Cartesian Therapeutics, Inc.

Previous wording

To date, we have financed our operations primarily through public offerings and private placements of our securities, funding received from research grants, collaboration and license arrangements and a credit facility. We do not have any products approved for sale and have not generated any product sales.

Current wording

To date, we have financed our operations primarily through public offerings and private placements of our securities, funding received from research grants, collaboration and license arrangements and credit facilities. We do not have any products approved for sale and have not generated any product sales.

Previous wording

We incurred net losses of $39.2 million and $17.7 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $861.6 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Current wording

We incurred net losses of $23.4 million and $1.8 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $845.8 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we:

Previous wording

The contingent value right liability is remeasured quarterly at fair value with the change in fair value recognized as a component of earnings.

Current wording

The contingent value rights liability is remeasured quarterly at fair value with the change in fair value recognized as a component of earnings.

Previous wording

Other (expense) income, net consists of non-operating income and non-operating expenses.

Current wording

Other income (expense), net consists of non-operating income and non-operating expenses.

Previous wording

During the three months ended March 31, 2026, we recognized $0.1 million of grant revenue, compared to $0.7 million for the three months ended March 31, 2025, a decrease of $0.6 million. The decrease was primarily due to decreased expenses reimbursable under the grant from the National Institute of Neurological Disorders and Stroke of the National Institutes of Health, or NINDS, incurred during the three months ended March 31, 2026.

Current wording

During the three months ended June 30, 2026, we recognized no grant revenue, compared to $0.3 million for the three months ended June 30, 2025, a decrease of $0.3 million. Grant revenue recognized during the three months ended June 30, 2025 was under the grant from the National Institute of Neurological Disorders and Stroke of the National Institutes of Health, or NINDS.

Previous wording

For the three months ended March 31, 2026, our research and development expenses were $19.5 million, compared to $14.7 million for the three months ended March 31, 2025, an increase of $4.8 million. The increase was primarily due to an increase in expenses for Descartes-08 for MG, primarily related to the expenses for the ongoing Phase 3 AURORA trial. This increase was partially offset by a decrease in expenses for early stage programs, primarily related to our decision to no longer pursue development of Descartes-08 in systemic lupus erythematosus.

Current wording

For the three months ended June 30, 2026, our research and development expenses were $20.4 million, compared to $14.9 million for the three months ended June 30, 2025, an increase of $5.5 million. The increase was primarily due to an increase in expenses for Descartes-08 for MG, primarily related to the expenses for the ongoing Phase 3 AURORA trial. This increase was partially offset by a decrease in stock-based compensation expense and expenses for early stage programs, primarily related to our decision to no longer pursue development of Descartes-08 in systemic lupus erythematosus, partially offset by new costs associated with the license agreement, or the WestGene Agreement, with WestGene Biopharma Co., Ltd., or WestGene.

Previous wording

For the three months ended March 31, 2026, our general and administrative expenses were $7.1 million, compared to $8.3 million for the three months ended March 31, 2025, a decrease of $1.2 million. The decrease was primarily the result of lower professional and consulting fees.

Current wording

For the three months ended June 30, 2026, our general and administrative expenses were $8.7 million, compared to $7.2 million for the three months ended June 30, 2025, an increase of $1.5 million. The increase was primarily the result of higher professional and consulting fees.

Previous wording

Interest income for the three months ended March 31, 2026 was $1.0 million, compared to $2.0 million for the three months ended March 31, 2025, a decrease of $1.0 million. The decrease in interest income was due to decreased cash and cash equivalents balance.

Current wording

Interest income for the three months ended June 30, 2026 was $1.1 million, compared to $1.7 million for the three months ended June 30, 2025, a decrease of $0.6 million. The decrease in interest income was due to decreased cash and cash equivalents balance and lower interest rates.

Previous wording

(Loss) gain on change in fair value of contingent value right liability

Current wording

(Loss) gain on change in fair value of warrant liability

Previous wording

For the three months ended March 31, 2026, we recognized $0.1 million of income from the decrease in the fair value of warrant liabilities, compared to $1.8 million of income from the decrease in the fair value of warrant liabilities for the three months ended March 31, 2025, a decrease of $1.7 million. Fair value of warrant liabilities was determined utilizing the Black-Scholes valuation methodology. The decrease in warrant value was primarily driven by a decrease in the per-share price of our common stock and a decrease in the remaining expected life of the warrants.

Current wording

For the three months ended June 30, 2026, we recognized $0.1 million of expense from the increase in the fair value of warrant liability, compared to $0.7 million of income from the decrease in the fair value of warrant liability for the three months ended June 30, 2025, a change of $0.8 million. The increase in fair value of the warrant liability in the current period was primarily driven by an increase in the per-share price of our common stock, partially offset by a decrease in the remaining expected life of the warrants.

Previous wording

For the three months ended March 31, 2026, we recognized $13.8 million of expense associated with the increase in the fair value of the CVR liability, compared to $0.3 million of income from the decrease in the fair value of the CVR liability for the three months ended March 31, 2025, an increase of $14.1 million. The fair value of the CVR liability was determined utilizing a Monte Carlo simulation model. The increase in the fair value of the CVR liability was primarily due to the passage of time.

Current wording

For the three months ended June 30, 2026, we recognized $49.2 million of income from the decrease in the fair value of the contingent value rights, or CVR, liability, compared to $35.3 million of income from the decrease in the fair value of the CVR liability for the three months ended June 30, 2025, a decrease of $13.9 million. The decrease in the fair value of the CVR liability was primarily due to changes in the timing of anticipated payments.

Previous wording

During the three months ended March 31, 2026, we recognized immaterial other expense, net, compared to no other expense, net for the three months ended March 31, 2025.

Current wording

During the three months ended June 30, 2026, we recognized $0.1 million of other income, net, compared to an immaterial amount of other expense, net for the three months ended June 30, 2025.

Previous wording

Net loss for three months ended March 31, 2026 was $39.2 million as compared to net loss of $17.7 million for the three months ended March 31, 2025, an increase of $21.5 million. The increase in net loss was primarily due to higher expense from the change in the fair value of the CVR liability, an increase in research and development expenses and lower revenue and interest income the three months ended March 31, 2026.

Current wording

Net income for three months ended June 30, 2026 was $15.8 million as compared to net income of $15.9 million for the three months ended June 30, 2025, an increase of $0.1 million. The increase in net income was primarily due to a higher gain on the change in the fair value of the CVR liability, partially offset by an increase in research and development expenses, the loss on change in fair value of embedded derivative, and an increase in general and administrative expenses for the three months ended June 30, 2026.

Previous wording

Our cash, cash equivalents, and restricted cash were $120.4 million as of March 31, 2026, of which $1.7 million was restricted cash related to lease commitments.

Current wording

Our cash, cash equivalents, and restricted cash were $149.3 million as of June 30, 2026, of which $1.7 million was restricted cash related to lease commitments.

Previous wording

In addition to our existing cash equivalents, we from time to time have received and may receive in the future research and development funding pursuant to our collaboration and license agreements. Currently, funding from payments under our collaboration agreements represent our only source of committed external funds.

Current wording

In addition to our existing cash equivalents, we from time to time have received and may receive in the future research and development funding pursuant to our collaboration and license agreements and debt financing from loans. Currently, funding from payments under our collaboration agreements and the Loan Agreement represent our only sources of committed external funds.

Previous wording

In June 2020, we entered into a License and Development Agreement, or as so amended, the Sobi License, with Swedish Orphan Biovitrum AB (publ.), or Sobi. Sobi paid us a one-time, upfront payment of $75 million, and upon the closing of a private placement of our common stock to Sobi at a price of $138.468 per share, we received an additional $25 million from Sobi. We are eligible to receive $630.0 million in milestone payments upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of Nanoecapsulated Sirolimus plus Pegadricase, or NASP, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier. Sobi has agreed to fund the Phase 3 clinical program of NASP, which commenced in September 2020. In July 2022, we received $10.0 million for the completion of the enrollment of the DISSOLVE II trial. In July 2024, we received $30.0 million for the milestone associated with the initiation of a rolling biologics license application to the FDA for NASP for the potential treatment of chronic refractory gout by Sobi. Proceeds from milestone payments and royalties on sales of NASP, if any, are required to be distributed, net of certain agreed deductions, to holders of the CVRs. For further description of the Sobi License, see Note 11, “Revenue Arrangements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

In June 2020, we entered into a License and Development Agreement, or as so amended, the Sobi License, with Swedish Orphan Biovitrum AB (publ.), or Sobi. Sobi paid us a one-time, upfront payment of $75.0 million, and upon the closing of a private placement of our common stock to Sobi at a price of $138.468 per share, we received an additional $25.0 million from Sobi. We are eligible to receive $630.0 million in milestone payments upon the achievement of various development and regulatory milestones and sales thresholds for annual net sales of Nanoecapsulated Sirolimus plus Pegadricase, or NASP, and tiered royalty payments ranging from the low double digits on the lowest sales tier to the high teens on the highest sales tier. Sobi has agreed to fund the Phase 3 clinical program of NASP, which commenced in September 2020. In July 2022, we received $10.0 million for the completion of the enrollment of the DISSOLVE II trial. In July 2024, we received $30.0 million for the milestone associated with the initiation of a rolling biologics license application to the FDA for NASP for the potential treatment of chronic refractory gout by Sobi. Proceeds from milestone payments and royalties on sales of NASP, if any, are required to be distributed, net of certain agreed deductions, to holders of the CVRs. For further description of the Sobi License, see Note 12, “Revenue Arrangements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

On December 13, 2024, the Company entered into a Sales Agreement, or the Sales Agreement, with Leerink Partners LLC to sell shares of the Company’s common stock, from time to time, through an “at the market” equity offering program under which Leerink Partners LLC acts as sales agent. The shares of common stock sold pursuant to the Sales Agreement will be issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-283803), filed on December 13, 2024 with the SEC and related prospectus supplement, filed on January 8, 2025 with the SEC, for aggregate gross sales proceeds of up to $100.0 million.

Current wording

On December 13, 2024, we entered into a Sales Agreement, or the Sales Agreement, with Leerink Partners LLC to sell shares of our common stock, from time to time, through an “at the market” equity offering program under which Leerink Partners LLC acts as sales agent. The shares of common stock sold pursuant to the Sales Agreement will be issued pursuant to our shelf registration statement on Form S-3 (File No. 333-283803), filed on December 13, 2024 with the SEC and related prospectus supplement, filed on January 8, 2025 with the SEC, for aggregate gross sales proceeds of up to $100.0 million.

Previous wording

During the three months ended March 31, 2026, the Company sold 2,270,712 shares of its common stock pursuant to the Sales Agreement for net proceeds of approximately $14.6 million after commissions and expenses. No shares were sold pursuant to the Sales Agreement during the three months ended March 31, 2025.

Current wording

During the six months ended June 30, 2026, we sold 2,813,736 shares of our common stock pursuant to the Sales Agreement for net proceeds of approximately $19.3 million after commissions and expenses. As of June 30, 2026, approximately $78.9 million remains available under the at the market program. No shares were sold pursuant to the Sales Agreement during the six months ended June 30, 2025.

Previous wording

As of the date of this Quarterly Report, we have not generated any revenue from product sales. We do not know when, or if, we will generate revenue from product sales. We will not generate significant revenue from product sales unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory expenses, milestone and royalty payments for in-licenses, and general overhead costs. We expect that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to risks in the development of our products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We expect that we will need substantial additional funding to support our continuing operations.

Current wording

As of the date of this Quarterly Report, we have not generated any revenue from product sales. We do not know when, or if, we will generate revenue from product sales. We will not generate significant revenue from product sales unless and until we obtain regulatory approval and commercialize one of our current or future product candidates. Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, Term Loan Facility payments, third-party clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory expenses, milestone and royalty payments for in-licenses, and general overhead costs. We expect that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to risks in the development of our products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We expect that we will need substantial additional funding to support our continuing operations.

Previous wording

As of March 31, 2026, we had an accumulated deficit of $861.6 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Current wording

As of June 30, 2026, we had an accumulated deficit of $845.8 million. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of our product candidates, conducting preclinical studies and clinical trials, and our administrative organization. We will require substantial additional financing to fund our operations and to continue to execute our strategy, and we will pursue a range of options to secure additional capital.

Previous wording

We regularly evaluate various potential sources of additional funding such as strategic collaborations, license agreements, debt issuance, potential royalty and/or milestone monetization transactions and the issuance of equity instruments to fund our operations. If we raise additional funds through strategic collaborations and alliances, which may include existing collaboration partners, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. To the extent that we raise additional capital through the sale of equity instruments, the ownership interest of our existing stockholders will be diluted, and other preferences may be necessary that adversely affect the rights of existing stockholders.

Current wording

We regularly evaluate various potential sources of additional funding such as strategic collaborations, license agreements, debt issuance, potential royalty and/or milestone monetization transactions and the issuance of equity instruments to fund our operations. If we raise additional funds through strategic collaborations and alliances, which may include existing collaboration partners, or debt issuance, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. To the extent that we raise additional capital through the sale of equity instruments or through debt issuance, the ownership interest of our existing stockholders will be diluted, and other preferences may be necessary that adversely affect the rights of existing stockholders.

Previous wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from March 31, 2026 through the end of the lease term total approximately $6.1 million. Payments made and remaining obligations on this lease liability are subject to potential reimbursement through deductions to CVR distributions as described in Note 5, “Fair Value Measurements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report and were reimbursed in the March 2025 CVR distribution.

Current wording

We are under agreement to lease approximately 32,294 square feet of laboratory and office space in Watertown, Massachusetts through May 2028. Remaining lease payments from June 30, 2026 through the end of the lease term total approximately $5.4 million. Payments made and remaining obligations on this lease liability are subject to potential reimbursement through deductions to CVR distributions as described in Note 5, “Fair Value Measurements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report and were reimbursed in the March 2025 CVR distribution.

Previous wording

In November 2023 we acquired two leases for office and laboratory space in Gaithersburg, Maryland, which expire in January 2027. Annualized rent is approximately $0.3 million and remaining lease payments from March 31, 2026 through the end of the lease term total approximately $0.3 million.

Current wording

In November 2023 we acquired two leases for office and laboratory space in Gaithersburg, Maryland, which expire in January 2027. Annualized rent is approximately $0.3 million and remaining lease payments from June 30, 2026 through the end of the lease term total approximately $0.2 million.

Previous wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Frederick, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet at the same site. In August 2024, we entered into a second amendment to lease an additional approximately 2,009 square feet at the same site. In March 2025, we entered into a third amendment to lease an additional approximately 6,439 square feet at the same site. The leases expire coterminously in June 2031. Annualized base rent under the leases is approximately $1.4 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million. Remaining lease payments total $8.4 million through the end of the lease term.

Current wording

In February 2024, we entered into an agreement to lease approximately 19,199 square feet of integrated manufacturing and office space in Frederick, Maryland. In May 2024, we entered into an amendment to lease an additional approximately 7,842 square feet at the same site. In August 2024, we entered into a second amendment to lease an additional approximately 2,009 square feet at the same site. In March 2025, we entered into a third amendment to lease an additional approximately 6,439 square feet at the same site. The leases expire coterminously in June 2031. Annualized base rent under the leases is approximately $1.4 million and is subject to annual increases in accordance with the terms of the lease agreement. The leases provide for a tenant improvement allowance of $0.8 million. Remaining lease payments total $8.0 million through the end of the lease term.

Previous wording

We are also party to certain license and collaboration agreements with Biogen, NCI, and Shenyang Sunshine Pharmaceutical Co., Ltd., or 3SBio. We may be obligated to make certain future payments which are contingent upon future events such as our achievement of specified regulatory and commercial milestones, or royalties on net product sales under these agreements. As of March 31, 2026, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales. Payments made and remaining obligations on the license agreement with 3SBio are subject to potential reimbursement through deductions to CVR distributions as described in Note 5, “Fair Value Measurements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

We are also party to certain license and collaboration agreements with WestGene, Biogen, NCI and Shenyang Sunshine Pharmaceutical Co., Ltd., or 3SBio. We may be obligated to make certain future payments which are contingent upon future events such as our achievement of specified regulatory and commercial milestones, or royalties on net product sales under these agreements. As of June 30, 2026, we were unable to estimate the timing or likelihood of achieving these milestones or generating future product sales. Payments made and remaining obligations on the license agreement with 3SBio are subject to potential reimbursement through deductions to CVR distributions as described in Note 5, “Fair Value Measurements” to our unaudited consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 was $22.1 million compared to $23.1 million for the three months ended March 31, 2025. The decrease in cash used in operating activities of approximately $1.0 million was primarily due to $22.2 million of net loss, adjusted for non-cash items, and $0.1 million of cash provided by changes in operating assets and liabilities, in each case during the three months ended March 31, 2026 compared to $16.0 million of net loss, adjusted for non-cash items, and $7.1 million of cash used in changes in operating assets and liabilities during the three months ended March 31, 2025.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026 was $43.2 million compared to $40.6 million for the six months ended June 30, 2025. The increase in cash used in operating activities of approximately $2.6 million was primarily due to $47.5 million of net loss, adjusted for non-cash items, and $4.3 million of cash provided by changes in operating assets and liabilities, in each case during the six months ended June 30, 2026 compared to $32.0 million of net loss, adjusted for non-cash items, and $8.6 million of cash used in changes in operating assets and liabilities during the six months ended June 30, 2025.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 was immaterial compared to $1.1 million for the three months ended March 31, 2025, a decrease of approximately $1.1 million. The net cash used in investing activities for the three months ended March 31, 2026 and 2025 consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 was $0.3 million compared to $3.7 million for the six months ended June 30, 2025, a decrease of approximately $3.4 million. The net cash used in investing activities for the six months ended June 30, 2026 and 2025 consisted of purchases of property and equipment.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $15.7 million compared to net cash used in financing activities of $8.0 million for the three months ended March 31, 2025, an increase of approximately $23.7 million. The net cash provided by financing activities in the three months ended March 31, 2026 was primarily from $15.4 million in proceeds from sales of our common stock pursuant to the Sales Agreement, net of commissions and expenses. The net cash used in financing activities in the three months ended March 31, 2025 was primarily the result of payments for the CVR distribution.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 was $66.0 million compared to net cash used in financing activities of $8.0 million for the six months ended June 30, 2025, an increase of approximately $74.0 million. The net cash provided by financing activities in the six months ended June 30, 2026 was primarily from approximately $46.0 million in proceeds from the issuance of Term Loan Facility, net, coupled with $19.3 million in proceeds from sales of our common stock pursuant to the Sales Agreement, net of commissions and expenses. The net cash used in financing activities in the six months ended June 30, 2025 was primarily the result of payments for the CVR distribution.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in our consolidated financial statements. Actual results may differ from these estimates under different assumptions or conditions. During the three and six months ended June 30, 2026, there were no material changes, other than described in Note 2, “Summary of Significant Accounting Policies” in this Quarterly Report on Form 10-Q, to our critical accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.