Pulmatrix, Inc.

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The information set forth below should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026 (the “Annual Report”). Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Pulmatrix, Inc., a Delaware corporation and its subsidiaries.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The information set forth below should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026, and amended on June 16, 2026 (the “Annual Report”). Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Pulmatrix, Inc., a Delaware corporation and its subsidiaries.

Previous wording

General and administrative expenses — General and administrative expenses were $1.3 million for the three months ended March 31, 2026, as compared to $1.8 million for the three months ended March 31, 2025, a decrease of approximately $0.5 million. The decrease was primarily due to higher costs incurred in the three months ended March 31, 2025, related to the preparation and filing of a registration statement and amendments thereto on Form S-4 with the SEC.

Current wording

General and administrative expenses — General and administrative expenses were $1.0 million for the three months ended June 30, 2026, as compared to $1.5 million for the three months ended June 30, 2025, a decrease of approximately $0.5 million. The decrease was primarily due to lower costs incurred as related to software subscriptions, legal and patent costs, and business development and merger-related activities.

Previous wording

Through March 31, 2026, we incurred an accumulated deficit of $303.5 million, primarily as a result of expenses incurred through a combination of research and development activities related to our various product candidates and general and administrative expenses supporting those activities. We have financed our operations since inception primarily through the sale of preferred and common stock, the issuance of convertible promissory notes, term loans, and collaboration and license agreements. Our total cash and cash equivalents balance as of March 31, 2026, was $3.3 million plus $0.7 million in restricted cash.

Current wording

Through June 30, 2026, we incurred an accumulated deficit of $304.5 million, primarily as a result of expenses incurred through a combination of research and development activities related to our various product candidates and general and administrative expenses supporting those activities. We have financed our operations since inception primarily through the sale of preferred and common stock, the issuance of convertible promissory notes, term loans, and collaboration and license agreements. Our total cash and cash equivalents balance as of June 30, 2026, was $2.2 million plus $0.7 million in restricted cash.

Previous wording

As of March 31, 2026, we had $3.3 million in cash and cash equivalents, as well as $0.7 million in restricted cash that would become unrestricted following consummation of the Merger or upon any termination of the Merger Agreement in accordance with its terms. We expect to incur significant costs in connection with the Merger and even if the Merger is ultimately not consummated, including legal and professional services costs related to filing registration statements with the SEC and obtaining shareholder approval.

Current wording

As of June 30, 2026, we had $2.2 million in cash and cash equivalents, as well as $0.7 million in restricted cash that would become unrestricted following consummation of the Merger or upon any termination of the Merger Agreement in accordance with its terms. We expect to incur significant costs in connection with the Merger and even if the Merger is ultimately not consummated, including legal and professional services costs related to filing registration statements with the SEC and obtaining shareholder approval.

Previous wording

In order to continue development of our programs, we would need to secure substantial additional funding in the future, from one or more equity or debt financings, collaborations, or other sources. Additional funding may not be available to us on acceptable terms, or at all. Contingent on securing additional funding and continuing development of our program candidates, we anticipate that we would continue to incur losses over the next several years due to development costs associated with our iSPERSE™ pipeline programs.

Current wording

In order to continue development of our programs, we would need to secure substantial additional funding in the future, from one or more equity or debt financings, collaborations, or other sources. Additional funding may not be available to us on acceptable terms, or at all. Contingent on securing additional funding and continuing development of our product candidates, we anticipate that we would continue to incur losses over the next several years due to development costs associated with our iSPERSE™ pipeline programs.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026, was $1.1 million, which was primarily the result of $1.2 million of net loss, partially offset by $0.1 million of cash flows associated with changes in operating assets and liabilities.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026, was $2.2 million, which was primarily the result of $2.2 million of net loss.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025, was $1.8 million, which was primarily the result of $1.8 million of net loss and $0.1 million in net non-cash adjustments, partially offset by $0.1 million of cash outflows associated with changes in operating assets and liabilities.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025, was $3.7 million, which was primarily the result of $3.4 million of net loss, $0.3 million of cash outflows associated with changes in operating assets and liabilities and less than $0.1 million in net non-cash adjustments.

Previous wording

No net cash was used in investing activities for the three months ended March 31, 2026.

Current wording

No net cash was used in investing activities for the six months ended June 30, 2026.

Previous wording

Net cash provided by financing activities was $1.0 million for the three months ended March 31, 2026, resulting from the sale of Series B Convertible Preferred Stock during the period. Issuance costs attributable to this sale have not yet been paid.

Current wording

Net cash provided by financing activities was approximately $1.0 million for the six months ended June 30, 2026, resulting from the $1.0 million sale of Series B Convertible Preferred Stock during the period, net of $50 thousand of issuance costs.

Previous wording

In connection with the entry into the Merger Agreement, we entered into a Securities Purchase Agreement, dated as of March 26, 2026, with an affiliate of Eos (the “Buyer”), pursuant to which we agreed to issue and sell to the Buyer in a private placement an aggregate of 1,000 shares of Series B Convertible Preferred Stock for aggregate gross proceeds of $1.0 million, which we received during the three months ended March 31, 2026. The Company delivered the shares of Series B Convertible Preferred Stock to the Buyer on April 16, 2026.

Current wording

In connection with the entry into the Merger Agreement, we entered into a Securities Purchase Agreement, dated as of March 26, 2026, with an affiliate of Eos (the “Buyer”), pursuant to which we agreed to issue and sell to the Buyer in a private placement an aggregate of 1,000 shares of Series B Convertible Preferred Stock for aggregate gross proceeds of $1.0 million, which we received during the three months ended March 31, 2026. We issued the shares of Series B Convertible Preferred Stock to the Buyer on April 16, 2026.

Previous wording

During the three months ended March 31, 2026, and 2025, no shares of our common stock were sold under the Sales Agreement.

Current wording

During the six months ended June 30, 2026, and 2025, no shares of our common stock were sold under the Sales Agreement.

Previous wording

The Company is subject to risks and uncertainties including, should it resume development of its product candidates, risks and uncertainties common to companies in the biopharmaceutical industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Should the Company resume development of its product candidates, significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization, would be required. These efforts would require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, should the Company resume development of its product candidates, it is uncertain when, if ever, the Company would realize revenue from product sales. Ongoing conflicts, such as in Venezuela, between Russia and Ukraine and in the Middle East may adversely affect the economy and political conditions in the United States may be adversely affected, and in turn, affect our business and financial condition. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business.

Current wording

The Company is subject to risks and uncertainties including, should it resume development of its product candidates, risks and uncertainties common to companies in the biopharmaceutical industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Should the Company resume development of its product candidates, significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization, would be required. These efforts would require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, should the Company resume development of its product candidates, it is uncertain when, if ever, the Company would realize revenue from product sales. Ongoing conflicts, such as those in Venezuela, between Russia and Ukraine, and in the Middle East may adversely affect the economy and political conditions in the United States may be adversely affected, and in turn, affect our business and financial condition. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, tariffs, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business.