AN2 Therapeutics, Inc.

Previous 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.

Current wording

The following discussion and analysis of our financial condition as of June 30, 2026 and results of operations for the three and six months ended June 30, 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

In March 2026, we announced our plan to expand the development of oral epetraborole into a Phase 2 proof-of-concept clinical study in adults with phlebotomy-dependent polycythemia vera (“PV”). PV is a blood cancer characterized by overproduction of red blood cells in the bone marrow. This overproduction increases hematocrit, which can lead to serious medical complications including arterial and venous thromboembolic events. If untreated, PV can be life-threatening. Despite available therapies, such as burdensome periodic therapeutic phlebotomies, many patients experience uncontrolled hematocrit levels and persistent symptoms, requiring long-term management to maintain adequate disease control. PV is estimated to affect approximately 155,000 people in the U.S.

Current wording

In March 2026, we announced our plan to expand the development of oral epetraborole into a Phase 2 proof-of-concept clinical study in adults with phlebotomy-dependent polycythemia vera (“PV”). PV is a slowly progressing blood cancer characterized by overproduction of red blood cells in the bone marrow. This overproduction increases hematocrit, which can lead to serious medical complications including arterial and venous thromboembolic events. If untreated, PV can be life-threatening. Despite available therapies, such as burdensome periodic therapeutic phlebotomies, many patients experience uncontrolled hematocrit levels and persistent symptoms, requiring long-term management to maintain adequate disease control. PV is estimated to affect approximately 155,000 people in the U.S.

Previous 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.

Current wording

Building on the microbiological and safety data from our prior non-tuberculous mycobacterial (“NTM”) study in treatment-refractory MAC, 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 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 whom 10–15% are caused by M. abscessus.

Previous wording

The Company is supporting an investigator-initiated trial (“IIT”) and anticipates that data from this study, if positive, could provide clinical proof-of-concept in M. abscessus lung disease and thereby inform the design of a subsequent pivotal trial. Patient screening commenced in March 2026. The multicenter, randomized, double-blind, placebo-controlled, prospective clinical study is being led by Dr. Kevin Winthrop, Professor of Public Health and Infectious Diseases at the Oregon Health and Sciences University, in conjunction with other investigators across an estimated 10-15 sites in the U.S. We anticipate reporting topline results in late 2027, subject to regulatory clearance and enrollment progress.

Current wording

The Company is supporting an investigator-initiated trial (“IIT”) and anticipates that data from this study, if positive, could provide clinical proof-of-concept in M. abscessus lung disease and thereby inform the design of a subsequent pivotal trial. Patient enrollment is ongoing. The 84-patient multicenter, randomized, double-blind, placebo-controlled, prospective clinical study is being led by Dr. Kevin Winthrop, Professor of Public Health and Infectious Diseases at the Oregon Health and Science University, in conjunction with other investigators across an estimated 10-15 sites in the U.S. We anticipate reporting topline results in late 2027, subject to enrollment progress.

Previous 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.

Current wording

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. We believe that efficacy in naturally infected NHP’s is the most clinically relevant predictor of efficacy for human chronic Chagas disease.

Previous wording

Our research and development initiatives - Oncology

Current wording

Our boron chemistry research and development initiatives

Previous 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.

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 that demonstrate sub-nanomolar activity, high selectivity and excellent oral pharmacokinetic properties. Earlier this year, the Company declared a development candidate (ENPP1) for the treatment of solid tumors and expects to advance a second development candidate by the end of 2026.

Previous 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.

Current wording

We do not have any products approved for sale and have not generated any revenue since inception. Our net losses were $18.2 million and $17.1 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $259.2 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 programs (“ATM Offerings”), 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 Offerings 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 $37.2 million, after deducting placement agent fees and other offering expenses. In the six months ended June 30, 2026, we raised net proceeds of $1.4 million from the ATM Offerings, after deducting commissions and offering expenses.

Previous 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.

Current wording

As of June 30, 2026, we had cash, cash equivalents, and investments of $79.9 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 $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.

Current wording

Research and development expenses were $6.0 million for the three months ended June 30, 2026 compared to $3.2 million for the three months ended June 30, 2025. The increase of $2.8 million was primarily due to increases in chemistry manufacturing and controls (“CMC”) expenses, other miscellaneous expenses, consulting and outside services, preclinical and research study expenses and clinical trial expenses, partially offset by a decrease in personnel-related expenses. In 2025, we completed manufacturing of the melioidosis drug product and due to the timing of when receipt of research contract offsets became reasonably assured, increases are seen in CMC expenses, other miscellaneous expenses, and consulting and outside services when comparing the second quarter of 2026 to the same period in 2025. CMC expenses increased by $1.5 million due to melioidosis program expense offsets, partially offset by decreased CMC activity related to our Chagas program. Other miscellaneous expenses increased by $0.6 million due an increase related to melioidosis program overhead offsets. Consulting and outside services increased by $0.6 million due to an increase in melioidosis program expense offsets and the prioritization of earlier stage research and clinical programs. Preclinical and research study expenses increased by $0.5 million due to increased activity in earlier stage research and preclinical programs. Clinical trial expenses increased by $0.3 million primarily due to increased activity in our trials in Chagas disease, M. abscessus and PV, partially offset by decreased expenses due to the termination of the EBO-301 trial. Personnel-related expenses decreased by $0.7 million primarily due to decreased stock-based compensation expense. During the three months ended June 30, 2026 and 2025, reimbursement of $0.4 million and $3.7 million, respectively, of operating expenses was recognized related to our funding arrangements.

Previous 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.

Current wording

General and administrative expenses were $2.9 million for the three months ended June 30, 2026 and $4.0 million for the three months ended June 30, 2025. The decrease of $1.1 million is primarily due to a $0.6 million decrease in professional and outside services expenses and a $0.5 million decrease in personnel-related expenses due to a decrease in stock-based compensation.

Previous 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.

Current wording

Interest income was $1.2 million for the six months ended June 30, 2026 compared to $1.6 million for the six months ended June 30, 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 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.

Current wording

We have incurred net losses since our inception. For the six months ended June 30, 2026 and 2025, we had net losses of $18.2 million and $17.1 million, respectively, and we expect to incur substantial additional losses in future periods. As of June 30, 2026, we had an accumulated deficit of $259.2 million. As of June 30, 2026, we had cash, cash equivalents, short-term and long-term investments of $79.9 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 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.

Current wording

To date, we have funded our operations primarily through our 2026 Private Placement, Underwritten Offering, ATM Offerings, IPO and issuances of our then existing redeemable convertible preferred stock. In the six months ended June 30, 2026, we issued and sold 286,498 shares of common stock under the ATM Offerings, resulting in net proceeds of $1.4 million, after deducting commissions and offering expenses. In March 2026, we generated approximately $37.2 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 Offerings, 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

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.

Current wording

Net cash used in operating activities was $19.1 million for the six months ended June 30, 2026, which consisted of a net loss of $18.2 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $3.1 million in our net operating assets and liabilities, partially offset by $2.2 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease of $3.6 million in accrued liabilities, accounts payable, accrued compensation, and other current liabilities, partially offset by a decrease of $0.5 million in prepaid expenses and other assets. The non-cash charges consisted of stock-based compensation expense of $2.4 million, partially offset by net accretion of discounts on investments of $0.2 million.

Previous 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.

Current wording

Net cash used in operating activities was $18.2 million for the six months ended June 30, 2025, which consisted of a net loss of $17.1 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $4.4 million in our net operating assets and liabilities, partially offset by $3.3 million in non-cash charges. The net decrease in our operating assets and liabilities was primarily due to a decrease of $3.2 million in accrued liabilities, accounts payable, accrued compensation, and other current liabilities and an increase of $1.2 million in prepaid expenses and other assets. The non-cash charges consisted of stock-based compensation expense of $4.0 million, partially offset by net accretion of discounts on investments of $0.7 million.

Previous 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.

Current wording

Net cash provided by investing activities was $4.6 million for the six months ended June 30, 2026, which primarily consisted of $21.0 million in proceeds from the maturity of investments, partially offset by $16.4 million in purchases of investments.

Previous 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.

Current wording

Net cash provided by investing activities was $15.0 million for the six months ended June 30, 2025, which primarily consisted of $49.0 million in proceeds from the maturity of investments, partially offset by $34.0 million in purchases of investments.

Previous 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.

Current wording

Net cash provided by financing activities was $38.8 million for the six months ended June 30, 2026, which consisted of $37.5 million in net proceeds from the issuance of common stock and pre-funded warrants from the 2026 Private Placement, $1.4 million in net proceeds from the issuance of common stock from the ATM Offerings, $0.08 million from the exercise of stock options, and $0.04 million in proceeds from the issuance of common stock under the employee stock purchase plan. These increases were partially offset by $0.2 million in payment of deferred offering costs related to the ATM Offerings.

Previous 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.

Current wording

Net cash provided by financing activities was $0.1 million for the six months ended June 30, 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

See the section “Recently Adopted Accounting Pronouncements” in “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” to the Notes to Financial Statements in Part I, Item 1 of this Quarterly Report on 10-Q.

Current wording

See the section “Recently Adopted Accounting Pronouncements” in “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” to the Notes to Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10‑Q.

Previous wording

We will remain an EGC until the earliest to occur of: (1) the last day of our first fiscal year in which we have total annual revenues of more than $1.235 billion; (2) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three- year period; and (4) the last day of the fiscal year ending after the fifth anniversary of our IPO.

Current wording

We will remain an EGC until the earliest to occur of: (1) the last day of our first fiscal year in which we have total annual revenues of more than $1.235 billion; (2) the date we qualify as a “large accelerated filer,” with at least $700.0 million of equity securities held by non-affiliates; (3) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three- year period; and (4) December 31, 2027.