was well-tolerated with no serious adverse events related to the study drug. Two subjects had adverse events that were possibly related to the study drug: one with transient liver enzyme elevation and one with hypersensitivity that resolved with discontinuation of vancomycin.

Previous wording

A statistically significant increase in investigator-assessed responder rate was observed at TOC for AP-SA02 (day 12) in AP-SA02 treated subjects (88%) versus placebo (58%) (p = 0.047). At TOC for BAT and at EOS, 100% of the AP-SA02 treated subjects had clinically responded (p = 0.017) versus 25% of placebo subjects considered non-responsive due to either relapse or treatment failure, consistent with the non-responder rate reported in the literature for recent phase 3 trials. Of note, the clinical response with AP-SA02 occurred regardless of whether subjects were infected with methicillin-sensitive S. aureus or methicillin-resistant S. aureus (“MRSA”). All subjects infected with MRSA and treated with AP-SA02 and BAT cleared their infection by TOC for BAT with no evidence of relapse through EOS, as compared to the relapse rate of BAT alone as noted above. Supporting the investigator assessment, clinical outcome was assessed by the CEAC, who agreed that subjects who received placebo had a 22% and 25% non-responder rate at TOC with BAT and at EOS, respectively, while 100% of the subjects who received AP-SA02 clinically responded (p = 0.025: TOC BAT; p = 0.020: EOS).

Current wording

A statistically significant increase in clinical response rate was observed at TOC for AP-SA02 (day 12) in AP-SA02 treated subjects (88%; 21/24) versus placebo (58%; 7/12) (p = 0.047) as assessed by blinded site investigators, and 83% (20/24) in the AP-SA02 group versus 58% (7/12) in the placebo group as assessed by the blinded CEAC. At TOC for BAT and at EOS, 100% of the AP-SA02 treated subjects had clinically responded (p = 0.017) versus 25% of placebo subjects considered non-responsive due to either relapse or treatment failure, consistent with the non-responder rate reported in the literature for recent phase 3 trials. Of note, the clinical response with AP-SA02 occurred regardless of whether subjects were infected with methicillin-sensitiveS. aureus (“MSSA”) or MRSA. All subjects infected with MRSA and treated with AP-SA02 and BAT cleared their infection by TOC for BAT with no evidence of relapse through EOS, as compared to the relapse rate of BAT alone as noted above. Supporting the investigator assessment, clinical outcome was assessed by the CEAC, who agreed that subjects who received placebo had a 22% and 25% non-responder rate at TOC with BAT and at EOS, respectively, while 100% of the subjects who received AP-SA02 clinically responded (p = 0.025: TOC BAT; p = 0.020: EOS).

Previous wording

Additionally, faster time to a negative blood culture and decline of key predictors of mortality and complications in SAB, including interleukin-10 and C-reactive protein, support the improved responder rates in subjects treated with AP-SA02.

Current wording

Additionally, patients treated with AP-SA02 showed trends toward rapid normalization of key predictors of mortality and complications in SAB including C-reactive protein and interleukin-10, shorter time to negative blood culture, quicker time to resolution of signs and symptoms at the infection site, shorter intensive care unit and hospital utilization.

Previous wording

The results from our Phase 1b/2a diSArm study are an important step forward in our effort to confirm the potent antimicrobial activity of phage therapy and the completion of the study represents a significant milestone in the development of AP-SA02, moving us one step closer to introducing an effective new treatment option to patients suffering from complicated S. aureus bacteremia. This is the first clear evidence in a randomized controlled trial of the efficacy of phage against a serious systemic pathogen that is responsible for significant morbidity and mortality in the United States.

Current wording

The results from our Phase 1b/2a diSArm study are an important step forward in our effort to confirm the potent antimicrobial activity of phage therapy and the completion of the study represents a significant milestone in the development of AP-SA02, moving us one step closer to introducing an effective new treatment option to patients suffering from complicated SAB. This is the first clear evidence in a randomized controlled trial of the efficacy of phage against a serious systemic pathogen that is responsible for significant morbidity and mortality in the United States.

Previous wording

Findings from the Phase 1b/2a study, including the favorable safety and tolerability profile of AP-SA02, inform the design of a larger definitive efficacy study to demonstrate superiority of AP-SA02 in treating complicated S. aureus bacteremia, and form the basis for an end-of-Phase-2 meeting with the FDA which the Company plans to hold in the second half of 2025. We are committed to developing a superiority pivotal trial focused on phage as an alternative to broad-spectrum antibiotics and/or antibiotic sparing to decrease the utilization of broad-spectrum antibiotics and their detrimental impact on the normal human microbiome.

Current wording

Findings from the Phase 1b/2a study, including the favorable safety and tolerability profile of AP-SA02, inform the design of a larger definitive efficacy study to demonstrate superiority of AP-SA02 in treating complicated SAB, and form the basis for an end-of-Phase-2 meeting with the FDA which the Company plans to hold in the second half of 2025. Subject to review and feedback from the FDA, we are committed to developing a superiority pivotal trial focused on phage as an alternative to broad-spectrum antibiotics and/or antibiotic sparing to decrease the utilization of broad-spectrum antibiotics and their detrimental impact on the normal human microbiome.

Previous wording

A key advantage of our phage manufacturing expertise is the purity profiles of our phage products, including AP-SA02, our phage product candidate forS. aureus; this has enabled us to pursue treatment of complicatedS. aureus bacteremia, where repetitive intravenous (“IV”) dosing is required. On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million award and entered into a multi-year program administered by the U.S Department of Defense through MTEC and managed by the Naval Medical Research Command (“NMRC”) – Naval Advanced Medical Development (“NAMD”) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. On September 29, 2022, the MTEC Agreement was modified to increase the total award by $1.3 million to $16.3 million and extend the term into the second half of 2024. On July 29, 2024, the MTEC Agreement was modified to increase the total award by $5.3 million to $21.6 million and extend the term into the third quarter of 2025. On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We are using the award to partially fund a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled dose escalation study to assess the safety, tolerability and efficacy of our phage-based candidate, AP-SA02, for the treatment of adults withS. aureus(the “diSArm” study) and to support activities required for an end-of-Phase 2 meeting with the FDA*.*

Current wording

On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million award and entered into a multi-year program administered by the U.S Department of Defense through MTEC and managed by the Naval Medical Research Command (“NMRC”) – Naval Advanced Medical Development (“NAMD”) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. This award has been used to partially fund the Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled dose escalation study to assess the safety, tolerability and efficacy of our phage-based candidate, AP-SA02, for the treatment of adults withS. aureus(the “diSArm” study) and to support activities required for an end-of-Phase 2 meeting with the FDA*.*On September 29, 2022, the MTEC Agreement was modified to increase the total award by $1.3 million to $16.3 million and extend the term into the second half of 2024. On July 29, 2024, the MTEC Agreement was modified to increase the total award by $5.3 million to $21.6 million and extend the term into the third quarter of 2025. On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026.

Previous wording

We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of June 30, 2025, we had an accumulated deficit of $350.6 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and seeking to obtain regulatory approval for our product candidates. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates. We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so.

Current wording

We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of September 30, 2025, we had an accumulated deficit of $377.2 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and seeking to obtain regulatory approval for our product candidates. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates. We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so.

Previous wording

Our existing cash and cash equivalents of $4.3 million as of June 30, 2025 will not be sufficient to enable us to complete all necessary development of any potential product candidates and fund our operations for the next twelve months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.

Current wording

Our existing cash and cash equivalents of $14.8 million as of September 30, 2025 will not be sufficient to enable us to complete all necessary development of any potential product candidates and fund our operations for the next 12 months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.

Previous wording

On August 11, 2025, we entered into a credit and security (the “August 2025 Credit Agreement”) for a loan in the aggregate amount of $15.0 million (the “August 2025 Loan”) with Innoviva. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our assets and the subsidiary guarantors.

Current wording

On August 11, 2025, we entered into a credit and security agreement (the “August 2025 Credit Agreement”) for a loan in the aggregate amount of $15.0 million (the “August 2025 Loan”) with Innoviva. The August 2025 Loan bears interest at an annual rate of 14.0% and matures on January 11, 2029. Principal and accrued interest are payable at maturity. Repayment of the August 2025 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our assets and the subsidiary guarantors.

Previous wording

On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.

Current wording

On July 2, 2025, the MTEC Agreement was modified to extend the term to March 31, 2026. We will continue to recognize additional grant and award revenue until the full amount of the amended award is utilized.

Previous wording

Comparison of three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

Comparison of three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

We recognized $2.2 million and zero of grant and award revenue during the three months ended June 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.

Current wording

We recognized $1.2 million and $3.0 million of grant and award revenue during the three months ended September 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.

Previous wording

We recognized $2.7 million and $1.0 million of grant and award revenue during the six months ended June 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.

Current wording

We recognized $3.8 million and $3.9 million of grant and award revenue during the nine months ended September 30, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment of SAB.

Previous wording

The following table summarizes our research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our research and development expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Clinical trial costs decreased by $1.5 million, from $2.7 million for the three months ended June 30, 2024, to $1.2 million for the three months ended June 30, 2025. The decrease is primarily attributable to a $1.5 million decrease in AP-PA02 NCFB trial costs.

Current wording

Clinical trial costs decreased by $2.7 million, from $3.2 million for the three months ended September 30, 2024, to $0.5 million for the three months ended September 30, 2025. The decrease is primarily attributable to a $1.6 million decrease in AP-PA02 NCFB trial costs and a $1.1 million decrease in SA study costs.

Previous wording

Clinical trial costs decreased by $3.1 million, from $4.4 million for the six months ended June 30, 2024, to $1.3 million for the six months ended June 30, 2025. The decrease is primarily attributable to a $3.6 million decrease in AP-PA02 NCFB trial costs and a $0.2 million decrease in the CF study. The decrease was partially offset by an increase of $0.7 million in AP-SA02 trial costs.

Current wording

Clinical trial costs decreased by $5.8 million, from $7.6 million for the nine months ended September 30, 2024, to $1.8 million for the nine months ended September 30, 2025. The decrease is primarily attributable to a $5.2 million decrease in AP-PA02 NCFB trial costs, a $0.4 decrease in SA study costs, and a $0.2 million decrease in the CF study.

Previous wording

Other external research and development costs decreased by $0.2 million from $0.8 million for the three months ended June 30, 2024 to $0.6 million for the three months ended June 30, 2025. The decrease was primarily due to a decrease of $0.3 million in consulting expenses partially offset by an increase of $0.1 million in outsource service contracts.

Current wording

Other external research and development costs decreased by $0.4 million from $1.0 million for the three months ended September 30, 2024 to $0.6 million for the three months ended September 30, 2025. The decrease was primarily due to a decrease of $0.3 million in consulting expenses and a decrease of $0.1 million in other costs related to the AP-PA02 NCFB and SA studies nearing completion.

Previous wording

Other external research and development costs decreased by $0.5 million from $1.8 million for the six months ended June 30, 2024 to $1.3 million for the six months ended June 30, 2025. The decrease was primarily due to a decrease of $0.5 million in consulting expenses.

Current wording

Other external research and development costs decreased by $0.8 million from $2.7 million for the nine months ended September 30, 2024 to $1.9 million for the nine months ended September 30, 2025. The decrease was primarily due to a decrease of $0.8 million in consulting expenses.

Previous wording

Our expenses by product and by project for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Current wording

Our expenses by product and by project for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):

Previous wording

Personnel-related costs, including employee payroll and related expenses, decreased by $0.5 million, from $2.8 million for the three months ended June 30, 2024 to $2.3 million for the three months ended June 30, 2025. This decrease was mainly driven by a $0.3 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel and a decrease of $0.2 million in stock-based compensation expense.

Current wording

Personnel-related costs, including employee payroll and related expenses, decreased by $0.6 million, from $2.9 million for the three months ended September 30, 2024 to $2.3 million for the three months ended September 30, 2025. This decrease was mainly driven by a $0.6 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel.

Previous wording

Personnel-related costs, including employee payroll and related expenses, decreased by $0.8 million, from $5.4 million for the six months ended June 30, 2024 to $4.6 million for the six months ended June 30, 2025. This decrease was mainly driven by a $0.9 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel as we maximize efficiency for product development. This decrease was partially offset by a $0.1 million increase in stock-based compensation expense and employee training expenses.

Current wording

Personnel-related costs, including employee payroll and related expenses, decreased by $1.4 million, from $8.3 million for the nine months ended September 30, 2024 to $6.9 million for the nine months ended September 30, 2025. This decrease was mainly driven by a $1.6 million decrease in incentive compensation, salaries and wages, vacation and insurance due to a reduction in personnel as we maximize efficiency for product development. This decrease was partially offset by a $0.2 million increase in stock-based compensation expense and employee training expenses.

Previous wording

Facilities and overhead costs decreased by $0.2 million, from $4.9 million for the six months ended June 30, 2024 to $4.7 million for the six months ended June, 2025 mainly due to a decrease of $0.3 million in lease expense partially offset by a $0.1 million increase in depreciation and other variable facility costs.

Current wording

Facilities and overhead costs decreased by $0.2 million, from $7.3 million for the nine months ended September 30, 2024 to $7.1 million for the nine months ended September 30, 2025 mainly due to a decrease of $0.3 million in lease expense partially offset by a $0.1 million increase in depreciation and other variable facility costs.

Previous wording

General and administrative expenses were $5.9 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively. The decrease of $0.7 million is primarily related to a decrease of $0.8 million in consulting fees as we continue to streamline and increase in-house expertise, and a decrease of $0.6 million in stock-based compensation expense, partially offset by an increase of $0.7 million in personnel-related costs other than stock-based compensation expense.

Current wording

General and administrative expenses were $8.9 million and $9.9 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease of $1.0 million is primarily related to a decrease of $1.0 million in consulting fees as we continue to streamline and increase in-house expertise and a decrease of $0.6 million in stock-based compensation expense, partially offset by an increase of $0.6 million in personnel-related costs other than stock-based compensation expense.

Previous wording

Interest income for the three months ended June 30, 2025 and 2024 was $0.1 million and $0.2 million, respectively, and related to interest earned on our money market fund investments.

Current wording

Interest income for the three months ended September 30, 2025 and 2024 was $0.1 million and $0.3 million, respectively, and related to interest earned on our money market fund investments.

Previous wording

Interest income for the six months ended June 30, 2025 and 2024 was $0.2 million and $0.3 million, respectively, and related to interest earned on our money market fund investments.

Current wording

Interest income for the nine months ended September 30, 2025 and 2024 was $0.3 million and $0.6 million, respectively, and related to interest earned on our money market fund investments.

Previous wording

We recognized interest expense of $3.8 million and $2.7 million for the three months ended June 30, 2025 and 2024 respectively, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan, as amended in March 2025, and the March 2025 Loan. Stated interest is accrued and is payable at the maturity of the amended 2023 Loan, 2024 Loan, and March 2025 Loan in March 2026.

Current wording

We recognized interest expense of $4.3 million and $2.9 million for the three months ended September 30, 2025 and 2024 respectively. The increase is primarily related to increased debt balances as compared to the prior year period. Interest expense related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan, 2024 Loan, March 2025 Loan, and August 2025 Loan. Stated interest is accrued and is payable at the maturity of the 2023 Loan, 2024 Loan and March 2025 Loan in March 2026, and the August 2025 Loan in January 2029.

Previous wording

We recognized interest expense of $7.4 million and $4.5 million for the six months ended June 30, 2025 and 2024 respectively, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan, as amended in March 2025, and the March 2025 Loan. Stated interest is accrued and is payable at the maturity of the amended 2023 Loan, 2024 Loan, and March 2025 Loan in March 2026.

Current wording

We recognized interest expense of $11.8 million and $7.5 million for the nine months ended September 30, 2025 and 2024 respectively. The increase is primarily related to increased debt balances as compared to the prior year period. Interest expense related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan, 2024 Loan, March 2025 Loan and August 2025 Loan. Stated interest is accrued and is payable at the maturity of the 2023 Loan, 2024 Loan and March 2025 Loan in March 2026, and the August 2025 Loan in January 2029.

Previous wording

We recognized a loss of $5.8 million and gain of $23.4 million on the change in the fair value of the Convertible Loan for the three months ended June 30, 2025 and 2024, respectively.

Current wording

We recognized a loss of $14.6 million and gain of $6.9 million on the change in the fair value of the Convertible Loan for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

We recognized a loss of $0.5 million and a gain of $10.4 million on the change in the fair value of the Convertible Loan for the six months ended June 30, 2025 and 2024, respectively.

Current wording

We recognized a loss of $15.2 million and a gain of $17.3 million on the change in the fair value of the Convertible Loan for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $4.3 million as of June 30, 2025 will not be sufficient to fund our operations for the next 12 months from the date of issuance of our condensed consolidated financial statements for the six months ended June 30, 2025. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financing, strategic alliances, and grant and award arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

Current wording

We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $14.8 million as of September 30, 2025 will not be sufficient to fund our operations for the next 12 months from the date of issuance of our condensed consolidated financial statements for the nine months ended September 30, 2025. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financing, strategic alliances, and grant and award arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

Previous wording

Net cash used in operating activities was $14.8 million and $20.8 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Net cash used in operating activities was $19.1 million and $29.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Cash used in operating activities in the six months ended June 30, 2025 was primarily due to our net loss for the period of $22.8 million, adjusted by non-cash items of $11.2 million and a decrease of $3.2 million in our net operating assets and liabilities. The non-cash items consist of $0.5 million related to a loss from change in fair value of the Convertible Loan, $7.4 million of non-cash interest expense on the 2023 Loan, 2024 Loan and March 2025 Loan, $1.4 million related to stock-based compensation expense, $0.7 million related to depreciation and amortization expense and $1.2 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities was primarily due to a decrease of $0.7 million in accrued compensation, a decrease of $0.8 million in accounts payable and accrued liabilities, a decrease of $0.5 million in the operating lease liability, and an increase of $1.2 million in prepaid expenses and other assets.

Current wording

Cash used in operating activities in the nine months ended September 30, 2025 was primarily due to our net loss for the period of $49.5 million, adjusted by non-cash items of $31.8 million and a decrease of $1.4 million in our net operating assets and liabilities. The non-cash items consist of $15.2 million related to a loss from change in fair value of the Convertible Loan, $11.7 million of non-cash interest expense on the 2023 Loan, 2024 Loan, March 2025 Loan, and August 2025 Loan, $2.0 million related to stock-based compensation expense, $1.1 million related to depreciation expense and $1.8 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities

Previous wording

Cash used in operating activities in the six months ended June 30, 2024 was primarily due to our net loss for the period of $16.0 million, adjusted by non-cash items of $2.4 million and a decrease of $2.4 million in our net operating assets and liabilities. The non-cash items consist of $10.4 million related to a gain from change in fair value of convertible debt, $4.5 million of non-cash interest expense on the 2023 Loan and the 2024 Loan, $1.9 million related to stock-based compensation expense, $1.0 million related to change in right-of-use asset and $0.6 million related to depreciation and amortization expense. The decrease in our net operating assets and liabilities was primarily due to a decrease of $3.2 million in operating lease liability related to lease payments and payments for the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, California, a decrease of $2.1 million in accounts payable and accrued liabilities, an increase of $0.5 million in accrued compensation, and a decrease of $2.6 million in prepaid expenses and other assets.

Current wording

Cash used in operating activities in the nine months ended September 30, 2024 was primarily due to our net loss for the period of $21.5 million, adjusted by non-cash items of $4.8 million and a decrease of $3.3 million in our net operating assets and liabilities. The non-cash items consist of $17.3 million related to a gain from change in fair value of convertible debt, $7.5 million of non-cash interest expense on the 2023 Loan and the 2024 Loan, $2.5 million related to stock-based compensation expense, $1.5 million related to change in right-of-use asset and $0.9 million related to depreciation expense. The decrease in our net operating assets and liabilities was primarily due to a decrease of $4.2 million in operating lease liability related to lease payments and payments for the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, CA, a decrease of $2.0 million in accounts payable and accrued liabilities, an increase of $0.8 million in accrued compensation, and a decrease of $2.1 million in prepaid expenses and other current assets.

Previous wording

Net cash used in investing activities was $0.2 million and $1.6 million for the six months ended June 30, 2025 and 2024, respectively, which is attributable to purchases of laboratory and manufacturing equipment for the new office, laboratory and manufacturing space at our leased facility in Los Angeles, California.

Current wording

Net cash used in investing activities was $0.5 million and $2.0 million for the nine months ended September 30, 2025 and 2024, respectively, which is attributable to purchases of laboratory and manufacturing equipment for the new office, laboratory and manufacturing space at our leased facility in Los Angeles, California.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2025 was $10.0 million, which consisted primarily of proceeds from issuance of short-term debt.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2025 was $25.0 million, which consisted primarily of proceeds from issuance of term debt.

Previous wording

Cash provided by financing activities for the six months ended June 30, 2024 was $35.0 million, which consisted primarily of proceeds from issuance of long-term debt, net of issuance costs of less than $0.1 million, and proceeds from exercise of stock options of less than $0.1 million.

Current wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $34.9 million, which consisted primarily of proceeds from issuance of term debt, net of issuance costs of less than $0.1 million, and proceeds from exercise of stock options of $0.1 million.