UroGen Pharma Ltd

Note*1** – Business and Nature of Operations*

Nature of Operations

UroGen Pharma Ltd. is an Israeli company incorporated in* April 2004 (*“UPL”).

UroGen Pharma, Inc., a wholly owned subsidiary of UPL, was incorporated in Delaware in* October 2015and began operating in February 2016 (*“UPI”).

UPL and UPI (together the “Company”) is a biotechnology company dedicated to developing and commercializing innovative solutions that treat urothelial and specialty cancers. Since commencing operations, the Company has devoted substantially all of its efforts to securing intellectual property rights, performing research and development activities, including conducting clinical trials and manufacturing activities, hiring personnel, launching the Company’sfirst commercial product,Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN-101, clinical development of UGN-102, and raising capital to support and expand these activities.

On* April 15, 2020,the U.S. Food and Drug Administration (“FDA”) granted expedited approval forJelmyto*, afirst-in-class treatment indicated for adults with low-grade upper tract urothelial cancer (“low-grade UTUC”).Jelmyto consists of mitomycin, an established chemotherapy, and sterile hydrogel, using our proprietary sustained releaseRTGel technology. It has been designed to enable longer exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non-surgical means.

Note 2 – Basis of Presentation

The Company has experienced net losses since its inception and has an accumulated deficit of $679.3 million and $577.1 million as of* December 31, 2023* and2022, respectively. The Company expects to incur losses and have negative net cash flows from operating activities as it executes on its strategy including engaging in further research and development activities, particularly conducting non-clinical studies and clinical trials. The success of the Company depends on the ability to successfully commercialize its technologies to support its operations and strategic plan.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of UPL and its wholly owned subsidiary UPI. All material intercompany balances and transactions have been eliminated during consolidation.

In accordance with the accounting guidance related to the presentation of financial statements, management evaluates whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for the nexttwelve months from the date the financial statements are issued. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, and donot include any adjustments relating to the carrying amounts and classification of assets and liabilities that* maybe necessary should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is expected to be impacted by its ability to raise additional capital to fund its operations, produce cash inflows from Jelmyto* product sales and develop UGN-102.

The Company believes that absent sufficient proceeds received from equity, financing, or business development transactions, the Company willnot have sufficient cash and cash equivalents to fund its operations beyondone year from the issuance of these financial statements. Accordingly, the Company will, over the nexttwelve months, require significant additional financing to continue its operations. In addition, there can beno assurances that the Company will be able to secure such additional financing if at all, on terms that are satisfactory to the Company, and in amounts sufficient to meet its needs. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Failure to successfully receive additional financing will require the Company to delay, limit or reduce product development and commercialization efforts.

Note 3 –Significant Accounting Policies

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of UPL and its subsidiary, UPI. Intercompany balances and transactions have been eliminated during consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results* may*differ from those estimates. As applicable to the consolidated financial statements, the critical accounting estimates relate to the fair value of share-based compensation, measurement of revenue, estimate of uncertain tax positions, and measurement of liabilities accounted for under the interest method.

80

Functional Currency

The U.S. dollar (“Dollar”) is the currency of the primary economic environment in which the operations of the Company are conducted. Therefore, the functional currency of the Company is the Dollar.

Accordingly, transactions in currencies other than the Dollar are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the Dollar are measured using the official exchange rate at the balance sheet date. The effects of foreign currency re-measurements are recorded in the consolidated statements of operations as “Interest and other income, net.”

Cash and Cash Equivalents; Marketable Securities

The Company presents all highly liquid investments with an original maturity ofthree months or less when purchased as cash equivalents. Cash and cash equivalents generally consist of money market funds and bank money market accounts and are stated at cost, which approximates fair value.

Cash and cash equivalents and marketable securities totaled $141.5 million as of* December**31,* 2023. The Company accounts for its investments, which include cash equivalents and marketable securities, as available-for-sale in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic320, “Investments — Debt and Equity Securities”. Available-for-sale debt securities are carried at fair value with unrealized gains and losses reported in other comprehensive income/loss within shareholders’ equity. Realized gains and losses are recorded as a component of interest and other income, net. The cost of securities sold is based on the specific-identification method.

Certain short-term investments are valued using models or other valuation methodologies that use Level2 inputs. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, default rates, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. The majority of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

For individual debt securities classified as available-for-sale securities where there has been a decline in fair value below amortized cost, the Company determines whether the decline resulted from a credit loss or other factors. The Company records impairment relating to credit losses through an allowance for credit losses, limited by the amount that the fair value is less than the amortized cost basis. Impairment that hasnot been recorded through an allowance for credit losses is recorded through other comprehensive income, net of applicable taxes.

Restricted cash is related primarily to cash held to secure corporate credit cards; restricted deposits are related to cash held to secure leases.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents and marketable securities. The primary objectives for the Company’s investment portfolio are the preservation of capital and the maintenance of liquidity. The Company doesnot enter into any investment transaction for trading or speculative purposes.

The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer. The Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation and concentrated within a limited number of financial institutions. The accounts are monitored by management to mitigate the risk.

The Company’s product sales are recognized through the Company's arrangement with a single customer, athird-party national specialty distributor. The Company assesses the need for an allowance for doubtful accounts primarily based on creditworthiness, historical payment experience and general economic conditions. The Company hasnot experienced any credit losses related to this customer and hasnot currently recognized any allowance for doubtful accounts.

81

The Company provides for income taxes based on pretax income, if any, and applicable tax rates available in the various jurisdictions in which it operates, including Israel and the United States. Deferred taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is recognized to the extent that it is more likely thannot that the deferred taxes willnot be realized in the foreseeable future.

The Company follows atwo-step approach in recognizing and measuring uncertain tax positions. After concluding that a particular filing position can be recognized (i.e., has a more-likely-than-not chance of being sustained), ASC740-10-30-7 requires that the amount of benefit recognized be measured using a methodology based on the concept of cumulative probability. Under this methodology, the amount of benefit recorded represents the largest amount of tax benefit that is greater than50% likely to be realized upon settlement with a taxing authority that has full knowledge of all relevant information. See Note17 for further discussion related to income taxes.

Inventory

The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. ForJelmyto, the Company commenced capitalization of inventory at the receipt of FDA approval.

The Company values its inventory at the lower of cost or net realizable value. The Company measures inventory approximating actual cost under afirst-in,first-out basis. The Company assesses recoverability of inventory each reporting period to determine any write down to net realizable value resulting from excess or obsolete inventories.

Property and Equipment

Property and equipment are recorded at historical cost, net of accumulated depreciation, amortization and, if applicable, impairment charges. The Company reviews its property and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable.

Property and equipment are depreciated over the following useful lives (in years):

Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. See Note8 for further discussion regarding property and equipment.

Prepaid Forward Obligation

The Company is party to a transaction with RTW Investments (the “RTW Transaction”) in which the Company received funds to support the continued launch ofJelmyto and the development of UGN-102 in return for tiered, future cash payments based on net sales ofJelmyto and UGN-102*,* if approved by the FDA. The net proceeds received under the RTW Transaction were recognized as a long-term liability. The Company recognizes the current cash payable amounts under the arrangement within other current liabilities on the consolidated balance sheets. The subsequent measurement for the liability follows the accounting principles defined in ASC Topic835-30, “Imputation of Interest”. See Note9 for further discussion related to the prepaid forward obligation.

Long-Term Debt

The Company is party to a loan agreement with funds managed by Pharmakon Advisors, L.P. (“Pharmakon”). The Company recognizes interest expense in current earnings, and accrued interest within other current liabilities on the consolidated balance sheets. The Company recognizes capitalized financing expenses as a direct offset to the long-term debt on the Company's consolidated balance sheets, and amortizes them over the term of the debt using the effective interest method. See Note10 for further discussion related to long-term debt.

Leases

The Company is a lessee in several noncancelable operating leases, primarily for office space, office equipment and vehicles. The Company currently hasno finance leases.

The Company accounts for leases in accordance with ASC Topic842, “Leases”. The Company determines if an arrangement is a lease at inception. Right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Operating lease ROU assets are presented as right-of-use assets on the consolidated balance sheets. The current portion of operating lease liabilities is included in other current liabilities and the long-term portion is presented separately as long-term lease liabilities on the consolidated balance sheets.

82

Lease expense is recognized on a straight-line basis for operating leases. Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented as operating expense on the consolidated statements of operations in the same line item as expense arising from fixed lease payments.

The Company’s lease terms* may*include options to extend the lease. The lease extensions are included in the measurement of the right-of-use asset and lease liability when it is reasonably certain that it will exercise that option.

Because most of the Company’s leases donot provide an implicit rate of return, an incremental borrowing rate is used based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.

ROU assets for operating leases are periodically reviewed for impairment losses under ASC360-10, “Property, Plant, and Equipment,” to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

Product sales fromJelmyto are recognized as revenue under ASC606 at the point in time that control of the product has been transferred to the customer, generally at the point the product has been delivered to the treating physician. All product sales ofJelmyto are recognized through the Company's arrangement with a single customer, athird-party national specialty distributor. Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to340B drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds for discarded drug, which are estimated based on the Company’s historical experience.

Research and Development Expenses

Research and development costs are expensed as incurred and consist primarily of the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, subcontractors and materials used for research and development activities, including nonclinical studies, clinical trials, manufacturing costs and professional services. The costs of services performed by others in connection with the research and development activities of the Company, including research and development conducted by others on behalf of the Company, shall be included in research and development costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from its external service providers. The Company adjusts its accrual as actual costs become known. Where contingent milestone payments are due tothird parties under research and development arrangements or license agreements, the milestone payment obligations are expensed when such development milestone results are achieved.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of personnel costs (including share-based compensation related to directors, employees and consultants). Other significant costs include commercial, medical affairs, external professional service costs, facility costs, accounting and audit services, legal services and other consulting fees. Selling, general and administrative costs are expensed as incurred, and the Company accrues for services provided bythird parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known.

Share-Based Compensation

Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period, which is equal to the vesting period. For performance stock units (“PSUs”), cost is measured at the grant date based on the fair value of the award and is recognized over any relevant service period as expense when the achievement of the performance condition is probable. The fair value of options is determined using the Black-Scholes option-pricing model. The fair value of a restricted stock unit (“RSU”) or a PSU equals the closing price of the Company’s ordinary shares on the grant date. The Company accounts for forfeitures as they occur in accordance with ASC Topic718, “Compensation—Stock Compensation”.

The Company elected to recognize compensation costs for awards conditioned only on continued service that have a graded vesting schedule using the straight-line method and to value the awards based on the single-option award approach.

Pre-funded Warrants

The Company issued pre-funded warrants in connection with a private placement transaction that are accounted for as a freestanding equity-linked financial instrument that meets the criteria for equity classification under ASC480, “Distinguishing Liabilities from Equity,” and ASC815, “Derivatives and Hedging.” Accordingly, the Company classifies the pre-funded warrants as a component of permanent shareholders’ equity within additional paid-in capital and records them at the issuance date using a relative fair value allocation method. The Company valued the pre-funded warrants at issuance, concluding that their sales price approximated their fair value, and allocated the net sales proceeds from the private placement transaction proportionately to the ordinary shares and pre-funded warrants. See Note15 for further discussion related to the private placement transaction.

Net Loss per Ordinary Share

Basic net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional ordinary shares that would have been outstanding if the potential ordinary shares had been issued and if the additional ordinary shares were dilutive.

For all periods presented, potentially dilutive securities are excluded from the computation of fully diluted loss per share as their effect is anti-dilutive.

The Company’s pre-funded warrants requires the holder to pay nominal consideration to receive the Company’s ordinary shares and are therefore considered outstanding shares in determining basic and diluted earnings per share in accordance with ASC Topic260, “Earnings per Share”.

83

The following table summarizes the calculation of basic and diluted loss per ordinary share for the periods presented (in thousands, except share and per share amounts):

Recently Adopted or Issued Accounting Pronouncements

In* November 2023,the FASB issued Accounting Standards UpdateNo.* 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures ("ASU2023-07"), which provides guidance to improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. Public entities must adopt the new guidance for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.The amendments in this ASU must be applied on a retrospective basis to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of ASU2023*-07 on the Company’s financial disclosures.

In* December 2023,the FASB issued Accounting Standards UpdateNo.* 2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures (“ASU2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU2023-09 for the2025 year-end and is currently evaluating the potential impact of the adoption on the Company’s financial disclosures. ASU2023-09 allows for adoption using either a prospective or retrospective transition method.

The Company has reviewed other Accounting Standards Updates recently issued by the FASB, and determined thatnone of these pronouncements will have a significant impact on the Company's consolidated financial statements and related disclosures.

NOTE4 –o THERf INANCIALI NFORMATION

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of* December 31, 2023* and2022 (in thousands):

Interest and Other Income, Net

Interest and other income, net consisted of the following for the year ended* December 31, 2023* and2022 (in thousands):

NOTE5 –INVENTORIES

Inventories consisted of the following as of* December 31, 2023* and* December 31, 2022* (in thousands):

(1) $1.7 million and $2.4 million of raw materials are included within other non-current assets on the consolidated balance sheets at* December 31, 2023and December 31, 2022,*respectively. Changes in non-current assets are reflected on the consolidated statements of cash flows within the caption of other non-current assets.

NOTE6 –FAIRV ALUEM EASUREMENTS

The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

84

As a basis for considering such assumptions, athree-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that arenot active.

Level3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The carrying amounts of the Company’s cash, restricted cash, other current assets, accounts payable and accrued liabilities are generally considered to be representative of their fair value because of the short-term nature of these assets and liabilities.

The carrying value of the prepaid forward obligation (See Note9 - Prepaid Forward Obligation) approximates its fair value. The Company estimated the fair value of the prepaid forward obligation using Level3 inputs, including internally developed financial forecasts and management's estimate of probability of success related to product candidates, and determined that the effective interest rate in the obligation approximates market rates for loans with similar terms and risk characteristics.

The Company estimated the fair value of long-term debt (see Note10 - Long-Term Debt) using the income approach with Level3 inputs. The Company estimated future floating rate interest payments using a forward curve of athree-month benchmark rate, and estimated fair value based on publicly available data reported in the financial statements of publicly traded venture lending companies. Based on a reasonable range of yields for debt instruments of similar tenor in a similar industry, the Company determined that the carrying value of the long-term debt on the Company's balance sheet approximates its fair value.

No transfers between levels have occurred during the periods presented.

Assets measured at fair value on a recurring basis based on Level1 and Level2 fair value measurement criteria as of* December 31, 2023* are as follows (in thousands):

Assets measured at fair value on a recurring basis based on Level1 and Level2 fair value measurement criteria as of* December 31, 2022* are as follows (in thousands):

The Company’s investments in U.S. government bonds and money market funds are measured based on publicly available quoted market prices for identical securities as of* December 31, 2023* and2022. The Company's investments in corporate bonds, commercial paper and certificates of deposits are measured based on quotes from market makers for similar items in active markets.

NOTE7 –Investments

The following table summarizes the Company’s investments as of* December 31, 2023* (in thousands):

85

The following table summarizes the Company’s investments as of* December 31, 2022 (*in thousands):

The Company classifies its investments as available-for-sale, and they consist entirely of debt securities. As of* December 31, 2023*, the amortized cost of investments included an immaterial amount of accrued interest. As of* December 31, 2023*, marketable securities were in a net unrealized gain position. Unrealized gains and losses on available-for-sale debt securities are included as a component of comprehensive loss.

As of* December 31, 2023*, the aggregate fair value of investments held by the Company in an unrealized loss position was $22.9 million which consisted of30 securities. The unrealized loss was primarily driven by rising interest rates. The Company doesnot expect to settle the debentures at a price less than the amortized cost basis of the investment; the Company expects to recover the entire amortized cost basis of the security. In accordance with the Company’s general investment strategy, the Company doesnot intend to sell the investments before maturity. As of* December 31, 2023*, the Company believes the cost basis for its marketable securities were recoverable in all material aspects andno allowance for credit losses were recognized in the period.

The Company’s investments as of* December 31, 2023* mature at various dates through* January**2026.* The fair values of investments by contractual maturity consist of the following (in thousands):

NOTE8 –PROPERTY ANDE QUIPMENT

Property and equipment, consists of the following as of* December 31, 2023* and2022 (in thousands):

Depreciation and amortization expense was $0.8 million and $0.9 million for the years ended* December 31, 2023* and2022, respectively.

NOTE 9 –Prepaid Forward Obligation

In* March 2021**,* the Company entered into a prepaid forward agreement with RTW Investments (“RTW”). Under the terms of the RTW Transaction, the Company received $75.0 million ($72.4 million net of transaction costs) to support the continued launch ofJelmyto and the development of UGN-102. In return for the transferred funds, RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales ofJelmyto in an amount equal to: (i)9.5% of annual net sales up to*$200* million, (ii)3.0% of annual net sales for annual net sales between*$200* million and*$300* million, and (iii)1.0% of annual net sales for annual net sales above*$300* million. If certain revenue thresholds forJelmyto aggregate worldwide annual net sales arenot met, the future cash payments to RTW with respect toJelmyto annual net sales up to*$200* million will increase by 3.5%, and* maydecrease back to9.5**%* dependent on the Company meeting certain subsequentJelmyto aggregate worldwide annual net sales thresholds. The rate in effect for the year ended* December 31, 2023*for annual net sales up to $200 million was 13.0%.

In addition, subject to FDA approval of UGN-102*,* RTW is entitled to receive tiered, future cash payments based on aggregate worldwide annual net product sales of UGN-102 in an amount equal to: (i)2.5% of annual net sales up to*$200* million, (ii)1.0% of annual net sales for annual net sales between*$200* million and*$300* million, and (iii)0.5% of annual net sales for annual net sales above*$300* million. If the Company doesnot receive FDA approval for UGN-102 by a specified date, the future cash payments to RTW with respect to aggregate worldwide annual net sales ofJelmyto across allJelmyto annual net sales tiers will increase by 1.5%.

In accordance with the prepaid forward agreement, the Company will be required to make payments of amounts owed to RTW each calendar quarter, through and until the quarter in which the aggregate cash payments received by RTW are equal to or greater than*$300* million. As security for the payment and fulfilment of these amounts throughout the arrangement, the Company has granted RTW afirst priority security interest inJelmyto and UGN-102*,* including the regulatory approvals, intellectual property, material agreements, proceeds and accounts receivable related to these products.

In* May 2021,following the receipt of necessary regulatory approvals, the Company received the $75.0 million prepaid forward payment ($72.4 million net of transaction costs) from RTW and recognized an associated prepaid forward obligation liability. Each period the Company makes a payment to RTW, an expense is recognized related to financing on the prepaid forward obligation based on an imputed rate derived from the expected future payments. Management reassesses the effective rate each period based on the current carrying value of the obligation and the revised estimated future payments. Changes in future payments from previous estimates are included in future financing expense. The Company doesnot expect to make any principal payments in the next12* months.

The following table shows the activity with respect to the carrying value of the prepaid forward liability for the year ended* December 31, 2023and2022* (in thousands):

(1)$3.0 million and $2.3 million of the Amounts paid and payable are included as current portion of the prepaid forward obligation within other current liabilities on the consolidated balance sheets as of* December 31, 2023* and* December 31,*2022, respectively.

86

NOTE10 –Long-Term Debt

On* March 7,2022, the Company entered into a loan agreement with Pharmakon for a senior secured term loan of up to $100 million intwo tranches. Thefirst tranche of $75 million was funded in March 2022.Thesecond* tranche of $25 million was funded in* December 2022.The facility will mature five years from initial funding and can be prepaid in whole at the Company's discretion, at any time, subject to prepayment premiums and make-whole amounts. The loan will require interest-only payments for thefirst* 48 months followed by principal and interest payments with interest accruing using3-month London Inter-Bank Offered Rate (“LIBOR”) (with a 1.25% floor) plus 8.25%. On* June 29, 2023,the loan agreement with Pharmakon was amended to replace the benchmark governing the interest rate with a rate based on the secured overnight financing rate ("SOFR") published by the Federal Reserve Bank of New York. Effective July 2023,the loan will accrues interest using a benchmark rate of3*-month SOFR plus a 0.26161% adjustment. The Company isnot required to maintain any financial covenants.

The Company incurred financing expenses of $4.2 million which are recognized as a direct offset to the long-term debt on the Company's consolidated balance sheets. These debt issuance costs are amortized over the term of the debt using the effective interest method, and are recorded in the consolidated statements of operations as “Interest expense".

The following table shows the activity with respect to the carrying value of the long-term debt, in thousands:

NOTE11 –Leases

Operating Leases

The Company had the following office and laboratory facility leases as of* December 31, 2023*:

In addition, the Company has other operating office equipment and vehicle leases. The Company’s operating leases* mayrequire minimum rent payments, contingent rent payments adjusted periodically for inflation, or rent payments equal to the greater of a minimum rent or contingent rent. The Company’s leases donot* contain any residual value guarantees or material restrictive covenants. The Company’s leases expire at various dates from2024 through2026, with varying renewal and termination options.

The components of lease cost for the year ended* December 31, 2023* and2022 were as follows (in thousands):

The amounts recognized as of* December 31, 2023* and2022 were as follows (in thousands):

As of* December 31, 2023*, no impairment losses have been recognized.

Supplemental information related to leases for the periods reported is as follows (in thousands, except for lease term and discount rate amounts):

87

As of* December 31, 2023*, maturities of lease liabilities were as follows (in thousands):

As of* December 31, 2022*, maturities of lease liabilities were as follows (in thousands):

Subleases

As of* December 31, 2023*, undiscounted cash flows to be received under the Company’s operating sublease on an annual basis were as follows (in thousands):

As of* December 31,*2022, undiscounted cash flows to be received under the Company’s operating sublease on an annual basis was as follows (in thousands):

NOTE12 –REVENUEFROMP RODUCTS ALES

Net product sales consist of the following for the year ended* December 31, 2023* and2022 (in thousands):

Net revenue recognized includes gross revenue and management’s estimate of returns, consideration paid to the customer, chargebacks relating to differences between the wholesale acquisition cost and the contracted price offered to the end consumer, chargebacks relating to340B drug pricing programs and other government sponsored programs, Medicaid drug rebate programs, the Company’s copay assistance program, and Medicare refunds for discarded drug, which are estimated based on the Company’s historical experience. Reserves related to items that are contractually able to be net settled are recognized as contra accounts receivable while other remaining reserves are recognized within other current liabilities on the consolidated balance sheets. The following table shows the activity with respect to sales reserves for the year ended* December 31, 2023* and2022, in thousands:

88

NOTE13 –LICENSE ANDC OLLABORATIONA GREEMENTS

In* November 2019,the Company entered into a license agreement with Agenus Inc. (“Agenus”), pursuant to which Agenus granted to the Company an exclusive, worldwide (not including Argentina, Brazil, Chile, Colombia, Peru, Venezuela and their respective territories and possessions), royalty-bearing, sublicensable license under Agenus’s intellectual property rights to develop, make, use, sell, import, and otherwise commercialize products incorporating a proprietary monoclonal antibody of Agenus known asAGEN1884* (zalifrelimab), an anti-CTLA-4 antagonist, for the treatment of cancers of the urinary tract via intravesical delivery. UGN-301 is a formulation of zalifrelimab administered usingRTGeltechnology that is in Phase1 clinical development for high-grade NMIBC.

In* January 2021,the Company announced that it entered into athree-year strategic research collaboration agreement with MD Anderson focusing on the sequential use of UGN-201 and UGN-301 as an investigational treatment for high-grade NMIBC. Pursuant to the agreement, the Company has made bi-annual payments totaling $2.0 million to MD Anderson to fund the collaboration, recognized evenly over the associated period through research and development expenses. In July 2022,the Company determined that it had achieved the objectives that it established when the agreement was initiated, and notified MD Anderson that it was exercising its right to conclude the collaboration in2022* as the Company didnot foresee initiating further development activities as part of the collaboration, although the Company will continue to collaborate on existing joint projects. As a result of this notification, the Company isnot responsible for any further fixed bi-annual funding payments in2023, although the Company will be responsible for costs related to existing joint projects to the extent they exceed the payments already made to MD Anderson.

NOTE14 –EMPLOYEER IGHTSUPONR ETIREMENT

In Israel, the Company is required by law to make severance payments upon dismissal of an employee or upon termination of employment in certain other circumstances.

The Company operates a number of post-employment defined contribution plans. A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes fixed payments to a separate and independent entity so that the Company hasno legal or constructive obligation to pay additional contributions if the fund doesnot hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The fund assets arenot included in the Company’s financial position.

The Company operates pension and severance compensation plans subject to Section14 of the Israeli Severance Pay Law,5723-1963. The plans are funded through payments to insurance companies or pension funds administered by trustees. In accordance with its terms, the plans meet the definition of a defined contribution plan, as defined above.

89

NOTE15 –SHAREHOLDERS’** EQUITY**

The Company had 100.0 million ordinary shares authorized for issuance as of* December 31, 2023* and2022. The Company had 32.5 million and 23.1 million ordinary shares issued and outstanding as of* December 31, 2023* and2022, respectively. Each ordinary share is entitled toone vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors (the "Board"). Since its inception, the Board hasnot declared any dividends.

On* July26,* 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional and other accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue to the Purchasers 7,300,380 ordinary shares of the Company (“Shares”) and 5,278,776 of pre-funded warrants to purchase ordinary shares of the Company at a purchase price of $9.54 per Share or $9.539 for each ordinary share underlying a pre-funded warrant, in a private placement transaction that closed on* July 28, 2023and August 9, 2023 (the “Private Placement”) for aggregate gross proceeds of $120.0 million, before deducting fees to placement agents and financial advisors and before other expenses paid by the Company. Each pre-funded warrant has an exercise price of $0.001 per ordinary share, subject to customary adjustments, became exercisable upon original issuance and willnot* expire until exercised in full. The pre-funded warrants* maynot* be exercised if the aggregate number of ordinary shares beneficially owned by the holder thereof immediately following such exercise would exceed a specified beneficial ownership limitation. The aggregate fee paid by the Company to placement agents and financial advisors was $3.6 million, plus the reimbursement of certain expenses.

Resales of the Shares and the ordinary shares issuable upon exercise of the pre-funded warrants were registered pursuant to the Company’s registration statement on Form S-3 (FileNo. 333-274423) filed with the U.S. Securities and Exchange Commission (“SEC”) on* September 8, 2023,which was declared effective on September 15, 2023.*

On* December 20, 2023,*the Company issued 1,599,733 ordinary shares through a cashless conversion of 1,599,840 pre-funded warrants for the purchase of ordinary shares of the Company.

Monograph Capital Partners I, L.P. (“Monograph”), a life sciences venture firm that is affiliated with Fred Cohen, M.D., a director of the Company, purchased 1,572,327 of the Shares in the Private Placement, for an aggregate purchase price of $15.0 million. Dr. Cohen is the Chair and Chief Investment Officer of Monograph.

NOTE16 –SHARE-BASEDC OMPENSATION

In* October 2010,the Board approved a share option plan (the“2010* Plan”) for grants to Company employees, consultants, directors, and other service providers. Subsequently, in* March 2017,the Board adopted the2017* Equity Incentive Plan (the*"2017* Plan" and, together with the2010 Plan, the "Plans"), which was approved by the shareholders in* April 2017.The2017* Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSU awards, performance share awards, performance cash awards, and other forms of share awards to the Company's employees, directors and consultants.

The grant of options to Israeli employees under the Plans is subject to the terms stipulated by Section102 of the Israeli Income Tax Ordinance (“Section102”). The option grants are subject to the track chosen by the Company, either the “regular income” track or the “capital gains” track, as set out in Section102. The Company registered the Plans under the capital gains track, which offers more favorable tax rates to the employees. As a result, and pursuant to the terms of Section102, the Company isnot allowed to claim as an expense for tax purposes the amounts credited to the employees in respect of options granted to them under the Plans, including amounts recorded as salary benefits in the Company’s accounts, with the exception of the work-income benefit component, if any, determined on grant date. For non-employees and for non-Israeli employees, the Plans is subject to Section3(i) of the Israeli Income Tax Ordinance.

Employees are typically granted stock options and/or restricted stock units ("RSUs"), upon commencement of employment. Also, eligible employees* mayreceive an annual grant of options or RSUs. Non-employee members of the Board typically receive a grant of stock options upon initial appointment to the Board, and/or stock options annually. The term of any option granted under the Plans cannot exceed 10 years. Options shallnot* have an exercise price less than 100% of the fair market value of the Company’s ordinary shares on the grant date, and generally vest over a period ofthree years. If the individual possesses more than 10% of the combined voting power of all classes of equity of the Company, the exercise price shallnot be less than 110% of the fair market value of an ordinary share on the date of grant.

The Company’s RSU and option grants provide for accelerated or continued vesting in certain circumstances as defined in the plans and related grant agreements, including a termination in connection with a change in control. RSUs generally vest in a 33% increment upon thefirst anniversary of grant, and in either equal quarterly or annual amounts for thetwo years following theone-year anniversary of the grant date. Options generally vest in a 33% increment upon thefirst anniversary of the grant date, and in either equal quarterly or annual amounts for thetwo years following theone-year anniversary of the grant date.

The expected volatility is based on a mix of the Company’s historical volatility, and the historical volatility of comparable companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted. The expected term is the length of time until the expected dates of exercising the options and is estimated for employees using the simplified method due to insufficient specific historical information of employees’ exercise behavior, and for non-employees, and directors using the contractual term.

On* January 31, 2023,the Board approved a performance stock unit ("PSU") award of 100,000 shares under the2017* Plan to the Company's Chief Executive Officer, subject to shareholder approval. Vesting of these PSUs will depend upon obtaining regulatory approval for the Company’s lead product candidate UGN-102 in thethree years following the grant. The PSU award was approved by the Company’s shareholders at the2023 Annual Shareholders’ Meeting on* September 7, 2023.*

The maximum number of ordinary shares that was initially authorized for issuance under the2017 Plan was 1,400,000. On* January 1, 2018,the share reserve increased by 250,167 to 1,650,167 shares. On October 12, 2018,the Company increased the number of ordinary shares authorized for issuance under the2017* Plan by 1,900,000 to 3,550,167 shares. On* June 8, 2020,the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the2017* Plan by 400,000 to 3,950,167 shares. On* June 7, 2021,the Company’s shareholders approved an increase to the number of ordinary shares authorized for issuance under the2017* Plan by 400,000 to 4,350,167 shares. On* June 8, 2022,the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the2017* Plan by 400,000 to 4,750,167 shares. On* September 7, 2023,the Company's shareholders approved an increase to the number of ordinary shares authorized for issuance under the2017* Plan by 450,000 to 5,200,167 shares.

In* May 2019,the Company adopted the UroGen Pharma Ltd.2019 Inducement Plan (the “Inducement Plan”). Under the Inducement Plan, the Company is authorized to issue up to 900,000 ordinary shares pursuant to inducement awards. The only persons eligible to receive grants under the Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule5635*(c)(4) and the related guidance under Nasdaq IM5635-1, including individuals who werenot previously an employee or director of the Company or are following a bona fide period of non-employment, in each case as an inducement material to such individual’s agreement to enter into employment with the Company. In* December 2021,*the Board approved a 300,000 increase in the share reserve of the Inducement Plan to 1,200,000 shares.

As of* December 31, 2023,*3,784,480 ordinary shares are subject to outstanding awards under the Company's share-based compensation plans, and 1,009,614 ordinary shares remain available for future awards.

90

Options granted:

Set forth below are grants made by the Company as of* December 31, 2023*. The majority of options vest over three years and expire on thetenth anniversary of the date of grant.

The fair value of options granted during2023 and2022 was $4.3 million and $2.2 million, respectively.

The total unrecognized compensation cost of options as of* December 31, 2023* was $4.4 million, which is expected to be recognized over a weighted average period of 1.7 years.

The fair value of options granted was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are as follows:

The expected volatility is based on a mix of the Company's historical volatility and the historical volatility of comparable companies with similar attributes to the Company, including industry, stage of life cycle, size and financial leverage. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted. The expected term is the length of time until the expected dates of exercising the options and is estimated for employees using the simplified method due to insufficient specific historical information of employees’ exercise behavior, and for non-employees, and directors using the contractual term.

The following table summarizes the number of employee and non-employee options outstanding under the Plan for the years ended* December 31, 2023* and2022, and related information:

91

The intrinsic value of stock options exercised was $0.7 million and $0.8 million for the years ended* December 31, 2023* and2022, respectively.

The following table summarizes the outstanding and exercisable options as of* December 31, 2023*:

The aggregate intrinsic value of the total vested and exercisable options as of* December 31, 2023* is $1.6 million.

The following table summarizes information about RSU activity as of* December 31, 2023*:

The fair value of RSUs granted during2023 and2022 was $10.4 million and $3.2 million, respectively. The total unrecognized compensation cost of RSUs as of* December 31, 2023* is $9.2 million with a weighted average recognition period of 1.86 years.

The following table illustrates the effect of share-based compensation on the Statements of Operations:

92

NOTE17 –INCOMET AXES

The Company is taxed under Israeli tax laws:

Corporate tax rate

The applicable Israeli tax rate relevant to the Company for2022 and thereafter is 23%.

For financial reporting purposes, the expense for current income taxes consists of the following (in thousands):

Deferred income taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company and its subsidiary deferred tax assets are as follows (in thousands):

The change in valuation allowance for the years ended* December 31, 2023* and2022 were as follows (in thousands):

The main reconciling items between the statutory tax rates of the Company and the effective rate are nondeductible expenses related to financing on the prepaid forward obligation and share-based compensation, the provision for a full valuation allowance in respect of tax benefits from carryforward tax losses due to the uncertainty of the realization of such tax benefits, utilization of tax credits and expense related to uncertain tax positions. A reconciliation of the Company’s statutory tax rate to effective tax is as follows (in thousands, except statutory rate):

(1)In the course of preparing the 2022 tax returns, adjustments were made for certain nondeductible amounts, reducing net operating loss carryforward and reflected as a change in valuation allowance of approximately $8.9 million in the current year.

93

Pretax loss for* December 31, 2023* and2022 includes pretax loss from foreign (United States) jurisdictions of $17.9 million and $13.3 million, respectively.

The Internal Revenue Code contains provisions that* maylimit our use of federal net operating loss carryforwards if significant changes occur in the constructive stock ownership of UroGen Pharma Inc. In the event it has had an “ownership change” within the meaning of Section382* of the Code, utilization of its net operating loss carryforwards could be restricted under Section382 of the Code and similar state provisions. Such limitations could result in the expiration of the net operating carryforwards incurred before2018 before their utilization.

Losses for tax purposes carried forward to future years

As of* December 31, 2023* and2022, the Company had approximately $452.0 million and $419.1 million of carryforward tax losses, prior to tax effecting, respectively, available to reduce future taxable income without limitation of use.

Uncertain tax positions

A reconciliation of the beginning and ending amount of uncertain tax positions is as follows (in thousands):

The balances of uncertain tax positions as of* December 31, 2023* would affect the Company’s effective tax rate if recognized.

The Company has recorded a liability for uncertain tax positions of $3.2 million as of* December 31, 2023* for tax positions relating to transfer pricing between affiliated entities. The Company recognizes interest accrued and penalties related to uncertain tax positions as a component of income tax expense. As of* December 31, 2023*, the Company's liability for uncertain tax positions includes $1.2 million of accrued interest and penalties.

The Company operates on a global basis and is subject to tax laws and regulations in the United States and Israel. The estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax laws and regulations, expectations regarding the outcome of tax authority examinations, as well as the ultimate measurement of potential liabilities.

The uncertain tax positions are reviewed quarterly and adjusted as events occur that could affect potential liabilities for additional taxes, including lapsing of applicable statutes of limitations, correspondence with tax authorities, proposed assessments by tax authorities, identification of new issues, and issuance of new legislation or regulations. The Company believes that adequate amounts of tax have been provided in income tax expense for any adjustments that* mayresult from its uncertain tax positions. Based upon the information currently available, the Company doesnot* reasonably expect changes in its existing uncertain tax positions in the next12 months and has recorded the gross uncertain tax positions as a long-term liability.

The Company has received final tax assessments up to and including its2017 tax year.

NOTE18 –RELATEDP ARTIES

See Note15 for discussion regarding an affiliated investor in the Private Placement for the year ended* December 31, 2023.There wereno related party transactions for the year ended December 31, 2022.*

NOTE19 –COMMITMENTS ANDC ONTINGENCIES

In the normal course of business, the Company enters into contracts that contain a variety of indemnifications with its employees, licensors, suppliers and service providers. Further, the Company indemnifies its directors and officers who are, or were, serving at the Company’s request in such capacities. The Company’s maximum exposure under these arrangements is unknown as of* December 31, 2023* and2022. The Company doesnot anticipate recognizing any significant losses relating to these arrangements.

On* February 25, 2024,we received a Paragraph IV Certification Notice Letter from Teva, providing notification that Teva has submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version ofJelmyto*. In the Notice Letter, Teva alleges thattwo of the patents listed in the FDA Orange Book forJelmyto, U.S. Patent Numbers9,040,074 and9,950,069 each of which expires in* January 2031,are invalid, unenforceable, or willnot* be infringed by Teva’s manufacture, use, or sale of the generic product described in its ANDA submission. If we are unable to maintain patent protection forJelmyto,Jelmyto will be subject to immediate competition from generic entrants after regulatory exclusivity expires in* April 2027.*

Leases

See Note11 for further discussion regarding lease commitments.

NOTE20 –SUBSEQUENTE VENTS

In* February 2024,*the Company sold 1,400,468 ordinary shares under the ATM Sales Agreement, for gross proceeds of approximately $26.6 million. The net proceeds to the Company after deducting sales commissions to Cowen were approximately $25.9 million. Following such sale, the remaining capacity under the ATM Sales Agreement is approximately $56.8 million.

On* March 13,2024, we entered into an amended and restated loan agreement with Pharmakon for an additionalthird andfourth tranche of senior secured loan. Thethird tranche of$25.0 million is mandatory and required to be drawn by September 30, 2024,subject to satisfaction of customary conditions. Thefourth* tranche of $75.0 million* maybe drawn at our optionno* later than* August 29, 2025,subject to (i) having successfully drawn the immediately preceding$25.0M* tranche, (ii) receiving FDA approval of an NDA for UGN-102 no later than* June 30, 2025*and (iii) satisfaction of customary conditions.

All outstanding loans with Pharmakon accrue interest using a benchmark rate of3-month SOFR plus 7.25% plus an additional adjustment of 0.26161%. All outstanding principal will be required to be repaid infour equal quarterly installments commencing in thesecond quarter of2026, with aone-year extension upon FDA approval of an NDA for UGN-102. All outstanding loans with Pharmakon can be prepaid in whole at the Company's discretion, at any time, subject to prepayment premiums, make-whole amounts and fees.

94