CalciMedica, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, this discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties. You should carefully read the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes and other consolidated financial information included elsewhere in this Annual Report on Form 10-K. In addition to historical consolidated financial information, this discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties. You should carefully read the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Previous wording

We are a clinical-stage biopharmaceutical company focused on developing therapeutics that treat serious illnesses driven by inflammatory and immunologic processes and direct cellular damage. Our product candidates act upon calcium release-activated calcium (“CRAC”) channels and would constitute a new class of drugs.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing therapeutics for serious illnesses driven by inflammatory and immunologic processes and direct cellular damage. Our product candidates target calcium release-activated calcium (“CRAC”) channels and, if approved, would represent a new class of therapeutics.

Previous wording

Our lead product candidate is Auxora, a potent and selective intravenous formulated small molecule CRAC channel inhibitor containing the active compound zegocractin (formerly referred to as CM4620) that, in animal models, reduced acute epithelial and/or endothelial cell injury and inflammation in organs, such as the pancreas, lungs and kidneys. Multiple Phase 2 clinical trials with Auxora have been conducted: an open-label Phase 2a trial in acute pancreatitis (“AP”) with accompanying systematic inflammatory response syndrome (“SIRS”), an international, randomized, double-blind placebo-controlled Phase 2b trial in AP with SIRS (which we refer to as “CARPO”), an investigator led open-label Phase 1/2 trial in asparaginase-induced pancreatic toxicity (“AIPT”) (which we also refer to as “CRSPA”) in which the first cohort of patients has been completed, a placebo-controlled double-blind Phase 2 trial in severe COVID-19 pneumonia (which we also refer to as “CARDEA”) and an investigator led open-label Phase 2a trial in COVID-19 pneumonia patients with acute respiratory distress syndrome (“ARDS”). We observed in all of these trials that patients treated with Auxora experienced a reduction of organ damage and reduced time to recovery. We believe the consistency of the results we observed from these trials in two different acute critical care conditions are mutually supportive and reinforce our plans to further pursue the use of Auxora in several additional acute critical illnesses, including acute kidney injury (“AKI”) with associated acute hypoxemic respiratory failure (“AHRF”), in which we are currently conducting a Phase 2 trial (which we also refer to as “KOURAGE”) with data expected around the end of 2025.

Current wording

Our lead product candidate is Auxora, a potent and selective, intravenously formulated small-molecule CRAC channel inhibitor containing the active compound zegocractin (formerly CM4620). Auxora has been evaluated in multiple Phase 2 clinical trials across acute critical care settings, including acute pancreatitis (“AP”), severe COVID-19 pneumonia, and pediatric asparaginase-induced pancreatic toxicity (“AIPT”), and acute kidney injury (“AKI”) with associated acute hypoxemic respiratory failure (“AHRF”). Results from these studies have informed our understanding of the pharmacologic profile of CRAC channel inhibition in acute inflammatory conditions.

Previous wording

In connection with the 2024 Follow-On, on October 30, 2024, we suspended sales of common stock under the ATM Facility pursuant to the Original Prospectus Supplement, and until December 20, 2024, did not offer for sale any shares of common stock pursuant to the ATM Agreement. We filed a prospectus supplement (the “Current Prospectus Supplement”) with the SEC on December 20, 2024 for an aggregate gross sales price of up to $4,450,000 of shares of common stock to be sold pursuant to the ATM Facility. As of December 31, 2024, we sold an aggregate of 101,522 shares of common stock for net proceeds of $319,000 after deducting $13,000 of commissions paid under the ATM Facility and approximately $4.5 million remains available for sale under the ATM Facility. As of December 31, 2024, $89.5 million remained available for sale under the Shelf Registration Statement.

Current wording

In connection with the 2024 Follow-On, on October 30, 2024, we suspended sales of common stock under the ATM Facility pursuant to the Original Prospectus Supplement, and until December 20, 2024, did not offer for sale any shares of common stock pursuant to the ATM Agreement. We filed a prospectus supplement (the “2024 Prospectus Supplement”) with the SEC on December 20, 2024 for an aggregate gross sales price of up to $4,450,000 of shares of common stock to be sold pursuant to the ATM Facility. As of December 31, 2025, we sold an aggregate of 2,031,828 shares of common stock for net proceeds of approximately $5.8 million after deducting $292,000 of commissions and settlement expenses paid under the ATM Facility.

Previous wording

On February 28, 2025 (the “Closing Date”), the Company entered into a Loan and Security Agreement and the Supplement to the Loan and Security Agreement (together, the “Loan Agreement”) with Avenue Venture Opportunities Fund II, L.P. (“Lender”) and Avenue Capital Management II, L.P., as administrative agent and collateral agent, for growth capital loans in an aggregate principal amount of up to $32,500,000 (the “Loan”), with (i) $10,000,000 funded on the Closing Date (“Tranche 1”), (ii) up to $7,500,000 to be made available to the Company between September 1, 2025 and March 31, 2026, subject to, among other things, the Company’s achievement of certain milestones with respect to certain of its ongoing clinical trials (“Tranche 2”) and (iii) up to $15,000,000 to be made available to the Company between October 1, 2025 and March 31, 2026, subject to, among other things, (a) the Company’s achievement of additional milestones with respect to certain of its ongoing clinical trials and (b) the mutual written agreement of the Company and the Lender (upon its investment committee approval). The Company will make interest only payments until the 18 month anniversary of the Closing Date, subject to a 6-month extension upon the Company’s achievement of certain milestones with respect to certain of its ongoing clinical trials and funding of the full amount under Tranche 2. The Loan bears interest at an annual rate equal to the greater of (a) the sum of 5.00% plus the prime rate as reported in The Wall Street Journal and (b) 12.75%. The Loan is secured by a lien upon and security interest in all of the Company’s assets, including intellectual property, subject to agreed exceptions. The maturity date of the Loan is September 1, 2028 (the “Maturity Date”).

Current wording

On February 28, 2025 (the “Closing Date”), we entered into a Loan and Security Agreement and the Supplement to the Loan and Security Agreement (together, the “Loan Agreement”) with Avenue Venture Opportunities Fund II, L.P. (“Lender”) and Avenue Capital Management II, L.P., as administrative agent and collateral agent, for growth capital loans in an aggregate principal amount of up to $32,500,000 (the “Loan”), with (i) $10,000,000 funded on the Closing Date (“Tranche 1”), (ii) up to $7,500,000 to be made available to us between September 1, 2025 and March 31, 2026, which was subject to, among other things, our achievement of certain milestones with respect to certain of its ongoing clinical trials (“Tranche 2”) and (iii) up to $15,000,000 to be made available to us between October 1, 2025 and March 31, 2026, which was subject to, among other things, (a) our achievement of additional milestones with respect to certain of its ongoing clinical trials and (b) the mutual written agreement of us and the Lender (upon its investment committee approval). In connection with the discontinuation of the KOURAGE trial, Tranche 2 and Tranche 3 are no longer available to us. We will make interest only payments until the 18 month anniversary of the Closing Date. The Loan bears interest at an annual rate equal to the greater of (a) the sum of 5.00% plus the prime rate as reported in The Wall Street Journal and (b) 12.75%. The Loan is secured by a lien upon and security interest in all of our assets, including intellectual property, subject to agreed exceptions. The maturity date of the Loan is September 1, 2028 (the “Maturity Date”).

Previous wording

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Through December 31, 2024, our operations have been funded primarily by aggregate net proceeds of $178.7 million from the issuance of convertible preferred stock, convertible notes, warrants, common stock and the Merger. Since inception we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss was $13.7 million for the year ended December 31, 2024. Included in the net loss for the year ended December 31, 2024 were total operating expenses of $24.2 million, offset by a gain from the fair value adjustment to our warrant liability of $9.5 million and interest income of $1.0 million. As of December 31, 2024, we had an accumulated deficit of $159.8 million and $18.7 million in cash, cash equivalents and short-term investments.

Current wording

Our ability to generate revenue from product sales sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Through December 31, 2025, our operations have been funded primarily by aggregate net proceeds of $193.9 million from the issuance of convertible preferred stock, convertible notes, warrants, common stock and the Merger. Since inception we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss was $29.6 million for the year ended December 31, 2025. Included in the net loss for the year ended December 31, 2025 were total operating expenses of $23.1 million, a change in the fair value adjustment to our warrant liability and promissory note of $6.0 million, interest expense of $1.4 million and offset by interest income and other income of $0.9 million. As of December 31, 2025, we had an accumulated deficit of $189.3 million and $13.0 million in cash, cash equivalents and short-term investments. We expect that our cash, cash equivalents and short-term investments will enable us to fund our current operating plan into the fourth quarter of 2026. As a result, there is substantial doubt about our ability to continue as a going concern.

Previous wording

We may never succeed in achieving regulatory approval for any of our remaining product candidates. We may obtain unexpected results from our preclinical studies and subsequent clinical trials, if any. We may elect to discontinue, delay or modify future clinical trials of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current preclinical product candidates. For example, if the FDA, or another regulatory authority, were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or future clinical trials, if any, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

Current wording

We may never succeed in achieving regulatory approval for any of our remaining product candidates. We may obtain unexpected results from our preclinical studies and subsequent clinical trials, if any. We may elect to discontinue, delay or modify future clinical trials or preclinical activities of some product candidates or focus on others. A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current preclinical product candidates. For example, if the FDA, or another regulatory authority, were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or current and future clinical trials, if any, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development.

Previous wording

Our other income includes (i) interest and change in fair value of our convertible promissory notes; (ii) changes in the fair value of our warrant liabilities; and (iii) other non-operating income.

Current wording

Our other income includes (i) interest income and expense and non-cash changes in the fair value of the promissory note; (ii) non-cash changes in the fair value of our warrant liabilities; and (iii) other non-operating income.

Previous wording

The following sets forth our results of operations (in thousands):

Current wording

The following sets forth our results of operations (dollars in thousands):

Previous wording

Research and development expenses were $14.5 million for the year ended December 31, 2024, compared to $15.9 million for the year ended December 31, 2023. The decrease of $1.4 million was due primarily to a decrease in personnel expense of $3.3 million driven by a one-time charge for the acceleration of vesting of stock options of $1.9 million and a one-time severance charge of $1.6 million as a result of the Merger for the year ended December 31, 2023. This was partially offset by an increase of $1.3 million in chemistry, manufacturing and control activities in regard to our Phase 2 clinical trials of Auxora, costs related to our preclinical studies of $0.3 million and consultants and other costs of $0.3 million.

Current wording

Research and development expenses were $15.2 million for the year ended December 31, 2025, compared to $14.5 million for the year ended December 31, 2024. The increase of $0.7 million was due primarily to an increase of $1.8 million in preclinical and clinical trial related activities, offset by a decrease of $0.9 million in chemistry, manufacturing and control activities in regard to our Phase 2 clinical trials of Auxora and a decrease of $0.2 million in personnel costs.

Previous wording

General and administrative expenses to support our business activities comprised (in thousands):

Current wording

General and administrative expenses to support our business activities comprised (dollars in thousands):

Previous wording

General and administrative expenses were $9.7 million for the year ended December 31, 2024, compared to $22.2 million for the year ended December 31, 2023. The decrease of $12.5 million was primarily related to a decrease in personnel costs of $13.0 million driven by a one-time charge for acceleration of vesting of stock options of $8.6 million and a one-time severance charge of $4.1 million as a result of the Merger for the year ended December 31, 2023. Additionally, professional services decreased $0.2 million due to increased costs as a result of the Merger for the year ended December 31, 2023. These costs were partially offset by an increase of $0.7 million in consultants and other costs.

Current wording

General and administrative expenses were $7.9 million for the year ended December 31, 2025, compared to $9.7 million for the year ended December 31, 2024. The decrease of $1.8 million was primarily related to a decrease in consultants and other costs of $1.3 million driven by transactions costs associated with the private placement as of the year ended December 31, 2024 and professional services of $1.0 million. These costs were partially offset by an increase in personnel costs of $0.5 million driven by an increase in stock based compensation of $0.5 million for the year ended December 31, 2025.

Previous wording

As of December 31, 2024 we had cash, cash equivalents and short-term investments of $18.7 million.

Current wording

As of December 31, 2025 we had cash, cash equivalents and short-term investments of $13.0 million.

Previous wording

Based on our current operating plans, we believe our cash, cash equivalents and short-term investments along with the Loan Agreement entered into on February 28, 2025, will be sufficient to fund our current operations for the next twelve months from the date of this report. We expect that our cash, cash equivalents and short-term investments, will allow us to fund our operations through certain clinical milestones, into the middle of 2026. However, our current cash, cash equivalents and short-term investments will not be sufficient to fund any of our product candidates through regulatory approval, nor will it be sufficient to pursue additional indications for Auxora such as AHRF, nor will it be sufficient to fund clinical work on other product candidates in our portfolio aside from Auxora, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates.

Current wording

The accompanying consolidated financial statements have been prepared on a basis which assumes we are a going concern and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to our ability to continue as a going concern. Based on our current operating plans, we believe our cash, cash equivalents and short-term investments will not be sufficient to fund our operations for the period one year following the issuance of the accompanying financial statements. Specifically, we expect that our cash, cash equivalents and short-term investments will allow us to fund the current operating plan into the fourth quarter of 2026. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. In addition, our current cash, cash equivalents and short-term investments will not be sufficient to fund any of our product candidates through regulatory approval, nor will it be sufficient to pursue additional indications for Auxora, nor will it be sufficient to fund clinical work on other product candidates in our portfolio aside from Auxora, and we will need to raise substantial additional capital to complete the development and commercialization of our product candidates.

Previous wording

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. To fund our operations in both the near term and long term (beyond 18 months), we will need to raise additional capital to develop our product candidates and implement our operating plans. There can be no assurance that we will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders.

Current wording

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. To fund our operations in both the near term and long term, we will need to raise additional capital to develop our product candidates and implement our operating plans. There can be no assurance that we will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders. In addition, the terms of the Loan Agreement contain certain restrictions on incurring additional indebtedness.

Previous wording

Since we commenced operations in October 2006, we have primarily financed our operations through private placements of our preferred stock, convertible promissory notes, warrants and common stock, through the Merger with Graybug and through an underwritten public offering. We have used substantial amounts of cash to fund our operations and expect our expenses to increase substantially for the foreseeable future. The development of drug product candidates is highly capital intensive. As our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our clinical, regulatory and quality capabilities. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Furthermore, we have incurred and expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. The global credit and financial markets have experienced extreme volatility, including in liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

Current wording

Since we commenced operations in October 2006, we have primarily financed our operations through private placements of our preferred stock, convertible promissory notes, promissory notes, warrants, common stock, and through the Merger. We have used substantial amounts of cash to fund our operations and expect our expenses to increase substantially for the foreseeable future. The development of drug product candidates is highly capital intensive. As our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our clinical, regulatory and quality capabilities. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to marketing, sales, manufacturing and distribution. Furthermore, we have incurred and expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. The global credit and financial markets have experienced extreme volatility, including in liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

Previous wording

In January 2024, the Company entered into the Purchase Agreement with certain accredited investors, in which the Company sold the following securities to the accredited investors the 2024 Private Placement: (i) an aggregate of 4,985,610 shares of our common stock; (ii) to certain investors, in lieu of shares, Pre-Funded Warrants to purchase an aggregate of 306,506 shares of our common stock; (iii) Tranche A Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants); and (iv) Tranche B Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants). The purchase price per share and accompanying Common Warrants was $3.827 (or $4.3915 for directors, employees or consultants participating in the 2024 Private Placement) (or $3.8269 per Pre-Funded Warrant and accompanying Common Warrants, which represented the price of $3.827 per share and accompanying Common Warrants minus the $0.0001 per share exercise price of each such Pre-Funded Warrant).

Current wording

In January 2024, we entered into the Purchase Agreement with certain accredited investors, in which we sold the following securities to the accredited investors the 2024 Private Placement: (i) an aggregate of 4,985,610 shares of our common stock; (ii) to certain investors, in lieu of shares, Pre-Funded Warrants to purchase an aggregate of 306,506 shares of our common stock; (iii) Tranche A Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants); and (iv) Tranche B Common Warrants to purchase an aggregate of up to 2,646,058 shares of our common stock (or Pre-Funded Warrants in lieu thereof and, in such case, shares of our common stock issuable upon exercise of such Pre-Funded Warrants). The purchase price per share and accompanying Common Warrants was $3.827 (or $4.3915 for directors, employees or consultants participating in the 2024 Private Placement) (or $3.8269 per Pre-Funded Warrant and accompanying Common Warrants, which represented the price of $3.827 per share and accompanying Common Warrants minus the $0.0001 per share exercise price of each such Pre-Funded Warrant).

Previous wording

On November 1, 2024, the Company closed the 2024 Follow-On. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were $10.2 million.

Current wording

On November 1, 2024, we closed the 2024 Follow-On. The gross proceeds from the offering, before deducting underwriting discounts and commissions and offering expenses, were $10.2 million.

Previous wording

In connection with the 2024 Follow-On, on October 30, 2024, we suspended sales of common stock under the ATM Facility pursuant to the Original Prospectus Supplement, and until December 20, 2024, did not offer for sale any shares of common stock. We filed the Current Prospectus Supplement with the SEC on December 20, 2024 for an aggregate gross sales price of up to $4,450,000 of shares of common stock to be sold pursuant to the ATM Facility. As of December 31, 2024, we sold an aggregate of 101,522 shares of common stock for net proceeds of $319,000 after deducting $13,000 of commissions paid under the ATM Facility and approximately $4.5 million remains available for sale under the ATM Facility. As of December 31, 2024, $89.5 million remained available for sale under the Shelf Registration Statement.

Current wording

In connection with the 2024 Follow-On, on October 30, 2024, we suspended sales of common stock under the ATM Facility pursuant to the Original Prospectus Supplement, and until December 20, 2024, did not offer for sale any shares of common stock. We filed the 2024 Prospectus Supplement with the SEC on December 20, 2024 providing for the sale of shares of common stock under the ATM Facility having an aggregate gross sales price of up to $4.45 million of shares of common stock.

Previous wording

On February 28, 2025, the Company entered into the “Loan Agreement”) with Avenue Venture Opportunities Fund II, L.P. and Avenue Capital Management II, L.P., as administrative agent and collateral agent, for growth capital loans in an aggregate principal amount of up to $32,500,000, with (i) $10,000,000 funded on the Closing Date (“Tranche 1”), (ii) up to $7,500,000 to be made available to the Company between September 1, 2025 and March 31, 2026, subject to, among other things, the Company’s achievement of certain milestones with respect to certain of its ongoing clinical trials (“Tranche 2”) and (iii) up to $15,000,000 to be made available to the Company between October 1, 2025 and March 31, 2026, subject to, among other things, (a) the Company’s achievement of additional milestones with respect to certain of its ongoing clinical trials and (b) the mutual written agreement of the Company and the Lender (upon its investment committee approval). The Company will make interest only payments until the 18 month anniversary of the Closing Date, subject to a 6-month extension upon the Company’s achievement of certain milestones with respect to certain of its ongoing clinical trials and funding of the full amount under Tranche 2. The Loan bears interest at an annual rate equal to the greater of (a) the sum of 5.00% plus the prime rate as reported in The Wall Street Journal and (b) 12.75%. The Loan is secured by a lien upon and security interest in all of the Company’s assets, including intellectual property, subject to agreed exceptions. The maturity date of the Loan is September 1, 2028 (the “Maturity Date”).

Current wording

On February 28, 2025, we entered into the Loan Agreement with Avenue Venture Opportunities Fund II, L.P. and Avenue Capital Management II, L.P., as administrative agent and collateral agent, for growth capital loans in an aggregate principal amount of up to $32,500,000, with (i) Tranche 1 for $10,000,000 funded on the Closing Date, (ii) Tranche 2 for up to $7,500,000 to be made available to us between September 1, 2025 and March 31, 2026, subject to, among other things, our achievement of certain milestones with respect to certain of its ongoing clinical trials and (iii) Tranche 3 for up to $15,000,000 to be made available to the Company between October 1, 2025 and March 31, 2026, subject to, among other things, (a) our achievement of additional milestones with respect to certain of our ongoing clinical trials and (b) the mutual written agreement of us and the Lender (upon its investment committee approval). We will make interest only payments until the 18 month anniversary of the Closing Date, subject to a 6-month extension upon our achievement of certain milestones with respect to certain of its ongoing clinical trials and funding of the full amount under Tranche 2. The Loan bears interest at an annual rate equal to the greater of (a) the sum of 5.00% plus the prime rate as reported in The Wall Street Journal and (b) 12.75%. The Loan is secured by a lien upon and security interest in all of our assets, including intellectual property, subject to agreed exceptions. The Maturity Date of the Loan is September 1, 2028.

Previous wording

Our operations through December 31, 2024, have been funded primarily by aggregate net proceeds of $178.7 million from the issuance of convertible preferred stock, convertible notes, common stock and the Merger. Since inception, we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss for the year ended December 31, 2024 was $13.7 million and consisted of total operating expenses of $24.2 million offset by a gain from the fair value adjustment to our warrant liability of $9.5 million and interest income of $1.0 million. For the year ended December 31, 2023, our net loss was $34.4 million consisting of $38.1 million of operating expenses (including $10.5 million in one-time charges related to the acceleration of vesting of the Graybug stock awards at the date of the Merger and $5.7 million of one-time severance charges as a result of the Merger). As of December 31, 2024, we had an accumulated deficit of $159.8 million and $18.7 million in cash, cash equivalents and short-term investments. During the year ended December 31, 2024, cash used in operations was $21.1 million, primarily due to cash outlays for operations. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Current wording

Our operations through December 31, 2025, have been funded primarily by aggregate net proceeds of $193.9 million from the issuance of convertible preferred stock, convertible notes, promissory notes, common stock, and the Merger. Since inception, we have had significant operating losses, except for the three month period ending March 31, 2024. Our net loss for the year ended December 31, 2025 was $29.6 million and consisted of total operating expenses of $23.1 million, interest expense of $1.4 million and a non-cash loss from the fair value adjustment to our warrant liability and promissory note of $6.0 million offset by interest income of $0.7 million and other income of $0.3 million. For the year ended December 31, 2024 our net loss was $13.7 million consisting of $24.2 million of operating expenses offset by a non-cash gain from the fair value adjustment to our warrant liability of $9.5 million and interest income of $1.0 million. As of December 31, 2025, we had an accumulated deficit of $189.3 million and $13.0 million in cash, cash equivalents and short-term investments. During the year ended December 31, 2025, cash used in operations was $21.2 million, primarily due to cash outlays for operations. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Previous wording

Cash used in operating activities of $25.7 million during the year ended December 31, 2023 was attributable to our net loss of $34.4 million and a net change in our operating assets and liabilities of $0.3 million offset by non-cash items of $8.9 million. Non-cash items consisted primarily of $12.0 million of stock-based compensation, which includes $10.5 million in one-time charges related to the acceleration of vesting of the Graybug stock awards at the date of the Merger and $0.1 million in accrued interest on our convertible promissory notes offset by $1.1 million and $2.0 million change in the fair value of our warrant liability and convertible promissory notes, respectively based on the value the warrant holder and promissory note holder received in common stock and $0.1 million of accretion on the discounts associated with our short-term investments.

Current wording

Cash used in operating activities of $21.2 million during the year ended December 31, 2025 was attributable to our net loss of $29.6 million and by a net change in our operating assets and liabilities of $0.6 million offset by non-cash items of $9.0 million. Non-cash items consisted primarily of $3.0 million of stock-based compensation, $6.0 million due to a change in the fair value of our financial instruments and debt issuance costs of $0.3 million as a result of the debt financing in the first quarter of 2025 offset by $0.3 million due to accretion of our short term investments.

Previous wording

Cash used in operating activities of $21.1 million during the year ended December 31, 2024 was attributable to our net loss of $13.7 million, non-cash items of $7.0 million and a net change in our operating assets and liabilities of $0.5 million. Non-cash items consisted primarily of $9.5 million due to a change in our warrant liability as a result of the 2024 Private Placement and accretion on our short-term investments of $0.6 million offset by $2.3 million of stock based compensation and $0.8 million of transaction costs allocated to warrants as a result of the 2024 Private Placement.

Current wording

Cash used in operating activities of $21.1 million during the year ended December 31, 2024 was attributable to our net loss of $13.7 million, non-cash items of $7.0 million and a net change in our operating assets and liabilities of $0.5 million. Non-cash items consisted primarily of $9.5 million due to a change in our warrant liability and accretion on our short-term investments of $0.6 million, offset by $2.3 million of stock-based compensation and transaction costs of $0.8 million as result of the private placement in the first quarter of 2024.

Previous wording

Investing activities of $8.9 million for the year ended December 31, 2023 consisted of the maturing of short-term investments of $15.1 million, offset by the purchase of short-term investments of $6.1 million and purchases of property and equipment of $0.1 million.

Current wording

Investing activities of $9.6 million for the year ended December 31, 2025 consisted of the maturing of short-term investments of $25.5 million, offset by purchases of short-term investments of $15.9 million.

Previous wording

Our material cash requirements from known contractual obligations consisted primarily of our lease obligation. We lease office and laboratory space in La Jolla, California with monthly rent expense of approximately $10,000 pursuant to a 12 month lease agreement that commenced in January 2024 and was amended and renewed in December 2024 for an additional 12 month term with monthly rent expense of approximately $10,500. Over the next 12 months, the Company expects cash requirements for our lease obligation to be approximately $126,000.

Current wording

Our material cash requirements from known contractual obligations consisted primarily of our lease obligation. We leased office and laboratory space in La Jolla, California with monthly rent expense of approximately $10,500 pursuant to a 12-month lease agreement that commenced in January 2025 and was amended and renewed in December 2025 for an additional month-to-month term through March 1, 2026, with an option that was extended for another 12 month term through February 28, 2027. The Company will also be relocating to smaller premises of approximately 691 square feet with a new monthly rent amount of $4,375. Monthly rent expense of approximately $13,300 will be due for each of the first two months of 2026. Over the next 12 months, the Company expects cash requirements for our lease obligation to be approximately $70,000 in the existing office space and after executing the option to relocate to smaller premises.

Previous wording

Emerging Growth Company and Smaller Reporting Company Status

Current wording

Smaller Reporting Company Status

Previous wording

We are also a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, because both the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of June 30th. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Current wording

We are a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), because both the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of June 30th. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.