Humacyte, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and with our audited financial statements and the notes thereto included in our Annual Report. In addition, you should read the “Risk Factors” and “Information Regarding Forward-Looking Statements” sections of this Quarterly Report and our Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and with our audited financial statements and the notes thereto included in our Annual Report. In addition, you should read the “Risk Factors” and “Forward-Looking Statements” sections of this Quarterly Report and our Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

We are initially using our proprietary, scientific technology platform to engineer and manufacture ATEVs. On December 19, 2024, the FDA granted full approval for the ATEV under the brand name Symvess® for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible. Our ATEVs are designed to be easily implanted into any patient without inducing a foreign body response or leading to immune rejection. We are developing a portfolio, or “cabinet,” of ATEVs with varying diameters and lengths. The ATEV cabinet would initially target the vascular repair, reconstruction and replacement market, including use in vascular trauma, AV access for hemodialysis and PAD. We are also developing the ATEV for CABG and pediatric heart surgery. Over the longer term, we are developing our ATEV for the delivery of cellular therapies, including pancreatic islet cell transplantation to treat Type 1 diabetes (our BioVascular Pancreas or BVP). We will continue to explore the application of our technology across a broad range of markets and indications, including the development of urinary conduit, trachea, esophagus and other novel cell delivery systems.

Current wording

We are initially using our proprietary, scientific technology platform to engineer and manufacture ATEVs. On December 19, 2024, the FDA granted full approval for the ATEV under the brand name Symvess® for use in adults as a vascular conduit for extremity arterial injury when urgent revascularization is needed to avoid imminent limb loss, and autologous vein graft is not feasible. Our ATEVs are designed to be easily implanted into any patient without inducing a foreign body response or leading to immune rejection. We are developing a portfolio, or “cabinet,” of ATEVs with varying diameters and lengths. The ATEV cabinet would initially target the vascular repair, reconstruction and replacement market, including use in vascular trauma, AV access for hemodialysis and PAD. We are also developing the ATEV for coronary artery bypass grafting (“CABG”) and pediatric heart surgery. Over the longer term, we are developing our ATEV for the delivery of cellular therapies, including pancreatic islet cell transplantation to treat Type 1 diabetes (our BioVascular Pancreas or BVP). We will continue to explore the application of our technology across a broad range of markets and indications, including the development of urinary conduit, trachea, esophagus and other novel cell delivery systems.

Previous wording

In May 2023, we were granted the RMAT designation for the ATEV for urgent arterial repair following extremity vascular trauma, and in June 2024, we were granted the RMAT designation for the ATEV for patients with advanced PAD. In addition, in 2018 our ATEV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92, enacted to expedite the FDA’s review of products that are intended to diagnose, treat or prevent serious or life-threatening conditions facing American military personnel.

Current wording

In addition to extremity vascular trauma, we and our collaborators are currently conducting Phase 3 and Phase 2 trials of our 6 millimeter ATEV in AV access for hemodialysis and PAD. We were granted Fast Track designation by the FDA for our 6 millimeter ATEV for use in AV access for hemodialysis in 2014. We also received the first Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA, for the creation of vascular access for performing hemodialysis, in March 2017. In May 2023, we were granted the RMAT designation for the ATEV for urgent arterial repair following extremity vascular trauma, and in June 2024, we were granted the RMAT designation for the ATEV for patients with advanced PAD. In addition, in 2018 our ATEV product candidate was assigned a priority designation by the Secretary of Defense under Public Law 115-92, enacted to expedite the FDA’s review of products that are intended to diagnose, treat or prevent serious or life-threatening conditions facing American military personnel.

Previous wording

In April 2023, we announced completion of enrollment of our V007 Phase 3 trial of the ATEV for use in AV access for hemodialysis. In July 2024, we announced positive topline results from our V007 Phase 3 trial, where the ATEV met the primary endpoints in the study. If the interim results from our ongoing V012 Phase 3 trial in women are positive, we plan to submit a supplemental BLA for the ATEV to the FDA for an indication in AV access for hemodialysis in the second half of 2026.

Current wording

In July 2024, we announced positive topline results from our V007 Phase 3 trial of the ATEV for use in AV access, where the ATEV met the primary endpoints in the study. In June 2026, we announced positive interim results from our V012 Phase 3 trial in women, showing that the ATEV achieved superior catheter-free days compared to AV fistula, the primary endpoint in the study. We plan to submit a supplemental BLA for the ATEV to the FDA for an indication in AV access for hemodialysis in the second half of 2026.

Previous wording

On April 21, 2026, we entered into the Third Amendment to our distribution agreement with Fresenius Medical Care. Pursuant to the amendment, we have the sole right to develop and commercialize, and conduct all regulatory matters relating to, the Distribution Product (as defined in the distribution agreement, as amended) on a worldwide basis. In connection with the reversion of ex-U.S. rights to us, we will pay Fresenius low-single-digit royalties on net sales of the Distribution Product outside the United States, subject to a two-year royalty-free period following launch of the Distribution Product in each applicable country. We will continue to pay royalties on net sales of the Distribution Product in the United States at rates ranging from mid-single digits to low double digits, and Fresenius remains obligated to support adoption of the Distribution Product as a standard of care in hemodialysis patients for which such use is supported by clinical results and health economic analyses.

Current wording

On April 21, 2026, we entered into the Third Amendment to our distribution agreement with Fresenius Medical Care. Pursuant to the amendment, we have the sole right to develop and commercialize, and conduct all regulatory matters relating to, the Distribution Product (as defined in the distribution agreement, as amended) on a worldwide basis. In connection with the reversion of ex-U.S. rights to us, we will pay Fresenius Medical Care low-single-digit royalties on net sales of the Distribution Product outside the United States, subject to a two-year royalty-free period following launch of the Distribution Product in each applicable country. We will continue to pay royalties on net sales of the Distribution Product in the United States at rates ranging from mid-single digits to low double digits, and Fresenius Medical Care remains obligated to support adoption of the Distribution Product as a standard of care in hemodialysis patients for which such use is supported by clinical results and health economic analyses.

Previous wording

We have incurred operating losses and negative cash flows from operations in each year since our inception in 2004. As of March 31, 2026 and December 31, 2025, we had an accumulated deficit of $744.5 million and $726.8 million, respectively, and working capital of $47.4 million and $49.4 million, respectively. Our operating losses were approximately $28.9 million and $23.2 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

We have incurred operating losses and negative cash flows from operations in each year since our inception in 2004. As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $781.3 million and $726.8 million, respectively, and working capital of $77.8 million and $49.4 million, respectively. Our operating losses were approximately $55.9 million and $52.9 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Net cash flows used in operating activities were $25.1 million and $28.6 million during the three months ended March 31, 2026 and 2025, respectively. Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations. We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we begin to commercialize Symvess and advance our product candidates.

Current wording

Net cash flows used in operating activities were $47.2 million and $55.0 million during the six months ended June 30, 2026 and 2025, respectively. Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to incur substantial operating losses and negative cash flows from operations for the foreseeable future as we continue to commercialize Symvess and advance our product candidates.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $48.5 million and restricted cash of $0.4 million.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $79.9 million and restricted cash of $0.4 million.

Previous wording

Our need for additional capital will depend in part on the scope and costs of our development and commercial manufacturing activities and on the results of our ongoing commercial sales efforts. Since receiving FDA approval to commercialize Symvess in the vascular trauma indication, we generated $0.5 million and $1.4 million in product revenue for the three months ended March 31, 2026, and twelve months ended December 31, 2025, respectively. Our ability to generate sufficient product revenue to finance our operations will depend on the successful commercialization of Symvess and the advancement of our product candidates. Until such time, if ever, we expect to finance our operations primarily through the use of existing cash and cash equivalents, private or public equity financings, debt financings, debt refinancings or restructurings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we plan to implement a program to delay, reduce, suspend or cease our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See “Risk Factors” for additional information.

Current wording

Our need for additional capital will depend in part on the scope and costs of our development and commercial manufacturing activities and on the results of our ongoing commercial sales efforts. Since receiving FDA approval to commercialize Symvess in the vascular trauma indication, we generated product revenue of $0.4 million and $0.9 million for the three and six months ended June 30, 2026, respectively, and $1.4 million for the twelve months ended December 31, 2025. Our ability to generate sufficient product revenue to finance our operations will depend on the successful commercialization of Symvess and the advancement of our product candidates. Until such time, if ever, we expect to finance our operations primarily through the use of existing cash and cash equivalents, private or public equity financings, debt financings, debt refinancings or restructurings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we plan to implement a program to delay, reduce, suspend or cease our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See “Risk Factors” for additional information.

Previous wording

As further disclosed in Note 12, Subsequent Events, to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report, on April 21, 2026, we entered into the Third Amendment to the distribution agreement with Fresenius Medical Care. Pursuant to the amendment, we have the sole right to develop and commercialize, and conduct all regulatory matters relating to, the Distribution Product (as defined in the distribution agreement, as amended) on a worldwide basis. In connection with the reversion of ex-U.S. rights to us, we will pay Fresenius low-single-digit royalties on net sales of the Distribution Product outside the United States, subject to a two-year royalty-free period following launch of the Distribution Product in each applicable country. We will continue to pay royalties on net sales of the Distribution Product in the United States at rates ranging from mid-single digits to low double digits, and Fresenius remains obligated to support adoption of the Distribution Product as a standard of care in hemodialysis patients for which such use is supported by clinical results and health economic analyses.

Current wording

On April 21, 2026, we entered into the Third Amendment to the distribution agreement with Fresenius Medical Care. Pursuant to the amendment, we have the sole right to develop and commercialize, and conduct all regulatory matters relating to, the Distribution Product (as defined in the distribution agreement, as amended) on a worldwide basis. In connection with the reversion of ex-U.S. rights to us, we will pay Fresenius Medical Care low-single-digit royalties on net sales of the Distribution Product outside the United States, subject to a two-year royalty-free period following launch of the Distribution Product in each applicable country. We will continue to pay royalties on net sales of the Distribution Product in the United States at rates ranging from mid-single digits to low double digits, and Fresenius Medical Care remains obligated to support adoption of the Distribution Product as a standard of care in hemodialysis patients for which such use is supported by clinical results and health economic analyses.

Previous wording

Also, as further disclosed in Note 12, in May 2026, we implemented a plan to reduce our workforce by approximately 45 employees, defer additional planned new hires, and reduce other operating expenses. These reductions have been implemented thoughtfully, and we have retained key personnel, resources, and initiatives to meet our key corporate goals and milestones. We estimate that we will incur aggregate charges of approximately $0.8 million representing one-time cash expenditures for severance and other employee termination benefits, of which the majority is expected to be incurred during the second quarter of 2026. We estimate net savings due to the workforce reductions and operating cost reductions, net of termination severance and benefits, totaling approximately $14.3 million during the remainder of 2026.

Current wording

In May 2026, we implemented a plan to reduce our workforce by approximately 45 employees, defer additional planned new hires, and reduce other operating expenses. These reductions have been implemented thoughtfully, and we have retained key personnel, resources, and initiatives to meet our key corporate goals and milestones. We estimate that we will incur aggregate charges of approximately $0.8 million representing one-time cash expenditures for severance and other employee termination benefits, of which the majority has been incurred during the second quarter of 2026. We estimate net savings due to the workforce reductions and operating cost reductions, net of termination severance and benefits, totaling approximately $14.3 million.

Previous wording

Prior to the recent commercialization of the ATEVs in the vascular trauma indication, all of our revenue was derived from government and other grants. During the three months ended March 31, 2026 and 2025, we have generated $0.5 million and $0.1 million, respectively, in product revenue from the sale of Symvess. The remainder of our revenue has been derived from contracts. From inception through March 31, 2026, we have been awarded grants, including grants from the California Institute of Regenerative Medicine, the National Institutes of Health, and the Department of Defense, to support our development, production scaling and clinical trials of our product candidates.

Current wording

Prior to the recent commercialization of the ATEVs in the vascular trauma indication, all of our revenue was derived from government and other grants. During the three and six months ended June 30, 2026, we generated $0.4 million and $0.9 million, respectively, in product revenue from sales of Symvess, compared with $0.1 million and $0.2 million, respectively, for the three and six months ended June 30, 2025. The remainder of our revenue has been derived from contracts. From inception through June 30, 2026, we have been awarded grants, including grants from the California Institute of Regenerative Medicine, the National Institutes of Health, and the Department of Defense, to support our development, production scaling and clinical trials of our product candidates.

Previous wording

Cost of goods sold consists of manufacturing costs associated with the production of Symvess, including materials, direct labor and manufacturing-related overhead. Cost of goods sold also includes royalty expense related to product sales, overhead associated with unused production capacity, and inventory reserves recorded to adjust inventory to its estimated net realizable value. Prior to FDA approval of Symvess for the vascular trauma indication in December 2024, manufacturing and material costs incurred in connection with product development were expensed as research and development costs as incurred, as commercialization and future economic benefit were not yet considered probable. Beginning in 2025, following commercialization of Symvess, certain manufacturing-related payroll and overhead costs previously included within research and development expenses were capitalized to inventory and recognized in cost of goods sold as product is sold. During the three months ended March 31, 2026, we recorded an inventory reserve to adjust certain inventory balances to the estimated net realizable value, which is reflected within cost of goods sold in the condensed consolidated statements of operations and comprehensive (loss) income.

Current wording

Cost of goods sold consists of manufacturing costs associated with the production of Symvess, including materials, direct labor and manufacturing-related overhead. Cost of goods sold also includes royalty expense related to product sales, overhead associated with unused production capacity, and inventory reserves recorded to adjust inventory to its estimated net realizable value. Prior to FDA approval of Symvess for the vascular trauma indication in December 2024, manufacturing and material costs incurred in connection with product development were expensed as research and development costs as incurred, as commercialization and future economic benefit were not yet considered probable. Beginning in 2025, following commercialization of Symvess, certain manufacturing-related payroll and overhead costs previously included within research and development expenses were capitalized to inventory and recognized in cost of goods sold as product is sold. During the three and six months ended June 30, 2026, we recorded an inventory reserve to adjust certain inventory balances to the estimated net realizable value, which is reflected within cost of goods sold in the condensed consolidated statements of operations and comprehensive (loss) income.

Previous wording

The majority of our research and development resources are currently focused on our Phase 2 and 3 clinical trials for our 6 millimeter ATEV and other work needed to obtain marketing approval for our 6 millimeter ATEV for use in AV access in hemodialysis and PAD in the United States. We have incurred and expect to continue to incur significant expenses in connection with these and our other clinical development efforts, including expenses related to regulatory filings, trial enrollment and conduct, data analysis, patient follow up and study report generation for our Phase 2 and Phase 3 clinical trials.

Current wording

The majority of our research and development resources are currently focused on our Phase 2 and 3 clinical trials for our 6 millimeter ATEV, other work needed to obtain marketing approval for our 6 millimeter ATEV for use in AV access in hemodialysis, and preparation for a planned Phase 2a study of the 3.5 millimeter coronary tissue engineered vessel (CTEV) in coronary artery bypass grafting (CABG). We have incurred and expect to continue to incur significant expenses in connection with these and our other clinical development efforts, including expenses related to regulatory filings, trial enrollment and conduct, data analysis, patient follow up and study report generation for our Phase 2 and Phase 3 clinical trials.

Previous wording

Direct expenses for our vascular trauma, AV access for hemodialysis and PAD indications include costs related to our clinical trials, including fees paid to CROs, consultants, clinical sites and investigators. Costs related to development activities which broadly support multiple programs using our technology platform, including personnel, materials and supplies, external services costs, and other internal expenses, such as facilities and overhead costs, are not allocated to individual research and development programs. Other research and development expenses include direct costs not identifiable with a specific product candidate, including costs associated with our research and development platform used across programs, process development, manufacturing analytics and preclinical research and development for prospective product candidates and new technologies.

Current wording

Direct expenses for our vascular trauma and AV access for hemodialysis indications include costs related to our clinical trials, including fees paid to CROs, consultants, clinical sites and investigators. Costs related to development activities which broadly support multiple programs using our technology platform, including personnel, materials and supplies, external services costs, and other internal expenses, such as facilities and overhead costs, are not allocated to individual research and development programs. Other research and development expenses include direct costs not identifiable with a specific product candidate, including costs associated with our research and development platform used across programs, process development, manufacturing analytics and preclinical research and development for prospective product candidates and new technologies.

Previous wording

Total revenue was $0.5 million for the three months ended March 31, 2026, compared to $0.5 million revenue for the three months ended March 31, 2025. Revenue for the three months ended March 31, 2026 consisted primarily of product revenue from sales of Symvess in the United States. Revenue for the three months ended March 31, 2025 consisted of $0.1 million of product revenue from sales of Symvess in the United States and $0.4 million of revenue earned related to research and development services pursuant to a research contract with a large medical technology company.

Current wording

Total revenue was $0.4 million for the three months ended June 30, 2026, compared with $0.3 million revenue for the three months ended June 30, 2025. Revenue for the three months ended June 30, 2026 consisted of product revenue from sales of Symvess in the United States. Revenue for the three months ended June 30, 2025 consisted of $0.1 million of product revenue from sales of Symvess in the United States and $0.2 million of revenue earned related to research and development services pursuant to a research contract with a large medical technology company.

Previous wording

Cost of goods sold was $2.0 million for the three months ended March 31, 2026, compared to $0.1 million for the three months ended March 31, 2025. During the three months ended March 31, 2026, cost of goods sold included a $1.6 million inventory reserve recorded to reduce certain inventory balances to their estimated net realizable value in connection with the initial commercialization of Symvess, excess capacity recorded as an expense, and royalty expense related to product sales.

Current wording

Cost of goods sold was $1.2 million for the three months ended June 30, 2026, compared to $0.2 million for the three months ended June 30, 2025. During the three months ended June 30, 2026, cost of goods sold included a $0.7 million inventory reserve to reduce certain inventory to its estimated net realizable value, $0.1 million in costs associated with excess capacity, and royalties on product sales.

Previous wording

The following table discloses the breakdown of research and development expenses for the periods indicated:

Current wording

The following table presents research and development expenses for the periods indicated:

Previous wording

Total other income, net was $11.3 million for the three months ended March 31, 2026 compared to total other income, net of $62.3 million for the three months ended March 31, 2025. The $51.0 million decrease in other income, net was primarily driven by lower non-cash gains, including a $45.0 million decrease from the fair value remeasurement of the Contingent Earnout Liability and a $6.4 million decrease from the fair value remeasurement of derivative liabilities.

Current wording

Total other income, net was $1.5 million for the six months ended June 30, 2026, compared with $54.4 million for the six months ended June 30, 2025. The $52.9 million decrease was primarily attributable to lower non-cash gains, including decreases of $42.3 million from the fair value remeasurement of the Contingent Earnout Liability and $10.8 million from the fair value remeasurement of derivative liabilities.

Previous wording

Although we are a commercial-stage biotechnology platform company, we have a single product approved for commercial sale and have generated $0.5 million and $1.4 million, respectively, in product revenue from the sale of Symvess during the three months ended March 31, 2026 and twelve months ended December 31, 2025 respectively.

Current wording

Although we are a commercial-stage biotechnology platform company, we have a single product approved for commercial sale and generated $0.4 million and $0.9 million of product revenue from sales of Symvess during the three and six months ended June 30, 2026, respectively, compared with $0.1 million and $0.2 million, respectively, for the three and six months ended June 30, 2025.

Previous wording

We have historically financed our operations primarily through the sale of equity securities and convertible debt, borrowings under loan facilities, including the Term Loan Facility, the Purchase Agreement, and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of March 31, 2026 and December 31, 2025, we had an accumulated deficit of $744.5 million and $726.8 million, respectively.

Current wording

We have historically financed our operations primarily through the sale of equity securities and convertible debt, borrowings under loan facilities, including the Term Loan Facility, the Purchase Agreement, and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of June 30, 2026 and December 31, 2025, we had an accumulated deficit of $781.3 million and $726.8 million, respectively.

Previous wording

As of March 31, 2026 and December 31, 2025, we had working capital of $47.4 million and $49.4 million, respectively. As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $48.5 million and $50.5 million, respectively, and restricted cash of $0.4 million as of both dates.

Current wording

As of June 30, 2026 and December 31, 2025, we had working capital of $77.8 million and $49.4 million, respectively. As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $79.9 million and $50.5 million, respectively, and restricted cash of $0.4 million as of both dates.

Previous wording

We will not have sufficient liquidity to fund our operations beyond one year from the issuance of these interim financial statements if we are unable to generate sufficient cash flows from commercial sales on a timely basis and/or obtain additional capital. These factors raise substantial doubt about our ability to continue as a going concern. Our future viability is dependent on our ability to generate cash flows from the sale of Symvess and raise additional capital to finance our operations. As further disclosed in Note 12, in May 2026, we implemented a plan to reduce our workforce by approximately 45 employees, defer additional planned new hires, and reduce other operating expenses. These reductions have been implemented thoughtfully, and we have retained key personnel, resources, and initiatives to meet our key corporate goals and milestones. We plan to seek additional funding through private or public equity financings, debt financings, debt refinancings or restructurings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Adequate additional capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases certain of our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. The accompanying unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern. See Note 1, Organization and Description of Business, to our accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information regarding this assessment.

Current wording

We will not have sufficient liquidity to fund our operations beyond one year from the issuance of these interim financial statements if we are unable to generate sufficient cash flows from commercial sales on a timely basis and/or obtain additional capital. These factors raise substantial doubt about our ability to continue as a going concern. Our future viability is dependent on our ability to generate cash flows from the sale of Symvess and raise additional capital to finance our operations. As further disclosed in Note 10, in May 2026, we implemented a plan to reduce our workforce by approximately 45 employees, defer additional planned new hires, and reduce other operating expenses. These reductions have been implemented thoughtfully, and we have retained key personnel, resources, and initiatives to meet our key corporate goals and milestones. We plan to seek additional funding through private or public equity financings, debt financings, debt refinancings or restructurings, collaborations, strategic alliances, and marketing, distribution or licensing arrangements. Adequate additional capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases certain of our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. The accompanying unaudited condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.

Previous wording

On December 15, 2025, we entered into the Loan Agreement with Avenue Venture Opportunities Fund II, L.P., as administrative agent and collateral agent for the lenders, which provides for a Term Loan Facility of up to $77.5 million in the aggregate that matures on December 1, 2029. The Loan Agreement consists of (i) an initial term loan of $40.0 million, which was fully funded on December 15, 2025, (ii) a $12.5 million delayed draw term loan which will be made available between October 1, 2026 and March 31, 2027, subject to the satisfaction of certain revenue, regulatory approval and liquidity conditions, and (iii) a $25.0 million delayed draw term loan which will be made available at the discretion of the lenders between July 1, 2027 and June 30, 2028, subject to the satisfaction of certain revenue, regulatory approval and liquidity conditions. The proceeds from the initial term loan were used primarily to repay the remaining obligations under the Purchase Agreement, as discussed below.

Current wording

On December 15, 2025, we entered into the Loan Agreement with Avenue Venture Opportunities Fund II, L.P., as administrative agent and collateral agent for the lenders, which provides for a Term Loan Facility of up to $77.5 million in the aggregate that matures on December 1, 2029. The Term Loan Facility consists of (i) an initial term loan of $40.0 million, which was fully funded on December 15, 2025, (ii) a $12.5 million delayed draw term loan which will be made available between October 1, 2026 and March 31, 2027, subject to the satisfaction of certain revenue, regulatory approval and liquidity conditions, and (iii) a $25.0 million delayed draw term loan which will be made available at the discretion of the lenders between July 1, 2027 and June 30, 2028, subject to the satisfaction of certain revenue, regulatory approval and liquidity conditions. The proceeds from the initial term loan were used primarily to repay the remaining obligations under the Purchase Agreement, as discussed below.

Previous wording

On September 1, 2022, we entered into a sales agreement with Jefferies LLC, acting as sales agent (the “Jefferies ATM Sales Agreement”), for the sale from time to time of up to $80.0 million of shares of Common Stock (the “Jefferies ATM Facility”). During the three months ended March 31, 2025, we sold an aggregate of 75,793 shares of Common Stock under the Jefferies ATM Facility at an average price of $5.04 per share for net proceeds of approximately $0.4 million. On November 21, 2025, we delivered a notice to Jefferies LLC terminating the Jefferies ATM Sales Agreement, which termination became effective 10 days thereafter.

Current wording

On September 1, 2022, we entered into a sales agreement with Jefferies LLC, acting as sales agent (the “Jefferies ATM Sales Agreement”), for the sale from time to time of up to $80.0 million of shares of Common Stock (the “Jefferies ATM Facility”). During the six months ended June 30, 2025, we sold an aggregate of 1,299,870 shares of Common Stock under the ATM Facility at an average price of $2.86 per share for net proceeds of approximately $3.6 million after deducting sales commissions of approximately $0.1 million. On November 21, 2025, we delivered a notice to Jefferies LLC terminating the Jefferies ATM Sales Agreement, which termination became effective 10 days thereafter.

Previous wording

On December 16, 2025, we entered into a sales agreement with TD Cowen, acting as sales agent (the “TD Cowen ATM Facility”), pursuant to which we may sell shares of Common Stock from time to time up to an aggregate offering price of $60.0 million. During the three months ended March 31, 2026, we sold an aggregate of 4,018,497 shares of Common Stock under the TD Cowen ATM Facility at an average price of $1.16 per share for net proceeds of approximately $4.6 million. On March 19, 2026, we suspended and terminated the ATM Prospectus pursuant to which shares had been sold under the TD Cowen ATM Facility.

Current wording

On December 16, 2025, we entered into a sales agreement with TD Cowen, acting as sales agent (the “TD Cowen ATM Facility”), pursuant to which we may sell shares of Common Stock from time to time up to an aggregate offering price of $60.0 million. During the six months ended June 30, 2026, we sold an aggregate of 4,018,497 shares of Common Stock under the TD Cowen ATM Facility at an average price of $1.16 per share for net proceeds of approximately $4.6 million. All such sales occurred during the first quarter of 2026. On March 19, 2026, we suspended and terminated the ATM Prospectus pursuant to which shares had been sold under the TD Cowen ATM Facility.

Previous wording

Our known material cash requirements include: (1) the purchase of supplies and services that are primarily for research and development; (2) manufacturing and commercialization expenditures; (3) employee wages, benefits, and incentives; (4) financing lease payments (for additional information see below), and (5) debt service obligations under our senior secured Term Loan Facility (for additional information see below and Note 6, Debt, to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report). We have also entered into contracts with CROs primarily for clinical trials. These contracts generally provide for termination upon limited notice, and therefore we believe that our non-cancellable obligations under these agreements are not material. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, for example, legal contingencies, uncertain tax positions, and other matters.

Current wording

Our known material cash requirements include: (1) the purchase of supplies and services that are primarily for research and development; (2) manufacturing and commercialization expenditures; (3) employee wages, benefits, and incentives; (4) finance lease payments (for additional information see below); and (5) debt service obligations under our senior secured Term Loan Facility (for additional information, see below and Note 6, Debt, to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report). We have also entered into contracts with CROs primarily for clinical trials. These contracts generally provide for termination upon limited notice, and therefore we believe that our non-cancellable obligations under these agreements are not material. Moreover, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, for example, legal contingencies, uncertain tax positions, and other matters.

Previous wording

As of March 31, 2026, we had non-cancellable purchase commitments of $27.8 million for supplies and services that are primarily for research and development. We have existing license agreements with Duke University and Yale University, a distribution agreement with Fresenius Medical Care and our JDRF Agreement. The amount and timing of any potential milestone payments, license fee payments, royalties and other payments that we may be required to make under these agreements are unknown or uncertain at March 31, 2026. For additional information regarding our agreement with Fresenius Medical Care, see Note 11, Related Party Transactions, to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report. For additional information regarding our agreements with Duke University, Yale University and JDRF, see Note 10 to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.

Current wording

As of June 30, 2026, we had non-cancellable purchase commitments of $22.3 million for supplies and services that are primarily for research and development. We have existing license agreements with Duke University and Yale University, a distribution agreement with Fresenius Medical Care and our JDRF Agreement. The amount and timing of any potential milestone payments, license fee payments, royalties and other payments that we may be required to make under these agreements are unknown or uncertain at June 30, 2026. For additional information regarding our agreement with Fresenius Medical Care, see Note 11, Related Party Transactions, to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report. For additional information regarding our agreements with Duke University, Yale University and JDRF, see Note 10 to our unaudited condensed consolidated financial statements contained elsewhere in this Quarterly Report.

Previous wording

Until such time, if ever, as we are able to successfully commercialize Symvess and to develop and commercialize our product candidates, we expect to continue financing our operations through the sale of equity, debt, financings, debt refinancings or restructurings or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt financing would also result in additional fixed payment obligations. If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.

Current wording

Until such time, if ever, as we are able to successfully commercialize Symvess and to develop and commercialize our product candidates, we expect to continue financing our operations through equity financings, debt financings, debt refinancings or restructurings or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt financing would also result in additional fixed payment obligations. If we are unable to raise capital, we plan to implement a program that delays, reduces, suspends or ceases our planned capital expenditures, research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition.

Previous wording

Our principal use of cash in recent periods has been primarily to fund our operations, including the clinical and preclinical development of our product candidates. Our future capital requirements, both short-term and long-term, will depend on many factors, including the progress and results of our clinical trials and preclinical development, timing and extent of spending to support development efforts, cost and timing of future commercialization activities, and the amount and timing of revenues that we receive from commercial sales.

Current wording

Our principal use of cash in recent periods has been to fund our operations, including the clinical and preclinical development of our product candidates. Our future capital requirements, both short-term and long-term, will depend on many factors, including the progress and results of our clinical trials and preclinical development, timing and extent of spending to support development efforts, cost and timing of future commercialization activities, and the amount and timing of revenues that we receive from commercial sales.

Previous wording

Net cash used in investing activities forthe three months ended March 31, 2026 and March 31, 2025 consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities forthe six months ended June 30, 2026 and 2025 consisted of purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 consisted primarily of $18.7 million of net proceeds from our March 2026 Registered Direct Offering and $4.6 million of net proceeds from the issuance of stock under our TD Cowen ATM Facility. Net cash provided by financing activities for the three months ended March 31, 2025 consisted primarily of $47.0 million of net proceeds from our 2025 Public Offering.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 consisted primarily of $18.3 million of net proceeds from our March 2026 Registered Direct Offering, $53.8 million of net proceeds from our 2026 Public Offering and $4.6 million of net proceeds from the issuance of stock under our TD Cowen ATM Facility. Net cash provided by financing activities for the six months ended June 30, 2025 consisted primarily of $46.7 million of net proceeds from our 2025 Public Offering and $3.6 million of net proceeds from the issuance of stock under our Jefferies ATM Facility.

Previous wording

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in SEC rules and regulations.

Current wording

During the periods presented, we did not have, and we do not currently have, any off-balance sheet arrangements as defined by SEC rules and regulations.

Previous wording

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent liabilities. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates based on different assumptions, judgments, or conditions.

Current wording

Our discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent liabilities. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Although we believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates based on different assumptions, judgments, or conditions.

Previous wording

An accounting estimate or assumption is considered critical if both (a) the nature of the estimate or assumption involves a significant level of estimation uncertainty, and (b) the impact within a reasonable range of outcomes of the estimate and assumption is material to our financial condition. There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, included in our Annual Report.

Current wording

An accounting estimate or assumption is considered critical if both (a) the nature of the estimate or assumption involves a significant level of estimation uncertainty, and (b) the impact within a reasonable range of outcomes of the estimate and assumption is material to our financial condition. There have been no material changes to our critical accounting estimates as compared to those disclosed in our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, included in our Annual Report.