AN2 Therapeutics, Inc.

Previous wording

The following discussion and analysis of our financial condition as of September 30, 2025 and results of operations for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and our audited financial statements and the related notes thereto included as a part of our Annual Report on Form 10-K for the year ended December 31, 2024. Except as otherwise indicated herein or as the context otherwise requires, references in this Form 10-Q to “AN2” “the Company,” “we,” “us” and “our” refer to AN2 Therapeutics, Inc.

Current wording

The following discussion and analysis of our financial condition as of March 31, 2026 and results of operations for the three months ended March 31, 2026 and 2025 should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”) and our audited financial statements and the related notes thereto included as a part of our Annual Report on Form 10-K for the year ended December 31, 2025. Except as otherwise indicated herein or as the context otherwise requires, references in this Form 10-Q to “AN2” “the Company,” “we,” “us” and “our” refer to AN2 Therapeutics, Inc.

Previous wording

We are a biopharmaceutical company focused on discovering and developing novel small molecule therapeutics derived from our boron chemistry platform. AN2 has a pipeline of boron-based compounds in development for Chagas disease, non-tuberculous mycobacterial (“NTM”) lung disease caused by M. abscessus, and melioidosis, along with programs focused on targets in oncology and other infectious diseases. We are committed to delivering high-impact drugs to patients that address critical medical needs and improve health outcomes.

Current wording

We are a clinical-stage biopharmaceutical company focused on the discovery and development of novel small molecule therapeutics derived from our boron chemistry platform. Our development pipeline spans hematologic diseases, infectious diseases, and oncology with three Phase 2 studies expected to be active in 2026 and two preclinical candidates, as well as advanced research programs focused on targets in oncology, bone disorders, and infectious diseases. We are committed to delivering high-impact drugs to patients that address critical medical needs and improve health outcomes.

Previous wording

Building on the microbiological and safety data from our prior NTM study, we believe that epetraborole has the potential to address a critical unmet need in M. abscessus lung disease, one of the most difficult to treat NTM infections for which no FDA-approved therapies exist. The Company is supporting the design of an investigator-initiated trial (IIT) expected to begin enrollment in early 2026, pending finalization of the trial protocol and regulatory allowance to proceed. The Company anticipates that data from this potential study, if positive, could provide the clinical evidence of human proof of concept in M. abscessusand inform the design of a subsequent pivotal trial. NTM lung disease represents a growing global health concern. It is estimated that approximately 120,000–150,000 people in the U.S. are living with NTM lung disease, of which 10–15% are caused by M. abscessus.

Current wording

Building on the microbiological and safety data from our prior non-tuberculous mycobacterial (“NTM”) study, we believe that epetraborole has the potential to address a critical unmet need in M. abscessus lung disease, one of the most difficult-to-treat NTM infections for which no FDA-approved therapy exists. M. abscessus lung disease is a serious NTM infection requiring prolonged therapy, initially often with IV-only antibiotics. People affected by this illness face limited, burdensome treatment options and high rates of morbidity and an estimated 5-year mortality. NTM lung disease represents a growing global health concern. It is estimated that approximately 120,000–150,000 people in the U.S. are living with NTM lung disease, of which 10–15% are caused by M. abscessus.

Previous wording

In May 2025, we reported the initiation of Phase 1 start up activities with AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease and in August 2025, we completed dosing the first Single Ascending Dose cohort in the trial. The Phase 1 study is evaluating the safety, tolerability, and pharmacokinetics of oral AN2-502998 for chronic Chagas disease, in healthy volunteers. In October 2023, we announced an exclusive license agreement with the University of Georgia Research Foundation to advance the development of AN2-502998, originally discovered by researchers at Anacor, in close collaboration with the University of Georgia. AN2-502998 is the only compound of which we are aware to have demonstrated curative activity in preclinical studies across multiple species, including in non human primates with long-term, naturally acquired chronic infections of diverse T. cruzi genetic types. We anticipate Phase 1 data in the first quarter of 2026 and initiation of a Phase 2 proof-of-concept study in patients with chronic Chagas disease in 2026, depending on the outcome and timing of completion of the Phase 1 study. In July 2025, we announced a collaboration with the non-profit medical research organization Drugs for Neglected Diseases initiative (“DNDi”) to advance clinical development of AN2-502998. Through the collaboration, AN2 will leverage DNDi's extensive clinical trial network and expertise in Chagas disease to rapidly advance the clinical development of AN2-502998. There are no FDA approved treatments for adults with chronic Chagas disease.

Current wording

In March 2026, we completed dosing all cohorts in our Phase 1 first-in-human trial of oral AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease, or American trypanosomia. In the second quarter of 2026, we anticipate reporting Phase 1 data from this study, as well as results from a non-human primate (“NHP”) study that tested the curative potential of AN2-502998 with a 28-day dosing duration. In October 2023, we announced an exclusive license agreement with the University of Georgia Research Foundation to advance the development of AN2-502998, originally discovered by researchers at Anacor, in close collaboration with the University of Georgia. Upon achievement of certain development and sales milestones, we are required to make payments of up to approximately $0.9 million and a low single digit royalty. AN2-502998 is the only compound of which we are aware to have demonstrated curative activity in preclinical studies across multiple species, including in NHPs with long-term, naturally acquired chronic infections caused by diverse T. cruzi genetic types. Because NHP infections are naturally acquired in the environment, these efficacy data may be more predictive of efficacy in human clinical trials than other animal models. We expect to initiate a Phase 2 proof-of-concept study in adults with chronic Chagas disease later in 2026, pending results of the Phase 1 study.

Previous wording

We are pursuing a number of oncology targets where we believe boron chemistry offers a competitive advantage in terms of binding-site differentiation, pharmacodynamics, drug-like properties and IP, including initially ENPP1 and PI3Kα. The unique binding modes of boron-containing compounds enable the discovery of inhibitors with high ligand efficiency against targets considered undruggable or difficult to access with traditional chemistry approaches. Boron chemistry has produced first-in-class molecules against a number of targets including CPSF3 (AN2-502998 and acoziborole) and LeuRS (epetraborole, ganfeborole and tavaborole). The Company has discovered preclinical compounds with profiles that are sub-nanomolar, highly selective and have excellent oral pharmacokinetics. We anticipate advancing the first oncology compound into development in early 2026 with potential clinical proof-of-concept data within the Company’s current cash runway. We expect to advance our second oncology compound into development in mid-2026.

Current wording

We are prioritizing targets in oncology and bone disorders where we believe boron chemistry may offer a competitive advantage in terms of binding-site differentiation, pharmacodynamics, drug-like properties and IP, including initially ENPP1 and PI3Kα. The unique binding modes of boron-containing compounds enable the discovery of inhibitors with high ligand efficiency against targets considered undruggable or difficult to access with traditional chemistry approaches. Boron chemistry has produced first-in-class molecules against a number of targets including CPSF3 (AN2-502998 and acoziborole) and LeuRS (epetraborole, ganfeborole and tavaborole). The Company has discovered preclinical compounds with profiles that are sub-nanomolar, highly selective and characterized by excellent oral pharmacokinetics. We have declared an ENPP1 candidate for the treatment of solid tumors marking an important step in transitioning the program from early research into development.

Previous wording

We are also studying epetraborole for the treatment of acute melioidosis, a highly lethal bacterial infection and recognized biothreat. We completed enrollment in a 200-patient observational trial (non-epetraborole treatment) in October 2024 and in June 2025 announced key insights from the trial, which reinforce the high mortality of the disease, despite standard of care (SOC). This study provided critical data which will allow the Company to optimize the design of upcoming clinical studies. Discussions are underway with the U.S. government to fund Phase 2 development of epetraborole in acute melioidosis. Melioidosis has a 90-day mortality rate approaching 40%, despite SOC drugs, including ceftazidime or meropenem. The aim of the program is to meaningfully lower the expected mortality rate by dosing epetraborole on top of SOC. If approved for the treatment of melioidosis, we plan to seek a priority review voucher and could generate revenue from U.S. and other governmental stockpiling, as well as from the use of treatment in disease-endemic countries, including the U.S.

Current wording

We are also studying epetraborole for the treatment of acute melioidosis, a highly lethal bacterial infection and recognized biothreat. We completed enrollment in a 200-patient observational trial (non-epetraborole treatment) in October 2024 and in June 2025 announced key insights from the trial, which reinforce the high mortality of the disease, despite standard of care (“SOC”). This study provided critical data which will allow the Company to optimize the design of upcoming clinical studies. Discussions are underway with the U.S. government to fund Phase 2 development of epetraborole in acute melioidosis. Melioidosis has a 90-day mortality rate approaching 40%, despite SOC drugs, including ceftazidime or meropenem. The aim of the program is to meaningfully lower the expected mortality rate by dosing epetraborole on top of SOC. If approved for the treatment of melioidosis, we plan to seek a priority review voucher and could generate revenue from U.S. and other governmental stockpiling, as well as from the use of treatment in disease-endemic countries.

Previous wording

We do not have any products approved for sale and have not generated any revenue since inception. Our net losses were $26.5 million and $43.8 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, we had an accumulated deficit of $232.2 million. We have funded our operations from the sale and issuance of redeemable convertible preferred stock and proceeds from our initial public offering (“IPO”), “at-the-market” equity offering program (“ATM Offering”) and an underwritten offering (the “Underwritten Offering”). From November 2019 through October 2020, we raised an aggregate of $12.0 million from the sale of Series A redeemable convertible preferred stock. In March 2021, we raised an aggregate of $80.0 million from the sale of Series B redeemable convertible preferred stock. In March and April 2022, we completed our IPO, with gross proceeds of $79.4 million and net proceeds of $70.4 million, net of underwriting discounts, commissions and offering expenses. In June 2023, we raised gross proceeds of $20.0 million from the ATM Offering and net proceeds of $19.1 million, after deducting commissions and offering expenses. In August 2023, we raised gross proceeds of $70.0 million from the Underwritten Offering and net proceeds of $65.5 million, after deducting commissions and offering expenses.

Current wording

We do not have any products approved for sale and have not generated any revenue since inception. Our net losses were $10.0 million and $10.6 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $251.0 million. We have funded our operations from the sale and issuance of redeemable convertible preferred stock and proceeds from our initial public offering (“IPO”), “at-the-market” equity offering program (“ATM Offering”), an underwritten offering (the “Underwritten Offering”), and the 2026 Private Placement (the “2026 Private Placement”). From November 2019 through October 2020, we raised an aggregate of $12.0 million from the sale of Series A redeemable convertible preferred stock. In March 2021, we raised an aggregate of $80.0 million from the sale of Series B redeemable convertible preferred stock. In March and April 2022, we completed our IPO, with gross proceeds of $79.4 million and net proceeds of $70.4 million, net of underwriting discounts, commissions and offering expenses. In June 2023, we raised gross proceeds of $20.0 million from the ATM Offering and net proceeds of $19.1 million, after deducting commissions and offering expenses. In August 2023, we raised gross proceeds of $70.0 million from the Underwritten Offering and net proceeds of $65.5 million, after deducting commissions and offering expenses. In March 2026, we raised gross proceeds of $40.0 million from the 2026 Private Placement and net proceeds of $37.3 million, after deducting placement agent fees and other offering expenses.

Previous wording

As of September 30, 2025, we had cash, cash equivalents, and investments of $65.1 million. We believe that our available cash will be sufficient to fund our planned operations under our current operating plan through at least twelve months following the date of this Form 10-Q.

Current wording

As of March 31, 2026, we had cash, cash equivalents, and investments of $85.3 million. We believe that our available cash will be sufficient to fund our planned operations under our current operating plan through at least twelve months following the date of this Form 10-Q.

Previous wording

Research and development expenses were $17.9 million for the nine months ended September 30, 2025 compared to $35.1 million for the nine months ended September 30, 2024. The decrease of $17.2 million was primarily due to decreases in clinical trials expenses, personnel-related expenses, consulting and outside services expenses, chemistry manufacturing and controls ("CMC") expenses and facilities and miscellaneous expenses, partially offset by increased preclinical and research study expenses. Clinical trial expenses decreased by $11.3 million primarily due to the termination of the EBO-301 trial in August 2024 and partially offset by the initiation of start-up activities of the Phase 1 trial in Chagas disease. Personnel-related expenses decreased by $5.2 million primarily due to our restructuring activities in 2024. Consulting and outside services expenses decreased by $2.4 million primarily due to reduced activities relating to the clinical development of epetraborole in treatment-refractory NTM, completion of the melioidosis observational study, and the timing of when receipt of research contract offsets became reasonably assured. CMC expenses decreased by $1.8 million due to decreases in epetraborole development in treatment-refractory NTM and the timing of non-dilutive contract offsets, partially offset by increased CMC activities for our Chagas program. Allocated facilities and miscellaneous expenses decreased by $0.5 million primarily due to recognition of our qualified small business payroll tax credit and lower costs as a result of our restructuring activities, partially offset by an increase in license fees. These decreases were partially offset by increased preclinical and research study expenses of $4.0 million resulting from the prioritization of certain research programs. During the nine months ended September 30, 2025 and 2024, reimbursement of $4.5 million and $2.0 million, respectively, of operating expenses was recognized related to our funding arrangements.

Current wording

Research and development expenses were $6.7 million for the three months ended March 31, 2026 compared to $7.7 million for the three months ended March 31, 2025. The decrease of $1.0 million was primarily due to decreases in chemistry manufacturing and controls (“CMC”) expenses and license fees, partially offset by increases in personnel-related expenses, clinical trial expenses, facilities and miscellaneous expenses, and consulting and outside services. CMC expenses decreased by $1.5 million due to decreased CMC activity in our melioidosis and Chagas programs. License fees decreased $0.2 million. Personnel-related expenses increased by $0.2 million primarily due to compensation-related payments offset by decreased stock-based compensation expense. Clinical trial expenses increased by $0.2 million primarily due to initiation of our Phase 1 trial in Chagas disease and our M. abscessus Phase 2 clinical trial, partially offset by decreased expenses due to the termination of the EBO-301 trial. Allocated facilities and miscellaneous expenses increased by $0.2 million primarily due to the recognition of our qualified small business payroll tax credit in 2025. Consulting and outside services increased by $0.1 million. During the three months ended March 31, 2026 and 2025, reimbursement of $0.7 million and $0.4 million, respectively, of operating expenses was recognized related to our funding arrangements.

Previous wording

General and administrative expenses were $3.0 million for the three months ended September 30, 2025 compared to $3.5 million for the three months ended September 30, 2024. The decrease of $0.5 million was primarily attributable to a $0.2 million decrease in personnel-related expenses, $0.2 million decrease in professional and outside services expenses, and $0.1 million decrease in allocated facilities and miscellaneous expenses.

Current wording

General and administrative expenses were $3.8 million for the three months ended March 31, 2026 and March 31, 2025. For the three months ended March 31, 2026, personnel-related expenses decreased by $0.3 million, offset by a $0.2 million increase in professional and outside services expenses and a $0.1 million increase in allocated facilities and miscellaneous expenses.

Previous wording

Interest income was $0.7 million for the three months ended September 30, 2025 compared to $1.3 million for the three months ended September 30, 2024. The decrease of $0.6 million was due to lower cash, cash equivalents, and investment balances and lower interest rates in 2025 as compared to 2024.

Current wording

Interest income was $0.5 million for the three months ended March 31, 2026 compared to $0.9 million for the three months ended March 31, 2025. The decrease of $0.4 million was due to lower average cash, cash equivalents, and investment balances and lower interest rates in 2026 as compared to 2025.

Previous wording

We have incurred net losses since our inception. For the nine months ended September 30, 2025 and 2024, we had net losses of $26.5 million and $43.8 million, respectively, and we expect to incur substantial additional losses in future periods. As of September 30, 2025, we had an accumulated deficit of $232.2 million. As of September 30, 2025, we had cash, cash equivalents, short-term and long-term investments of $65.1 million. Based on our current plan, we believe that our available cash will be sufficient to fund our operations for at least 12 months following the date of this Form 10-Q.

Current wording

We have incurred net losses since our inception. For the three months ended March 31, 2026 and 2025, we had net losses of $10.0 million and $10.6 million, respectively, and we expect to incur substantial additional losses in future periods. As of March 31, 2026, we had an accumulated deficit of $251.0 million. As of March 31, 2026, we had cash, cash equivalents, short-term and long-term investments of $85.3 million. Based on our current plan, we believe that our available cash will be sufficient to fund our operations for at least 12 months following the date of this Form 10-Q.

Previous wording

To date, we have funded our operations primarily through our Underwritten Offering, ATM Offering, IPO and private placements of our then existing redeemable convertible preferred stock. In August 2023, we generated approximately $65.5 million from the Underwritten Offering, after deducting commissions and offering expenses. In June 2023, we generated approximately $19.1 million in net proceeds from the ATM Offering, after deducting commissions and offering expenses. In March and April 2022, we generated aggregate net proceeds of approximately $70.4 million from our IPO, after deducting underwriting discounts and commissions and offering expenses. Prior to our IPO, we raised $91.6 million from the issuance of our redeemable convertible preferred stock. Upon the closing of our IPO, all outstanding shares of our then existing redeemable convertible preferred stock were converted into shares of our common stock.

Current wording

To date, we have funded our operations primarily through our 2026 Private Placement, Underwritten Offering, ATM Offering, IPO and issuances of our then existing redeemable convertible preferred stock. In March 2026, we generated approximately $37.3 million from the 2026 Private Placement, after deducting placement agent fees and other offering expenses. In August 2023, we generated approximately $65.5 million from the Underwritten Offering, after deducting commissions and offering expenses. In June 2023, we generated approximately $19.1 million in net proceeds from the ATM Offering, after deducting commissions and offering expenses. In March and April 2022, we generated aggregate net proceeds of approximately $70.4 million from our IPO, after deducting underwriting discounts and commissions and offering expenses. Prior to our IPO, we raised $91.6 million from the issuance of our redeemable convertible preferred stock. Upon the closing of our IPO, all outstanding shares of our then existing redeemable convertible preferred stock were converted into shares of our common stock.

Previous wording

the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates;

Current wording

the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates, including in countries outside the U.S.;

Previous wording

Net cash used in operating activities was $24.6 million for the nine months ended September 30, 2025, which consisted of a net loss of $26.5 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $2.0 million in our net operating assets and liabilities, partially offset by $3.9 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease of $3.4 million in accrued liabilities, accounts payable, accrued compensation, and other current liabilities and an increase of $1.4 million in prepaid expenses and other assets. The non-cash charges consisted of stock-based compensation expense of $4.8 million, partially offset by net accretion of discounts on investments of $0.9 million.

Current wording

Net cash used in operating activities was $12.1 million for the three months ended March 31, 2026, which consisted of a net loss of $10.0 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $3.4 million in our net operating assets and liabilities, partially offset by $1.4 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease of $3.1 million in accrued liabilities, accounts payable, accrued compensation, and other current liabilities and an increase of $0.3 million in prepaid expenses and other assets. The non-cash charges consisted of stock-based compensation expense of $1.5 million, partially offset by net accretion of discounts on investments of $0.1 million.

Previous wording

Net cash used in operating activities was $44.0 million for the nine months ended September 30, 2024, which consisted of a net loss of $43.8 million, primarily due to the use of funds to develop our initial drug product candidate, and a net decrease of $4.0 million in our net operating assets and liabilities, partially offset by $3.8 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease in accrued liabilities, accrued compensation, and accounts payable, and an increase in other current liabilities. The non-cash charges consisted of stock-based compensation expense of $6.5 million, partially offset by net accretion of discounts on investments of $2.7 million.

Current wording

Net cash used in operating activities was $10.6 million for the three months ended March 31, 2025, which consisted of a net loss of $10.6 million, primarily due to the use of funds to develop our initial drug product candidate, and a net decrease of $1.6 million in our net operating assets and liabilities, offset by $1.6 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease of $2.2 million in accrued liabilities, accrued compensation, accounts payable, and other current liabilities partially offset by a decrease of $0.6 million in prepaid expenses and other assets. The non-cash charges consisted of stock-based compensation expense of $2.0 million, partially offset by net accretion of discounts on investments of $0.4 million.

Previous wording

Net cash provided by investing activities was $21.1 million for the nine months ended September 30, 2025, which primarily consisted of $59.0 million in proceeds from the maturity of investments, partially offset by $37.9 million in purchases of investments.

Current wording

Net cash provided by investing activities was $8.3 million for the three months ended March 31, 2026, which primarily consisted of $11.0 million in proceeds from the maturity of investments, partially offset by $2.7 million in purchases of investments.

Previous wording

Net cash provided by investing activities was $61.5 million for the nine months ended September 30, 2024, which primarily consisted of $83.8 million in proceeds from the maturity of investments, partially offset by $22.3 million in purchases of investments.

Current wording

Net cash provided by investing activities was $9.2 million for the three months ended March 31, 2025, which primarily consisted of $31.5 million in proceeds from the maturity of investments, partially offset by $22.3 million in purchases of investments.

Previous wording

Net cash provided by financing activities was $0.4 million for the nine months ended September 30, 2024, which consisted of $0.2 million in proceeds from the issuance of common stock under the employee stock purchase plan and $0.2 million from the exercise of stock options.

Current wording

Net cash provided by financing activities was $37.3 million for the three months ended March 31, 2026, which consisted of $37.3 million in proceeds from the issuance of common stock and pre-funded warrants from the 2026 Private Placement, $0.04 million in proceeds from the issuance of common stock under the employee stock purchase plan and $0.02 million from the exercise of stock options.

Previous wording

Net cash provided by financing activities was $0.1 million for the nine months ended September 30, 2025, which consisted of $0.08 million in proceeds from the issuance of common stock under the employee stock purchase plan and $0.02 million from the exercise of stock options.

Current wording

Net cash provided by financing activities was $0.1 million for the three months ended March 31, 2025, which consisted of $0.05 million in proceeds from the issuance of common stock under the employee stock purchase plan and $0.05 million from the exercise of stock options.

Previous wording

Critical Accounting Policies, Significant Judgements, and Use of Estimates

Current wording

Critical Accounting Policies, Significant Judgments, and Use of Estimates