Arcturus Therapeutics Holdings Inc.

Previous wording

The following is a discussion of the financial condition and results of operations of Arcturus Therapeutics Holdings Inc. for the three and six months ended June 30, 2026. Unless otherwise specified herein, references to the “Company,” “Arcturus,” “we,” “our” and “us” mean Arcturus Therapeutics Holdings Inc. and its consolidated subsidiaries. You should read the following discussion and analysis together with the interim condensed consolidated financial statements and related notes included elsewhere herein. For additional information relating to our management’s discussion and analysis of financial conditions and results of operations, please see our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “Commission”) on March 3, 2026. Unless otherwise defined herein, capitalized words and expressions used herein shall have the same meanings ascribed to them in the 2025 Annual Report.

Current wording

The following is a discussion of the financial condition and results of operations of Arcturus Therapeutics Holdings Inc. for the three and nine months ended September 30, 2026. Unless otherwise specified herein, references to the “Company,” “Arcturus,” “we,” “our” and “us” mean Arcturus Therapeutics Holdings Inc. and its consolidated subsidiaries. You should read the following discussion and analysis together with the interim condensed consolidated financial statements and related notes included elsewhere herein. For additional information relating to our management’s discussion and analysis of financial conditions and results of operations, please see our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “Commission”) on March 3, 2026. Unless otherwise defined herein, capitalized words and expressions used herein shall have the same meanings ascribed to them in the 2025 Annual Report.

Previous wording

This report includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. This report also includes certain statements based solely on information, reports and studies provided by or conducted by Seqirus, Inc. and Meiji Holdings Co., Ltd or their respective affiliates.

Current wording

This report includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. This report also includes certain statements based solely on information, reports and studies provided by or conducted by Seqirus, Inc. and Meiji Seika Pharma Co., Ltd. or their respective affiliates.

Previous wording

We are a messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics. We have ongoing Phase 2 clinical studies for our RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF).

Current wording

We are a messenger RNA medicines company focused on the development of liver and respiratory therapeutics. We have ongoing Phase 2 clinical studies for our RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF).

Previous wording

The treatment was generally safe and well tolerated. Bronchospasm was not reported in these participants, either with or without pretreatment with a bronchodilator. Treatment-related AEs that were identified in the single-dose Phase 1 study were also observed in some participants for the first few doses but ceased with continued dosing. Two subjects experienced SAEs after the dosing period that were unrelated to ARCT-032, and the safety review committee approved the study to proceed. After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026 and continues to advance with active screening and enrollment in the United States and Israel. The fourth cohort was initiated with 10 mg administered once daily via inhalation over a 12-week period to better assess longer term safety, tolerability and early evidence of clinical efficacy.

Current wording

The treatment was generally safe and well tolerated. Bronchospasm was not reported in these participants, either with or without pretreatment with a bronchodilator. Treatment-related AEs that were identified in the single-dose Phase 1 study were also observed in some participants for the first few doses but ceased with continued dosing. Two subjects experienced SAEs after the dosing period that were unrelated to ARCT-032, and the safety review committee approved the study to proceed. After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026 and continues to advance with active screening and enrollment in the United States, Israel and Turkey. Enrollment has accelerated due to increased site activations in Israel and Turkey and is expected to be completed by year-end 2026. The fourth cohort was initiated with 10 mg administered once daily via inhalation over a 12-week period to better assess longer term safety, tolerability, and early evidence of clinical efficacy.

Previous wording

LUNAR-OTC/ARCT-810. The LUNAR-OTC development program addresses ornithine transcarbamylase (OTC) deficiency, a rare, life-threatening, genetic disease caused by mutations in the OTC gene that lead to dysfunctional or deficient OTC.

Current wording

LUNAR-OTC/ARCT-810 and ARCT-2601. The LUNAR-OTC development program addresses ornithine transcarbamylase (OTC) deficiency, a rare, life-threatening, genetic disease caused by mutations in the OTC gene that lead to dysfunctional or deficient OTC.

Previous wording

We have completed enrollment in the open-label multiple ascending dose Phase 2 study of ARCT-810 and all enrolled subjects have completed study drug dosing. The study evaluates safety and pharmacodynamics in adult and adolescent patients requiring clinical management for OTC deficiency. We continue to evaluate supplementary data to inform regulatory discussions and preparation for an End-of-Phase 2 meeting regarding the potential path forward across adult and pediatric development.

Current wording

We have completed enrollment in the open-label multiple ascending dose Phase 2 study of ARCT-810 and all enrolled participants have completed study drug dosing. The study evaluates safety and pharmacodynamics in adults and adolescents requiring clinical management for OTC deficiency. In September 2026, we presented interim results from the U.S. Phase 2 study, in which eight participants were enrolled across the 0.3 mg/kg and 0.5 mg/kg dose cohorts.

Previous wording

On August 3, 2026, the Company entered into the Termination Agreement with CSL Seqirus pursuant to which the Company and CSL Seqirus mutually terminated the CSL Collaboration Agreement, effective as of such date. Under the Termination Agreement, the Company received a one-time cash payment of $12.0 million from CSL Seqirus. In addition, the Company was released from a liability and from repayment of an R&D credit with an aggregate value of approximately $16.0 million.

Current wording

On August 3, 2026, the Company entered into the Termination Agreement with CSL Seqirus pursuant to which the Company and CSL Seqirus mutually terminated the CSL Collaboration Agreement, effective as of such date. Under the Termination Agreement, the Company received a one-time cash payment of $12.0 million from CSL Seqirus. In addition, the Company was released from an R&D credit and from repayment of unspent development payments with an aggregate value of approximately $16.0 million.

Previous wording

As a result of the termination, we expect deferred revenue from CSL Seqirus of approximately $5.2 million associated with remaining performance obligations under the CSL Collaboration Agreement to be recognized during the third quarter of 2026.

Current wording

As a result of the termination, we recognized revenue of approximately $16.8 million during the third quarter of 2026.

Previous wording

Meiji launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025. In June 2026, Meiji filed a Partial Change Application for KOSTAIVE updated for the NB.1.8.1 variant in a two-dose vial with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to support commercialization for the 2026-2027 season in Japan.

Current wording

Meiji launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025. In June 2026, Meiji filed a Partial Change Application for KOSTAIVE updated for the NB.1.8.1 variant in a two-dose vial with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to support commercialization for the 2026-2027 season in Japan. The application was approved on August 25, 2026, and commercial sales of KOSTAIVE in Japan are ongoing for the 2026-2027 season.

Previous wording

Revenue decreased by $25.3 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decline was primarily driven by lower revenue recognized under the CSL collaboration, reflecting reduced supply agreement revenue and decreased amortization of deferred revenue as KOSTAIVE transitions from development to the commercial phase. Grant revenue also decreased primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Current wording

Revenue decreased by $51.5 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. Collaboration revenue decreased $45.8 million, primarily due to lower revenue recognized under the CSL Collaboration Agreement prior to its termination, partially offset by the recognition of the $12.0 million termination payment and the remaining deferred revenue upon termination of the CSL Collaboration Agreement on August 3, 2026. Grant revenue decreased $5.7 million, primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Previous wording

Research and development expenses were $17.5 million for the three months ended June 30, 2026, compared with $29.6 million for the three months ended June 30, 2025. The decrease was primarily driven by lower clinical trial expenses associated with the BARDA, LUNAR-CF, and LUNAR-OTC programs, as well as reduced manufacturing costs related to the LUNAR-COVID and LUNAR-OTC programs. Additional decreases were attributable to lower payroll and benefits costs associated with lower share-based compensation expense and a reduction in headcount.

Current wording

Research and development expenses were $17.0 million for the three months ended September 30, 2026, compared with $23.3 million for the three months ended September 30, 2025, and $56.0 million for the nine months ended September 30, 2026, compared with $87.7 million for the nine months ended September 30, 2025. The decreases for both periods were primarily driven by lower clinical trial expenses associated with the LUNAR-COVID and BARDA programs and lower manufacturing costs related to the LUNAR-COVID program. Additional decreases for both periods were attributable to lower payroll and benefits costs associated with a reduction in headcount and lower share-based compensation expense, as well as lower facilities costs.

Previous wording

Early-stage programs represent programs that are in the preclinical or Phase 1 clinical stage and may be partnered or unpartnered. Early-stage programs include our Phase 1 clinical stage LUNAR-FLU program which was formerly partnered with CSL Seqirus. Discovery technologies represent our efforts to expand our product pipeline and are primarily related to pre-partnered studies and new capabilities. The related expenses may be partially offset with funds that have been reimbursed or awarded to us and consist of external manufacturing costs, lab supplies, equipment, and consulting and professional fees. Expenses for both early-stage programs and discovery technologies are expected to increase slightly over the next twelve months as we continue to advance both our early- and later-stage programs.

Current wording

Early-stage programs represent programs that are in the preclinical or Phase 1 clinical stage and may be partnered or unpartnered. Early-stage programs include our Phase 1 clinical stage LUNAR-FLU program which was formerly partnered with CSL Seqirus. Discovery technologies represent our efforts to expand our product pipeline and are primarily related to pre-partnered studies and new capabilities. The related expenses were partially offset with funds that have been reimbursed or awarded to us and consist of external manufacturing costs, lab supplies, equipment, and consulting and professional fees. Expenses for both early-stage programs and discovery technologies are expected to increase slightly over the next twelve months as we continue to advance both our early- and later-stage programs.

Previous wording

General and administrative expenses were $11.0 million for the three months ended June 30, 2026, compared with $10.3 million for the three months ended June 30, 2025. The slight increase was related to legal and professional fees offset by reduced share-based compensation. General and administrative expenses were $20.5 million for the six months ended June 30, 2026, compared with $21.7 million for the six months ended June 30, 2025. The decrease was primarily due to lower share-based compensation expense, reduced payroll and benefits costs resulting from lower headcount, and lower facilities costs.

Current wording

General and administrative expenses were $10.5 million for the three months ended September 30, 2026, compared with $10.4 million for the three months ended September 30, 2025. The slight increase was related to legal and professional fees offset by reduced share-based compensation. General and administrative expenses were $30.9 million for the nine months ended September 30, 2026, compared with $32.1 million for the nine months ended September 30, 2025. The decrease was primarily due to lower payroll and benefit costs and lower share-based compensation expense, both resulting from reduced headcount, partially offset by an increase in legal and professional fees.

Previous wording

Interest income is generated by the Company’s cash and cash equivalents. The decrease in interest income for the three and six months ended June 30, 2026, compared to the same period in 2025, was primarily due to lower interest rates and a reduced cash balance.

Current wording

Interest income is generated by the Company’s cash and cash equivalents. The decrease in interest income for the three and nine months ended September 30, 2026, compared to the same periods in 2025, was primarily due to lower interest rates and a reduced cash balance.

Previous wording

From the Company’s inception through the quarter ended June 30, 2026, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt. Through the second quarter of 2026, we have received a total of approximately $514.3 million in upfront payments and milestones from CSL Seqirus. As of June 30, 2026, the Company’s balance of cash and cash equivalents was $191.5 million.

Current wording

From the Company’s inception through the quarter ended September 30, 2026, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt. Through the termination of the CSL Collaboration Agreement, we received a total of approximately $514.3 million in upfront payments and milestones from CSL Seqirus, in addition to the $12.0 million payment received under the Termination Agreement. As of September 30, 2026, the Company’s balance of cash and cash equivalents was $184.8 million.

Previous wording

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers, for global exclusive rights to research, develop, manufacture and commercialize mRNA vaccines. Following the end of the second quarter of 2026, we entered into the Termination Agreement with CSL Seqirus, pursuant to which we mutually terminated the CSL Collaboration Agreement effective as of August 3, 2026.

Current wording

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers, for global exclusive rights to research, develop, manufacture and commercialize mRNA vaccines. On August 3, 2026, we entered into the Termination Agreement with CSL Seqirus, pursuant to which we mutually terminated the CSL Collaboration Agreement effective as of such date.

Previous wording

Under the Termination Agreement, we received a one-time cash payment of $12.0 million from CSL Seqirus. In addition, we were released from a liability and from repayment of an R&D credit with an aggregate value of approximately $16.0 million. We also regained strategic control of our vaccine portfolio, including KOSTAIVE® and our vaccine programs for seasonal influenza, pandemic influenza, RSV and EBV, subject to ongoing arrangements with Meiji for the Northern Hemisphere 2026-2027 season.

Current wording

Under the Termination Agreement, we received a one-time cash payment of $12.0 million from CSL Seqirus. In addition, we were released from an R&D credit and from repayment of unspent development payments with an aggregate value of approximately $16.0 million. We also regained strategic control of our vaccine portfolio, including KOSTAIVE® and our vaccine programs for seasonal influenza, pandemic influenza, RSV and EBV, subject to ongoing arrangements with Meiji for the Northern Hemisphere 2026-2027 season.

Previous wording

As a result of the termination, we expect deferred revenue from CSL Seqirus of approximately $5.2 million associated with remaining performance obligations under the CSL Collaboration Agreement to be recognized during the third quarter of 2026.

Current wording

As a result of the termination, we recognized revenue of approximately $16.8 million during the third quarter of 2026.

Previous wording

On August 31, 2022, we entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Advanced Research and Development Authority (“BARDA”), a division of the Office of the Assistant Secretary for Preparedness and Response (“ASPR”) within the U.S. Department of Health and Human Services (“HHS”) to support the development of a low-dose pandemic influenza candidate based on our proprietary self-amplifying messenger RNA-based vaccine platform. The BARDA Contract is to support our non-clinical and pre-clinical development, early-stage clinical development through Phase 1, and associated drug product manufacturing, regulatory and quality-assurance activities over a period of three years. It provides for reimbursement by BARDA of our permitted costs up to $63.2 million. As of June 30, 2026, the remaining available funding net of revenue earned was $24.6 million.

Current wording

On August 31, 2022, we entered into a cost reimbursement contract (the “BARDA Contract”) with the Biomedical Advanced Research and Development Authority (“BARDA”), a division of the Office of the Assistant Secretary for Preparedness and Response (“ASPR”) within the U.S. Department of Health and Human Services (“HHS”) to support the development of a low-dose pandemic influenza candidate based on our proprietary self-amplifying messenger RNA-based vaccine platform. The BARDA Contract is to support our non-clinical and pre-clinical development, early-stage clinical development through Phase 1, and associated drug product manufacturing, regulatory and quality-assurance activities over a period of three years. It provides for reimbursement by BARDA of our permitted costs up to $63.2 million. As of September 30, 2026, the remaining available funding net of revenue earned was $23.8 million.

Previous wording

A portion of our current cash balance is expected to be utilized during fiscal year 2026 to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (iii) expenses incurred prior to customer payments under the BARDA agreement and any transition or settlement-related activities following termination of the CSL Collaboration Agreement and (iv) continued exploratory activities related to our platform and other general administrative activities.

Current wording

A portion of our current cash balance is expected to be utilized during the next twelve months to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, and the planned integration of ARCT-2601 into that trial, (iii) expenses incurred prior to customer payments under the BARDA agreement and any transition or settlement-related activities following termination of the CSL Collaboration Agreement, (iv) the cash portion of the consideration for our acquisition of myNEO, which closed on October 15, 2026, and (v) continued exploratory activities related to our platform, including LUNAR 2.0™, the integration of myNEO, and other general administrative activities.

Previous wording

We expect to continue to incur additional losses in the long term, and we will need to raise additional debt or equity financing or enter into additional partnerships to fund development. Our ability to transition to profitability is dependent on regulatory approvals and subsequent sales of KOSTAIVE, and identifying and developing other successful mRNA drug and vaccine candidates. If we are not able to achieve planned milestones or incur costs in excess of our forecasts, we will need to reduce discretionary spending, discontinue the development of some or all of our programs, which will delay part of our development programs, all of which will have a material adverse effect on our ability to achieve our intended business objectives.

Current wording

We expect to continue to incur additional losses in the long term, and we will need to raise additional debt or equity financing or enter into additional partnerships to fund development. Our ability to transition to profitability is dependent on regulatory approvals of our product candidates and subsequent sales of KOSTAIVE and any approved products, and identifying and developing other successful mRNA drug and vaccine candidates. If we are not able to achieve planned milestones or incur costs in excess of our forecasts, we will need to reduce discretionary spending, discontinue the development of some or all of our programs, which will delay part of our development programs, all of which will have a material adverse effect on our ability to achieve our intended business objectives.

Previous wording

Net cash used in operating activities was $39.4 million for the six months ended June 30, 2026, compared to $40.9 million for the six months ended June 30, 2025. The decrease in cash outflows was primarily driven by improved collections in accounts receivable and more favorable changes in accrued liabilities and deferred revenue. These factors were partially offset by less favorable changes in accounts payable and prepaid expenses.

Current wording

Net cash used in operating activities was $46.3 million for the nine months ended September 30, 2026, compared to $58.0 million for the nine months ended September 30, 2025. The decrease in net cash used in operating activities was primarily driven by the $12.0 million payment received under the Termination Agreement and lower cash outflows related to accrued liabilities and deferred revenue, partially offset by a higher net loss and lower share-based compensation expense.

Previous wording

Net cash provided by investing activities was $0.1 million for the six months ended June 30, 2026, compared with net cash used of $0.1 million for the six months ended June 30, 2025. The increase in cash provided by investing activities was primarily driven by the absence of property and equipment purchases during the current year period.

Current wording

Net cash used in investing activities was nominal for the nine months ended September 30, 2026, compared to $0.3 million for the nine months ended September 30, 2025. The decrease in cash outflows was primarily driven by a decrease in purchases of property and equipment during the current-year period.

Previous wording

Net cash provided by financing activities was nominal for the six months ended June 30, 2026, compared to $0.5 million for the six months ended June 30, 2025. The decrease in cash provided by financing activities was primarily driven by lower proceeds from employee stock option exercises.

Current wording

Net cash provided by financing activities was $0.3 million for the nine months ended September 30, 2026, compared to $1.7 million for the nine months ended September 30, 2025. The decrease in cash provided by financing activities was primarily driven by lower proceeds from employee stock option exercises.

Previous wording

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the 2025 Annual Report.

Current wording

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the 2025 Annual Report, except as related to the myNEO acquisition discussed in Note 11 to the condensed consolidated financial statements.