TALPHERA, INC.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vincent J. Angotti and Raffi Asadorian, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution for him or her, and in his or her name in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

TALPHERA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

To the Shareholders and Board of Directors of Talphera, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Talphera, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring operating losses and negative cash flows from operating activities since inception and expects to continue to incur operating losses and negative cash flows in the future. These matters raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/BPM LLP

We have served as the Company's auditor since 2023.

Walnut Creek, California

March 23, 2026

(in thousands, except share data)

(in thousands, except share and per share data)

Consolidated Statements of Stockholders’** Equity**

(in thousands, except share data)

(in thousands)

Notes to Consolidated Financial Statements

(In thousands, except where otherwise noted)

1. Organization and Summary of Significant Accounting Policies

The Company

Talphera, Inc., or the Company, or Talphera, was incorporated in Delaware on July 13, 2005, as SuRx, Inc. The Company subsequently changed its name to AcelRx Pharmaceuticals, Inc. and, on January 9, 2024, to Talphera, Inc. The Company’s operations are based in San Mateo, California.

Talphera is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings. The Company’s product development portfolio features Niyad (a regional anticoagulant for the dialysis circuit). All resources are currently focused on developing Niyad. LTX-608 is a nafamostat formulation for direct IV infusion that the Company may develop for one or more of the following indications: disseminated intravascular coagulation, or DIC, acute respiratory distress syndrome, or ARDS, acute pancreatitis, or as an anti-viral treatment. There are two ready-to-use pre-filled syringe product candidates that have been explored but are being evaluated for discontinuation.

On January 7, 2022, the Company acquired Lowell Therapeutics, Inc., or Lowell, a privately held company (see Note 4, “Asset Acquisition”) and, as a result acquired the Niyad developmental product, a regional anticoagulant for the dialysis circuit during continuous renal replacement therapy for acute kidney injury patients in the hospital, that the Company is studying under an investigational device exemption, or IDE, and for which it has received Breakthrough Device Designation status from the FDA. While not approved for commercial use in the United States, the active drug component of Niyad, nafamostat, has been approved in Japan and South Korea as a regional anticoagulant for the dialysis circuit, disseminated intravascular coagulation, and acute pancreatitis. Niyad is a lyophilized formulation of nafamostat, a broad-spectrum, synthetic serine protease inhibitor, with anticoagulant, anti-inflammatory, and potential anti-viral activities. The second intended indication for Niyad is as a regional anticoagulant for the dialysis circuit for chronic kidney disease patients undergoing intermittent hemodialysis in dialysis centers. In addition, the Company acquired LTX-608, a nafamostat formulation for direct IV infusion.

On July 14, 2021, the Company entered into a License and Commercialization Agreement, or the PFS Agreement, with Laboratoire Aguettant, or Aguettant, pursuant to which the Company obtained the exclusive right to develop and, subject to FDA approval, commercialize in the United States (i) an ephedrine pre-filled syringe for injection (Fedsyra), and (ii) a phenylephrine PFS for injection. Aguettant will supply the Company with the products for use in commercialization, if they are approved in the U.S. This agreement is currently being evaluated for potential termination given the competitive environment for these product candidates.

Liquidity and Going Concern

The consolidated financial statements for the year ended December 31, 2025, were prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The Company has incurred recurring operating losses and negative cash flows from operating activities since inception and expects to continue to incur operating losses and negative cash flows in the future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Considering the Company’s current cash resources and its current and expected levels of operating expenses for the next twelve months, management expects to need additional capital to fund its planned operations prior to the 12-month anniversary of the date this Annual Report on Form 10-K is filed with the United States Securities and Exchange Commission, or the SEC.

Management may seek to raise such additional capital through public or private equity offerings, debt securities, a new debt facility, monetizing or securitizing certain assets, entering into product development, license or distribution agreements with third parties, or divesting any of the Company’s remaining product candidates. While management believes its plans to raise additional funds will alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, these plans are not entirely within the Company’s control and cannot be assessed as being probable of occurring.

Additional funds may not be available when the Company needs them on terms that are acceptable to the Company, or at all. If adequate funds are not available, the Company may be required to further reduce its workforce, delay the ongoing clinical trial for Niyad, or delay the development of its regulatory filing plans for its product candidates in advance of the date on which the Company’s cash resources are exhausted to ensure that the Company has sufficient capital to meet its obligations and continue on a path designed to preserve stockholder value. In addition, if additional funds are raised through collaborations, strategic alliances or licensing arrangements with third parties, the Company may have to relinquish rights to its technologies, future revenue streams or product candidates, or to grant licenses on terms that may not be favorable to the Company.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, or GAAP, and with the rules and regulations of the U.S. Securities and Exchange Commission, or SEC.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes its most significant accounting estimates relate to fair value of warrants, liability related to the sale of future payments, accrued clinical trial liabilities and management’s assessment of going concern. Management evaluates its estimates on an ongoing basis including critical accounting policies. Estimates are based on historical experience and on various other market-specific and other relevant assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity (at date of purchase) of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks.

Short-Term Investments

All marketable securities are classified as available for sale and consist of commercial paper and U.S. government sponsored enterprise debt securities. These securities are carried at estimated fair value, which is based on quoted market prices or observable market inputs of almost identical assets, with unrealized gains and losses included in accumulated other comprehensive income (loss). The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income or expense. The cost of securities sold is based on specific identification. When the fair value of an available-for-sale security falls below the amortized cost basis, it is evaluated to determine if any of the decline in value is attributable to credit loss. Decreases in fair value attributable to credit loss are recorded directly to the consolidated statement of operations with a corresponding allowance for credit losses, limited to the amount that the fair value is less than the amortized cost basis. If the credit quality subsequently improves, the allowance is reversed up to a maximum of the previously recorded credit losses. When the Company intends to sell an impaired available-for-sale security, or if it is more likely than not that the Company will be required to sell the security prior to recovering the amortized cost basis, the entire fair value adjustment will immediately be recognized in the consolidated statement of operations with no corresponding allowance for credit losses.

Fair Value of Financial Instruments

The Company measures and reports its cash equivalents, investments and financial liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level I—Unadjusted quoted prices in active markets for identical assets or liabilities;

Level II—Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level III—Unobservable inputs that are supported by little or no market activity for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Concentration of Risk

The Company invests cash that is currently not being used for operational purposes in accordance with its investment policy in debt securities of U.S. government sponsored agencies, commercial paper and overnight deposits. The Company is exposed to credit risk in the event of default by the institutions holding the cash equivalents and available-for-sale securities to the extent recorded on the consolidated balance sheets. The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

The Company relies on a single contract development and manufacturing organization, or CDMO, for the active ingredient (nafamostat) for Niyad and a second single contract manufacturer for the finished Niyad product.

All revenue relates to the Company’s services for fees earned on the sales of DSUVIA to the DoD by Alora.

Acquisitions

The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets.

Acquisitions meeting the definition of business combinations are accounted for using the acquisition method of accounting, which requires that the purchase price be allocated to the net assets acquired at their respective fair values. In a business combination, any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Direct transaction costs are recognized as part of the cost of an asset acquisition. The Company also evaluates which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. When a transaction accounted for as an asset acquisition includes an in-process research and development, or IPR&D, asset, the IPR&D asset is only capitalized if it has an alternative future use other than in a particular research and development project. For an IPR&D asset to have an alternative future use (a) the Company must reasonably expect that it will use the asset acquired in the alternative manner and anticipate economic benefit from that alternative use, and (b) the Company’s use of the asset acquired is not contingent on further development of the asset subsequent to the acquisition date (that is, the asset can be used in the alternative manner in the condition in which it existed at the acquisition date). Otherwise, amounts allocated to IPR&D that have no alternative use are expensed. Asset acquisitions may include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is paid or probable of payment, at which point the consideration is allocated to the assets acquired on a relative fair value basis.

In-Process Research and Development

In accordance with ASC Topic 350,Intangibles - Goodwill and Other, the acquired IPR&D has initially been accounted for as an indefinite-lived intangible asset and, therefore, not amortized. If the IPR&D asset achieves regulatory approval and the asset life is determined to be finite, the asset’s useful life will be estimated, and the asset will be amortized over its remaining useful life.

The IPR&D asset is reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. These events and changes can include significant current period operating losses or negative cash flows associated with the use of the IPR&D asset, such as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing the Company’s programs. When impairment indicators are present, the Company compares undiscounted future cash flows to the asset’s carrying value to determine if the asset is recoverable. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset to its carrying value.

No impairment losses were recorded on the IPR&D asset during the years ended December 31, 2025 or 2024.

Discontinued Operations

In accordance with ASC 205-20Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, non-current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes, shall be reported as components of net loss separate from the net income (loss) of continuing operations.

The Company’s DSUVIA business met the definition of a discontinued operation as of March 31, 2023. Accordingly, the Company has classified the results of the DSUVIA business as discontinued operations in its consolidated statements of operations for all periods presented. All assets and liabilities associated with the DSUVIA business were classified as assets and liabilities of discontinued operations in the consolidated balance sheets for the periods presented. All amounts included in the notes to the consolidated financial statements relate to continuing operations unless otherwise noted. (See Note 3, “Discontinued Operations”).

Research and Development Expenses

Research and development costs are charged to expense when incurred. Research and development expenses include salaries, employee benefits, including stock-based compensation, consultant fees, laboratory supplies, costs associated with clinical trials and manufacturing, including contract research organization fees, other professional services and allocations of corporate costs. The Company reviews and accrues clinical trial expenses based on work performed, which relies on estimates of total costs incurred based on patient enrollment, completion of patient studies and other events.

Stock-Based Compensation

Compensation expense for all stock-based payment awards made to employees and directors, including employee stock options and restricted stock units related to the 2020 Equity Incentive Plan, or 2020 EIP, the 2011 Equity Incentive Plan, or 2011 EIP, and employee share purchases related to the Amended and Restated 2011 Employee Stock Purchase Plan, or ESPP, is based on estimated fair values at grant date. The Company determines the grant date fair value of the awards using the Black-Scholes option-pricing model and generally recognizes the fair value as stock-based compensation expense on a straight-line basis over the vesting period of the respective awards. The Company applies the graded-vesting attribution method to awards with market conditions that include graded-vesting features. Additionally, the Company uses the Monte Carlo Simulation model to evaluate the derived service period and fair value of awards with market conditions, including assumptions of historical volatility and risk-free interest rate commensurate with the vesting term.

The Black-Scholes option pricing model requires inputs such as expected term, expected volatility and risk-free interest rate. These inputs are subjective and generally require significant analysis and judgment to develop. The expected term, which represents the period of time that options granted are expected to be outstanding, is derived by analyzing the historical experience of similar awards, giving consideration to the contractual terms of the stock‑based awards, vesting schedules and expectations of future employee behavior. Expected volatilities are estimated using the historical stock price performance over the expected term of the option, which are adjusted as necessary for any other factors which may reasonably affect the volatility of the Company’s stock in the future. The risk‑free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for the expected term of the award. The Company recognizes forfeitures when they occur and does not anticipate paying dividends in the near future.

Warrants Issued in Connection with Financings

The Company accounts for issued warrants as either liability or equity in accordance with ASC 480-10,Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, or ASC 815-40,Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. Under ASC 480-10, warrants are considered liability if they are mandatorily redeemable and they require settlement in cash or other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as liability or equity. Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP. Equity classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Sale of Future Payments

On January 12, 2024, the Company entered into the Purchase Agreement with XOMA to monetize a portion of its future payments for commercial sales of DSUVIA and services performed by the Company to support sales of DSUVIA to the Department of Defense, or DoD, by Alora under the Marketing Agreement, and sales milestones under the DSUVIA Agreement. Refer to Note 6, “Sale of Future Payments” for further details on the Purchase Agreement.

The Company recorded approximately $6.1 million, net of $0.5 million in issuance costs, of the $8.0 million proceeds as a liability, as this portion of the proceeds represents a sale of future revenues under ASC 470 for which the Company has continuing involvement in the generation of cash flows. The Company recorded approximately $1.2 million, net of $0.2 million in issuance costs, of the $8.0 million proceeds as other income, as this portion of proceeds represents the sale of all of the Company’s interest in future payments related to commercial sales of DSUVIA for which the Company is no longer entitled to receive such payments and has no further continuing involvement. The Company utilized internal estimates to develop a cash flow model based on business assumptions to determine the allocation of the proceeds.

The liability related to the sale of future payments is recorded as debt and will be amortized under the effective interest rate method over the estimated life of the Purchase Agreement. The Company estimates the effective interest rate based on its estimate of total payments to be received by XOMA under the Purchase Agreement. The Company reassesses these estimates at each reporting date and adjusts the effective interest rate and amortization of the liability on a prospective basis, as necessary. The Company records the payments to XOMA as a reduction of the liability when paid. As such payments are made to XOMA, the balance of the liability will be effectively repaid over the life of the Purchase Agreement.

Income Taxes

Deferred tax assets and liabilities are measured based on differences between the financial reporting and tax basis of assets and liabilities using enacted rates and laws that are expected to be in effect when the differences are expected to reverse. The Company records a valuation allowance for the full amount of deferred assets, which would otherwise be recorded for tax benefits relating to operating loss and tax credit carryforwards, as realization of such deferred tax assets cannot be determined to be more likely than not.

Net Loss per Share of Common Stock

Basic and diluted net income (loss) per common share, or EPS, are calculated in accordance with the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic260, Earnings per Share.

The Company applies the two-class method to compute basic and, if more dilutive than other methods, diluted net income or loss per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders (including pre-funded warrants). Shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration and are exercisable after the original issuance date. In addition, the Company is required to calculate diluted net income or loss per share under the two-class method if the effect is more dilutive than the application of another dilutive method of calculating diluted EPS (i.e., the treasury stock, if-converted, or contingently issuable share method). In periods where there is a net loss, no allocation of undistributed net loss to participating securities is performed if the holders of these securities are not contractually obligated to participate in the Company’s losses. The Company’s participating securities include the November 2021 Financing Warrants, December 2022 Common Stock Warrants, the July 2023 Series A and Series B common stock warrants, and the placement agent July 2023 Series A and Series B common stock warrants (see Note 8, “Stockholders’ Equity” and Note 9, “Warrants”).

For additional information regarding the net loss per share, see Note 11, “Net Loss per Share of Common Stock”.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued Accounting Standard Update, or ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. The Company has adopted ASU 2023-09 for its period beginning January 1, 2025 on a prospective basis. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements (see Note 14, “Income Taxes”).

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, or ASU 2024-03, which is intended to enhance transparency into the nature and function of expenses, primarily through additional disclosures on certain cost and expenses. Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. This authoritative guidance is effective for the Company beginning with its annual disclosures for 2027 and interim periods beginning in 2028. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. The Company is in the process of evaluating the impact of this new guidance on its disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial statements.

2. Investments and Fair Value Measurement

Investments

The Company classifies its marketable securities as available for sale and records its investments at fair value. Available-for-sale securities are carried at estimated fair value based on quoted market prices or observable market inputs of almost identical assets, with the unrealized holding gains and losses included in accumulated other comprehensive income (loss).

As of December 31, 2025 and 2024, the contractual maturity of all investments held was less than one year.

The tables below summarize the Company’s cash, cash equivalents and short-term investments (in thousands):

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are the result of credit losses. Impairment is assessed at the individual security level. Factors considered in determining whether a loss resulted from a credit loss or other factors include the Company’s intent and ability to hold the investment until the recovery of its amortized cost basis, the extent to which the fair value is less than the amortized cost basis, the length of time and extent to which fair value has been less than the cost basis, the financial condition of the issuer, any historical failure of the issuer to make scheduled interest or principal payments, any changes to the rating of the security by a rating agency, any adverse legal or regulatory events affecting the issuer or issuer’s industry, any significant deterioration in economic conditions. There wereno material realized or unrealized gains or losses on marketable securities for the years ended December 31, 2025 or 2024. As such, the Company didnot record a credit allowance for the year ended December 31, 2025 or 2024.

Fair Value Measurement

The Company’s financial instruments consist of Level I and II assets. Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments is readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy. For Level II instruments, the Company estimates fair value by utilizing third-party pricing services in developing fair value measurements where fair value is based on valuation methodologies such as models using observable market inputs, including benchmark yields, reported trades, broker/dealer quotes, bids, offers and other reference data. Such Level II instruments typically include U.S. Treasury, U.S. government agency securities and commercial paper. As of December 31, 2025 and December 31, 2024, the Company held, in addition to Level I and II assets, a warrant liability related to the December 2022 Common Stock Warrants. The fair value of the warrant liability was estimated using the Black Scholes Model which uses as inputs the following weighted average assumptions: dividend yield, expected term in years; equity volatility; and risk-free interest rate. The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The estimated fair value of the warrant liability represents a Level III measurement. Changes to the estimated fair value of these liabilities are recorded in change in fair value of warrant liability in the consolidated statements of operations.

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy (in thousands):

The following table sets forth a summary of the changes in the fair value of the Company’s Level III warrant liability for the years ended December 31, 2025 and 2024 (in thousands):

At December 31, 2025, the December 2022 Common Stock Warrants were valued at approximately $2.4 million, using the Black-Scholes option pricing model as follows: exercise price of $2.07 per share, stock price of $1.14 per share, expected life of 3 years, volatility of 96.23%, a risk-free rate of 3.55% and 0% expected dividend yield.

At December 31, 2024, the December 2022 Common Stock Warrants were valued at approximately $1.1 million, using the Black-Scholes option pricing model as follows: exercise price of $2.07 per share, stock price of $0.5241 per share, expected life of 4 years, volatility of 100.81%, a risk-free rate of 4.33% and 0% expected dividend yield.

There were no transfers between Level I, Level II or Level III of the fair value hierarchy during the years ended December 31, 2025 or 2024.

3. Discontinued Operations

DSUVIA Agreement

On March 12, 2023, the Company entered into an Asset Purchase Agreement, or the DSUVIA Agreement, with Vertical Pharmaceuticals, LLC, a wholly owned subsidiary of Alora Pharmaceuticals, LLC, or Alora, for Alora’s acquisition of all assets related to DSUVIA, including inventories, equipment and intellectual property in exchange for consideration at closing of $1.1 million, a 15% payment on commercial sales of DSUVIA,75% payment on sales of DSUVIA to the Department of Defense and up to $116.5 million in sales-based milestones. The closing of the DSUVIA Agreement occurred on April 3, 2023.

The closing of the DSUVIA Agreement included an ongoing marketing agreement, or the Marketing Agreement, pursuant to which the Company has the exclusive right to market and offer DSUVIA for sale to the DoD and Alora will pay to the Company 75% of net sales of DSUVIA sold to the DoD, subject to adjustment in certain circumstances.

The Company’s DSUVIA business met the definition of a discontinued operation as of March 31, 2023. Accordingly, the liabilities associated with these operations have been classified as liabilities of discontinued operations in the consolidated balance sheets at December 31, 2025 and 2024. There were no assets of discontinued operations at December 31, 2025 or 2024. The operations and cash flows of the DSUVIA business are presented as discontinued for all periods presented.

The following table presents the results of the discontinued operations (in thousands):

The following table summarizes the carrying amounts of major classes of liabilities of discontinued operations for each of the periods presented (in thousands).​

In October 2024, Alora notified the Company that they had discontinued their DSUVIA sales efforts on behalf of non-DoD customers. The Company was also notified in 2025 that Alora submitted a letter to the FDA to request the withdrawal of the DSUVIA NDA. For additional information, see Note 6, “Sale of Future Payments”.

4. Asset Acquisition

In January 2022, the Company acquired Lowell pursuant to the Merger Agreement, in a transaction which includes up to approximately $26.0 million of contingent consideration payable in cash or stock at the Company’s option, upon the achievement of regulatory and sales-based milestones. In connection with the Merger Agreement, the Company acquired Niyad and LTX-608, an IPR&D asset.

The carrying value of the IPR&D asset is $8.8 million at December 31, 2025 and 2024. Contingent consideration of up to $26.0 million associated with the Merger Agreement, payable in cash or stock at the Company’s option, was not included in the initial cost of the assets purchased as the contingent consideration is contingent upon events that are outside the Company’s control, such as regulatory approvals and issuance of patents, which are not considered probable until notification is received. However, upon achievement or anticipated achievement of each milestone, the Company shall recognize the related, appropriate payment as an additional cost of the acquired IPR&D asset. As of December 31, 2025, none of the contingent events have occurred.

5. In-License Agreement

On July 14, 2021, the Company entered into a License and Commercialization Agreement, or the PFS Agreement, with Aguettant pursuant to which the Company obtained the exclusive right to develop and, subject to FDA approval, commercialize in the United States (i) an ephedrine pre-filled syringe for injection (Fedsyra), and (ii) a phenylephrine pre-filled syringe for injection. Aguettant will supply the Company with the products for use in commercialization if they are approved in the United States.

The PFS Agreement has an initial term of ten (10) marketing years, with the first marketing year ending on December 31 of the calendar year after the first launch of a product (or December 31 of the same calendar year if the first launch of a product occurs between January 1 and April 30 of a calendar year). The term will automatically renew for successive five marketing year periods unless a party notifies the other party of its intention not to renew at least six (6) months prior to the expiration of the then-current term.

The Company will purchase each product from Aguettant at an agreed price, or the PFS Purchase Price, subject to adjustment. The Company will also make revenue share payments that, combined with the PFS Purchase Price, will range from 40% to 45% of net sales in the United States. The Company and Aguettant will agree on minimum sales obligations twelve (12) months prior to the launch of each product. The Company has the right to grant sublicenses to its affiliates or, with the prior approval of Aguettant, third parties, subject to certain limitations. As of December 31, 2025, there have beenno payments by the Company to Aguettant under the PFS Agreement.

The Company is currently evaluating whether to discontinue the agreement with Aguettant given the other FDA approved pre-filled syringe products on the market and the principal focus of the Company’s resources on its nafamostat product candidates.

6. Sale of Future Payments

In January 2024, the Company and XOMA entered into the Purchase Agreement for the sale by the Company to XOMA, in exchange for $8.0 million, of the Company’s right, title and interest in and to certain amounts payable to the Company, or collectively, the Purchased Receivables, pursuant to the DSUVIA Agreement in respect of net sales of the Product, excluding sales of the Product outside the United States by Laboratoire Aguettant, or Aguettant.

The Purchased Receivables include:

(i)100% of certain payments based on net sales of the Product and potential sales-based milestone payments of up to $116.5 million in respect of net sales of the Product, in each case made on and after January 1, 2024 and excluding sales of the Product by Aguettant, and of certain associated license and acquisition payments relating to the Product, until XOMA has received $20.0 million of payments in respect of the foregoing, or the XOMA Threshold, or the Stepdown Date; and

(ii) following the Stepdown Date, (A)100% of payments based on net sales of the Product other than net sales to the United States Department of Defense, or DoD and (B)50% of each of the following: (a) payments based on net sales of the Product to the DoD, (b) potential sales-based milestone payments in respect of net sales of the Product, and (c) certain associated license and acquisition payments relating to the Product.

The Company has retained its right, title and interest in and to, following the Stepdown Date,50% of each of the following: (a) payments based on net sales of the Product to the DoD, (b) potential sales-based milestone payments in respect of net sales of the Product, and (c) of certain associated license and acquisition payments relating to the Product.

The Purchase Agreement contains customary representations, warranties and agreements by the Company and XOMA, indemnification obligations of the parties and other obligations of the parties.

The allocation of the consideration for the Purchase Agreement resulted in proceeds of $1.4 million reduced by $0.2 million of transaction costs being allocated to the sale of all future interest in payments related to commercial sales of DSUVIA representing its fair value. As a result of the Company’s loss of control, no further continuing involvement in, or rights to future payments related to commercial sales of DSUVIA, the Company recognized other income of $1.2 million in January 2024.

The Company evaluated the terms of the Purchase Agreement and concluded that the features of the Purchased Receivables are similar to those of a debt instrument. Accordingly, the Company recorded the allocated proceeds of approximately $6.6 million reduced by approximately $0.5 million of transaction costs, as a liability. The Company accounts for the value of the debt at amortized cost. The amounts received by the Company will be accreted to the total estimated amount of the payments necessary to extinguish the Company’s obligation under the Purchase Agreement, which will be recognized as interest expense. The carrying value of the debt will decrease for payments made to XOMA.

The Company periodically assesses the expected payments for services performed to support sales of DSUVIA to the DoD by Alora under the Marketing Agreement and milestone payments under the DSUVIA Agreement using a combination of historical results, internal projections, and forecasts from external sources. To the extent such payments are greater or less than the Company’s initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the liability and the effective interest rate. Due to the significant judgments and factors related to the estimates of future payments under the Purchase Agreement, there are significant uncertainties surrounding the amount and timing of future payments.

As the payments are remitted to XOMA, the liability will be effectively repaid over the life of the agreement. In order to determine the amortization of the liability related to the sale of future payments, the Company is required to estimate the total amount of future payments to XOMA over the life of the Purchase Agreement. In October 2024, Alora notified the Company that they had discontinued their DSUVIA sales efforts to non-DoD customers. The Company was also notified in 2025 that Alora submitted a letter to the FDA to request the withdrawal of the DSUVIA NDA. While the Company has continued its efforts to facilitate sales of the remaining DSUVIA inventory held by Alora to the DoD, it has not obtained any orders from the DoD to purchase the remaining product available. If there are no orders for DSUVIA purchases from the DoD the Company expects that Alora will destroy the remaining DSUVIA inventory. The Company attempted to facilitate a longer-term supply arrangement for DSUVIA but was unsuccessful and does not believe there are any prospective parties currently interested in producing DSUVIA for commercial or DoD use. As a result, the Company estimates that future payments under the Purchase Agreement will be less than the proceeds from the sale of such future payments. Accordingly, the Company will not recognize any related non-cash interest expense. When the expected payments under the sale of future payments are lower than the gross proceeds of $6.6 million received, the Company defers recognition of any probable contingent gain until the Company has met its obligations under the liability related to the sale of future payments. For the year ended December 31, 2025, the estimated effective interest rate under the agreement was approximately 0%.

The Company recognized de minimus non-cash revenue and did not recognize any non-cash interest expense for the year ended December 31, 2025. For the year ended December 31, 2024, the Company didnot recognize any non-cash revenue and recognized non-cash interest expense of approximately $0.4 million. The interest and amortization of issuance costs are reflected as non-cash interest expense for the sale of future payments in the consolidated statements of operations.

The following table shows the activity within the liability account (in thousands):

7. Commitments and Contingencies

Litigation

On June 8, 2021, a securities class action complaint was filed in the U.S. District Court for the Northern District of California against the Company andtwo of its officers. The plaintiff is a purported stockholder of the Company. The complaint alleged that defendants violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by making false and misleading statements and omissions of material fact about the Company’s disclosure controls and procedures with respect to its marketing of DSUVIA. The complaint sought unspecified damages, interest, attorneys’ fees, and other costs. On December 16, 2021, the Court appointed co-lead plaintiffs. Plaintiffs’ amended complaint was filed on March 7, 2022. The amended complaint named the Company andthree of its officers and continued to allege that defendants violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by making false and misleading statements and omissions of material fact about the Company’s disclosure controls and procedures with respect to its marketing of DSUVIA. The amended complaint also asserted a violation of Section 20A of the Exchange Act against the individual defendants for alleged insider trading. The amended complaint sought unspecified damages, interest, attorneys’ fees, and other costs. The Court granted three motions to dismiss plaintiffs’ complaint: the first on September 28, 2022, the second on November 28, 2022, and the third, with prejudice on May 7, 2024. Judgment was entered for defendants on plaintiffs’ claims on May 7, 2024. Plaintiffs appealed the District Court’s decision to the United States Court of Appeals for the Ninth Circuit. On August 20, 2025, the Ninth Circuit affirmed the District Court’s dismissal of the securities class action.

On July 6, 2021, a purported shareholder derivative complaint was filed in the U.S. District Court for the Northern District of California. The complaint namesten of the Company’s officers and directors and asserts state and federal claims based on the same alleged misstatements as the securities class action complaint. On September 30, 2021, October 26, 2021, and November 17, 2021, three additional purported shareholder derivative complaints were filed in the U.S. District Court for the Northern District of California. The complaints name nine of the Company’s officers and directors and also assert state and federal claims based on the same alleged misstatements as the securities class action complaint. Allfour complaints seek unspecified damages, attorneys’ fees, and other costs. On December 6, 2021, the Court entered an order consolidating all four actions and staying the consolidated action pending the outcome of any motion to dismiss the securities class action. On September 30, 2025, the Court terminated the consolidated action, following the parties’ stipulation to dismiss the case in light of the Ninth Circuit order in securities class action.

On February 16, 2024, another purported shareholder derivative complaint was filed in the Court of Chancery of the State of Delaware, asserting the same claims as those in the previously filed derivative actions. The case has been stayed pending the outcome of any motion to dismiss the securities class action. On October 8, 2025, plaintiff filed a notice of dismissal of the case in light of the Ninth Circuit order in the securities class action.

8. Stockholders’** Equity**

The Company is authorized to issue two classes of stock to be designated, respectively, as “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 210,000,000 shares, and includes 200,000,000 shares of Common Stock, each having a par value of $0.001, and 10,000,000 shares of Preferred Stock, each having a par value of $0.001. Each outstanding share of Common Stock entitles the holder thereof to one vote on each matter properly submitted to the stockholders of the Company for their vote. The rights, preferences and privileges of the holders of Common Stock are subject to and may be adversely affected by the rights of the holders of shares of any series of Preferred Stock that we may designate in the future. As of December 31, 2025 and 2024, there areno shares of Preferred Stock issued and outstanding.

Subject to the preferences that may be applicable to any outstanding shares of Preferred Stock, the holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Company’s board of directors. No dividends have been declared to date.

Common Stock

September 2025 Private Placement

The Company entered into securities purchase agreements and a registration rights agreement, each dated September 7, 2025, with CorMedix Inc., or CorMedix, a publicly traded life science company, and several institutional investors, or collectively, the September 2025 Purchasers, relating to the issuance and sale in a private placement of shares of its common stock, par value $0.001 per share, and pre-funded warrants to purchase shares of common stock.

At the first closing of the private placement on September 10, 2025, the Company issued and sold to the September 2025 Purchasers: (i)25,036,360 shares of common stock at a purchase price of $0.55 per share, and (ii) pre-funded warrants to purchase up to an aggregate of 5,845,455 shares of common stock at a purchase price of $0.549 per share (see Note 9, “Warrants” for additional information). The pre-funded warrants were exercisable immediately following the first closing, subject to beneficial ownership limitations, and have an unlimited term and an exercise price of $0.001 per share. The aggregate gross proceeds to the Company from the first closing of the private placement were approximately $17.0 million, before deducting expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the pre-funded warrants.

The September 2025 Purchasers, other than CorMedix, have also agreed to purchase an additional $12.0 million of shares of common stock or pre-funded warrants to purchase shares of common stock in a second closing at the same purchase price as the first closing. The second closing will occur if the Company announces the achievement of the primary endpoint in the NEPHRO CRRT study, and then following such announcement the average VWAP of the Company’s common stock for each of the immediately subsequent five trading days is at least $0.6875 per share (as adjusted for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the September 2025 Purchase Agreements and prior to the second closing date (which is 125% of the per share purchase price)), or the Second Closing Milestone. The September 2025 Purchasers may choose to waive the Second Closing Milestone through the termination of the Niyad NEPHRO CRRT study.

The Company evaluated the shares of common stock and pre-funded warrants to purchase shares of common stock in each of the first and second closings under the September 2025 Private Placement under ASC 815-40 and determined that they did not require liability classification and met the requirements for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity. Accordingly, the proceeds from the first closing were allocated between common stock and the pre-funded warrants, at their respective relative fair value basis to stockholders’ equity and as a component of additional paid-in capital on the consolidated balance sheets. The fair value of the pre-funded warrants was determined using a Black-Scholes option pricing model and the common stock based on the closing date share price and were recorded in additional paid-in capital within stockholders' equity on the consolidated balance sheets. The Company has determined that the shares of common stock and pre-funded warrants in the second closing under the September 2025 Private Placement will also be equity classified as they are indexed to the Company's own shares and meet all other conditions for equity classification and that the fair value of the right to the second closing was immaterial at issuance.

The September 2025 Private Placement securities purchase agreements contain customary representations, warranties and agreements by the Company and the September 2025 Purchasers, indemnification rights and other obligations of the parties.

Pursuant to the registration rights agreement, the Company agreed to file registration statements under the Securities Act of 1933, as amended, with the Securities and Exchange Commission following the applicable closings covering the resale of the shares of common stock issued in the September 2025 Private Placement and the shares of common stock underlying the pre-funded warrants.

CorMedix Director Appointment and Right of First Negotiation

Pursuant to the September 2025 Purchase Agreement entered into with CorMedix, for so long as CorMedix and its affiliates beneficially own at least 25% of the shares of common stock it purchased at the first closing, CorMedix shall have the right, subject to compliance with the applicable rules and regulations of The Nasdaq Capital Market, to designate one member of the Company’s board of directors.

Additionally, pursuant to the September 2025 Purchase Agreement entered into with CorMedix, following the public announcement, or the Public Announcement, by the Company of the achievement of the primary endpoint and topline clinical data and results of the NEPHRO CRRT clinical study for its product candidate Niyad, CorMedix shall have the right for 60 days thereafter, or the Exclusivity Period, to negotiate exclusively with the Company, or the Right of First Negotiation, with respect to an acquisition of 100% of the capital stock and equity interests of the Company, or an Acquisition Transaction. During the Exclusivity Period, the Company agreed that it shall not engage in discussions with any other third party about an Acquisition Transaction, a sale or exclusive license of all or substantially all of the assets of the Company or any similar transaction. If after conducting good faith negotiations during the Exclusivity Period, the parties are unable to reach a definitive agreement with respect to an Acquisition Transaction, the Company will not, for a period of nine months from the date of the Public Announcement, enter into a definitive agreement or binding arrangement with a third party with respect to an Acquisition Transaction or similar transaction on financial terms less favorable (in the good faith determination of the board of directors of the Company) than those offered in writing by CorMedix during the Exclusivity Period (if any) without the written consent of CorMedix, which consent shall not be unreasonably withheld, delayed or conditioned. The Right of First Negotiation shall terminate upon the earlier of: (i) Talphera’s public announcement of the termination of the NEPHRO CRRT clinical study for any reason prior to the achievement of the study’s primary endpoint and (ii) December 31, 2027.

April 2025 Private Placement

The Company entered into a securities purchase agreement and registration rights agreement with several institutional investors and a member of management, or collectively, the April 2025 Purchasers, dated March 31, 2025, relating to the issuance and sale in a private placement in three separate tranches of: (i) shares of its common stock, par value $0.001 per share, and (ii) pre-funded warrants to purchase shares of common stock, or the April 2025 Private Placement. The pre-funded warrants will be exercisable immediately following the applicable closing, subject to beneficial ownership limitations, and have an unlimited term and an exercise price of $0.001 per share.

At the first closing of the April 2025 Private Placement, on April 2, 2025, the Company issued and sold to the April 2025 Purchasers: (i)3,405,118 shares of common stock at a price of $0.586 per share, and (ii) pre-funded warrants at a price of $0.585 per warrant to purchase up to an aggregate of 4,999,316 shares of common stock at an exercise price of $0.001 per share (see Note 9, “Warrants” for additional information). The aggregate gross proceeds to the Company from the first closing of the April 2025 Private Placement were approximately $4.9 million, before deducting expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the pre-funded warrants.

The second closing of the April 2025 Private Placement was scheduled to occur if the Company announced the enrollment of at least 17 patients in its Niyad NEPHRO CRRT study, and following such announcement the average volume weighted average price of its common stock for each of the immediately subsequent five trading days was at least $0.7325 per share. The third closing of the April 2025 Private Placement will occur if the Company announces the enrollment of at least 35 patients in the Niyad NEPHRO CRRT study and following such announcement the average volume weighted average price of its common stock for each of the immediately subsequent five trading days is at least $0.7325 per share. The Company announced the enrollment of 17 patients in the Niyad NEPHRO CRRT study on August 25, 2025; however, the average volume weighted average price of its common stock for each of the immediately subsequent five trading days was not at least $0.7325 per share. Therefore, the second closing did not occur. The April 2025 Purchasers may elect to waive the milestones related to each of the second and third closings and exercise their related purchase rights under the April 2025 Private Placement through termination of the NEPHRO CRRT study.

In October 2025, certain April 2025 Purchasers elected to waive the milestone requirements for the second and third closings, resulting in the issuance of: (i)1,023,890 shares of common stock, at a price of $0.586 per share, and (ii) pre-funded warrants at a price of $0.585 per warrant to purchase up to an aggregate of 1,706,484 shares of common stock at an exercise price of $0.001 per share, and gross proceeds of $1.6 million, or the Optional Closing. Following the Optional Closing, (i) approximately $4.1 million shares of common stock and/or pre-funded warrants may be sold if the April 2025 Purchasers waive the closing conditions to the second closing and (ii) approximately $4.1 million shares of common stock and/or pre-funded warrants may be sold in a third closing upon the achievement of the milestones related to the third closing or if the April 2025 Purchasers waive the closing condition to the third closing.

The Company evaluated the shares of common stock and pre-funded warrants in each of the first, second and third closings under the April 2025 Private Placement under ASC 815-40 and determined that they did not require liability classification and met the requirements for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity. Accordingly, the proceeds from the first closing were allocated between common stock and the pre-funded warrants, at their respective relative fair value basis to stockholders’ equity and as a component of additional paid-in capital on the consolidated balance sheets. The fair value of the pre-funded warrants was determined using a Black-Scholes option pricing model and the common stock based on the closing date share price and were recorded in additional paid-in capital within stockholders' equity on the consolidated balance sheets. The Company has determined that the shares of common stock and pre-funded warrants in each of the second and third closings under the April 2025 Private Placement will also be equity classified as they are indexed to the Company's own shares and meet all other conditions for equity classification and that the fair value of the right to the second and third closings was immaterial at issuance.

The April 2025 Private Placement securities purchase agreements contain customary representations, warranties and agreements by the Company and the Purchasers, indemnification rights and other obligations of the parties.

Pursuant to the registration rights agreement, the Company agreed to file registration statements under the Securities Act of 1933, as amended, with the Securities and Exchange Commission following the applicable closings covering the resale of the shares of common stock issued in the April 2025 Private Placement and the shares of common stock underlying the pre-funded warrants.

The April 2025 Private Placement released the entities affiliated with Nantahala Management, LLC from their obligations under the Nantahala Agreements related to the second tranche of the January 2024 Private Placement. Accordingly, the second tranche of the January 2024 Private Placement will not be consummated.

January 2024 Private Placement

On January 17, 2024, the Company entered into a private placement with certain institutional investors, or the January 2024 Purchasers, for aggregate gross proceeds of $6.0 million upfront, an additional $10.0 million committed upon the announcement of positive clinical trial results for the Company’s NEPHRO CRRT study of Niyad, and an additional $2.0 million if Talphera stock trades above a specified price following the NEPHRO CRRT registration trial announcement, before deducting offering expenses payable by the Company, or the January 2024 Private Placement.

The terms of the January 2024 Private Placement include:

Any of the conditions in the second tranche can be waived by each of the January 2024 Purchasers. The Company determined that the conditional tranche right is equity classified as it is indexed to the Company's own shares and meets all other conditions for equity classification and that the fair value of the right was immaterial at issuance.

In connection with the January 2024 Private Placement, the Company and the January 2024 Purchasers agreed to amend and restate a portion of the July 2023 Series A common stock warrants and July 2023 Series B common stock warrants outstanding by reducing the exercise price thereunder from $1.11 to $0.77 per share (see Note 9, “Warrants”).

On September 30, 2024, the Company amended the securities purchase agreements of the January 2024 Private Placement, dated January 17, 2024, with entities affiliated with Nantahala Management, LLC, or the Nantahala Agreements, to extend to June 30, 2025 the date by which the Company must achieve the precedent conditions to the second closing thereunder, or the Nantahala Amendments. If prior to the second closing, the Company consummates an equity financing, then the January 2024 Purchasers shall be released from their obligation to purchase additional shares of Common Stock and/or pre-funded warrants to purchase Common Stock pursuant to the Nantahala Agreements, as amended. The Company determined that the Nantahala Amendments represented a modification but that no financial impact would be recorded as the difference between the fair values of the Nantahala Agreements immediately before and after the Nantahala Amendments was insignificant.

In connection with the April 2025 Private Placement released the entities affiliated with Nantahala Management, LLC from their obligations under the Nantahala Agreements related to the second tranche of the January 2024 Private Placement. Accordingly, the second tranche of the January 2024 Private Placement will not be consummated.

The January 2024 Private Placement contains customary representations, warranties and agreements by the Company and the Purchasers, indemnification rights and other obligations of the parties.

Stock Plans

2011 Equity Incentive Plan

In January 2011, the Board of Directors adopted, and the Company’s stockholders approved, the 2011 Equity Incentive Plan, or 2011 EIP. The initial aggregate number of shares of the Company’s common stock that were issuable pursuant to stock awards under the 2011 EIP was approximately 93,750 shares. The number of shares of Common Stock reserved for issuance under the 2011 EIP automatically increased on January 1 of each year, starting on January 1, 2012 and continuing through January 1, 2020, by 4% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or such lesser number of shares of Common Stock as determined by the Board of Directors.

As of June 16, 2020, no additional awards may be granted under the 2011 Equity Incentive Plan, or the 2011 EIP, although all outstanding stock options and other stock awards previously granted under the 2011 EIP will continue to remain subject to the terms of the 2011 EIP.

Amended and Restated 2020 Equity Incentive Plan

On June 16, 2020, at the 2020 Annual Meeting of Stockholders of the Company, the Company’s stockholders, upon the recommendation of the Company’s Board of Directors, approved the Company’s 2020 Equity Incentive Plan, or the 2020 EIP.

The initial aggregate number of shares of the Company’s common stock issuable pursuant to stock awards under the 2020 EIP was 275,000 shares. In addition, the share reserve will be increased by the number of returning shares, if any, as such shares become available from time to time under the 2011 EIP, for an additional number of shares not to exceed 744,608 shares. The term of any option granted under the 2020 EIP is determined on the date of grant but shall not be longer than 10 years. The Company issues new shares for settlement of vested restricted stock units and exercises of stock options. The Company does not have a policy of purchasing its shares relating to its stock-based programs.

On October 23, 2025, at the 2025 Annual Meeting of Stockholders of the Company, upon the recommendation of the Company’s Board of Directors, the Company’s stockholders approved an amendment and restatement of the Company’s 2020 Equity Incentive Plan, or the Amended 2020 Plan, to increase the number of authorized shares reserved for issuance thereunder by 1,400,000 shares, subject to adjustment for certain changes in the Company’s capitalization. Accordingly, the aggregate number of shares of the Company’s common stock that may be issued under the Amended 2020 Plan will not exceed the sum of: (i)4,561,395 shares, and (ii) up to 744,608 shares subject to outstanding awards granted under the 2011 Equity Incentive Plan that may become available for issuance under the Amended 2020 Plan, as such shares become available from time to time.

Inducement Grant

In May 2024, the Company granted stock-based awards outside of the existing stock plans to one new employee, or the Inducement Grant. These awards were granted as a material inducement for accepting employment with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4). The inducement awards consisted of a total of 217,000 shares of the Company’s common stock, which includes an aggregate of 185,000 shares of Common Stock issuable upon the exercise of inducement stock option grants and 32,000 shares of Common Stock issuable upon the vesting of restricted stock unit awards generally subject to the same terms and conditions as grants that are made under the Company’s Amended 2020 Plan.

Amended and Restated 2011 Employee Stock Purchase Plan

On June 16, 2020, the Company’s stockholders, upon the recommendation of the Company’s Board of Directors, approved the Amended and Restated 2011 Employee Stock Purchase Plan, or the Amended ESPP, which increased the aggregate number of shares of the Company’s common stock reserved for issuance under the 2011 Employee Stock Purchase Plan, or ESPP, to 245,000 shares, subject to adjustment for certain changes in the Company’s capitalization, and removed the “evergreen” provision from the ESPP.

On October 23, 2025, at the 2025 Annual Meeting of Stockholders of the Company, upon the recommendation of the Company’s Board of Directors, the Company’s stockholders approved an amendment and restatement of the Company’s 2011 Employee Stock Purchase Plan, or the Amended 2011 ESPP, to increase the number of authorized shares reserved for issuance thereunder by 100,000 shares, subject to adjustment for certain changes in the Company’s capitalization. Accordingly, the aggregate number of shares of the Company’s common stock that may now be issued under the Amended 2011 ESPP is 445,000.

9. Warrants

The activity related to warrants during the years ended December 31, 2025 and 2024, is summarized as follows:

At December 31, 2025, the range of exercise prices for shares under warrants and the weighted-average remaining contractual life is as follows:

2025 Pre-Funded Warrants

In September 2025, the Company issued and sold pre-funded warrants to purchase up to an aggregate of 5,845,455 shares of common stock to the September 2025 Purchasers at a purchase price of $0.549 per share and an exercise price of $0.001 per share (see Note 8, “Stockholders’ Equity” for additional information). The pre-funded warrants were exercisable immediately, subject to beneficial ownership restrictions, and have an unlimited term. In November 2025,1,000,000 of these pre-funded warrants were exercised.

In April 2025, the Company issued and sold pre-funded warrants to purchase up to an aggregate of 4,999,316 shares of common stock to the April 2025 Purchasers at a purchase price of $0.585 per share and an exercise price of $0.001 per share (see Note 8, “Stockholders’ Equity” for additional information). The pre-funded warrants were exercisable immediately, subject to beneficial ownership restrictions, and have an unlimited term.

All the pre-funded warrants issued by the Company in April and September 2025 were classified as a component of permanent equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of common stock upon exercise. All of the shares underlying the pre-funded warrants are included in the weighted-average number of shares of common stock used to calculate net loss per share attributable to common stockholders because the shares may be issued for little or no consideration and are fully vested and are exercisable after their original issuance date. The pre-funded warrants may participate with common shareholders in dividends or other distributions.

In October 2025, the Company issued and sold additional pre-funded warrants to purchase up to an aggregate of 1,706,484 shares of common stock at a purchase price of $0.585 per share and an exercise price of $0.001 per share, to certain April 2025 Purchasers that elected to waive the April 2025 Private Placement milestone requirements for the second and third closings. The pre-funded warrants were exercisable immediately, subject to beneficial ownership restrictions, and have an unlimited term. In October 2025, the 1,706,484 pre-funded warrants were exercised in full.

As of December 31, 2025, there were 4,999,316 pre-funded warrants outstanding in connection with the April 2025 Private Placement and 4,845,455 pre-funded warrants outstanding in connection with the September 2025 Private Placement.

January 2024 Pre-Funded Warrants and Amendment of Prior Warrants

On January 17, 2024, the Company issued the January 2024 Pre-Funded Warrants to purchase up to an aggregate of 7,792,208 shares of Common Stock in the first tranche of the two-tranche January 2024 Private Placement (see Note 8, “Stockholders’ Equity”). The January 2024 Pre-Funded Warrants were exercisable immediately following the closing date of the first tranche of the January 2024 Private Placement, or January 22, 2024, and have an unlimited term and an exercise price of $0.001 per share.

The January 2024 Pre-Funded Warrants were classified as a component of permanent equity in the Company's consolidated balance sheet as they are freestanding financial instruments that are immediately exercisable, do not embody an obligation for the Company to repurchase its own shares and permit the holders to receive a fixed number of shares of Common Stock upon exercise. All of the shares underlying the January 2024 Pre-Funded Warrants have been included in the weighted-average number of shares of Common Stock used to calculate net loss per share attributable to common stockholders because the shares may be issued for little or no consideration and are fully vested and are exercisable after their original issuance date. The January 2024 Pre-Funded Warrants may participate with common shareholders in dividends or other distributions.

In July 2023, in connection with the July 2023 Private Placement Warrants (see below), the Company issued to certain of the July 2023 Purchasers (i) Series A common stock warrants to purchase up to 3,676,473 shares of Common Stock and (ii) Series B common stock warrants to purchase up to 3,676,473 shares of Common Stock, or collectively, the Prior Warrants. In connection with the January 2024 Private Placement, the Company and the January 2024 Purchasers agreed to amend and restate 2,941,178 of each the Series A common stock warrants and Series B common stock warrants outstanding, by reducing the exercise price thereunder from $1.11 to $0.77 per share. Pursuant to ASU 2021-04, the Company remeasured the fair value of the amended and restated Prior Warrants as of the modification date based on the modified terms and recorded the increase in fair value of $0.3 million as equity issuance costs, all of which was allocated to additional paid in capital. The fair value assumptions related to the modification of these 5,882,356 amended and restated Prior Warrants as of January 17, 2024 were as follows: exercise price of $0.77 per share, stock price of $0.769 per share, expected life of 4.5 years, volatility of 96.91%, a risk-free rate of 4.02% and 0% expected dividend yield.

None of the January 2024 Pre-Funded Warrants have been exercised and all remained outstanding as of December 31, 2025.

July 2023 Private Placement Warrants

On July 20, 2023, the Company issued pre-funded warrants to purchase up to an aggregate of 2,012,356 shares of Common Stock at an exercise price of $0.001 per share, or the July 2023 Pre-Funded Warrants, the July 2023 Series A common stock warrants to purchase up to an aggregate of 7,352,947 shares of Common Stock at an exercise price of $1.11 per share, and the July 2023 Series B common stock warrants to purchase up to an aggregate of 7,352,947 shares of Common Stock at an exercise price of $1.11 per share.

The July 2023 Pre-Funded Warrants were exercisable immediately following the closing date of the July 2023 Private Placement, or July 20, 2023, and have an unlimited term.

The July 2023 Series A and Series B common stock warrants were exercisable immediately following the closing date of July 20, 2023, and have afive-year term, unless certain milestone events are met which accelerate the expiration date to 45 days following such announcement. The July 2023 Series A and Series B common stock warrants also include certain rights upon “fundamental transactions” as described in such warrants, including the right of the holders thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Common Stock in such fundamental transaction in the amount of the Black Scholes value (as described in such warrants) of the unexercised portion of the applicable warrants on the date of the consummation of such fundamental transaction.

The Company evaluated the July 2023 Pre-Funded Warrants, and the July 2023 Series A and Series B common stock warrants under ASC 815-40 and determined that they did not require liability classification and met the requirements for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity. Accordingly, the proceeds were allocated between Common Stock and the July 2023 Pre-Funded Warrants, Series A and Series B common stock warrants at their respective relative fair value basis to stockholders’ equity and as a component of additional paid-in capital on the consolidated balance sheets. The fair value of the July 2023 Series A and Series B common stock warrants was determined using a Black-Scholes option pricing model and the Common Stock based on the closing date share price and were recorded in additional paid-in capital within stockholders' equity on the consolidated balance sheets.

In connection with the January 2024 Private Placement, the Company and the purchasers agreed to amend and restate the Prior Warrants by reducing their exercise price from $1.11 to $0.77 per share (see “January 2024 Pre-Funded Warrants and Amendment of Prior Warrants” above).

The placement agent July 2023 Series A and Series B Common Stock Warrants (see Note 8, “Stockholders’ Equity”) have the same terms as the July 2023 Series A and Series B Common Stock Warrants, except such warrants do not have a Black Scholes provision in the event of a fundamental transaction and the exercise price of such warrants is $1.70 per share, which is 125% of the combined offering price per share. The Company concluded that the placement agent July 2023 Series A and Series B Common Stock Warrants are freestanding equity-linked derivative instruments that met the criteria for equity classification. The placement agent July 2023 Series A and Series B Common Stock Warrants were valued at approximately $0.3 million, using the Black-Scholes option pricing model as follows: exercise price of $1.70 per share, stock price of $1.07 per share, expected life of 5 years, volatility of 94.3%, a risk-free rate of 4.08% and 0% expected dividend yield.

As of December 31, 2025, none of the July 2023 Series A and Series B common stock warrants nor the placement agent July 2023 Series A and Series B common stock warrants had been exercised and all were still outstanding, while 595,883 of the July 2023 Pre-Funded Warrants had been exercised, and 1,416,473 remained outstanding as of December 31, 2025.

December 2022 Registered Direct Offering Warrants

On December 29, 2022, the Company issued pre-funded warrants to purchase 2,632,898 shares of Common Stock, or the December 2022 Pre-Funded Warrants, and common warrants to purchase an aggregate of 4,227,052 shares of Common Stock, or the December 2022 Common Stock Warrants.

The December 2022 Pre-Funded Warrants were exercisable immediately following the closing date of the December 2022 Registered Direct Offering, or December 29, 2022, had an unlimited term and an exercise price of $0.0001 per share.

The December 2022 Common Stock Warrants were exercisable following thesix-month anniversary of the closing date of December 29, 2022, have asix-year term and an exercise price of $2.07 per share. The 2022 Warrants included full ratchet anti-dilutive adjustment rights in the event the Company issued shares of Common Stock or common stock equivalents in the future with a value less than the then effective exercise price of such common warrants subject to certain customary exceptions, and further subject to a minimum exercise price of $1.00 per share. On April 25, 2023, the December 2022 Common Stock Warrants were amended to remove these full ratchet anti-dilutive adjustment rights.

In the event of certain fundamental transactions involving the Company, the holder of the December 2022 Common Stock Warrants may require the Company to make a payment based on a Black-Scholes valuation, using specified inputs. The December 2022 Pre-Funded Warrants did not provide similar rights to the Purchaser. Therefore, the Company accounted for the December 2022 Common Stock Warrants as a liability, while the December 2022 Pre-Funded Warrants met the permanent equity criteria classification. The December 2022 Pre-Funded Warrants were classified as a component of permanent equity, or APIC, because they were freestanding financial instruments that are legally detachable and separately exercisable from the shares of Common Stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of shares of Common Stock upon exercise. In addition, the December 2022 Pre-Funded Warrants did not provide any guarantee of value or return.

As of December 31, 2025, none of the 4,227,052 December 2022 Common Stock Warrants had been exercised and all remained outstanding, while all of the 2,632,898 December 2022 Pre-Funded Warrants had been exercised in full andnone remained outstanding at December 31, 2025.

August 2022 LPC Warrant

The August 2022 LPC Warrant had an original exercise price of $4.07 per share (subject to adjustment for stock splits, reverse stock splits and similar recapitalization events), became immediately exercisable and has a term ending on February 3, 2028. In addition, through August 3, 2023, if the Company issued or sold (or is deemed to have issued or sold) any Common Stock, convertible securities or options (as defined in the August 2022 LPC Warrant), for a consideration per share, or the New Issuance Price, less than a price equal to the exercise price in effect immediately prior to such issue or sale or deemed issuance or sale, each of the foregoing, a dilutive issuance, then immediately after such dilutive issuance, the exercise price then in effect for the August 2022 LPC Warrant shall be reduced to an amount equal to the New Issuance Price, or the Down Round Feature.

In December 2022, the Down Round Feature was triggered due to the price per share received from the issuance of Common Stock and warrants in connection with the December 2022 Financing. In July 2023, the Down Round Feature was again triggered due to the price per share received from the issuance of Common Stock and warrants in connection with the in connection with the July 2023 Private Placement. In each instance, the Company calculated the value of the effect of the Down Round Feature measured as the difference between the warrants’ fair value, using the Black-Scholes option-pricing model, before and after the Down Round Feature was triggered using the then current exercise price and the new exercise price. The difference in fair value of the effect of the Down Round Feature was immaterial in both instances and had no impact on net loss per share in the periods presented. This down round feature expired on August 3, 2023.

As of December 31, 2025, the August 2022 LPC Warrant hadnot been exercised and was still outstanding.

November 2021 Financing Warrants

On November 15, 2021, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company, in a registered direct offering, sold (i) an aggregate of 875,000 shares of the Company’s common stock, and (ii) warrants to purchase up to an aggregate of 875,000 shares of Common Stock, for an aggregate purchase price of $14.0 million.

The November 2021 Financing Warrants had an original exercise price of $20.00 per share and became exercisable, if the holder’s post-exercise beneficial ownership is less than or equal to 9.99%,6 months after their issuance date and had afive-year term through November 15, 2026.

Upon the closing of the December 2022 Financing,750,000 of the 875,000 November 2021 Financing Warrants were modified, to reduce the exercise price of the warrants from $20.00 per share to $2.07 per share and to extend the expiration date to December 29, 2028.

The remaining warrants issued in the November 17, 2021, registered direct offering for 125,000 shares of the Company’s common stock are currently exercisable at a price of $20.00 per share and expire on November 15, 2026.

As of December 31, 2025, none of the November 2021 Financing Warrants had been exercised and all remained outstanding.

Loan Agreement Warrants

In connection with the Loan Agreement, on May 30, 2019, the Company issued warrants to Oxford Finance LLC, or the Lender, which are exercisable for an aggregate of 8,833 shares of the Company’s common stock with a per share exercise price of $56.60, or the Loan Agreement Warrants. The Loan Agreement Warrants may be exercised on a cashless basis. The Loan Agreement Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur often years from the date of issuance or the consummation of certain acquisitions of the Company as set forth in the Loan Agreement Warrants. The number of shares for which the Loan Agreement Warrants are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Loan Agreement Warrants. The Loan Agreement Warrants have been classified within stockholders’ equity and accounted for as a discount to the loan by allocating the gross proceeds on a relative fair value basis.

As of December 31, 2025, none of the Loan Agreement Warrants had been exercised and all remained outstanding.

10. Stock-Based Compensation

The Company recorded total stock-based compensation expense for stock options, stock awards and the Amended ESPP as follows (in thousands):

In the year ended December 31, 2025, there were 53,066 shares issued under the Amended ESPP. The weighted average fair value of shares issued under the Amended ESPP in 2025 and 2024 was $0.47 and $0.88 per share, respectively. As of December 31, 2025, there were 212,831 shares available for future grant under the Amended ESPP.

The following table summarizes restricted stock unit activity under the Company’s Equity Incentive Plans:

The following table summarizes stock option activity under the Company’s Equity Incentive Plans:

As of December 31, 2025, there were 1,954,964 shares available for future grant under the 2020 EIP.

Additional information regarding the Company’s stock options outstanding and vested and exercisable as of December 31, 2025, is summarized below:

The weighted average grant-date fair value of options granted during the years ended December 31, 2025 and 2024, was $0.56 and $0.84 per share, respectively. As of December 31, 2025, total stock-based compensation expense related to unvested options to be recognized in future periods was $1.0 million which is expected to be recognized over a weighted-average period of 2.2 years. The grant date fair value of options vested during the years ended December 31, 2025 and 2024, was $0.7 million and $2.0 million, respectively. The total intrinsic value of options exercised during the year ended December 31, 2025 was de minimus. There wereno options exercised during the year ended December 31, 2024. In addition, the performance-based stock options granted in March 2021 to certain of the Company’s executive officers remained unvested and expired during the year ended December 31, 2024.

The Company used the following assumptions to calculate the fair value of each time-based stock option:

11. Net Loss per Share of Common Stock

The Company applies the two-class method to compute basic net income (loss) per share by dividing the net income (loss) attributable to common shareholders by the weighted average number of shares of common stock outstanding for the period. The diluted net income (loss) per share of common stock is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the more dilutive of the 1) treasury stock method, if-converted method, or contingently issuable share method, as applicable, or 2) the two-class method. For purposes of this calculation, options to purchase common stock, RSUs, and warrants to purchase common stock were considered to be common stock equivalents.

The July 2023 Series A and Series B common stock warrants, the placement agent July 2023 Series A and Series B common stock warrants, the December 2022 Common Stock Warrants, and the November 2021 Financing Warrants are all participating securities which, by definition, entitle the holders thereof to participate in dividends and other distributions of assets by the Company to its holders of common shares as though the holder then held common shares; however, there is no contractual obligation on the part of the warrantholders to participate in the Company’s losses.

Given that the Company’s participating securities do not have a contractual obligation to share in the Company’s losses, net loss for the years ended December 31, 2025 and 2024, was attributed entirely to common stockholders. In periods with a reported net loss, common stock equivalents are excluded from the calculation of diluted net loss per share of common stock if their effect is antidilutive. Potential common shares that are issuable for little or no cash consideration, such as the Company’s September 2025, April 2025, January 2024, and July 2023 Pre-Funded Warrants issued with de minimis exercise prices of $0.001 per share, are considered outstanding common shares which are included in the calculation of basic and diluted net income (loss) per share in all circumstances.

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented because including them would have been antidilutive:

In addition, the shares contingently issuable in connection with the Merger Agreement, as described in Note 4, “Asset Acquisition”, have also been excluded from the computation of diluted net loss per share of common stock for the periods presented because the contingencies for issuance of these shares have not been met.

12. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

13. 401(k) Plan

The Company sponsors a 401(k) plan that stipulates that eligible employees can elect to contribute to the 401(k) plan, subject to certain limitations. Pursuant to the 401(k) plan, the Company makes a matching contribution of up to 4% of the related compensation. Under the vesting schedule, employees have ownership in the matching employer contributions based on the number of years of vesting service completed. Company contributions were $0.1 million for the year ended December 31, 2025 and $0.2 million for the year ended December 31, 2024.

14. Income Taxes

The Company did not accrue or pay any income taxes in the years ended December 31, 2025 or 2024.

Net deferred tax assets as of December 31, 2025 and 2024, consist of the following (in thousands):

The Company adopted ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures prospectively, as disclosed in Note 1. The following is a reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate for the year ended December 31, 2025, in accordance with the new disclosure requirements (in thousands):

The following is a reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate for the year ended December 31, 2024, in accordance with the guidance prior to the adoption of ASU 2023-09 (in thousands):

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of deferred tax assets is dependent on future taxable income, if any, the timing and the amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by $30.5 million and increased by $2.9 million during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had federal net operating loss carryforwards of $295.9 million, of which $12.7 million federal net operating losses generated before January 1, 2018, will begin to expire in 2029. Federal net operating losses of $283.2 million generated from 2018 to 2025, will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2025, the Company had state net operating loss carryforwards of $23.0 million, which begin to expire in 2028.

As of December 31, 2025, the Company had federal research credit carryovers of $0.1 million, which begin to expire in 2045. As of December 31, 2025, the Company had state research credit carryovers of $4.9 million, which will carryforward indefinitely.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research credits, to offset its post-change income may be limited. Based on an analysis performed by the Company as of December 31, 2025, an ownership change occurred September 10, 2025. The ownership change results in an annual limitation of approximately $1.7 million for the first five years after the change, and a limitation of approximately $0.6 million thereafter for federal net operating loss carryforwards, and a limitation of approximately $0.6 million annually for California net operating loss carryforwards. As a result of the change, approximately $102.2 million in federal net operating loss carryforwards approximately $119.6 million of California net operating loss carryforwards, and approximately $7.5 million of federal research and development credit carryforwards will expire unutilized.

Uncertain Tax Positions

A reconciliation of the beginning and ending balances of the unrecognized tax benefits during the years ended December 31, 2025 and 2024, is as follows (in thousands):

The entire amount of the unrecognized tax benefits would not impact the Company’s effective tax rate if recognized.

There wereno accrued interest or penalties related to unrecognized tax benefits in the years ended December 31, 2025 or 2024. The Company files income tax returns in the United States, California, and other states. The tax years 2005 through 2014, and 2016 through 2025, remain open in all jurisdictions. The Company is not currently under examination by income tax authorities in U.S. federal, state or foreign jurisdictions. The Company does not anticipate any significant changes within 12 months of this reporting date of its uncertain tax positions.

15. Segment Information

The Company reports segment information based on how it internally evaluates the operating performance of its business units, or segments. The Company hasone reportable segment, which is the development and commercialization of innovative therapies for use in medically supervised settings.

The Company’s chief operating decision maker, or CODM, which consists of its Chief Executive Officer and the Chief Financial Officer, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations. The CODM assesses performance for the segment and decides how to allocate resources based on consolidated net loss that is also reported on the consolidated statements of operations. The CODM uses consolidated net loss to evaluate the Company's spend and monitor budget versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the segment and in establishing resource allocation across the organization.

The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

Factors used in determining the reportable segment include the nature of the Company's operating activities, the organizational and reporting structure and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The segment derives its revenues in the United States pursuant to the Marketing Agreement with Alora. All long-lived assets are maintained in the United States.

The table below is a summary of the segment loss, including significant segment expenses (in thousands):

(a)Other general and administrative expense includes consulting and professional services fees, insurance, facilities and other corporate expenses.

(b)Other segment loss (income), net includes gain on sale of future payments, fair value adjustments to warrant liability, interest income and expense, and stock-based compensation expense and marketing support.

16. Subsequent Event

On March 13, 2026, the third closing of the April 2025 Private Placement took place following the Company’s announcement of the enrollment of 35 patients in the Niyad NEPHRO CRRT study and the achievement of the target price milestone, which resulted in the issuance of: (i)639,931 shares of common stock, at a price of $0.586 per share, and (ii) pre-funded warrants at a price of $0.585 per warrant to purchase up to an aggregate of 6,399,316 shares of common stock at an exercise price of $0.001 per share, and gross proceeds of $4.1 million. There are no additional shares of common stock and/or pre-funded warrants remaining to be sold in connection with the third closing of the April 2025 Private Placement.