Savara Inc

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Nature of Operations

Description of Business

Savara Inc. (together with its subsidiaries “Savara,” the “Company,” “we” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases. The Company’s sole program, molgramostim inhalation solution ("MOLBREEVI[1]" or "molgramostim"), is an investigational inhaled biologic, specifically an inhaled granulocyte-macrophage colony-stimulating factor ("GM-CSF") in Phase 3 development for autoimmune pulmonary alveolar proteinosis (“autoimmune PAP”). The Company and its wholly-owned domestic and foreign subsidiaries operate inone segment with its principal office in Yardley, Pennsylvania, though a significant portion of employees work remotely.

Since inception, Savara has devoted its efforts and resources to identifying and developing its product candidates, recruiting personnel, and raising capital. Savara has incurred operating losses and negative cash flow from operations and hasno product revenue from inception to date. The Company has not yet commenced commercial operations.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) as defined by the Financial Accounting Standards Board (“FASB”). The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments that are necessary to fairly present the statements of financial position, operations and cash flows for the periods presented. The results of operations for interim periods shown in this report are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other future annual or interim period.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted from these condensed consolidated financial statements, as permitted by rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The Company believes the disclosures made in these condensed consolidated financial statements are adequate to make the information herein not misleading. The Company recommends that these condensed consolidated financial statements be read in conjunction with its audited consolidated financial statements and related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025. The Company’s significant accounting policies are described in Note 2 to the audited consolidated financial statements. There have been no changes to the Company's significant accounting policies since the date of those financial statements.

Principles of Consolidation

The interim condensed consolidated financial statements of the Company are stated in U.S. dollars and are prepared under U.S. GAAP. These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. The financial statements of the Company’s wholly-owned subsidiaries are recorded in their functional currency and translated into the reporting currency. The cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is reported in Accumulated other comprehensive lossin the condensed consolidated balance sheet. All intercompany transactions and accounts have been eliminated in consolidation. The condensed consolidated balance sheet at December 31, 2025 has been derived from the Company's audited consolidated financial statements at that date but does not include all of the information and notes required by U.S. GAAP for complete financial statements.

Liquidity

As of June 30, 2026, the Company had an accumulated deficit of approximately$685.6 million, cash and cash equivalents of$41.8 million and short-term investments of$131.2 million. The Company used cash in operating activities of approximately$62.8 million during the six months ended June 30, 2026. The cost to further develop and obtain regulatory approval for any drug is substantial and, as noted below, the Company may have to take certain steps to maintain a positive cash position. Although the Company has sufficient capital to fund many of its planned activities, it may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, its product candidate and begin to commercialize any approved product.

[1] MOLBREEVI is the proposed trade name for molgramostim inhalation solution. It is not approved in any indication. MOLBREEVI is a trademark of Savara Inc.

The Company is currently focused on the development and regulatory approval of MOLBREEVI for the treatment of autoimmune PAP and believes such activities will result in the continued incurrence of significant research and development, regulatory, commercial and other expenses related to this program. If the Company’s product candidate does not gain regulatory approval or, if approved, fails to achieve market acceptance, the Company may never become profitable. Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. The Company intends to cover its future operating expenses through cash and cash equivalents on hand, short-term investments, and through a combination of equity offerings, debt financings, royalty agreements, government or other third-party funding, and other collaborations and strategic alliances with partner companies. The Company cannot be sure that additional financings will be available when needed or that, if available, financings will be obtained on terms favorable to the Company or its stockholders. If such additional financings are not available timely and at adequate levels, the Company will need to reevaluate its long-term operating plans. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

In order to mitigate risks associated with our banking deposits, the Company maintains a significant portion of its liquidity in US Treasuries and Government money market funds and other short-term investments with custodial services provided by U.S. Bank, N.A., and FNZ, refer to Note 5. Short-term Investments and Note 7. Fair Value Measurements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management’s estimates include those related to the accrual of research and development and general and administrative costs, certain financial instruments recorded at fair value, stock-based compensation, and the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience and on various other market-specific and relevant assumptions that it believes to be reasonable under the circumstances. Accordingly, actual results could be materially different from those estimates.

Risks and Uncertainties

The product candidate being developed by the Company requires approval from the U.S. Food and Drug Administration (“FDA”) or foreign regulatory agencies prior to commercial sales. There can be no assurance that the Company’s product candidate will receive the necessary approvals. If the Company is denied regulatory approval of its product candidate, or if approval is delayed, it will have a material adverse impact on the Company’s business, results of operations, and its financial position.

The Company is subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the successful discovery and development of drug candidates, raising additional capital, development of competing drugs and therapies, protection of proprietary technology, regulatory approval of drug candidates, and market acceptance of the Company’s product. As a result of these and other factors and the related uncertainties, there can be no assurance of the Company’s future success.

Concentration of Credit Risk

We are subject to credit risk from our portfolio of cash equivalents and marketable securities. These investments were made in accordance with our investment policy which specifies the categories, allocations, and ratings of securities we may consider for investment. The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receive without significantly increasing risk. We maintain our cash and cash equivalents and marketable securities with a limited number of financial institutions. Deposits held with the financial institutions exceed the amount of insurance provided on such deposits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities to the extent recorded on the consolidated balance sheets.

Recent Accounting Pronouncements

There are no recent accounting pronouncements issued by the FASB, the American Institute of Certified Public Accountants, or the SEC which have not been previously identified that the Company believes will have a material effect, if any, on the Company’s condensed consolidated financial statements.

3. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

Prepaid Contracted Research and Development Costs

As of June 30, 2026, Prepaid contracted research and development costs are primarily comprised of contractual prepayments associated with the Company's clinical trial for MOLBREEVI for the treatment of autoimmune PAP. This includes prepaid amounts paid under agreements with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), and other outside service providers that provide services in connection with the Company's research and development activities.

R&D Tax Credit Receivable

The Company has recorded a Danish tax credit earned by its subsidiary, Savara ApS, as of June 30, 2026. Under Danish tax law, Denmark remits a research and development tax credit equal to 22% of qualified research and development expenditures, not to exceed established thresholds. During the year ended December 31, 2025, the Company generated a Danish tax credit of$0.9 million, which is included in Prepaid expenses and other current assets and is expected to be received in the fourth quarter of 2026. During the six months ended June 30, 2026, the Company generated a Danish tax credit of$0.8 million, which is recorded in Other non-current assets in the condensed consolidated balance sheet and is expected to be received in the fourth quarter of 2027.

4. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of (in thousands):

Accrued Contracted Research and Development Costs

As of June 30, 2026, Accrued contracted research and development costs are primarily comprised of costs associated with MOLBREEVI for the treatment of autoimmune PAP, including expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers that provide services in connection with the Company's research and development activities.

Accrued Compensation

As of June 30, 2026, Accrued compensation includes amounts to be paid to employees for salary, bonuses, vacation and non-equity performance-based compensation. At the end of any period, the amounts accrued for such compensation may vary due to many factors including, but not limited to, timing of payments to employees.

5. Short-term Investments

The Company’s investment policy seeks to preserve capital and maintain sufficient liquidity to meet operational and other needs of the business. The following table summarizes, by major security type, the Company’s investments (in thousands):

The Company has classified its investments as available-for-sale securities. These securities are carried at estimated fair value with the aggregate unrealized gains and losses related to these investments reflected as a part of Accumulated other comprehensive loss in the condensed consolidated balance sheet. Classification as short-term or long-term is based upon whether the initial maturity of the debt securities is less than or greater than twelve months, as further discussed in Note 7 . Fair Value Measurements.

There wereno significant realized gains or losses related to investments for thesix months ended June 30, 2026 and 2025.

6. Debt Facility

On March 26, 2025, the Company, as borrower, entered into a Loan and Security Agreement (the “Hercules Loan Agreement”) with the lenders party thereto (the “Lenders”) and Hercules Capital, Inc., as administrative agent and collateral agent.

The initial advance of $30 million under the Hercules Loan Agreement was drawn in March 2025 and used to repay all outstanding obligations under the Company’s prior term loan with Silicon Valley Bank ("SVB Loan"), to pay the Company’s expenses in connection with the Hercules Loan Agreement, and for general corporate purposes. See Note 7, Debt Facility, to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for more information regarding the Hercules Loan Agreement.

On January 26, 2026, the Company entered into a First Amendment (the “First Amendment”) to the Hercules Loan Agreement, with the Lenders and Hercules Capital, Inc., as administrative agent and collateral agent. As amended, the Loan Agreement provides for the Company to borrow up to an aggregate of $105 million of term loans.

The First Amendment amended the Loan Agreement to provide that upon achievement of the Approval Milestone, the Company may borrow up to $75 million of additional term loans, as follows:

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Up to $45 million through the earlier of (i) 120 days following the Approval Milestone or (ii) June 30, 2027 (the “First Post-Approval Tranche”).

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Beginning upon the earlier of the full draw or expiration of the First Post-Approval Tranche, up to $30 million through the earlier of (i) 120 days following the Approval Milestone or (ii) June 30, 2027.

The First Amendment extended the dates by which the Company may be required to comply with two financial covenants, extending the initial date for compliance with the Cash Requirement to April 1, 2027, and the date for compliance with the Conditional Minimum Revenue Covenant to September 30, 2027, if its market capitalization falls below the previously reported thresholds for each respective covenant.

The Hercules Loan Agreement, as amended by the First Amendment, grants the Lenders a first-priority perfected security interest in the Company’s intellectual property that will convert to a negative pledge if the Company terminates the Purchase and Sale Agreement dated October 29, 2025 with funds managed by RTW Investments, LP (the “Purchase Agreement”), as further described below in Note 9. Commitments and Contingencies, prior to receiving funds under the Purchase Agreement and so long as the Company maintains $50 million or more in unrestricted cash.

As of June 30, 2026, approximately$0.4 million of fees consisting of legal, commitment and facility charges, paid to the Lenders were capitalized and will be amortized over the term of the Hercules Loan Agreement.

The Company has identified certain embedded features within the Hercules Loan Agreement, as amended. The Company assessed these features and determined the one feature related to interest due upon an event of default (the “Default Penalty”) is required to be bifurcated from the debt and accounted for separately at fair value. As of June 30, 2026, the Default Penalty does not have a discernable fair value and no amounts are recorded.

The Company evaluated the Hercules Loan Agreement, as amended by the First Amendment, under ASC 470-50, “Debt - Modification and Extinguishment,” and concluded that the amended terms represented a decrease in the borrowing capacity of a delayed draw term loan with a single lender. Accordingly, the Company immediately recognized an expense equal to 19% of the Hercules Loan Agreement unamortized deferred financing costs while the remaining unamortized debt financing costs and any new deferred financing costs incurred as part of the First Amendment are being amortized over the term of the remaining new arrangement pursuant to the terms of the First Amendment.

The Company accounted for the repayment of the SVB Loan in the first quarter of 2025 as an extinguishment in accordance with the guidance in ASC 470-50 and recognized a loss associated with the extinguishment of approximately $0.5 million in other income (expense) in the accompanying consolidated statements of operations and comprehensive loss for thethree months ended March 31, 2025.

Summary of Carrying Value

The following table summarizes the components of the long-term debt carrying value, which approximates the fair value (in thousands):

7. Fair Value Measurements

The Company measures and reports certain financial instruments at fair value on a recurring basis and evaluates its financial instruments subject to fair value measurements on a recurring and nonrecurring basis to determine the appropriate level in which to classify them in each reporting period.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows:

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Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

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Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determined that certain investments in debt securities classified as available-for-sale securities were Level 1 financial instruments.

Additional investments in corporate debt securities, commercial paper, and asset-backed securities are considered Level 2 financial instruments because the Company has access to quoted prices but does not have visibility to the volume and frequency of trading for all of these investments. For the Company’s investments, a market approach is used for recurring fair value measurements and the valuation techniques use inputs that are observable, or can be corroborated by observable data, in an active marketplace.

The fair value of these instruments as of June 30, 2026 and December 31, 2025 was as follows (in thousands):

The Company didnot transfer any assets measured at fair value on a recurring basis to or from Level 1, Level 2, and Level 3 during thesix months ended June 30, 2026 and 2025.

Royalty Purchase and Sale Agreement Derivative Liability

The derivative liability arose from the Purchase Agreement entered on October 29, 2025, as further described in Note 9. Commitments and Contingencies, under which the Company has the option to prepay the Purchaser (as defined below) and the Purchaser may have the option to require the Company to remunerate proceeds of $4.0 million upon a Change of Control (as defined below) prior to approval of MOLBREEVI by the FDA on or before March 31, 2027. The fair value of the derivative liability is estimated utilizing a probability-adjusted discounted cash flow approach and is performed quarterly with gains and losses included within change in fair value of the derivative liability in the consolidated statements of comprehensive loss. This obligation would be settled in cash. As of June 30, 2026, the Company assessed a remote probability that a Change of Control would occur prior to the Closing Date (as defined below) and the Purchaser would exercise its right to the prepayment, which would terminate the Purchase Agreement. After taking into consideration the probability of repayment, which was unchanged since December 31, 2025, the time value of money, and the counterparty credit risk, the estimated fair value of the put option derivative liability was determined to be$385 thousand as of the June 30, 2026 measurement date.

The derivative liability has been classified as a Level 3 recurring liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the inputs to the valuation approach, the estimated fair value could be significantly different than the fair value the Company determined. The derivative liability is expected to either be settled or absolved within twelve months and is therefore classified as a current liability in the consolidated balance sheet.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments annually or whenever events or circumstances indicate that the carrying value of those assets may not be recoverable. These assets and liabilities can include acquired IPR&D and other long-lived assets that are written down to fair value if they are impaired.

During the six months ended June 30, 2026 and 2025, the Company experienced a decrease of approximately$0.3 million and an increase of approximately$1.3 million, respectively, in the carrying value of IPR&D due to foreign currency translation.

8. Stockholders’ Equity

Common Stock Reserved for Issuance

The Company’s shares of common stock reserved for issuance as of the periods indicated were as follows:

Warrants

The following table summarizes the outstanding warrants for the Company’s common stock as of June 30, 2026:

Accumulated Other Comprehensive Loss Information

The components of accumulated other comprehensive loss as of the dates indicated and the change during the period were (in thousands):

9. Commitments and Contingencies

Operating Lease

The Company was obligated under an operating lease, as amended, for commercial real estate located in Langhorne, Pennsylvania, the Company’s headquarters through June 30, 2026. The lease subsequently terminated on June 30, 2026.

In March 2026, the Company entered into a noncancellable lease agreement (the “Yardley Lease”) for approximately 10,795 square feet of space in Yardley, Pennsylvania to be used as the Company's corporate headquarters. The contractual lease term is 65 months and is effective July 1, 2026. However, the Company gained early access to the premises on May 1, 2026 for the purpose of constructing and installing tenant improvements, for which the landlord has agreed to contribute up to approximately $0.3 million (the “Tenant Allowance”). The Tenant Allowance is accounted for as a lease incentive and therefore reduces the measurement of the right of use ("ROU") asset. Since the Company gained control of the underlying assets on the date that early access was granted by the landlord, the accounting commencement date for the Company's new office headquarters is May 1, 2026 ("Commencement Date") and continues through November 30, 2031, with annual rental payments of approximately $0.3 million starting July 1, 2026, net of a Tenant Allowance, to be paid in a lump sum, subject to increases of approximately 2% annually on the anniversary of the Commencement Date of the lease term. In addition, the monthly base rent for July 2026, August 2026, September 2027, September 2028 and September 2029 of the lease term was abated.

The ROU asset was calculated using the present value of the lease payments, as offset by the Tenant Allowance, and utilizing the Company’s incremental borrowing rate based on the remaining lease term. The Company recorded a ROU asset and lease liability, current and noncurrent, for the Yardley Lease on the Commencement Date which has a carry value of $1.1 million and $1.1 million, respectively as of June 30, 2026.

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of June 30, 2026 (in thousands):

Manufacturing and Other Commitments and Contingencies

The Company has entered into a number of contracts for the manufacture of its product candidate, MOLBREEVI. Some of these, as enumerated below, entail various royalties and manufacturing and development payments.

FujiFilm Diosynth (“Fuji”)

In February 2024, the Company entered into a master services agreement with Fuji to provide development and manufacturing services related to the active pharmaceutical ingredient (“API”) for the Company’s MOLBREEVI product candidate in accordance with the terms of separate scope of work agreements and to perform a manufacturing campaign for process performance qualification of the API of MOLBREEVI. The total estimated accumulated fees the Company will have paid this manufacturer for services under that master services agreement and related work orders and subsequent change orders is $57.1 million. Amounts payable for future services are subject to various cancellation fees ranging from ten percent (10%) to one hundred percent (100%) of the cost of the respective activity based upon the timing of the commencement date and status of the activity.

GEMABIOTECH SAU (“GEMA”)

Upon first receipt of marketing approval by the Company from a regulatory authority in a country for a product containing the API supplied by GEMA for therapeutic use in humans and ending the earlier of (i) ten (10) years thereafter or (ii) the date a biosimilar of such product is first sold in such country, the Company shall pay GEMA a royalty equal to low-single digits of the net sales in that country.

Additionally, the Company is subject to a purchase requirement under which for ten years following the date of receipt of approval by a regulatory authority of the first regulatory filing for the marketing and sale of the first product containing the API supplied by GEMA in any country, the Company will purchase from GEMA the API required to produce a percentage of such product it sells each year (the “Purchase Requirement”); provided, however, that the Purchase Requirement will no longer apply if (i) the price charged by GEMA exceeds a certain price charged by an alternative supplier, (ii) there is a shortage of supply, or (iii) GEMA at any time fails to materially fulfill a purchase order of the Company.

PARI Pharma GmbH (“PARI”)

The Company is also subject to certain contingent milestone payments of approximately$0.6 million, payable to PARI, the manufacturer of the proprietary nebulizer used to administer MOLBREEVI, upon the achievement of various development activities and regulatory approval of proprietary nebulizer utilized. In addition to these milestones, the Company will owe PARI a royalty of three and one-half percent (3.5%) based on net sales.

Contract Research

As part of its development of MOLBREEVI for the treatment of autoimmune PAP, the Company entered into a master services agreement (“MSA”) with Parexel International (IRL) Limited (“Parexel”) pursuant to which Parexel will provide contract research services related to clinical trials. Contemporaneously with entering the MSA in January 2021, a work order was executed with Parexel, under which they provide services related to the IMPALA-2 clinical trial. From inception of the original work order and subsequent change orders through trial close-out activities, the Company will have paid Parexel service fees, pass-through expenses, and investigator fees estimated to be approximately$51.3 million over the course of the IMPALA-2 clinical trial.

In the second quarter of 2024, the Company initiated an open-label, multicenter clinical trial of MOLBREEVI in pediatric subjects with autoimmune PAP ("IMPACT") under a separate work order with Parexel. Pursuant to the IMPACT trial, Parexel has the opportunity to earn up to approximately$5.4 million dependent upon patient enrollment, site management, project oversight and the compliance with defined study protocols.

Royalty Purchase and Sale Agreement

On October 29, 2025, the Company entered into the Purchase Agreement with funds managed by RTW Investments, LP (the “Purchaser”). Under the terms of the Purchase Agreement, the Purchaser has agreed to pay the Company $75.0 million (the “Purchase Price”) upon approval of MOLBREEVI by the FDA on or before March 31, 2027 (the date of such payment, the "Closing Date") and subject to satisfaction of other customary closing conditions, in exchange for a true sale of assigned interests, including the right to receive royalty payments equal to a percentage of Net Sales (as defined in the Purchase Agreement) of MOLBREEVI in the U.S. The royalty rate is tiered, with the payments ranging from 7.0% to 1.0% of Net Sales in each calendar year, with the 7.0% tier increasing to 9.5% for a calendar year if the prior year’s Net Sales do not achieve a specified level. The royalty payments commence in the first calendar quarter in which there is a commercial sale of MOLBREEVI in the United States and end upon the receipt by the Purchaser of $187.5 million (the “Maximum Payment”). The Purchase Agreement includes a buy-back option that may allow the Company to pay a specified amount up to the Maximum Payment to terminate the Purchase Agreement and all obligations in the event of certain changes of control within two years of receipt of the Purchase Price. Unless otherwise agreed with the Purchaser, the Company is required to use a portion of the Purchase Price to repay all outstanding indebtedness. However, the Purchaser entered into an intercreditor agreement with the Lenders that allows amounts borrowed under the Hercules Loan Agreement, as amended, as described in Note 6, Debt Facility, to remain outstanding. The Purchase Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the Company’s ability to, among other things, incur indebtedness (which restrictions are eliminated after the achievement by the Company of a specified amount of Net Sales), and other provisions customary for transactions of this nature, in each case subject to certain exceptions set forth in the Purchase Agreement.

Under the Purchase Agreement, upon the occurrence of a Change of Control of the Company (as defined in the Purchase Agreement) the Company has the option to prepay (“Company Call”) and the Purchaser, in certain circumstances, has the option to demand the prepayment (“Buyer Put”) of a specified amount and terminate the Purchase Agreement. The revenue-based repayments to the Buyer (“Revenue-Based Payment”) will be established on a schedule of royalty rates as a factor of Annual Net Sales, including applicable ratchets in the definition of a Royalty Rate, until the Royalty Cap is reached.

The Company has identified the embedded features in the Purchase Agreement and concluded that the Buyer Put Option and the Company Call Option are embedded derivatives that must be bifurcated under ASC 815-10-15-83 and ASC 815-15-25-1, Derivatives and Hedging.

Accordingly, the Company has recorded the royalty agreement derivative as of the date of issuance and determined its fair value to be approximately$0.4 million as of June 30, 2026 and December 31, 2025, which is reflected in Accrued expenses and other current liabilities and subject to periodic fair value remeasurement. The Company has also capitalized the amount as deferred issuance costs, subject to straight line amortization up until the Closing Date, as reflected in Prepaid expenses and other current assets and similarly subject to periodic fair value remeasurement.

In addition, direct and incremental Company issuance costs as well as reimbursed Buyer expenses have been capitalized by the Company and amortized over the expected term of the arrangement. Upon the Closing Date, the remaining balance will be applied against the proceeds received and subsequently amortized using the effective interest method.

10. Stock-Based Compensation

Equity Incentive Plans

The Company’s 2024 Omnibus Incentive Plan (the “2024 Plan”) was adopted by the Company’s board of directors in March 2024, was approved by the Company’s stockholders on June 6, 2024, became effective on June 7, 2024, and was amended with the approval of our stockholders in June 2026. The 2024 Plan was intended to replace the Company’s Amended and Restated 2015 Omnibus Incentive Plan (the “2015 Plan”), and upon the effectiveness of the 2024 Plan, no further grants may be made under the 2015 Plan. All outstanding awards under the 2015 Plan will continue in accordance with the 2015 Plan and any award agreement executed in connection with such outstanding awards. The 2024 Plan provides for the grant of stock options (both incentive and non-statutory stock options), stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units, and other stock-based awards. Stock-based awards are subject to terms and conditions established by the board of directors or the compensation committee of the board of directors. As of June 30, 2026, the number of shares of common stock available for grant under the 2024 Plan was 22,119,152 shares.

The Company’s 2021 Inducement Equity Incentive Plan (the “Inducement Plan”) was adopted by the Company’s board of directors in May 2021 and subsequently amended to increase the shares available for grant. The Inducement Plan provides for the grant of non-statutory stock options, restricted stock, RSUs, stock appreciation rights, performance stock units, and performance shares exclusively for newly hired employees. Each award under the Inducement Plan is intended to qualify as an employment inducement grant in accordance with Nasdaq Listing Rule 5635(c)(4). As of June 30, 2026, the number of shares of common stock available for grant under the Inducement Plan was 797,413 shares.

The Savara Inc. Stock Option Plan (the “2008 Plan”) was adopted in 2008, and the Companyno longer issues awards under the 2008 Plan. As of June 30, 2026, the Company had options outstanding to purchase 45,121 shares of common stock under the 2008 Plan. The outstanding awards granted under the 2008 Plan are fully vested and generally have a maximum contractual term often years.

Stock-Based Awards Activity

The following table provides a summary of stock-based awards activity for thesix months ended June 30, 2026:

Stock Options:

The total compensation cost related to non-vested stock options not yet recognized as of June 30, 2026, was$10.5 million, which will be recognized over a weighted-average period of approximately 2.3 years.

RSUs:

Since the year ended December 31, 2025, the Company has granted, and which are currently outstanding,4,562,000 performance stock units (the “PSUs”) to certain of its employees and non-employee service providers. The PSUs are subject to certain performance conditions and a service condition. The performance conditions range from (i) FDA approval of the Company’s BLA for MOLBREEVI for the treatment of autoimmune PAP, (ii) the European Medicines Agency approval of the Company’s marketing authorisation application for MOLBREEVI for the treatment of autoimmune PAP, (iii) the achievement of a certain revenue target, or (iv) a combination of some of the aforementioned performance conditions. The service condition is continuous employment or service with the Company through the date the performance obligations are achieved. The potential payout of the award ranges from 0% to 100% of the target, dependent on the achievement of the performance conditions and their respective weighting towards the vesting of the PSUs as predetermined by the Company. The Company began recognizing and recording compensation cost on a straight-line basis in the consolidated statements of comprehensive loss upon the grant date of the PSU grants as the performance conditions were deemed probable by the Company. Any forfeitures of unvested awards that occur after the recognition of compensation cost will result in the cumulative reversal of expense in the period in which the forfeiture occurs. Additionally, as of June 30, 2026, the Company had 160,000 vested RSUs with deferred settlement outstanding, representing deferred shares to be issued in future periods. Deferred RSUs are fully vested, not subject to forfeiture, included in the denominator of basic earnings per share, as the underlying shares are issuable for no further consideration and issuance is not contingent upon any condition other than the passage of time, and the related stock based compensation is not affected by the deferral election.

The total compensation cost related to unvested RSUs and PSUs not yet recognized as of June 30, 2026, was$18.6 million, which will be recognized over a weighted-average period of approximately 0.8 year.

Stock-Based Compensation

Stock-based compensation expense is included in the following line items in the accompanying statements of operations and comprehensive loss for thethree and six months ended June 30, 2026 and 2025 (in thousands):

11. Segment Reporting

We follow the accounting guidance of ASC Topic 280, Segment Reporting, which establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision-makers in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated results including operating expenses and operating losses at a consolidated level only. The Company and its CODM do not distinguish between potential markets for the purpose of making decisions about resource allocation and performance assessment of its sole pre-revenue development program, MOLBREEVI, for the treatment ofautoimmune PAP. Therefore, the Company has onlyone operating segment andone reportable segment, specialty pharmaceuticals within the respiratory system. The Company's only significant long-lived asset, IPR&D, is located in Denmark, andthe Company currently does not generate any revenues and its operating expenses and losses are viewed on a consolidated basis by the CODM. Therefore, no geographical segments are presented. In addition to the significant expense categories included on the Company's consolidated statements of operations, refer below for disaggregated amounts that comprise research and development expenses and the segment net loss (in thousands):

a)

Primary program research and development expenses are comprised primarily of costs paid to third parties for clinical trials and product development manufacturing, nonclinical, regulatory, and quality assurance activities, and the portion of related research and development expenses incurred by our collaborators and third-party service providers, including contract research and manufacturing organizations that we are obligated to reimburse.

b)

Other segment income (expense), net includes interest income, interest expense, foreign currency exchange gain or loss, depreciation and amortization, non-cash stock-based compensation, loss on extinguishment of debt (for the six months ended June 30, 2025), and tax credit income.

12. Net Loss per Share

Basic and diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common stock and pre-funded warrants outstanding during the period without consideration of common stock equivalents. For periods in which the Company generated a net loss, the Company does not include the potential impact of dilutive securities in diluted net loss per share, as the impact of these items is anti-dilutive. Diluted net loss per share is the same as basic net loss per common share since the effects of potentially dilutive securities are antidilutive.

The following equity instruments were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

• Pre-funded warrants are excluded herein.

The following table calculates basicnet loss per share of common stock and diluted net loss per share of common stock for the three and six months ended June 30, 2026 and 2025 (in thousands, except share and per share amounts):

13. Subseq uent Events

The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued and determined there were no events that required disclosure or recognition in these condensed consolidated financial statements.