Inhibikase Therapeutics, Inc.

Nature of Business

Inhibikase Therapeutics, Inc. is a clinical-stage pharmaceutical company developing IKT-001 for pulmonary arterial hypertension (“PAH”). The Company's lead product candidate, IKT-001, is a prodrug of imatinib mesylate (“imatinib”), being developed for PAH, which is an orphan indication for which the Company has been granted Orphan Drug Designation by the U.S. Food and Drug Administration. Imatinib was first approved in the United States in 2001 for various cancers and blood disorders and, following more than 20 years of clinical use, has a well-characterized safety profile with the first reported use of imatinib in PAH occurring in 2005. PAH is a progressive, life-threatening disease characterized by pulmonary vascular remodeling and elevated pulmonary vascular resistance that affects approximately 50,000 Americans. The Company hascompleted a non-human primate safety study and a bioequivalence clinical study in healthy volunteers to determine the doses of IKT-001 that are equivalent to imatinib. The Company's Phase 3 clinical study, named IMPROVE-PAH (IKT-001 for Measuring Pulmonary Vascular Resistance and Outcome Variables in a Phase 3 Evaluation of PAH), is a single pivotal global study, which is presently enrolling patients with 28 country regulatory approvals globally and 79 clin ical sites activated to date, and three additional pending country regulatory approvals and one planned country regulatory submission.

2. Liquidity

As of September 30, 2026, the Company had cash, cash equivalents and marketable securities of approximately $193.3 million.

The Company has incurred recurring losses and at September 30, 2026, and had an accumulated deficit of approximately $199.1 million.

To date, the Company has funded its operations primarily through public offerings of its common stock, private placements of its common stock (and pre-funded warrants) and sales of common stock through at-the-market (“ATM”) offerings. The Company has raised an aggregate of $328.2 million in public offerings, sales under its ATM program, including $52.0 million in net ATM proceeds, and $1.0 million from the exercise of Series A-1 Warrants during the nine months ended September 30, 2026.

The Company is subject to a variety of risks similar to other clinical stage life science companies including, but not limited to, the successful development, regulatory approval, and market acceptance of the Company’s product candidates, development by competitors of new technological innovations, protection of proprietary technology, and raising additional working capital. The Company has incurred significant research and development expenses related to its product candidate programs, general and administrative expenses and negative cash flows from operations. The Company anticipates costs and expenses to increase in the future as the Company continues to develop and pursue regulatory approval of IKT-001.

While the Company believes its capital resources are sufficient to fund the Company’s ongoing operations for the next 12 months from the issuance date of these unaudited condensed consolidated financial statements, the Company’s liquidity could be materially affected by: (1) its ability to raise additional capital through equity offerings, debt financings, or other non-dilutive third-party funding including, without limitation, the availability, if any, of potential proceeds from the exercise of the Series A-1 Warrants or the Series B-1 Warrants (see Note 8); (2) costs associated with new or existing strategic alliances, or licensing and collaboration arrangements; (3) negative regulatory events or unanticipated costs related to IKT-001; (4) any other unanticipated material negative events, delays for the Company's Phase 3 studies, or costs. One or more of these events or costs could materially affect the Company’s liquidity. If the Company is unable to meet its obligations when they become due, the Company may have to delay expenditures, reduce the scope of its research and development programs, or make significant changes to its operating plan. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis of Presentation and Significant Accounting Policies

There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 other than those identified below.

Basis of Presentation of Interim Financial Statements

The Company’s unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, except as otherwise disclosed, necessary for the fair presentation of the financial position, results of operations, and changes in financial position for such periods, have been made. These unaudited interim condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. Certain information that is normally required by U.S. GAAP has been condensed or omitted in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The December 31, 2025 condensed consolidated balance sheet was derived from the audited financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC.

Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 26, 2026.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of its liquidity and working capital adequacy, contingent consideration, the fair value of its stock options and warrants, deferred tax valuation allowances, and to record expenses relating to research and development contracts and accrued expenses. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates.

Segment Information

Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker or decision-making group in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating and reporting segment, which is the business of developing protein kinase inhibitor therapeutics (see Note 14).

Recently Issued Accounting Pronouncements

There have been no material changes to the recently issued accounting pronouncements disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Concentrations of Credit Risk

The Company maintains its cash and cash equivalent balances with high-quality financial institutions and, consequently, the Company believes that such funds are subject to minimal credit risk. The Company is exposed to credit risk in the event of default by the financial institutions to the extent amounts recorded on the condensed consolidated balance sheets are in excess of insured limits. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds.

The Company has not experienced any losses in such accounts and management believes that the Company does not have significant credit risk with respect to such cash and cash equivalents and marketable securities.

Research and Development Costs

Costs incurred in the research and development of the Company’s product candidates are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, and include salaries and benefits, stock compensation, research-related subcontractors and consultants, clinical studies costs, supplies and overhead costs and in-process research and development. Advance payments made to suppliers and contract research organizations are classified as prepaid research and development and are expensed as research and development as the supplies are consumed and the contract services are provided.

Fair Value Measurement

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

· Level 1 — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access;

· Level 2 — Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves and foreign currency spot rates; and

· Level 3 — Inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s financial assets and financial liabilities, which include cash equivalents and marketable securities and accounts payable, have been initially valued at the transaction price, and marketable securities are subsequently revalued at the end of each reporting period, utilizing third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, to determine value.

Marketable Securities

The Company's marketable securities consist of U.S. Treasury bills and commercial paper with maturities of less than one year which are classified as available-for-sale and included in current assets on the condensed consolidated balance sheets. Available-for-sale debt securities are carried at fair value with unrealized gains and losses reported as a component of stockholders’ equity in accumulated other comprehensive income (loss). Realized gains and losses, if any, are included in other income, in the condensed consolidated statements of operations and comprehensive loss.

Available-for-sale debt securities in an unrealized loss position are evaluated at least quarterly to determine whether the decline in fair value has resulted from credit-related factors or other factors, such as changes in interest rates. The Company considers various factors in this assessment, including the extent to which fair value is less than amortized cost, the financial condition and credit quality of the issuer, and the Company’s intent and ability to hold the security to recovery.

If the Company intends to sell a security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the amortized cost basis is written down to fair value through earnings. For securities that do not meet these criteria, the Company evaluates whether any portion of the unrealized loss is attributable to credit-related factors. If so, an allowance for credit losses is recorded through earnings for the credit-related portion of the loss, with the remaining unrealized loss recognized in accumulated other comprehensive income (loss).

As of September 30, 2026, and December 31, 2025, the Company’s marketable securities consisted exclusively of highly rated U.S. Treasury bills with short-term maturities. Unrealized losses, if any, were not attributable to credit-related factors. Accordingly, no allowance for credit losses was recorded at September 30, 2026 or December 31, 2025.

Contingent Consideration Liabilities

The Company recognizes contingent consideration issued in connection with asset acquisitions when it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated.

The Company remeasures the contingent consideration liability to fair value at each reporting date, until the contingency is resolved or expires, with changes in the fair value of the contingent consideration liability included within operating expenses on the Company’s condensed consolidated statements of operations and comprehensive loss.

Fair Value Measurements

The Company’s U.S. Treasury bills are classified within Level 1 of the fair value hierarchy and are valued based on quoted prices in active markets. For cash, cash equivalents and accounts payable, the carrying amounts approximate fair value, because of the short maturity of these instruments. Contingent consideration related to the acquisition of CorHepta (see Note 9) is classified within Level 3 of the fair value hierarchy as the determination of fair value uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability.

The following table summarizes cash equivalents, marketable securities and contingent consideration measured at their fair value on a recurring basis as of September 30, 2026 and December 31, 2025:

Marketable Securities

Marketable securities consisted of the following as of:

All U.S. Treasury obligations were due to mature inless than one year as of September 30, 2026 and December 31, 2025, respectively. The Company didnot realize any gains or losses from maturities of marketable securities for the period ended September 30, 2026 or the year ended December 31, 2025.

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

7. ATM Program/Open Market Sales Agreement

On June 20, 2025, the Company entered into an Open Market Sale Agreement SM (the “Sales Agreement”) with Jefferies LLC, as sales agent ("Jefferies"), pursuant to which the Company may, from time to time, issue and sell shares of its common stock, in an aggregate offering price of up to $185,000,000, through or to Jefferies. Under the terms of the Sales Agreement, Jefferies may sell the shares of the Company's common stock at market prices by any method that is deemed to be an "at the market offering" as defined in Rule 415 under the Securities Act of 1933, as amended. During the nine months ended September 30, 2026, the Company sold 27,166,262 shares of the Company's common stock pursuant to the Sales Agreement, including 25,000,000 shares sold to RA Capital Management, for aggregate net proceeds of $52.0 million. On July 29, 2026,18,030,000 of the shares sold to RA Capital Management were exchanged for pre-funded warrants to purchase shares of common stock. As of September 30, 2026, $131.5 million of common stock remained available for sale pursuant to the prospectus supplement relating to the Company's ATM program.

8. Stockholders’ Equity

Each share of common stock is entitled toone vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. On January 3, 2025, the number of the Company's authorized shares of common stock was increased from 100,000,000 shares to 500,000,000 shares. Also, the number of authorized shares of common stock reserved for issuance under the Company's 2020 Equity Incentive Plan was increased by 27,453,993 shares and will automatically be increased on January 1 of each year during the term of the plan, starting with January 1, 2026 to the lesser of (a)4% of the total shares of the Company’s common stock outstanding on December 31 of the prior year (including, for this purpose, the number of shares underlying any pre-funded warrants) or (b) a lesser number of shares of the Company’s Common Stock determined by the administrator of the 2020 Equity Incentive Plan (the “2020 Plan”). As of September 30, 2026 and December 31, 2025, a total of 3,372,704 and 5,197,330 shares of common stock, respectively, were reserved for issuance upon the exercise of outstanding stock options and warrants under the 2020 Equity Incentive Plan and the 2011 Equity Incentive Plan.

Share Issuances

On July 10, 2026, the Company sold 25,000,000 shares of its common stock to RA Capital Management through its ATM facility for gross proceeds of $50.0 million. Subsequently, on July 29, 2026,18,030,000 of these shares of common stock were exchanged for pre-funded warrants to purchase shares of common stock.

On November 24, 2025, the Company closed an underwritten public offering of approximately $115 million from the issuance and sale of shares of the Company's common stock and pre-funded warrants, before deducting placement agent fees and offering expenses (“November 2025 Offering”). The November 2025 Offering consisted of (i)56,436,566 shares of common stock sold at $1.45 per share and (ii) pre-funded warrants (“Pre-Funded Warrants”) to purchase up to 22,873,779 shares of common stock with an exercise price of $0.001. The Company received net proceeds from the November 2025 Offering of approximately $107.6 million.

On October 21, 2024, the Company announced the closing of a private placement of approximately $110 million from the issuance and sale of shares of the Company's common stock and accompanying warrants with potential aggregate financing of up to approximately $275 million upon the full cash exercise of the Warrants (as defined below) issued in the private placement, before deducting placement agent fees and offering expenses (“October 2024 Offering”). The October 2024 Offering consisted of (i)58,310,000 shares of common stock sold at $1.37 per share, or, in lieu thereof, Pre-Funded warrants to purchase up to 21,985,000 shares of common stock with an exercise price of $0.001, (ii) Series A-1 Warrants to purchase an aggregate of 40,139,474 shares of common stock with an exercise price of $1.37, or in lieu thereof, Pre-Funded Warrants to purchase the same number of shares of common stock (“Series A-1 Warrants”), and (iii) Series B-1 Warrants to purchase an aggregate of 73,813,529 shares of common stock with an exercise price of $1.49, or in lieu thereof, Pre-Funded Warrants to purchasethe same number of shares of common stock (“Series B-1 Warrants,”) and together with the Series A-1 Warrants, (the “Warrants”). Effective November 20, 2025, the Company and the holders of all of the outstanding Series A-1 Warrants and outstanding Series B-1 Warrants, amended the terms of the Series A-1 Warrants and the Series B-1 Warrants to reflect the Company’s then plan to advance IKT-001 to a global pivotal Phase 3 clinical study in PAH noting that the previous contractual terms referenced a Phase 2b clinical study. The Pre-Funded Warrants underlying the Series A-1 Warrants and Series B-1 Warrants are exercisable at any time after their original issuance and will not expire. The Series A-1 Warrants and the Series B-1 Warrants became exercisable on the fifth business day after the date the Company was notified by the SEC that the initial registration statement covering the resale of the shares of common stock issuable upon the exercise of the Series A-1 Warrants and Series B-1 Warrants was not subject to further review. Each Series A-1 Warrant, as amended, is exercisable for one share of common stock and will expire at 5:00 p.m. (New York City time) on the 30th day following the later of (a) the Company’s public announcement of the Phase 3 Part A interim 12-week safety readout for IKT-001 for PAH and (b) the Company both obtaining stockholder approval for and filing an amendment to its charter to increase the number of authorized shares of common stock to a number of shares of common stock sufficient to allow for the full exercise of the warrants (“Charter Amendment”). Each Series B-1 Warrant, as amended, is exercisable for one share of common stock, will become exercisable by an investor once all of such investor’s Series A-1 Warrants have been exercised and will expire at 5:00 p.m. (New York City time) on the 30th day following the later of (a) the Company’s public announcement of its Phase 3 Part A 24-week pulmonary vascular resistance efficacy readout for IKT-001 with respect to PAH and (b) the Company both obtaining stockholder approval for and filing the Charter Amendment. Under the terms of the warrants, an investor may not exercise Warrants (other than a Pre-Funded Warrant), to the extent such exercise would cause such investor, together with its affiliates and attribution parties, to beneficially own a number of shares of our common stock which would exceed 4.99% or 9.99%, as applicable, of our then outstanding shares of common stock following such exercise, excluding for purposes of such determination the shares of our common stock issuable upon exercise of the warrants which have not been exercised. The Series A-1 Warrants have an exercise price of $1.37 per share and the Series B-1 Warrants have an exercise price of $1.49 per share. The Company intends to use the net proceeds from share issuances to finance the Company's clinical development plans, including to advance the Phase 3 study of IKT-001 in PAH and for general corporate purposes. During the three and nine months ended September 30, 2026, the Company received $1.0 million in proceeds from the exercise of 730,000 Series A-1 Warrants.

As of September 30, 2026, and December 31, 2025, the Company had outstanding Pre-Funded Warrants to purchase an aggregate of up to 60,568,910 and 42,538,910 shares of the Company's common stock, respectively.

9. Acquisition of CorHepta

On February 21, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (“Merger Agreement”) with Project IKT Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”) and CorHepta. Pursuant to the Merger Agreement, on the closing date, Merger Sub merged with and into CorHepta, with CorHepta surviving as a wholly-owned subsidiary of the Company. At the time of entering into the Merger Agreement, the Company agreed to issue 4,979,101 shares of the Company’s common stock to the shareholders of CorHepta, of which (i)829,849 shares were fully vested on the acquisition date, (ii)2,489,030 shares represented contingent consideration and vested on February 21, 2026, upon the achievement of a service milestone, and (iii)1,660,222 shares represented post-merger compensation expense, subject to both service- and performance-based vesting conditions. The performance-based vesting condition was not met and, as a result, these shares in category (iii) above were forfeited on February 21, 2026 (see Note 11). As of the acquisition date, the achievement of the only service milestone condition, representing 1,493,415 unvested shares in category (ii), was deemed probable and the fair value of these shares was therefore included in the purchase price of the acquisition as contingent consideration of $4,435,443. The Company recognized a contingent consideration liability and corresponding expense for the remaining contingent consideration shares in future periods when it was probable that a liability had been incurred and the amount of that liability could be reasonably estimated. As of February 21, 2026, the Company remeasured the contingent consideration liability to fair value. Upon determination that the service milestone was satisfied in relation to category (ii) above on February 21, 2026, the liability was settled through the issuance of 2,489,030 shares of common stock and reclassification to additional paid-in capital.

The Company remeasured the initial contingent consideration recognized at acquisition shown below to fair value at each reporting date and recorded a change in fair value of $0 and$373,354 for the three and nine months ended September 30, 2026, respectively, which is included within operating expenses and $492,827 and $2,016,111 for the three and nine months ended September 30, 2025, respectively, which is included within operating expenses. The holders of a total of 4,149,252 unvested shares (those issued inconnection with the acquisition outlined in category (ii) and (iii) above) were entitled to exercise all voting rights with respect to such shares, and receive all dividends payable in respect of such shares. The Company does not expect to pay any dividends in the foreseeable future. The 4,149,252 unvested shares are excluded from the weighted average number of shares outstanding used in the calculation of basic loss per share for the nine months ended September 30, 2025, since they are held by the Company and not considered “outstanding” until vested. The 4,149,252 unvested shares were treated as “contingently issuable” shares as that term is defined in ASC 260-10-45-54 for the purposes of any diluted earnings per share calculations in periods those apply. Of the total 4,149,252 shares under category (ii) and (iii) above,2,489,545 shares vested on February 21, 2026 and are included in the weighted average number of shares outstanding calculation of basic loss per share for the nine months ended September 30, 2026 and the remaining 1,660,222 shares forfeited as of that date as the relevant performance milestone was not satisfied.

The following table provides a rollforward of the contingent consideration related to the acquisition of CorHepta:

The Company determined that the transaction represented an asset acquisition as defined by ASC 805 as substantially all of the value was attributed to a single intangible asset, in-process research and development (“IPR&D”). As a result, the consideration transferred was allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their relative fair values resulting in approximately $7.4 million being assigned to the IPR&D asset.

The fair value of consideration transferred was determined as follows:

The allocation of consideration transferred is as follows:

The IPR&D had not reached technological feasibility and had no alternative future use at the acquisition date, and therefore, the acquired IPR&D asset of $7,357,294 was written-off as research and development expense during the first quarter of 2025 in the Company’s condensed consolidated statements of operations and comprehensive loss immediately following the acquisition in accordance with ASC 730.

10. ABLi License Agreement

On May 5, 2025, the Company entered into a license agreement (the "License Agreement") with ABLi Therapeutics, Inc. ("ABLi"), pursuant to which the Company granted ABLi an exclusive, sub-licensable, royalty-bearing license under the Licensed IP (as defined in the License Agreement) to develop, manufacture, and commercialize risvodetinib (IKT-148009) globally. Under the terms of the License Agreement, ABLi is solely responsible for all further development and commercialization activities of risvodetinib and will bear all costs incurred in connection with these efforts. Except as otherwise permitted under the terms of the License Agreement, the License Agreement will automatically terminate if ABLi does not meet certain milestones with respect to the Licensed Material within 18 months of the date of the License Agreement.

The Company assessed the transaction under ASC 606 and identified a single, combined performance obligation to transfer the exclusive license and associated materials, know-how, and trademarks to ABLi. The Company satisfied its performance obligation at a point in time upon completing these transfers in May 2025.

In exchange for the exclusive license rights, ABLi made a non-refundable, non-creditable payment of one dollar. In addition, the Company is eligible to receive development and regulatory milestone payments up to $47.5 million and double-digit royalty payments based on net sales. The Company is also entitled to receive allocations of proceeds following the closing of certain transactions, as defined in the License Agreement.

As of September 30, 2026, the Company received aggregate payments of one dollar from ABLi for the upfront payment, thus the Company has recognized all of the initial transaction price. The Company evaluated the likelihood of the Company achieving the specified milestones and determined that the likelihood is not yet probable and as such no accrual of these payments is required as of September 30, 2026.

The Company also reimbursed ABLi $0.1 million of legal expenses incurred in connection with the negotiations of the License Agreement, which was recorded as a selling, general and administrative expense during the second quarter of 2025.

11. Stock-Based Compensation

The 2020 Plan

The 2020 Plan was established for granting stock incentive awards to directors, officers, employees and consultants to the Company. On June 7, 2024, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which the number of shares of common stock reserved and available for issuance under the 2020 Plan increased by 2,500,000 shares. On January 3, 2025, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which the number of authorized shares of common stock reserved for issuance under the 2020 Plan increased by 27,453,993 shares. On June 27, 2025, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which (i) the term of the 2020 Plan was extended by approximately five years to 2030, and (ii) an automatic evergreen provision was added to provide for an annual increase to the number of shares available for issuance under the 2020 Plan on January 1 of each year during the term of the plan, starting with January 1, 2026 to the lesser of (a)4% of the total shares of the Company’s common stock outstanding on December 31 of the prior year (including, for this purpose, the number of shares underlying any pre-funded warrants) or (b) a lesser number of shares of the Company’s Common Stock determined by the administrator of the 2020 Plan. On January 1, 2026, the number of shares available for issuance under the 2020 Plan was increased by 6,969,206 shares pursuant to the evergreen provision.

On June 26, 2026, the stockholders of the Company approved an amendment to the 2020 Plan, pursuant to which the number of shares of common stock reserved and available for issuance under the 2020 Plan increased by 3,000,000 shares. Subject to certain adjustments, including the forfeiture of options previously granted under the Company's 2011 Equity Incentive Plan that are added back to the 2020 Plan, the maximum number of shares of common stock that may be issued under the 2020 Plan following the stockholders' approval on June 26, 2026 is limited to 41,386,723 shares.

The 2026 Inducement Plan

On March 25, 2026, the Company's board of directors approved the Inhibikase Therapeutics, Inc. 2026 Inducement Plan (the "Inducement Plan"), pursuant to which the Company reserved 4,000,000 shares of common stock for issuance exclusively pursuant to equity-based awards to individuals who were not previously employees or directors of the Company, as a material inducement to the individual’s entry into employment with the Company. The Inducement Plan provides for the grant of equity-based awards in the form of nonstatutory stock options, stock appreciation rights, restricted stock awards, and restricted stock unit awards. The Inducement Plan was adopted without stockholder approval in accordance with Nasdaq Listing Rule 5635(c)(4).

Restricted Stock

In connection with the acquisition of CorHepta in February 2025 (see Note 9), the Company issued a combined 1,660,222 shares of restricted common stock to two selling shareholders of CorHepta who were subsequently employed by the Company, which were subject to a combination of post-acquisition service- and performance-based vesting conditions, as follows: (i)996,133 shares vested on the first anniversary of the closing of the acquisition, (ii) the remaining 664,089 shares were forfeited on February 21, 2026 as a result of the non-achievement of a certain milestone specified in the Merger Agreement. There was no restricted stock outstanding as of September 30, 2026.

For the restricted shares with service-based vesting conditions, stock-based compensation expense is recognized on a straight-line basis over the service period, which is generally the vesting term. For restricted shares with performance-based vesting conditions, stock-based compensation expense is recognized over the requisite service period when it is probable that the performance condition will be achieved.

The weighted-average grant date fair value of the restricted shares issued in connection with the asset acquisition was $4.9 million. During the three and nine months ended September 30, 2026, the Company recognized stock-based compensation expense of $0 and $0.4 million, respectively, related to the restricted shares with service-based vesting conditions. During the three and nine months ended September 30, 2025, the Company recognized stock-based compensation expense of $0.7 million and $1.8 million, respectively, related to the restricted shares with service-based vesting conditions. No stock-based compensation expense was recognized related to the restri cted shares with performance-based vesting conditions during the three and nine months ended September 30, 2026 and 2025, as the performance conditions were not probable. As of September 30, 2026, there was $0 of unrecognized compensation expense related to the restricted shares issued in connection with the acquisition of CorHepta.

Stock Options

During the nine months ended September 30, 2026, the Company granted 13,667,142 options to purchase common stock with a weighted average exercise price of $1.99. These options vest either (i) one-fourth on the first anniversary of the grant of such option with the remainder to vest in 36 equal monthly installments thereafter, (ii) in 36 equal monthly installments, or (iii) on the first anniversary of the grant date. Theaggregate grant date fair value of all options granted was $21.7 million.

During the nine months ended September 30, 2025, the Company granted 27,225,823 options to purchase common stock with a weighted average exercise price of $2.34. These options vest either (i) annually in three equal parts over three years, (ii) one-fourth on the first anniversary of the grant of such option with the remainder to vest in 36 equal monthly installments thereafter, (iii) in 48 equal monthly installments, (iv) annually over two years, (v) annually over four years, (vi) on the earlier of one year or the day prior to the annual meeting of stockholders, or (vii) in full on the date of grant. The Company also granted 2,056,049 performance-based options to purchase common stock with a weighted average exercise price of $2.35 to certain employees. These options will vest and become exercisable once the performance conditions are probable of being met. There is no assurance that the performance conditions will be met and therefore some or all of these options may never vest or become exercisable. The aggregate grant date fair value of all options granted was $54.7 million. During the nine months ended September 30, 2025, certain performance conditions were probable of being met.

For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, the Company recognizes expense from the date the Company reaches this conclusion through the estimated vesting date.

The activity for the Company's 2020 Plan, 2011 Plan and Inducement Plan for the nine months ended September 30, 2026, is summarized as follows:

As of September 30, 2026, the total compensation cost related to non-vested option awards not yet recognized was $49.2 million, with a weighted average remaining vesting period of 2.41 years.

The weighted-average fair values of options granted during the nine months ended September 30, 2026 and 2025 were $1.59 and $1.75 per share, respectively, and were calculated using the following estimated assumptions:

Stock-Based Compensation Expense

The following table summarizes the stock-based compensation expense for stock options granted to employees and non-employees:

*Includes $0 and $0.4 million for the three and nine months ended September 30, 2026, respectively, and $0.7 million and $1.8 million for the three and nine months ended September 30, 2025, respectively, related to the restricted stock awards issued in connection with the acquisition of CorHepta.

12. Net Loss Per Share

Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of shares outstanding during the period which includes 60,568,910 of Pre-Funded Warrants and shares held in abeyance from date of issuance.

The following potentially dilutive shares of common stock have not been included in the computation of diluted net income (loss) per share for the three and nine months ended September 30, 2026 and 2025, as the result would be anti-dilutive:

13. Commitments and Contingencies

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to the estimated loss, the recorded liability would include probable and estimable legal costs associated with the claim or potential claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. The Company is not currently a party to any material litigation or legal proceedings.

Lease

On April 18, 2022, the Company entered into an operating lease agreement for office space located in Lexington, Massachusetts (the "Office Lease"). On August 8, 2022, the Company commenced occupancy of the leased space. The lease ran through September 30, 2025 and the Company did not renew or continue occupancy of these premises upon lease expiration.

The Company accounts for the Office Lease under the provisions of ASC 842. The Company recorded a right-of-use asset and a corresponding operating lease liability on the Company's condensed consolidated balance sheets upon the accounting commencement date in August 2022. The lease liability was measured at the accounting commencement date utilizing a 12% discount rate. The lease expired in September 2025 and therefore the right-of-use asset and the operating lease liability each had a balance of $0 at September 30, 2026. The Company recorded lease expense related to the Office Lease of $35,934 and $106,525 and other short-term payments of $6,427 and $16,291 for the three and nine months ended September 30, 2025, respectively, in selling, general and administrative expenses.

The Office Lease contained escalating payments during the lease period. Upon execution of the Office Lease, the Company prepaid one month of rent, which applied to the first month's rent, and a security deposit, which is held in escrow and was credited after the termination of the lease with a refund received in July 2026.

No future minimum lease payments remained under this lease as of September 30, 2026.

Clinical and Manufacturing Agreements

The Company has entered into various agreements with a contract research organization ("CRO") and contract manufacturing organizations ("CMOs") to support its ongoing Phase 3 study in PAH, known as IMPROVE-PAH, and manufacturing activities. These agreements are generally cancelable; however, some agreements are subject to payment of termination fees and typically include fixed and variable components based on actual services performed.

As of September 30, 2026, the Company’s estimated contractual commitments under these agreements were as follows (in millions):

(1)

The total commitment of $132.5 million includes $7.5 million subject to achievement of certain performance milestones associated with IMPROVE-PAH. The amount and timing of any such payments related to the $7.5 million performance milestones are contingent upon the vendor meeting specific criteria. As of September 30, 2026, one milestone of $0.4 million had been achieved and therefore a liability was recognized. The remaining milestones are not considered probable, and the potential payments cannot be reasonably estimated. Accordingly, no liability has been recorded in the accompanying consolidated financial statements for the remaining milestones. The Company will continue to evaluate this arrangement each reporting period and will recognize a liability when achievement of the remaining milestones becomes probable, and the amount can be reasonably estimated.

The estimated remaining contract costs exclude the potential milestone payments. As of September 30, 2026, the Company had a remaining upfront payment balanceof $6.4 million to the CROs, of which $2.8 million will be held as a retainer until the end of the study and applied against final invoicing and $3.5 million will be applied to passthrough costs as incurred.

14. Segment Information

The Company views its operations and manages its business asone operating and reportable segment, which is drug development. Consistent with the operational structure, the Chief Executive Officer, as the chief operating decision maker (“CODM”), manages and allocates resources on a consolidated basis using consolidated net income (loss) as a measure of profit/loss for the single reportable segment that is also reported on the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. This decision-making process reflects the way in which the financial information is regularly reviewed and used by the CODM to evaluate performance, set operational targets, forecast future financial results, and allocate resources.

The table below provides information about the Company's drug development segment and includes the reconciliation to consolidated net income (loss) for the three and nine months ended September 30, 2026 and 2025, respectively

(1) The nine months ended September 30, 2025 figure includes a one-time (non-cash) charge of $7.4 million for the acquired IPR&D related to the CorHepta acquisition.

(2) Other research and development costs include, but are not limited to employee travel, professional education, technology costs, and license fees.