Athira Pharma, Inc.

Previous wording

To date, we have funded our operations primarily through proceeds from the sale of equity securities, including proceeds from the sale and issuance of common stock in our IPO and in a subsequent follow-on public offering, the sale and issuance of convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From inception to June 30, 2025, we have raised aggregate net cash proceeds of approximately $407.4 million primarily from the issuance of our common stock (excluding option exercises), convertible preferred stock, common stock warrants, and convertible notes. We have incurred significant operating losses to date. Our net losses were $16.1 million and $53.2 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $422.3 million and cash, cash equivalents and investments of $29.8 million.

Current wording

To date, we have funded our operations primarily through proceeds from the sale of equity securities, including proceeds from the sale and issuance of common stock in our IPO and in a subsequent follow-on public offering, the sale and issuance of convertible preferred stock, common stock warrants, and convertible notes, and to a lesser extent from grant income and stock option exercises. From inception to September 30, 2025, we have raised aggregate net cash proceeds of approximately $407.4 million primarily from the issuance of our common stock (excluding option exercises), convertible preferred stock, common stock warrants, and convertible notes. We have incurred significant operating losses to date. Our net losses were $22.7 million and $81.9 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $428.9 million and cash, cash equivalents and investments of $25.2 million.

Previous wording

On April 4, 2025, we filed an application to transfer the listing of our common stock from the Nasdaq Global Market to the Nasdaq Capital Market, which transfer was approved and occurred on April 17, 2025. As a result of the transfer, we have been granted an additional 180-day grace period, or until October 13, 2025, to regain compliance with Nasdaq's closing bid price requirement, which we have failed to comply with since September 4, 2024.

Current wording

On April 4, 2025, we filed an application to transfer the listing of our common stock from the Nasdaq Global Market to the Nasdaq Capital Market, which transfer was approved and occurred on April 17, 2025.

Previous wording

Research and development expenses decreased by $18.5 million, from $22.2 million for the three months ended June 30, 2024 to $3.7 million for the three months ended June 30, 2025. The decrease was driven primarily by decreases in fosgonimeton program costs of $12.7 million, personnel-related expenses of $2.8 million, and ATH-1105 program costs of $2.0 million. The decrease in fosgonimeton program costs of $12.7 million was driven by decreases in contract research organization, and clinical site visit costs of $8.2 million following the completion of our Phase 2/3 LIFT-AD clinical trial and the conclusion of our corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials in the prior year, a decrease in contract manufacturing costs of $3.0 million, and a decrease in fosgonimeton program consulting costs of $1.5 million.

Current wording

Research and development expenses decreased by $15.1 million, from $17.9 million for the three months ended September 30, 2024 to $2.8 million for the three months ended September 30, 2025. The decrease was driven primarily by decreases in fosgonimeton program costs of $9.8 million, personnel-related expenses of $2.8 million, and ATH-1105 program costs of $1.8 million. The decrease in fosgonimeton program costs of $9.8 million was driven by decreases in contract research organization, other third party vendors and clinical site visit costs of $8.7 million following the completion of our Phase 2/3 LIFT-AD clinical trial and the conclusion of our corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials in the prior year and a decrease in contract manufacturing costs of $0.7 million.

Previous wording

General and administrative expenses decreased by approximately $2.3 million, from $5.9 million for the three months ended June 30, 2024 to $3.6 million for the three months ended June 30, 2025. The decrease was primarily due to a decrease in personnel-related expenses of $2.0 million.

Current wording

General and administrative expenses decreased by approximately $3.6 million, from $7.6 million for the three months ended September 30, 2024 to $4.0 million for the three months ended September 30, 2025. The decrease was primarily due to a decrease in personnel-related expenses of $2.9 million.

Previous wording

Other income, net, decreased by $0.8 million, from $1.2 million for the three months ended June 30, 2024 to $0.3 million for the three months ended June 30, 2025 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted primarily from lower balances of available-for-sale securities held during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Other income, net, decreased by $0.6 million, from $0.9 million for the three months ended September 30, 2024 to $0.3 million for the three months ended September 30, 2025 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted primarily from lower balances of available-for-sale securities held during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Research and development expenses decreased by $35.4 million, from $43.4 million for the six months ended June 30, 2024 to $8.0 million for the six months ended June 30, 2025. The decrease was driven primarily by decreases in fosgonimeton program costs of $25.7 million, personnel-related expenses of $5.9 million, and ATH-1105 program costs of $1.1 million. The decrease in fosgonimeton program costs of $25.7 million was driven by decreases in contract research organization and clinical site visit costs of $16.0 million following the completion of our Phase 2/3 LIFT-AD clinical trial and the conclusion of our corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials in the prior year, a decrease in contract manufacturing costs of $6.1 million, and a decrease in fosgonimeton program consulting costs of $2.7 million.

Current wording

Research and development expenses decreased by $50.5 million, from $61.3 million for the nine months ended September 30, 2024 to $10.8 million for the nine months ended September 30, 2025. The decrease was driven primarily by decreases in fosgonimeton program costs of $35.4 million, personnel-related expenses of $8.7 million, and ATH-1105 program costs of $4.0 million. The decrease in fosgonimeton program costs of $35.4 million was driven by decreases in contract research organization, other third party vendors and clinical site visit costs of $26.2 million following the completion of our Phase 2/3 LIFT-AD clinical trial and the conclusion of our corresponding open-label extension for our Phase 2 ACT-AD and Phase 2/3 LIFT-AD clinical trials in the prior year and a decrease in contract manufacturing costs of $6.8 million.

Previous wording

General and administrative expenses decreased by approximately $3.4 million, from $12.3 million for the six months ended June 30, 2024 to $8.9 million for the six months ended June 30, 2025. The decrease was primarily due to a decrease in personnel-related expenses of $3.6 million and a decrease in business development expenses of $0.2 million. These decreases were partially offset by an increase in professional service expenses of $0.7 million.

Current wording

General and administrative expenses decreased by approximately $7.0 million, from $19.9 million for the nine months ended September 30, 2024 to $12.9 million for the nine months ended September 30, 2025. The decrease was primarily due to a decrease in personnel-related expenses of $8.7 million.

Previous wording

Other income, net, decreased by $1.8 million, from $2.5 million for the six months ended June 30, 2024 to $0.7 million for the six months ended June 30, 2025 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted primarily from lower balances of available-for-sale securities held during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Other income, net, decreased by $2.4 million, from $3.4 million for the nine months ended September 30, 2024 to $1.0 million for the nine months ended September 30, 2025 due to lower income from accretion of discounts on debt securities purchased below par value and held to maturity and lower interest income earned on our available-for-sale securities. These decreases resulted primarily from lower balances of available-for-sale securities held during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

As of June 30, 2025, we had $29.8 million in cash, cash equivalents and investments and have not generated positive cash flows from operations. Since our inception, we have devoted substantially all of our resources to our research and development efforts such as small molecule compound discovery, nonclinical studies and clinical trials, as well as manufacturing activities, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

Current wording

As of September 30, 2025, we had $25.2 million in cash, cash equivalents and investments and have not generated positive cash flows from operations. Since our inception, we have devoted substantially all of our resources to our research and development efforts such as small molecule compound discovery, nonclinical studies and clinical trials, as well as manufacturing activities, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these operations.

Previous wording

Our material cash requirements include our operating leases for laboratory and office facilities. As of June 30, 2025, we had lease payment obligations of $1.1 million, with $0.5 million payable within 12 months. For additional information regarding our lease commitments, see Note 7 to our consolidated financial statements included elsewhere in this report. Additionally, we have purchase obligations and open purchase orders that support normal operations and are primarily due in the next 12 months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions. We anticipate that our research and development expenses and our general and administrative expenses will remain lower in the near-term as a result of our decision to pause further development of fosgonimeton and to shift our focus to the clinical development of ATH-1105, and our decrease in headcount as a result of the Restructuring.

Current wording

Our material cash requirements include our operating leases for laboratory and office facilities. As of September 30, 2025, we had lease payment obligations of $1.0 million, with $0.5 million payable within 12 months. For additional information regarding our lease commitments, see Note 7 to our consolidated financial statements included elsewhere in this report. Additionally, we have purchase obligations and open purchase orders that support normal operations and are primarily due in the next 12 months. These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions. We anticipate that our research and development expenses and our general and administrative expenses will remain lower in the near-term as a result of our decision to pause further development of fosgonimeton and to shift our focus to the clinical development of ATH-1105, and our decrease in headcount as a result of the Restructuring.

Previous wording

Based upon our current operating plan, we estimate that our $29.8 million of cash, cash equivalents and investments at June 30, 2025 will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months. However, our resource requirements could materially change depending on the outcome of our ongoing strategic alternative review process, including to the extent we identify and enter into any potential strategic transaction. We will need to raise substantial additional capital to fund the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, we expect to finance our operations through the sale of equity securities, debt financings, or other capital, which could include income from collaboration, licensing or similar arrangements with third parties, or receiving research contributions, or grants. For example, in January 2023, we entered into a sales agreement with Cantor Fitzgerald and BTIG, LLC, or BTIG, to sell shares of our common stock having aggregate sales proceeds of up to $75.0 million, from time to time, subject to applicable limitations on sales pursuant to SEC rules and regulations, through an ATM equity offering program under which Cantor Fitzgerald and BTIG are acting as sales agents. As of the date of this report, we have not sold any securities pursuant to this ATM offering. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or grant licenses on terms that may not be favorable to us or may reduce the value of our common stock. Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less favora…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Based upon our current operating plan, we estimate that our $25.2 million of cash, cash equivalents and investments at September 30, 2025 will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months. However, our resource requirements could materially change depending on the outcome of our ongoing strategic alternative review process, including to the extent we identify and enter into any potential strategic transaction. We will need to raise substantial additional capital to fund the development of our drug candidates. Until such time as we can generate significant revenue from drug product sales, we expect to finance our operations through the sale of equity securities, debt financings, or other capital, which could include income from collaboration, licensing or similar arrangements with third parties, or receiving research contributions, or grants. For example, in January 2023, we entered into a sales agreement with Cantor Fitzgerald and BTIG, LLC, or BTIG, to sell shares of our common stock having aggregate sales proceeds of up to $75.0 million, from time to time, subject to applicable limitations on sales pursuant to SEC rules and regulations, through an ATM equity offering program under which Cantor Fitzgerald and BTIG are acting as sales agents. As of the date of this report, we have not sold any securities pursuant to this ATM offering. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or drug candidates or grant licenses on terms that may not be favorable to us or may reduce the value of our common stock. Adequate funding may not be available when needed or on terms acceptable to us, or at all. Our ability to raise additional funds may be negatively impacted by potential adverse global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide. If we fail to obtain necessary capital when needed on acceptable terms, or at all, it could force us to delay, limit, reduce or terminate our drug product development programs, commercialization efforts or other operations. Insufficient liquidity may also require us to relinquish rights to drug candidates at an earlier stage of development or on less f…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

During the six months ended June 30, 2025, net cash used in operating activities was $21.7 million. This consisted primarily of a net loss of $16.1 million, partially offset by non-cash charges of $3.7 million, and an increase in our net operating assets of $9.2 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, non-cash lease expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The increase in our net operating assets was primarily due to a decrease in accrued expenses, partially offset by an increase in accounts payable and a decrease in prepaid expenses and other assets.

Current wording

During the nine months ended September 30, 2025, net cash used in operating activities was $26.3 million. This consisted primarily of a net loss of $22.7 million, partially offset by non-cash charges of $5.3 million, and an increase in our net operating assets of $8.9 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, non-cash lease expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The increase in our net operating assets was primarily due to a decrease in accrued expenses, partially offset by an increase in accounts payable and a decrease in prepaid expenses and other assets.

Previous wording

During the six months ended June 30, 2024, net cash used in operating activities was $48.1 million. This consisted primarily of a net loss of $53.2 million, partially offset by non-cash charges of $6.1 million, and an increase in our net operating assets of $1.0 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The increase in our net operating assets was primarily due to a decrease in accounts payable and accrued expenses, partially offset by a decrease in prepaid expenses and other assets.

Current wording

During the nine months ended September 30, 2024, net cash used in operating activities was $71.2 million. This consisted primarily of a net loss of $81.9 million, partially offset by non-cash charges of $9.2 million, and a decrease in our net operating assets of $1.5 million. The non-cash charges primarily consisted of stock-based compensation expense, depreciation expense, and amortization of premiums and accretion of discounts on available-for-sale securities. The decrease in our net operating assets was primarily due to a decrease in prepaid expenses and other assets and an increase in accounts payable, partially offset by a decrease accrued expenses.

Previous wording

During the six months ended June 30, 2025, net cash used in investing was $6.9 million. This consisted of purchases of available-for-sale securities of $16.3 million, partially offset by maturities of available-for-sale securities of $9.4 million.

Current wording

During the nine months ended September 30, 2025, net cash used in investing was $1.3 million. This consisted of purchases of available-for-sale securities of $19.6 million, partially offset by maturities of available-for-sale securities of $18.3 million.

Previous wording

During the six months ended June 30, 2024, net cash provided by investing was $39.6 million. This consisted of maturities of available-for-sale securities of $51.0 million, partially offset by purchases of available-for-sale securities of $11.3 million.

Current wording

During the nine months ended September 30, 2024, net cash provided by investing was $57.6 million. This consisted of maturities of available-for-sale securities of $69.0 million, partially offset by purchases of available-for-sale securities of $11.3 million.

Previous wording

During the six months ended June 30, 2025, net cash provided by financing activities was $0.02 million, consisting of proceeds received from the issuance of common stock under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2025, net cash provided by financing activities was $0.02 million, consisting of proceeds received from the issuance of common stock under our employee stock purchase plan.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities was $0.1 million, consisting of proceeds received from the issuance of common stock under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $0.2 million, consisting of proceeds received from the exercise of stock options and the issuance of common stock under our employee stock purchase plan.

Previous wording

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies, Significant Judgments and Use of Estimates” in our Annual Report on Form 10-K filed with the SEC on February 27, 2025 and Note 2 to our unaudited condensed consolidated financial statements included in “Part I, Item 1—Financial Statements (Unaudited)” of this report. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity:

Current wording

During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies, Significant Judgments and Use of Estimates” in our Annual Report on Form 10-K filed with the SEC on February 27, 2025 and Note 2 to our unaudited condensed consolidated financial statements included in “Part I, Item 1—Financial Statements (Unaudited)” of this report. We believe that of our critical accounting policies, the following accounting policies involve the most judgment and complexity: