Armata Pharmaceuticals, Inc.

Previous wording

Our common stock, par value $0.01 per share (the “Common Stock”) is traded on the NYSE American exchange under the symbol “ARMP.” We are currently headquartered in Los Angeles, CA, and we have a research and development facility for product development to support advancing phage products from the bench to the clinic. In addition to microbiology, synthetic biology, formulation, chemistry and analytical laboratories, the facility is equipped with two licensed current good manufacturing practice (“cGMP”) drug manufacturing suites enabling the production, testing and release of clinical trial material.

Current wording

Our common stock, par value $0.01 per share (the “Common Stock”) is traded on the NYSE American exchange under the symbol “ARMP.” We are currently headquartered in Los Angeles, California, and we have a research and development facility for product development to support advancing phage products from the bench to the clinic. In addition to microbiology, synthetic biology, formulation, chemistry and analytical laboratories, the facility is equipped with two licensed current good manufacturing practice (“cGMP”) drug manufacturing suites enabling the production, testing and release of clinical trial material.

Previous wording

We are a clinical-stage biotechnology company focused on the development of high purity, pathogen-specific bacteriophage therapeutics for the treatment of chronic pulmonary diseases exacerbated by concurrent bacterial infection with antibiotic-resistant and difficult-to-treat bacteria using our proprietary bacteriophage-based technology. We see bacteriophages as a potentially safer and effective alternative to antibiotics and an essential response to the growing bacterial resistance to current classes of antibiotics. Bacteriophages or “phages” have a powerful and highly differentiated mechanism of action that enables binding to and killing of specific targeted bacteria while uniquely preserving the normal human microbiome or “healthy bacteria”. This is in direct contrast to traditional broad-spectrum antibiotics which can alter the human microbiome increasing susceptibility to opportunistic pathogens, such asC. difficile. We believe that phages represent a promising means to effectively treat bacterial infections as an alternative to broad-spectrum antibiotics, especially for patients with bacterial infections resistant to current standard of care therapies, including the multidrug-resistant or “superbug” strains of bacteria. We are a leading developer of clinical-stage phage therapeutics of high purity, and believe we are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections. We have completed three critical Phase 2 trials, two of which were completed this year, utilizing two distinct phage cocktails against two different pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection, as well as acute systemic bacterial infections. We believe we are on a critical pathway towards pivotal Phase 3 clinical studies.

Current wording

We are a clinical-stage biotechnology company focused on the development of high-purity, pathogen-specific bacteriophage therapeutics for the treatment of antibiotic-resistant and difficult-to-treat bacterial infections using our proprietary bacteriophage-based technology. We have completed three Phase 2 clinical trials to date. We see bacteriophages as a potentially safer and effective alternative to antibiotics and an essential response to the growing bacterial resistance to current classes of antibiotics. Bacteriophages or “phages” have a powerful and highly differentiated mechanism of action that enables binding to and killing of specific targeted bacteria while uniquely preserving the normal human microbiome or “healthy bacteria”. This is in direct contrast to traditional broad-spectrum antibiotics which can alter the human microbiome increasing susceptibility to opportunistic pathogens, such asClostridium difficile (“C. difficile”). We believe that phages represent a promising means to effectively treat bacterial infections as an alternative to broad-spectrum antibiotics, especially for patients with bacterial infections resistant to current standard of care therapies, including the multidrug-resistant or “superbug” strains of bacteria. We are a leading developer of clinical-stage phage therapeutics of high purity, and believe we are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections. We have completed three critical Phase 2 trials, utilizing two distinct phage cocktails against two different bacterial pathogens with the potential to treat chronic pulmonary disease complicated by bacterial infection, as well as acute systemic bacterial infection. We believe we are on a critical pathway towards pivotal Phase 3 clinical studies.

Previous wording

cGMP manufacturing capabilities to advance a target pipeline of high-quality bacteriophage product candidates for late-stage clinical development. We have improved our manufacturing processes by significantly increasing phage titers and improving production efficiency with the goal of ensuring commercial viability. We believe that we are uniquely advancing two lead candidates to address both chronic and acute bacterial infections.

Current wording

cGMP manufacturing capabilities to advance a target pipeline of high-quality bacteriophage product candidates for late-stage clinical development. We have improved our manufacturing processes by significantly increasing phage titers and improving production efficiency with the goal of ensuring commercial viability. We believe that we are uniquely advancing two lead candidates, referred to as AP-PA02 and AP-SA02, to address both chronic and acute bacterial infections.

Previous wording

Our first lead phage candidate, inhaled AP-PA02, is focused primarily on the treatment of chronic pulmonary infections withP. aeruginosa. On October 14, 2020, we received the approval to proceed from the U.S. Food and Drug Administration (the “FDA”) for our Investigational New Drug (“IND”) application for AP-PA02. In the first quarter of 2023, we announced positive topline results from the completed “SWARM-P.a.” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose and multiple ascending dose clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with cystic fibrosis and chronic pulmonaryP. aeruginosainfection. Data indicate that AP-PA02 was well-tolerated with a treatment emergent adverse event profile similar to placebo. Pharmacokinetics findings confirm that AP-PA02 can be effectively delivered to the lungs through nebulization with minimal systemic exposure, with single ascending doses and multiple ascending doses resulting in a proportional increase in exposure as measured in induced sputum. AP-PA02 exposures were generally consistent across subjects. Additionally, bacterial levels ofP. aeruginosain the sputum measured at several timepoints suggest improvement in bacterial load reduction for subjects treated with AP-PA02 at the end of treatment as compared to placebo after ten days of dosing. In addition, a correlation was seen between increasing phage dose (higher AP-PA02 exposures) and reduction in the bacterial load, supporting the biologic plausibility of a bacterial specific mechanism of action and creating the opportunity for phage as a therapeutic alternative to inhaled antibiotics. This study was supported by the CFF, which granted us a Therapeutics Development Award of $5.0 million. As of September 30, 2024, we received the full award’s amount, including the final payment of $0.3 million in January 2024. Following the promising Phase 1b/2a results of favorable safety and tolerability profile and plausible mechanism of action, an additional confirmatory Phase 2 trial was initiated in non-cystic fibrosis Bronchiectasis (“NCFB”) patients with similar chronic pulmonary disease with infections due toP. aeruginosa.

Current wording

Our first lead phage candidate, inhaled AP-PA02, is focused primarily on the treatment of chronic pulmonary infections due toPseudomonas aeruginosa (“P. aeruginosa”). On October 14, 2020, we received the approval to proceed from the U.S. Food and Drug Administration (the “FDA”) for our Investigational New Drug (“IND”) application for AP-PA02. In the first quarter of 2023, we announced positive topline results from the completed “SWARM-P.a.” study – a Phase 1b/2a, multicenter, double-blind, randomized, placebo-controlled, single ascending dose and multiple ascending dose clinical trial to evaluate the safety and tolerability of inhaled AP-PA02 in subjects with cystic fibrosis (“CF”) and chronic pulmonaryP. aeruginosainfection. Data indicate that AP-PA02 was well-tolerated with a treatment emergent adverse event profile similar to placebo. Pharmacokinetics findings confirm that AP-PA02 can be effectively delivered to the lungs through nebulization with minimal systemic exposure, with single ascending doses and multiple ascending doses resulting in a proportional increase in exposure as measured in induced sputum. AP-PA02 exposures were generally consistent across subjects. Additionally, bacterial levels ofP. aeruginosain the sputum measured at several timepoints suggest improvement in bacterial load reduction for subjects treated with AP-PA02 at the end of treatment as compared to placebo after ten days of dosing. In addition, a correlation was seen between increasing phage dose (higher AP-PA02 exposures) and reduction in the bacterial load, supporting the biologic plausibility of a bacterial specific mechanism of action and creating the opportunity for phage as a therapeutic alternative to inhaled antibiotics. This study was supported by the CFF, which granted us a Therapeutics Development Award of $5.0 million. We received the full award’s amount, including the final payment of $0.3 million, in January 2024. Following the promising Phase 1b/2a results of favorable safety and tolerability profile and plausible mechanism of action, an additional confirmatory Phase 2 trial was initiated in non-cystic fibrosis bronchiectasis (“NCFB”) patients with similar chronic pulmonary disease with infections due toP. aeruginosa.

Previous wording

In parallel, we have an acute bacterial infection clinical development plan focused onStaphylococcus aureus (“S. aureus”) bacteremia, a difficult-to-treat and often life-threatening human infection that can result in high morbidity and mortality and for which bacterial resistance to antibiotics is growing.

Current wording

In parallel to developing novel phage therapeutics that target chronic bacterial infections, we have an acute bacterial infection clinical development plan focused onStaphylococcus aureus (“S. aureus”) bacteremia, a difficult-to-treat and often life-threatening human infection that can result in high morbidity and mortality and for which bacterial resistance to antibiotics is growing.

Previous wording

A key advantage of our phage manufacturing expertise is the purity profiles of our phage products, including AP-SA02, our phage product candidate forS. aureus; this has enabled us to pursue treatment of complicatedS. aureus bacteremia, where repetitive intravenous dosing is required. On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million grant and entered into a multi-year program administered by the U.S Department of Defense through MTEC and managed by the Naval Medical Research Command (NMRC) – Naval Advanced Medical Development (NAMD) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. On September

Current wording

A key advantage of our phage manufacturing expertise is the purity profiles of our phage products, including AP-SA02, our phage product candidate forS. aureus; this has enabled us to pursue treatment of complicatedS. aureus bacteremia, where repetitive intravenous dosing is required. On June 15, 2020, we entered into an agreement (the “MTEC Agreement”) with the Medical Technology Enterprise Consortium (“MTEC”), pursuant to which we received a $15.0 million award and entered into a multi-year program administered by the U.S Department of Defense through MTEC and managed by the Naval Medical Research Command (NMRC) – Naval Advanced Medical Development (NAMD) with funding from the Defense Health Agency and Joint Warfighter Medical Research Program. On September 29, 2022, the MTEC Agreement was modified to increase the total award by $1.3 million to $16.3 million and extend the term into the second half of 2024. On July 29, 2024, the MTEC Agreement was modified to increase the total award by $5.3 million to $21.6 million and extend the term into the third quarter of 2025. On April 29, 2025, we received $4.65 million of additional non-dilutive award funding through MTEC, thereby increasing the total MTEC award to $26.2 million, and the MTEC Agreement was modified to extend the term to September 30, 2025. We are using the award to partially fund a Phase 1b/2a, multicenter, randomized, double-blind, placebo-controlled dose escalation study that will assess the safety, tolerability and efficacy of our phage-based candidate, AP-SA02, for the treatment of adults withS. aureus(the “diSArm” study).

Previous wording

On November 17, 2021, we announced that we had received approval from the FDA to proceed with our IND application for AP-SA02. Since dosing the first patient in the Phase 2a portion of the study on September 26, 2023, we have focused on accelerating enrollment of the diSArm study, evaluating safety with higher intravenous doses, which is possible due to the high purity of our phage product candidates. The high purity of our phages has allowed us to dose escalate to 5E10 PFU every six hours (2E11 PFU every 24 hours) for five days without clinically significant adverse events. In parallel with dose escalation, the evolution of two distinct blinded subsets of subjects receiving phage has been observed. One subset, comprising approximately half of the treated group, has evidence of persistence of detectable phage in the blood providing early evidence ofin vivo phage amplification and resultant release of phage progeny. On November 12, 2024, we announced the completion of enrollment of the Phase 1b/2a diSArm study. We anticipate topline data from the diSArm study in the first quarter of 2025 where we can explore the two aforementioned subsets in an unblinded manner. We are committed to developing a pivotalS. aureus bacteremia trial in 2025 to evaluate the intravenous phage product candidate, AP-SA02, as an adjunct to standard of care broad-spectrum antibiotics and/or potentially as an alternative to broad-spectrum antibiotics, which would decrease the utilization of broad-spectrum antibiotics and their detrimental impact on the healthy human microbiome.

Current wording

On November 17, 2021, we announced that we had received approval from the FDA to proceed with our IND application for AP-SA02. On November 12, 2024, we announced completion of enrollment of the Phase 1b/2a diSArm study of intravenous AP-SA02 as a potential treatment forS. aureus bacteremia. The last patient final follow-up visit was completed on January 14, 2025. The study was conducted at sites in the United States and also at sites in Australia. During the Phase 2a portion of diSArm, Armata focused on evaluating clinical safety of higher intravenous doses of AP-SA02 and accelerating enrollment to arrive at topline data expeditiously. The manufacture of highly purified phages using Armata’s proprietary methods enabled dose escalation to 5E10 PFU every six hours (2E11 PFU every 24 hours) for five days without clinically significant adverse events. In parallel with dose escalation, the evolution of two distinct blinded subsets of subjects receiving phage has been observed. One subset, comprising approximately half of the treated group, has evidence of persistence of detectable phage in the blood providing early evidence ofin vivo phage amplification and resultant release of phage progeny. The Company anticipates topline data from the diSArm study in the first half of 2025 where it can explore the two aforementioned subsets in an unblinded manner. Topline results are also expected to inform the optimal dose of AP-SA02 to be evaluated in a larger definitive efficacy study. Data from this Phase 1b/2a study will be invaluable for a follow-on trial that is being designed to demonstrate efficacy of AP-SA02 in treatingS. aureus bacteremia. We anticipate findings from the Phase 1b/2a study will provide the basis for constructing a robust trial strategy for registration which can be the basis for an End-of-Phase-2 meeting with the FDA that enables us to obtain agreement on a path to approval. We are committed to developing a definitive efficacy trial focused on phage as an alternative to broad-spectrum antibiotics and/or antibiotic sparing to decrease the utilization of broad-spectrum antibiotics and their detrimental impact on the normal human microbiome.

Previous wording

On August 1, 2022, we announced FDA approval to proceed with our IND application for AP-SA02 in a second indication, prosthetic joint infections (“PJI”) withS. aureus. We had planned to initiate a Phase 1b/2a trial in 2023; however, in light of the growing concerns of both PJI and wound infection, we are planning to revise the protocol to include both indications. Driven by data from the bacteremia study, and with sufficient funding, we may in the future initiate a Phase 1b/2a trial to assess the safety and tolerability of intravenous and intra-articular AP-SA02 as an adjunct to standard of care antibiotics in adults undergoing treatment of periprosthetic joint infections and/or wound infections caused byS. aureus.

Current wording

On August 1, 2022, we announced FDA approval to proceed with our IND application for AP-SA02 in a second indication, prosthetic joint infections (“PJI”) withS. aureus. We had planned to initiate a Phase 1b/2a trial; however, in light of the growing concerns of both PJI and wound infections, we are considering revising the protocol to include both indications. Driven by data from the bacteremia study, and with sufficient funding, we may in the future initiate a Phase

Previous wording

We remain committed to conducting randomized controlled clinical trials required for FDA approval in order to move towards the commercialization of our phage products as alternatives and/or reinforcements to traditional antibiotics, providing a potential safe and effective method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections.

Current wording

We remain committed to our mission to evaluate phage-based therapeutics in randomized controlled clinical trials that evaluate safety and efficacy required to support potential regulatory approval and commercialization of our phage products as alternatives to traditional antibiotics, providing a potential method of treating patients suffering from drug-resistant and difficult-to-treat bacterial infections.

Previous wording

We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of September 30, 2024, we had an accumulated deficit of $330.3 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and

Current wording

We have incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of March 31, 2025, we had an accumulated deficit of $334.3 million. We currently expect to use our existing cash and cash equivalents for the focused research and development of our current product candidates and for working capital and other general corporate purposes. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development of and seeking to obtain regulatory approval for our product candidates. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates. We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so.

Previous wording

Our existing cash and cash equivalents of $17.1 million as of September 30, 2024 will not be sufficient to enable us to complete all necessary development of any potential product candidates. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.

Current wording

Our existing cash and cash equivalents of $11.7 million as of March 31, 2025 will not be sufficient to enable us to complete all necessary development of any potential product candidates and fund our operations for the next twelve months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and potential disruptions to, and volatility in, financial markets in the United States and worldwide. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.

Previous wording

On March 4, 2024, we entered into the 2024 Credit Agreement for the 2024 Loan in an aggregate amount of $35.0 million with Innoviva. Concurrently with the execution of the 2024 Loan, we amended certain provisions of the Convertible Credit Agreement and the 2023 Credit Agreement to, among other things, conform certain terms relating to permitted indebtedness and permitted liens. The 2024 Loan bears interest at an annual rate of 14% and matures in June 2025. Principal and accrued interest are payable at maturity.

Current wording

On March 4, 2024, we entered into the 2024 Credit Agreement for the 2024 Loan in an aggregate amount of $35.0 million. The 2024 Loan bears interest at an annual rate of 14.0% and was scheduled to mature on June 4, 2025. Principal and accrued interest are payable at maturity. Repayment of the 2024 Loan is guaranteed by our domestic subsidiaries, and the loan is secured by substantially all of our assets and the subsidiary guarantors. Concurrently with the execution of the 2024 Credit Agreement, we amended certain provisions of the Convertible Loan and Convertible Credit Agreement and the 2023 Loan and 2023 Credit Agreement to, among other things, conform certain terms relating to permitted indebtedness and permitted liens.

Previous wording

Comparison of three and nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

Comparison of three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Our grant revenue represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment ofS. aureus. The full amount of the MTEC award of $16.3 million was utilized as of March 31, 2024. In July 2024, we amended the MTEC agreement and increased the amount of the award by $5.3 million to a total of $21.6 million. We recognized $3.0 and $1.2 million of grant revenue during the three months ended September 30, 2024 and 2023, respectively, and $3.9 million and $3.0 million during the nine months ended September 30, 2024 and 2023, respectively, related to the MTEC award.

Current wording

We recognized $0.5 million and $1.0 million of grant and award revenue during the three months ended March 31, 2025 and 2024, respectively, which represents MTEC’s share of the costs incurred for our AP-SA02 program for the treatment ofS.aureus bacteremia.

Previous wording

The following table summarizes our research and development expenses for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Current wording

The following table summarizes our research and development expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Previous wording

Research and development expenses increased by $1.5 million, from $8.0 million for the three months ended September 30, 2023 to $9.5 million for the three months ended September 30, 2024.

Current wording

Research and development expenses decreased by $2.6 million, from $8.0 million for the three months ended March 31, 2024 to $5.4 million for the three months ended March 31, 2025.

Previous wording

Other external research and development costs decreased by $0.1 million from $1.1 million for the three months ended September 30, 2023, to $1.0 million for the three months ended September 30, 2024. The decrease was primarily due to a decrease of $0.1 million in consulting expenses.

Current wording

Other external research and development costs decreased by $0.3 million from $0.9 million for the three months ended March 31, 2024 to $0.6 million for the three months ended March 31, 2025. The decrease was primarily due to a decrease of $0.2 million in consulting expenses and a decrease of $0.1 million in laboratory supplies.

Previous wording

Our expenses by product and by project for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Current wording

Our expenses by product and by project for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Previous wording

Expenses not allocated by projects include consultants, lab supplies and outsourced services expenses.

Current wording

Expenses not allocated by projects include consultants, laboratory supplies and outsourced services expenses.

Previous wording

Personnel-related costs, including employee payroll and related expenses, increased by $0.8 million, from $2.1 million for the three months ended September 30, 2023 to $2.9 million for the three months ended September 30, 2024. This increase was mainly driven by a $0.3 million increase in stock-based compensation expense, which was primarily due to options granted in March 2024, 2024 a mid-year bonus payments of $0.2 million, and an increase of $0.3 million in other personnel-related costs, offset by a $0.1 million decrease in severance costs.

Current wording

Personnel-related costs, including employee payroll and related expenses, decreased by $0.3 million, from $2.6 million for the three months ended March 31, 2024 to $2.3 million for the three months ended March 31, 2025. This decrease was mainly driven by a $0.6 million decrease in incentive compensation, salaries and wages, vacation, severance and insurance due to a reduction in personnel. This decrease was partially offset by a $0.3 million increase in stock-based compensation expense.

Previous wording

Facilities and overheads costs increased by $0.2 million, from $2.2 million for the three months ended September 30,2023 to $2.4 million for the three months ended September 30, 2024 mainly due to an increase in facilities maintenance costs.

Current wording

Facilities and overhead costs decreased by $0.4 million, from $2.8 million for the three months ended March 31, 2024 to $2.4 million for the three months ended March 31, 2025 mainly due to a decrease in lease expense.

Previous wording

Interest income for the three months ended September 30, 2024 and 2023 was $0.3 million and less than $0.1 million, respectively, and related to interest income on our money market fund investments.

Current wording

Interest income for the three months ended March 31, 2025 and 2024 was negligible, and related to interest earned on our money market fund investments.

Previous wording

We recognized interest expense of $2.9 million and $1.2 million for the three months ended September 30, 2024 and 2023, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan received from Innoviva in July 2023 and March 2024, respectively. Stated interest is accrued and is payable at the maturity of the 2023 Loan and the 2024 Loan in 2025.

Current wording

We recognized interest expense of $3.6 million and $1.8 million for the three months ended March 31, 2025 and 2024, related to the interest expenses and the amortization of debt discount and issuance costs for the 2023 Loan and 2024 Loan, as amended in March 2025, and the 2025 Loan. Stated interest is accrued and is payable at the maturity of the amended 2023 Loan, 2024 Loan, and 2025 Loan in March 2026.

Previous wording

We recognized a gain on change in the fair value of the Convertible Loan for the three months ended September 30, 2024 of $6.9 million. The gain of $6.9 million is primarily attributable to the decrease in our Common Stock price in the three months ended September 30, 2024. We recognized a loss of $15.8 million for three months ended September 30, 2023, which is primarily due to the increase in our Common Stock price in the three months ended September 30, 2023.

Current wording

Change in Fair Value of the Convertible Loan

Previous wording

We recognized a gain on change in the fair value of the Convertible Loan for the nine months ended September 30, 2024 of $17.3 million and a loss of $13.0 million for the nine months ended September 30, 2023. Such fluctuations in fair values are primarily attributable to the changes in our estimated probabilities of various settlement scenarios, changes in our Common Stock price, remaining loan term and changes in volatilities. The Convertible Loan received from Innoviva in January 2023 and amended in July 2023 is accounted for at fair value using a weighted probability of various settlement scenarios of the Convertible Loan during its term discounted to each reporting date. Conversion option scenarios are valued using an option pricing model with significant assumptions and estimates such as volatility, expected term and risk-free interest rates.

Current wording

We recognized a gain of $5.2 million and loss of $13.0 million on the change in the fair value of the Convertible Loan for the three months ended March 31, 2025 and 2024, respectively. The Convertible Loan received from Innoviva in January 2023 and amended in July 2023 and March 2025 is accounted for at fair value using a weighted probability of

Previous wording

We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $17.1 million as of September 30, 2024 will not be sufficient to fund our operations for the next 12 months from the date of issuance of our condensed consolidated financial statements for the nine months ended September 30, 2024. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financings, strategic alliances, and grant arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within its control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

Current wording

We have incurred net losses since our inception and have negative operating cash flows. Our cash and cash equivalents of $11.7 million as of March 31, 2025 will not be sufficient to fund our operations for the next 12 months from the date of issuance of our condensed consolidated financial statements for the three months ended March 31, 2025. We plan to control our expenses and to raise additional capital through a combination of public and private equity, debt financing, strategic alliances, and grant and award arrangements. These circumstances raise substantial doubt about our ability to continue as a going concern. While management believes this plan to raise additional funds will alleviate the conditions that raise substantial doubt, these plans are not entirely within our control and cannot be assessed as being probable of occurring. We may not be able to secure additional financing in a timely manner or on favorable terms, if at all.

Previous wording

In July 2024, we amended the MTEC Agreement and increased the amount of the award by $5.3 million to a total of $21.6 million. We will recognize grant revenue from the third quarter of 2024 until the full amount of the amended award is utilized.

Current wording

On July 29, 2024, we amended the MTEC Agreement and increased the amount of the award by $5.3 million to a total of $21.6 million. We will recognize grant and award revenue from the third quarter of 2024 until the full amount of the amended award is utilized.

Previous wording

Any additional fundraising efforts may divert our management team from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. We cannot be certain that sufficient funds will be available to us when required or on acceptable terms. If we are unable to secure additional funds on a timely basis or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations, increase the risk of insolvency and loss of investment by our stockholders. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in dilution to our existing stockholders. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide.

Current wording

Any additional fundraising efforts may divert our management team from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. We cannot be certain that sufficient funds will be available to us when required or on acceptable terms. If we are unable to secure additional funds on a timely basis or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations, increase the risk of insolvency and loss of investment by our stockholders. To the extent that additional capital is raised through the sale of equity or convertible loan securities, the issuance of such securities could result in dilution to our existing stockholders. Our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the United States and worldwide.

Previous wording

Net cash used in operating activities was $29.6 million and $39.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

Net cash used in operating activities was $7.6 million and $10.6 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Cash used in operating activities in the nine months ended September 30, 2023 was primarily due to our net loss for the period of $49.2 million, adjusted by non-cash items of $20.1 million and a decrease of $10.2 million in our net operating assets and liabilities. The non-cash items consist of $13.0 million related to a loss from change in fair value of convertible debt, $3.9 million related to a loss on convertible debt extinguishment, $1.2 million of non-cash interest expense on the 2023 Loan, $0.7 million related to stock-based compensation expense, $0.7 million related to depreciation and amortization expense and $0.7 million related to a change in right-of-use assets. The decrease in our net operating assets and liabilities was primarily due to a decrease of $9.7 million in operating lease liability, which primarily relates to payments to the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, CA, a decrease of $0.3 million in accounts payable and accrued liabilities, a decrease of $0.1 million in accrued compensation, partially offset by an increase of $0.1 million in prepaid expenses and other current assets.

Current wording

Cash used in operating activities in the three months ended March 31, 2025 was primarily due to our net loss for the period of $6.5 million, adjusted by non-cash items of $0.1 million and a decrease of $1.2 million in our net operating assets and liabilities. The non-cash items consist of $5.2 million related to a gain from change in fair value of convertible debt, $3.6 million of non-cash interest expense on the 2023 Loan, 2024 Loan and 2025 Loan, $0.8 million related to stock-based compensation expense, $0.4 million related to depreciation and amortization expense and $0.6 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities was primarily due to a

Previous wording

Cash used in operating activities in the nine months ended September 30, 2024 was primarily due to our net loss for the period of $21.5 million, adjusted by non-cash items of $4.8 million and a decrease of $3.3 million in our net operating assets and liabilities. The non-cash items consist of $17.3 million related to a gain from change in fair value of convertible debt, $7.5 million of non-cash interest expense on the 2023 Loan and the 2024 Loan, $2.5 million related to stock-based compensation expense, $1.5 million related to change in right-of-use asset and $0.9 million related to depreciation and amortization expense. The decrease in our net operating assets and liabilities was primarily due to a decrease of $4.2 million in operating lease liability related to lease payments and payments for the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, CA, a decrease of $2.0 million in accounts payable and accrued liabilities, an increase of $0.8 million in accrued compensation, and a decrease of $2.1 million in prepaid expenses and other current assets.

Current wording

Cash used in operating activities in the three months ended March 31, 2024 was primarily due to our net loss for the period of $25.0 million, adjusted by non-cash items of $16.1 million and a decrease of $1.7 million in our net operating assets and liabilities. The non-cash items consist of $13.0 million related to a loss from change in fair value of convertible debt, $1.8 million of non-cash interest expense on the 2023 Loan and 2024 Loan, $0.5 million related to stock-based compensation expense, $0.3 million related to depreciation and amortization expense and $0.5 million related to change in right-of-use asset. The decrease in our net operating assets and liabilities was primarily due to a decrease of $2.2 million in operating lease liability, which primarily relates to payments for the construction of office and laboratory and manufacturing space at our new leased facility in Los Angeles, California which was completed in the second half of 2024, a decrease of $1.5 million in accounts payable and accrued liabilities, an increase of $0.2 million in accrued compensation, and an increase of $1.8 million in prepaid expenses and other current assets.

Previous wording

Net cash used in investing activities was $2.0 million and $5.7 million for the nine months ended September 30, 2024 and 2023, respectively, which is attributable to purchases of laboratory and manufacturing equipment in connection with the construction of a new office, laboratory and manufacturing space at our leased facility in Los Angeles, CA.

Current wording

Net cash used in investing activities was $0.1 million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively, which is attributable to purchases of laboratory and manufacturing equipment for the new office, laboratory and manufacturing space at our leased facility in Los Angeles, California.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $34.9 million, which consisted primarily of proceeds from issuance of term debt, net of issuance costs of less than $0.1 million, and proceeds from exercise of stock options of $0.1 million.

Current wording

Cash provided by financing activities for the three months ended March 31, 2024 was $34.9 million, which consisted primarily of proceeds from issuance of long-term debt, net of issuance costs of less than $0.1 million, and proceeds from exercise of stock options of less than $0.1 million.

Previous wording

Management’s discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate estimates and assumptions, including but not limited to those related to convertible debt, stock-based compensation expense, accruals for research and development costs, lease assets and liabilities, the valuation of deferred tax assets, valuation of uncertain income tax positions, impairment of goodwill and intangible assets and impairment of

Current wording

Management’s discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate estimates and assumptions, including but not limited to those related to convertible debt, stock-based compensation expense, accruals for research and development costs, lease assets and liabilities, the valuation of deferred tax assets, valuation of uncertain income tax positions, impairment of goodwill and intangible assets and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions that are believed 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 may differ from these estimates under different assumptions or conditions.