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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 75 added, 104 removed, 215 unchanged (45% of the section changed)

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You should read the “Risk Factors” and “Special Note Regarding Forward-Looking Statements” sections of this annual report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a biotechnology company devoted to discovering and developing innovative therapies designed to treat immune-mediated and metabolic diseases.

We are a biotechnology company devoted to discovering and developing innovative therapies designed to treat immune-mediated diseases.

Our approach is to develop pharmaceuticals that modulate protein systems, instead of directly inhibiting or activating single protein targets, with the goal of optimizing multiple pathways at once while minimizing toxicity.

Our late-stage product candidates are reproxalap, a RASP modulator for the potential treatment of dry eye disease and allergic conjunctivitis, and ADX‑2191, a novel formulation of intravitreal methotrexate for the potential treatment of retinitis pigmentosa.

Our preclinical RASP platform includes ADX‑248, ADX‑743, ADX‑631, ADX‑246, and other product candidates in development for inflammatory and metabolic diseases.

Our product candidates include RASP (reactive aldehyde species) modulators ADX‑248, ADX‑246, and chemically related molecules for the potential treatment of systemic and retinal immune-mediated diseases.

Since our incorporation, we have devoted substantially all of our resources to the preclinical and clinical development of our product candidates.

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The results of our operations will vary significantly from year-to-year and quarter-to-quarter, and depend on a number of factors, including risks related to our business and industry, risks relating to intellectual property and other legal matters, risks related to our common stock, and other risks that are detailed in the section of this annual report on Form 10-K entitled “Risk Factors".

In March 2019, we entered into the Hercules Credit Facility, which provided for a term loan of up to $60.0 million, $15.0 million of which has been funded as of September 30, 2024.

In April 2021, the Hercules Credit Facility was amended to, among other things, increase the amount which may become available for draw-down prior to May 2023, subject to the satisfaction of certain conditions contained therein, from $10.0 million to $20.0 million.

In December 2022, the Hercules Credit Facility was amended to, among other things, (i) extend the expiration of the period in which interest-only payments on borrowings from May 1, 2023 to May 1, 2024;

(ii) extend the Maturity Date from October 1, 2023 to October 1, 2024;

and (iii) extend the availability of the $20.0 million draw-down from May 2023 to May 2024, subject to the satisfaction of certain conditions contained therein.

In April 2024, the Hercules Credit Facility was amended to, among other things, extend the expiration of the period in which interest-only payments on borrowings under the Hercules Credit Facility were to be made from May 1, 2024 to October 1, 2024.

In September 2024, the Hercules Credit Facility was amended to, among other things, (i) extend the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from October 1, 2024 to April 1, 2026;

(ii) extend the Maturity Date from October 1, 2024 to April 1, 2026;

and (iii) amend the term loan interest rate to be the greater of (a) the Prime Rate (as defined in the Hercules Credit Facility) plus 3.10%, or (b) 11.10%.

The Hercules Credit Facility contains customary affirmative and negative covenants and events of default.

Affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, and maintain insurance coverage.

Negative covenants include, among others:

restrictions on transferring any part of our business or intellectual property;

incurring additional indebtedness;

engaging in mergers or acquisitions;

paying dividends or making other distributions;

making investments;

and creating other liens on our assets, in each case subject to customary exceptions.

In March 2019, we entered into the Hercules Credit Facility which provided for a term loan of up to $60.0 million, $15.0 million of which has been funded as of December 31, 2025.

The Hercules Credit Facility (as amended) provides for interest-only payments on borrowings until April 1, 2026;

(ii) has a Maturity Date of April 1, 2026;

and (iii) accrues interest at a rate of the greater of (a) the Prime Rate (as defined in the Hercules Credit Facility) plus 3.10%, or (b) 11.10%.

The Hercules Credit Facility, as amended, is described in Note 9 to the notes to the consolidated financial statements contained in this annual report on Form 10-K.

As of December 31, 2025, $15.0 million was outstanding under the Hercules Credit Facility, and no amounts remained available for borrowing.

In August 2024, we entered into an Open Market Sales Agreement SM with Jefferies, as sales agent (the 2024 Jefferies Sales Agreement), under which we have the ability to offer and sell, from time to time through Jefferies,

shares of common stock providing for aggregate sales proceeds of up to $75.0 million.

No sales had been made pursuant to the 2024 Jefferies Sales Agreement as of December 31, 2025.

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Our Agreement with AbbVie

On October 31, 2023 (the Option Agreement Effective Date), we entered into an exclusive option agreement (the Option Agreement) with AbbVie Inc.

(AbbVie), pursuant to which we granted AbbVie an exclusive option (the Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement).

AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the Option (the Option Payment).

On December 21, 2023, pursuant to the Option Agreement, AbbVie extended the period during which it may exercise the Option (the Exercise Period Extension) by paying us a non-refundable payment of $5.0 million (the Option Extension Fee).

If the Collaboration Agreement is entered into, the Option Payment and the Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie, which amended certain terms of the Option Agreement.

The Expansion Letter makes certain changes to the Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise.

If AbbVie does not deliver a written notice of exercising the Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such launch activities costs.

On October 31, 2023 (the AbbVie Option Agreement Effective Date), we entered into an exclusive option agreement (the AbbVie Option Agreement) with AbbVie Inc.

(AbbVie), pursuant to which we granted AbbVie an exclusive option (the AbbVie Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture, and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or

otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement).

AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the AbbVie Option (the AbbVie Option Payment).

On December 21, 2023, pursuant to the AbbVie Option Agreement, AbbVie extended the period during which it may exercise the AbbVie Option by paying us a non-refundable payment of $5.0 million (the AbbVie Option Extension Fee).

If the Collaboration Agreement is entered into, the AbbVie Option Payment and the AbbVie Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie.

The Expansion Letter makes certain changes to the AbbVie Option Agreement, among other things, providing that we will conduct certain launch activities, which costs shall not exceed mid-single-digit millions of dollars without AbbVie’s approval, and which costs will be considered allowable expenses pursuant to the Collaboration Agreement upon the delivery of AbbVie’s written notice of exercising the AbbVie Option and entry into the Collaboration Agreement, such that 60% of our allowable expenses will be reimbursed by AbbVie in the event of exercise.

If AbbVie does not deliver a written notice of exercising the AbbVie Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such costs.

AbbVie has also independently initiated pre-commercialization planning activities.

In addition, the Exercise Period (as defined in the Option Agreement) was further modified to ten (10) business days following the date, if any, that we receive approval from the U.S.

Food and Drug Administration of the new drug application (NDA) for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the Option.

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100 million upfront cash payment, less the Option Payment and the Option Extension Fee.

In addition, the Exercise Period (as defined in the AbbVie Option Agreement) was restricted to ten (10) business days following the date, if any, that we receive approval from the U.S.

Food and Drug Administration of the NDA for reproxalap in dry eye disease (the FDA Decision), provided that AbbVie shall provide us notice in case AbbVie determines that it will not exercise the AbbVie Option.

Upon AbbVie’s delivery of the agreement execution notice and the parties entering into the Collaboration Agreement, AbbVie would pay us a $100.0 million upfront cash payment, less the AbbVie Option Payment and the AbbVie Option Extension Fee.

In addition, we would be eligible to receive up to approximately $300.0 million in regulatory and commercial milestone payments, inclusive of a $100.0 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement.

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Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap.

As of February 28, 2025, AbbVie has not exercised the Option.

As of February 27, 2026, AbbVie has not exercised the AbbVie Option.

Our Agreement with MEEI

We previously developed ADX‑2191 for the treatment of proliferative vitreoretinopathy pursuant to an Exclusive License Agreement with Massachusetts Eye and Ear Infirmary (MEEI), originally entered into in

July 2016 between MEEI and Helio Vision, Inc.

(Helio), as amended, (the MEEI Agreement).

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We may terminate the MEEI Agreement with timely written notice to MEEI.

MEEI has the right to terminate the MEEI Agreement, subject to certain specified cure periods, in the event of our insolvency or bankruptcy or if we cease all business operations with respect to licensed products, fail to pay amounts due under the MEEI Agreement, fail to comply with certain due diligence obligations, do not maintain specific levels of insurance, one of our officers is convicted of a felony relating to the manufacture, use, sale or importation of licensed products, or we materially breach any provisions of the MEEI Agreement or in the event of our insolvency or bankruptcy.

MEEI has the right to terminate the MEEI Agreement, subject to certain specified cure periods, in the event of our insolvency or

bankruptcy or if we cease all business operations with respect to licensed products, fail to pay amounts due under the MEEI Agreement, fail to comply with certain due diligence obligations, do not maintain specific levels of insurance, one of our officers is convicted of a felony relating to the manufacture, use, sale or importation of licensed products, or we materially breach any provisions of the MEEI Agreement or in the event of our insolvency or bankruptcy.

In the event of an early termination of the MEEI Agreement, all rights licensed and developed by us under the MEEI Agreement will revert to MEEI.

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• employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense.

Substantially all of our research and development expenses to date have been incurred in connection with reproxalap and ADX‑2191, as well as proof of concept trials with ADX‑629.

Substantially all of our research and development expenses to date have been incurred in connection with reproxalap and ADX‑2191, as well as proof of concept trials with ADX‑629, which was a signal-finding molecule no longer under development.

We expect our research and development expenses to increase for the foreseeable future as we advance other compounds through preclinical and clinical development.

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Development costs incurred after the asset acquisition are expensed as incurred.

We do not expect reproxalap or any of our other product candidates to be commercially available, if at all, before at least the first half of 2025.

We do not expect reproxalap or any of our other product candidates to be commercially available, if at all, before at least the second quarter of 2026.

General and Administrative Expenses

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Comprehensive loss is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources.

For the year ended December 31, 2024, comprehensive loss is equal to our net loss of $55.9 million and our net unrealized gain on marketable securities of approximately $0.1 million.

For the year ended December 31, 2023, comprehensive loss is equal to our net loss of $37.5 million and $0.1 million of losses on marketable securities reclassified to net loss.

For the year ended December 31, 2025, comprehensive loss is equal to our net loss of $33.8 million and reclassification of gains on marketable securities to net loss of less than $0.1 million.

For the year ended December 31, 2024, comprehensive loss is equal to our net loss of $55.9 million and our net unrealized gain on marketable securities of less than $0.1 million.

Critical Accounting Estimates

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We evaluate estimates and judgments on an ongoing basis.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience and on various other factors that we

believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Our actual results may differ materially from estimates under different assumptions or conditions.

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As of December 31, 2025, we had federal and state income tax net operating loss (NOL) carryforwards of approximately $327.9 million and $320.8 million,] respectively.

Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards will expire at various dates through 2044.

Federal NOL carryforwards generated through December 31, 2017 and state NOL carryforwards generated through December 31, 2025 will expire at various dates through 2045.

Federal NOLs generated during the years ended December 31, 2018 and thereafter will carry forward indefinitely.

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Any future ownership changes, including those resulting from our recent or future financing activities, may cause our existing tax attributes to have additional limitations.

It is the Company’s policy to include penalties and interest expense related to income taxes as a component of the provision for income taxes.

As of December 31, 2025 and 2024, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statements of operations.

For the year ended December 31, 2025, the Company generated research and development tax credits as well as an Orphan Drug Credit but has not conducted a study to document the qualified activities.

This study may result in an adjustment to the Company’s research and development tax credit carryforwards;

however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position.

A full valuation allowance has been provided against the Company’s research and development tax credit carryforwards and, if an adjustment is required, this adjustment would result in an adjustment to the deferred tax asset established for the research and development tax credit carryforwards and the valuation allowance.

Recent Accounting Pronouncements

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Results of Operations

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, including the progress of our research and development efforts, the timing and outcome of clinical trials, regulatory requirements, and the exercise, if any, of the Option, including any related commercialization costs.

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, including the progress of our research and development efforts, the timing and outcome of clinical trials, regulatory requirements, and the exercise, if any, of the AbbVie Option, including any related commercialization costs.

Our limited operating history makes predictions of future operations difficult or impossible.

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Research and development expenses were $25.7 million for the year ended December 31, 2025 compared to $48.2 million for the same period in 2024.

The increase of $18.7 million is primarily related to an increase in $10.1 million in external clinical development costs, $8.3 million in drug product manufacturing costs, and $1.2 million in personnel costs, partially offset by an decrease in $0.6 million in external preclinical development costs and $0.3 million in consulting expenditures.

The decrease of approximately $22.5 million is primarily related to a decrease in $10.5 million in external clinical development costs, $8.5 million in drug product manufacturing costs, $1.6 million in external preclinical development costs, $1.5 million in personnel costs and $0.4 million in consulting expenditures.

For the year ended December 31, 2025, approximately 33% of the total research and development expenses related to the advancement of late-stage product candidates.

Of the total late-stage product candidate spend during the year ended December 31, 2024, approximately 45% was attributable to reproxalap and 3% to ADX‑2191.

As it relates to our late-stage product candidate spend during the year ended December 31, 2025, approximately 19% of research and development expense was attributable to reproxalap and 14% of research and development expense to ADX‑2191.

We do not track labor associated with each program and have allocated headcount costs on a pro-rated basis.

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General and administrative expenses were $9.6 million for the year ended December 31, 2025, compared to $11.9 million for the year ended December 31, 2024.

The decrease of approximately $1.4 million is primarily related to decreases in consulting and legal expenditures.

The decrease of approximately $2.3 million is primarily related to decreases in personnel and legal expenditures.

Other Income (Expense).

Total other income (expense), net, was approximately $4.3 million and $5.3 million for the year ended December 31, 2024 and 2023, respectively, was principally due to a decrease in interest income as a result of decreased interest rates on our investments.

Total other income, net, was approximately $1.4 million and $4.3 million for the year ended December 31, 2025 and 2024.

The decrease of $2.9 million was principally due to a decrease in interest income as a result of a decrease in investments.

Liquidity and Capital Resources

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Since inception, we have incurred operating losses and negative cash flows from operating activities and have devoted substantially all our efforts to research and development.

At December 31, 2024, we had total stockholders’ equity of approximately $71.0 million and cash, cash equivalents, and marketable securities of $101.2 million.

At December 31, 2025, we had total stockholders’ equity of approximately $44.3 million and cash, and cash equivalents of $70.0 million.

During the year ended December 31, 2025, we had net loss of approximately $33.8 million.

We expect to generate operating losses for the foreseeable future.

In August 2024, we entered into the 2024 Jefferies Sales Agreement under which we have the ability to offer and sell, from time to time through Jefferies, shares of common stock providing for aggregate sales proceeds of up to $75.0 million.

As of December 31, 2025, no shares of common stock were sold under the 2024 Jefferies Sales Agreement.

In March 2019, we entered into the Hercules Credit Facility (the Loan and Security Agreement), pursuant to which a term loan of up to an aggregate principal amount of $60.0 million may be made available to us.

The Loan and Security Agreement provides for (i) an initial term loan advance of up to $5.0 million at our option, which expired unutilized on April 15, 2019;

(ii) three additional term loan advances of up to $15.0 million each, at our option, available to us upon the occurrence of certain funding conditions prior to September 30, 2019 (2019 Tranche), March 31, 2020 (2020 Tranche), and March 31, 2021 (2021 Tranche);

and (iii) a final additional term loan advance (Fourth Loan Tranche) of up to $10.0 million prior to December 31, 2021, at our option, subject to approval by Lender’s investment committee.

We drew down the 2019 Tranche in full in September 2019 and the 2020 Tranche and the 2021 Tranche expired unutilized prior to us satisfying the funding conditions for such tranche.

On April 20, 2021, we entered into the First Amendment (First Amendment) to Loan and Security Agreement with Hercules.

The First Amendment, among other things, (i) increased the Fourth Loan Tranche from $10.0 million to $20.0 million and extended the deadline for drawing down the Fourth Loan Tranche to July 1, 2022;

(ii) lowered the variable per annum rate of interest on borrowings under the Loan and Security Agreement to the greater of (a) the Prime Rate plus 3.10% or (b) 8.60%;

(iii) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are required from May 1, 2021 to July 1, 2022;

and (iv) following the satisfaction of certain conditions, which conditions were satisfied in April 2021, further extended the expiration of the interest-only period and the deadline for drawing down the Fourth Loan Tranche to May 1, 2023.

On December 22, 2022, we entered into the Second Amendment (Second Amendment) to the Loan and Security Agreement with Hercules, which became effective as of December 31, 2022 (Second Amendment Effective Date).

The Second Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from May 1, 2023 to May 1, 2024;

(ii) extended the Maturity Date from October 1, 2023 to October 1, 2024 (Maturity Date);

(iii) extended the availability of the Fourth Loan Tranche commitment of $20 million from May 1, 2023 to May 1, 2024;

and (iv) amended the Prepayment Charge (as defined therein) to equal 0.75% of the amount prepaid during the 12-month period following the Second Amendment Effective Date, and 0% thereafter.

The ability to draw the Fourth Loan Tranche remains conditioned on approval by the Lenders’ investment committee.

In addition, a supplemental end of term charge of $292,500 (Supplemental End of Term Charge) shall be due on the earlier of (A) the Maturity Date, as amended, or (B) repayment of the aggregate amount of advances under the Loan and Security Agreement.

The existing end of term charge of $1,042,500 (End of Term Charge) was paid on October 2, 2023.

On April 29, 2024, we entered into the Third Amendment (Third Amendment) to the Loan and Security Agreement with Hercules.

The Third Amendment, among other things, extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from May 1, 2024 to October 1, 2024.

On May 1, 2024, the Fourth Loan Tranche commitment expired unutilized.

On September 30, 2024, we entered into the Fourth Amendment (Fourth Amendment) to the Loan and Security Agreement with Hercules.

The Fourth Amendment, among other things, (i) extended the expiration of the period in which interest-only payments on borrowings under the Loan and Security Agreement are made from October 1, 2024 to April 1, 2026;

(ii) extended the Maturity Date from October 1, 2024 to April 1, 2026;

and (iii) amended the term loan interest rate to be the greater of (a) the Prime Rate (as defined in the Loan and Security Agreement) plus 3.10%, or (b) 11.10%.

In addition, a supplemental end of term charge of $300,000 (Second Supplemental End of Term Charge) shall be due on the earlier of (A) the Maturity Date, as amended, or (B) repayment of the aggregate amount of advances under the Loan and Security Agreement.

The Supplemental End of Term Charge of $292,500 was paid on October 1, 2024.

The Loan and Security Agreement contains customary affirmative and negative covenants and events of default.

In March 2019, we entered into the Hercules Credit Facility which provided for a term loan of up to $60.0 million, $15.0 million of which has been funded as of December 31, 2025.

The Hercules Credit Facility (as amended) provides for interest-only payments on borrowings until April 1, 2026;

(ii) has a Maturity Date of April 1, 2026;

and (iii) accrues interest at a rate of the greater of (a) the Prime Rate (as defined in the Hercules Credit Facility) plus 3.10%, or (b) 11.10%.

The Hercules Credit Facility contains customary affirmative and negative covenants and events of default.

Affirmative covenants include, among others, covenants requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports, and maintain insurance coverage.

Negative covenants include, among others:

Negative covenants include, in each case subject to customary exceptions, among others:

restrictions on transferring any part of our business or intellectual property;

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making investments;

and creating other liens on our assets, in each case subject to customary exceptions.

and creating other liens on our assets.

The Hercules Credit Facility, as amended, is described in Note 9 to the notes to the consolidated financial statements contained in this annual report on Form 10-K.

As of December 31, 2025, $15.0 million was outstanding under the Hercules Credit Facility and no amounts remained available for borrowing.

On October 31, 2023 (the Option Agreement Effective Date), we entered into an exclusive option agreement (the Option Agreement) with AbbVie Inc.

AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the Option (the Option Payment).

If the Collaboration Agreement is entered into, the Option Payment and the Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie, which amended certain terms of the Option Agreement.

If AbbVie does not deliver a written notice of exercising the Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such launch activities costs.

On October 31, 2023 (the AbbVie Option Agreement Effective Date), we entered into an exclusive option agreement (the AbbVie Option Agreement) with AbbVie Inc.

(AbbVie), pursuant to which we granted AbbVie an

exclusive option (the AbbVie Option) to obtain (a) a co-exclusive license in the United States to facilitate a collaboration with us to develop, manufacture and commercialize reproxalap in the United States, (b) an exclusive license to develop, manufacture, and commercialize reproxalap outside the United States, (c) a right of first negotiation for compounds that are owned or otherwise controlled by us in the field of ophthalmology relating to treating conditions of the ocular surface, and (d) a right to review data for any other compounds that are owned or otherwise controlled by us in the fields of ophthalmology and immunology before such data is shared with any other third party (the Collaboration Agreement).

AbbVie has paid us a non-refundable payment of $1.0 million in consideration of the AbbVie Option (the AbbVie Option Payment).

If the Collaboration Agreement is entered into, the AbbVie Option Payment and the AbbVie Option Extension Fee will be credited against the upfront cash payment payable by AbbVie.

On November 15, 2024, we entered into the Expansion Side Letter (the Expansion Letter) with AbbVie.

If AbbVie does not deliver a written notice of exercising the AbbVie Option and we do not execute the Collaboration Agreement, we will remain solely responsible for such costs.

AbbVie has also independently initiated pre-commercialization planning activities.

In addition, the Exercise Period (as defined in the Option Agreement) was further modified to ten (10) business days following the date, if any, that we receive approval from the U.S.

In addition, the Exercise Period (as defined in the AbbVie Option Agreement) was restricted to ten (10) business days following the date, if any, that we receive approval from the U.S.

In addition, we would be eligible to receive up to approximately $300.0 million in regulatory, and commercial milestone payments, inclusive of a $100.0 million milestone payment payable if the FDA Decision is received prior to or after the execution of the Collaboration Agreement.

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Outside of the United States, we would be eligible to receive tiered royalties on net sales of reproxalap.

Based on our current operating plan, we believe that our cash and cash equivalents, as of December 31, 2024, will be sufficient to fund our currently projected operating expenses and debt obligations into 2027, including continued early and late-stage development of our product candidates in ocular and systemic immune-mediated and metabolic diseases.

Based on our current operating plan, we believe that our cash and cash equivalents, as of December 31, 2025, will be sufficient to fund our currently projected operating expenses and debt obligations for at least twelve months from February 27, 2026, including continued early and late-stage development of our product candidates in ocular and systemic immune-mediated diseases.

We base our projections of operating capital requirements on our current operating plan, which includes several assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.

Because of the numerous risks and uncertainties associated with research, development, and commercialization (as applicable) of product candidates, we are unable to estimate the exact amount of our working capital requirements.

activities and regulatory activities, commence or continue ongoing commercialization, including manufacturing, sales, marketing and distribution for our product candidates, or conduct any substantial additional development requirements requested by the FDA.

We will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of our planned research and development activities and regulatory activities, commence or continue ongoing commercialization, including manufacturing, sales, marketing and distribution for our product candidates, or conduct any substantial additional development requirements requested by the FDA.

At this time, due to the risks inherent in the drug development process, we are unable to estimate with any certainty the costs we will incur in the continued clinical development of reproxalap, and our other product candidates.

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• the progress, costs, and results of any clinical activities for regulatory review of reproxalap outside of the United States;

• the exercise, if any, of the Option;

• the exercise, if any, of the AbbVie Option;

• the costs and timing of process development and manufacturing scale up activities associated with reproxalap;

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Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash used in financing activities

Net decrease in cash and cash equivalents

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Operating Activities .

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The primary use of cash was to fund our operations.

The increase in the amount of cash used in operating activities for 2024 as compared to 2023 was primarily due to increases in research and development activities, increases in accrued expenses due to the amount and timing of payments for research and development activities, and increases in prepayments, due to changes in working capital needs.

The decrease in the amount of cash used in operating activities for 2025 as compared to 2024 was primarily due to decreases in research and development activities, and decreases in accrued expenses due to the amount and timing of payments for research and development activities.

Investing Activities .

Net cash used in investing activities in 2024 was $44.9 million compared to net cash provided by investing activities in 2023 of $30.0 million.

Net cash used in investing activities related to purchases of marketable securities in 2024.

Net cash provided by investing activities in 2025 was $47.7 million compared to net cash used in investing activities in 2024 of $44.9 million.

Net cash provided by investing activities primarily related to maturities of marketable securities in 2025.

Net cash used in investing activities related to purchases of marketable securities in 2024.

Financing Activities .

Net cash used in financing activities was $0.2 million for the year ended December 31, 2024 and consisted of offering costs offset by stock purchases under the employee stock purchase plan.

Net cash used in financing activities of $1.3 million for year ended 2023 consisted of stock withheld for tax obligations on option settlement proceeds and repayment of the end of term fee on our long-term debt, offset by proceeds from stock option exercises and stock purchases under the employee stock purchase plan.

Net cash provided by financing activities was $1.1 million for the year ended December 31, 2025 and consisted of proceeds from stock option exercises.

Net cash used in financing activities of $0.2 million for year ended 2024 consisted of offering costs offset by stock purchases under the employee stock purchase plan.

Off-Balance Sheet Arrangements.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis