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What changed 10-Q

Item 1. Financial Statements

2025-05-13 compared with 2024-11-12 · 95 added, 142 removed, 214 unchanged (53% of the section changed)

3 unchanged sentences

(In thousands, except share and per-share amounts)

September 30,

Current assets:

19 unchanged sentences

200,000,000 shares authorized;

71,124,407 and 70,677,400 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

77,825,450 and 72,352,701 shares issued and outstanding as of March 31, 2025 and December 31 2024, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

September 30,

Operating expenses:

8 unchanged sentences

Total other income (expense), net

Net loss before income taxes

Income tax expense (benefit)

Other comprehensive income — unrealized gain on short-term investments

13 unchanged sentences

Issuance of common stock from Employee Stock Purchase Plan

Issuance of common stock upon exercise of warrants

Issuance of common stock in at-the-market offerings, net

Unrealized (loss) gain on short-term investments

Balance at March 31, 2025

Stock-based compensation

Exercise of stock options

Vesting of restricted stock awards including withholding, net

Unrealized (loss) gain on short-term investments

Balance at June 30, 2024

Stock-based compensation

Exercise of stock options

Vesting of restricted stock awards including withholding, net

Issuance of common stock from Employee Stock Purchase Plan

Unrealized (loss) gain on short-term investments

Balance at September 30, 2024

The accompanying notes are an integral part of the unaudited consolidated financial statements.

9 unchanged sentences

Issuance of common stock from Employee Stock Purchase Plan

Issuance of common stock upon exercise of warrants

Unrealized (loss) gain on short-term investments

Balance at March 31, 2024

Stock-based compensation

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Unrealized (loss) gain on short-term investments

Balance at June 30, 2023

Stock-based compensation

Vesting of restricted stock awards including withholding, net

Issuance of common stock in at-the-market offerings, net

Issuance of common stock from Employee Stock Purchase Plan

Unrealized (loss) gain on short-term investments

Balance at September 30, 2023

The accompanying notes are an integral part of the unaudited consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Loss (gain) on foreign currency exchange

Deferred income tax benefit

Changes in operating assets and liabilities:

8 unchanged sentences

Purchases of short-term investments

Purchases of property and equipment, net

Net cash (used in) provided by investing activities

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Proceeds from issuance of common stock in at-the-market offerings, net

Payment of conditional economic incentive

Proceeds from issuance of common stock from Employee Stock Purchase Plan

1 unchanged sentence

Payments for tax withholding in share-based compensation

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents and restricted cash

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

1 unchanged sentence

SUPPLEMENTAL NON-CASH ACTIVITIES:

Operating lease liability and right-of-use asset addition

Deferred offering costs in accrued expenses and other current liabilities

The accompanying notes are an integral part of the unaudited consolidated financial statements.

3 unchanged sentences

Nature of Business

Altimmune, Inc., headquartered in Gaithersburg, Maryland, United States, together with its subsidiaries (collectively, the “Company” or “Altimmune”) is a clinical stage biopharmaceutical company incorporated under the laws of the State of Delaware.

The Company is focused on developing treatments for obesity and liver diseases.

The Company’s lead product candidate, pemvidutide (formerly known as ALT-801), is a novel, investigational, peptide-based GLP-1/glucagon dual receptor agonist in development for the treatment of obesity and metabolic dysfunction-associated steatohepatitis (“MASH”), previously termed non-alcoholic steatohepatitis (“NASH”).

Altimmune, Inc., headquartered in Gaithersburg, Maryland, United States, together with its subsidiaries (collectively, the “Company” or “Altimmune”) is a late clinical stage biopharmaceutical company incorporated under the laws of the State of Delaware.

The Company is a late clinical-stage biopharmaceutical company focused on developing novel peptide-based therapeutics for liver and cardiometabolic diseases.

The Company’s lead program is pemvidutide (formerly known as ALT-801), a GLP-1/glucagon dual receptor agonist for the treatment of metabolic dysfunction-associated steatohepatitis (“MASH”), obesity, Alcohol Use Disorder (“AUD”) and Alcohol Liver Disease (“ALD”).

The Company may also pursue additional indications for pemvidutide that leverage its differentiated clinical profile.

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital, and has financed its operations through the issuance of common and preferred stock, long-term debt, and proceeds from research grants and government contracts.

4 unchanged sentences

Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States (“U.S.

GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, included in the Annual Report on Form 10-K which was filed with the SEC on March 27, 2024.

GAAP”) for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, included in the Annual Report on Form 10-K, which was filed with the SEC on February 27, 2025.

In the opinion of management, the Company has prepared the accompanying unaudited consolidated financial statements on the same basis as the audited consolidated financial statements, and these consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented.

5 unchanged sentences

Summary of Significant Accounting Policies

During the nine months ended September 30, 2024, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 27, 2024.

During the three months ended March 31, 2025, there have been no significant changes to the Company’s summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 27, 2025.

Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to,

the valuation of share-based awards, income taxes, and accruals for research and development activities.

Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, the valuation of share-based awards, income taxes, prepaids, and accruals for research and development activities.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable.

However, actual results could differ from those estimates.

Due to a full valuation allowance, the Company did no t record an income tax expense (benefit) for either of the three and nine months ended September 30, 2024 or 2023.

During the three months ended March 31, 2025, the Company has recorded a discrete tax benefit of approximately $ 0.7 million, related to a portion of carryback claims with the State of Maryland of which the Company previously held an uncertain tax position against.

Other than the discrete tax benefit discussed above, due to a full valuation allowance, the Company did no t record an income tax expense (benefit) for either of the three months ended March 31, 2025 and 2024.

The Company calculates its quarterly income tax provision based on estimated, annual effective tax rates applied to ordinary income (or loss) and other known items computed and recognized as they occur.

1 unchanged sentence

Fair Value Measurements

The Company’s assets measured at fair value on a recurring basis as of September 30, 2024 consisted of the following (in thousands):

Fair Value Measurement at September 30, 2024

The Company’s assets measured at fair value on a recurring basis as of March 31, 2025, consisted of the following (in thousands):

Fair Value Measurement at March 31, 2025

Cash equivalents - money market funds

6 unchanged sentences

The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value.

Short-term investments with quoted prices as of September 30, 2024 as shown below (in thousands):

September 30, 2024

The Company’s short-term investments have a maturity date of one year or less.

Short-term investments with quoted prices as of March 31, 2025, as shown below (in thousands):

March 31, 2025

Unrealized Gain

Unrealized Gain

Amortized Cost

6 unchanged sentences

December 31, 2024

Unrealized Gain

Unrealized Gain

Amortized Cost

4 unchanged sentences

Agency debt securities

As of September 30, 2024 and December 31, 2023, none of the unrealized losses on the Company’s short-term investments are a result of credit loss;

therefore, any unrealized losses were recognized in OCI.

As of September 30, 2024 and December 31, 2023, the Company had $ 0.3 million and $ 0.1 million, respectively, accrued interest on short-term investments included in “Accounts and other receivables” on the accompanying Consolidated Balance Sheets.

As of March 31, 2025 and December 31, 2024, none of the unrealized losses on the Company’s short-term investments are a result of credit loss, therefore, any unrealized losses were recognized in OCI.

As of March 31, 2025 and December 31, 2024, the Company had $ 0.4 million accrued interest on short-term investments included in “Accounts and other receivables” on the accompanying Consolidated Balance Sheets.

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis.

Assets recorded at fair value on a non-recurring basis, such as property and equipment and intangible assets are recognized at fair value when they are impaired.

During the nine months ended September 30, 2024 and year ended December 31, 2023, the Company had no significant assets or liabilities that were measured at fair value on a non-recurring basis.

Operating Leases

The Company’s operating lease for office and laboratory space in the United States was set to expire on April 30, 2025.

On May 20, 2024, the Company exercised its one-time 60 -month renewal option to renew its lease for an additional 60 months.

As of May 1, 2024, the Company remeasured its lease liability and recorded $ 1.4 million additional lease liability and right-of-use asset using an updated incremental borrowing rate of 9.5 %.

The renewed lease has a term of 72 months and expires on April 30, 2030.

The Company reassessed that the renewed lease remains an operating lease under Topic 842.

Rent expense under the Company’s operating leases was $ 0.1 million and $ 0.4 million during the three and nine months ended September 30, 2024, respectively.

During the three and nine months ended September 30, 2023, rent expense under the Company’s operating leases was $ 0.1 million and $ 0.4 million, respectively.

Rent expense includes short-term leases and variable lease costs that are not included in the lease obligation.

Short-term leases are leases having a term of twelve months or less.

The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases.

The cash paid for operating lease liabilities for each of the nine months ended September 30, 2024 and 2023 was $ 0.4 million.

Supplemental other information related to the operating leases balance sheet information is as follows (in thousands):

September 30, 2024

December 31, 2023

Balance Sheet Classification

Operating lease obligations, current (see Note 5)

Accrued expenses and other current liabilities

Operating lease obligations, noncurrent (see Note 6)

Noncurrent liabilities

Operating lease right-of-use assets

Weighted-average remaining lease term (years)

Weighted-average discount rate

Maturities of operating lease liabilities as of September 30, 2024 are as follows (in thousands):

2024 - remainder of the year

Total operating lease payments

imputed interest

Total operating lease liabilities

During the three months ended March 31, 2025 and year ended December 31, 2024, the Company had no assets or liabilities that were measured at fair value on a non-recurring basis.

Accrued Expenses

Accrued expenses and other current liabilities consist of the following (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

2 unchanged sentences

Accrued research and development

Lease obligation, current portion (see Note 4)

Lease obligation, current portion

Accrued interest and other

2 unchanged sentences

The Company’s noncurrent liabilities are summarized as follows (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

Research and development incentive credit

Lease obligation, long-term portion (see Note 4)

Lease obligation, long-term portion

Conditional economic incentive grants

1 unchanged sentence

Stockholders’ Equity

The Amended and Restated Certificate of Incorporation, as amended (“Charter”), authorizes the Company to issue 200,000,000 shares of common stock, par value $ 0.0001 per share.

As of September 30, 2024, the Company had 71,124,407 shares of common stock issued and outstanding .

The Amended and Restated Certificate of Incorporation, as amended (“Charter”), authorized the Company to issue 200,000,000 shares of common stock, par value $ 0.0001 per share.

As of March 31, 2025, the Company had 77,825,450 shares of common stock issued and outstanding .

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

Common stockholders are not entitled to receive dividends, unless declared by the board of directors.

The Charter also authorizes the Company to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share.

As of September 30, 2024, the Company had no shares of preferred stock issued and outstanding .

The Charter also authorized the Company to issue 1,000,000 shares of preferred stock, par value $ 0.0001 per share.

As of March 31, 2025, the Company had no shares of preferred stock issued and outstanding .

At-the-Market Offerings

On February 28, 2023, the Company entered into an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B.

Riley Securities, Inc., serving as sales agents (the “Sales Agents”), with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the “Shares”) through the Sales Agents (the “2023 Offering”).

All Shares offered and sold in the 2023 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the SEC on February 28, 2023, which was declared effective immediately, the prospectus supplement relating to the 2023 Offering filed with the SEC on February 28, 2023, and any applicable additional prospectus supplements related to the 2023 Offering that form a part of the Registration Statement.

On February 27, 2025, the Company entered into an Equity Distribution Agreement (the “2025 Agreement”) with Leerink Partners LLC, Piper Sandler & Co.

and Stifel, Nicolaus & Company, Incorporated, serving as sales agents (the “2025 Sales Agents”) with respect to an at-the-market offerings program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the “2025 Shares”) through the 2025 Sales Agents (the “2025 Offering”).

All Shares offered and sold in the 2025 Offering will be issued pursuant to the Company’s Registration Statement on Form S-3 filed with the SEC on February 27, 2025, which was declared effective on March 13, 2025, and the prospectus supplements related to the 2025 Offering that form a part of the Registration Statement.

The Company capitalized approximately $ 0.3 million of other offering costs which will offset the proceeds received from the shares sold under the 2025 Agreement.

Since inception through September 30, 2024, the Company has sold 20,454,516 shares of common stock under the 2023 Agreement, resulting in approximately $ 86.6 million in proceeds, net of $ 2.8 million commission and other offering costs.

No shares were sold under the 2023 Agreement during the nine months ended September 30, 2024, and as of September 30, 2024, $ 60.6 million remained available to be sold under the 2023 Agreement.

As of September 30, 2024, there was $ 0.1 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

On March 5, 2024, warrant holders exercised 50,000 warrants with an exercise price of $ 3.21 , resulting in the issuance of 50,000 shares of common stock.

As of September 30, 2024, the Company had no outstanding warrants.

During the three months ended March 31, 2025, the Company has sold 805,502 shares of common stock under the 2025 Agreement resulting in approximately $ 4.6 million in proceeds, net of $ 0.2 million commission and other offering costs, and as of March 31, 2025, $ 145.3 million remained available to be sold under the 2025 Agreement.

As of March 31, 2025, there was $ 0.3 million deferred offering costs included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.

On February 28, 2023, the Company entered into an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B.

Riley Securities, Inc., serving as sales agents (the “2023 Sales Agents”), with respect to an at-the-market offerings program under which the Company offered and sold shares of its common stock, having an aggregate offering price of up to $ 150.0 million (the “2023 Shares”) through the 2023 Sales Agents (the “2023 Offering”).

All 2023 Shares offered and sold in the 2023 Offering were issued pursuant to the Company’s Registration Statement on Form S-3 filed with the SEC on February 28, 2023.

During the three months ended March 31, 2025, the Company has sold 4,467,866 shares of common stock under the 2023 Agreement resulting in approximately $ 30.2 million in proceeds, net of $ 1.0 million commission and other offering costs.

Since inception through the expiration of the 2023 Agreement in February 2025, the Company sold a total of 26,129,903 shares of common stock resulting in approximately $ 126.8 million in net proceeds.

As of March 31, 2025, there were no remaining shares available under the 2023 Agreement as the 2023 Agreement was terminated.

Stock-Based Compensation

4 unchanged sentences

The Company’s stock option awards generally vest over four years and typically have a contractual life of ten years .

As of September 30, 2024, there was $ 18.4 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 2.5 years.

During the nine months ended September 30, 2024, the Company granted 1,821,375 stock options with a weighted average exercise price of $ 8.96 and per share weighted average grant date fair value of $ 7.24 .

Information related to stock options outstanding as of September 30, 2024 is as follows (in thousands, except share, exercise price and contractual term):

As of March 31, 2025, there was $ 23.9 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 3.0 years.

During the three months ended March 31, 2025, the Company granted 1,842,450 stock options with a weighted average exercise price of $ 6.71 and per share weighted average grant date fair value of $ 5.48 .

Information related to stock options outstanding as of March 31, 2025, is as follows (in thousands, except share, exercise price, and contractual term):

Weighted-Average

5 unchanged sentences

Forfeited or expired

Outstanding, September 30, 2024

Exercisable, September 30, 2024

Vested and expected to vest, September 30, 2024

Outstanding, March 31, 2025

Exercisable, March 31, 2025

Vested and expected to vest, March 31, 2025

Restricted Stock Units (RSUs)

During the nine months ended September 30, 2024, the Company granted 484,600 shares of RSUs with a weighted average grant date fair value of $ 9.32 which vest over four years .

As of September 30, 2024, the Company had unvested RSUs of 784,227 shares with total unrecognized compensation expense of $ 5.6 million, which the Company expects to recognize over a weighted average period of approximately 2.6 years.

During the nine months ended September 30, 2024, the Company issued 191,883 shares of unrestricted common stock as a result of the vesting of 288,040 RSUs net of 96,157 shares of common stock withheld to satisfy tax withholding obligations.

During the three months ended March 31, 2025, the Company granted 466,700 shares of RSUs with a weighted average grant date fair value of $ 6.88 which vest over four years .

As of March 31, 2025, the Company had unvested RSUs of 1,053,337 shares with total unrecognized compensation expense of $ 7.6 million, which the Company expects to recognize over a weighted average period of approximately 3.1 years.

During the three months ended March 31, 2025, the Company issued 165,259 shares of unrestricted common stock as a result of the vesting of 264,153 RSUs, net of 98,894 shares of common stock withheld to satisfy tax withholding obligations.

2019 Employee Stock Purchase Plan (“ESPP”)

Under the ESPP, employees purchased 86,857 shares for $ 0.3 million during the nine months ended September 30, 2024.

For the three months ended September 30, 2024 and 2023, compensation expense was negligible.

During each of the nine months ended September 30, 2024 and 2023, the Company recognized compensation expense of $ 0.1 million.

Under the ESPP, employees purchased 32,872 shares for $ 0.2 million during the three months ended March 31, 2025.

Stock-based Compensation Expense

During the nine months ended September 30, 2024, the Company recorded $ 1.0 million incremental stock-based compensation expense as a result of the modifications of stock awards upon termination of the former Chief Financial Officer.

The modification changed the vesting conditions of the awards by accelerating the vesting of certain unvested awards that would have otherwise been forfeited upon termination.

The incremental costs are included in the Statements of Operations and Comprehensive Loss under general and administrative expense.

Stock-based compensation expense is classified in the unaudited consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023 as follows (in thousands):

Stock-based compensation expense is classified in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

September 30,

Research and development

1 unchanged sentence

Net Loss Per Share

Because the Company has reported net loss attributable to common stockholders for the three and nine months ended September 30, 2024 and 2023, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Because the Company has reported net loss attributable to common stockholders for the three months ended March 31, 2025 and 2024, basic and diluted net loss per share attributable to common stockholders in each period are the same.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average numbers of shares of common stock outstanding for the period.

Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period.

As such, all unvested restricted stock, RSUs, common stock and stock options have been excluded from the computation of diluted weighted average shares outstanding because such securities would have an anti-dilutive impact for all periods presented.

Potential common shares, issuable upon conversion, vesting, or exercise of unvested RSUs, common stock warrants, and stock options, that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

Three and Nine Months Ended

September 30,

Common stock warrants

As such, all unvested RSUs and stock options have been excluded from the computation of diluted weighted average shares outstanding because such securities would have an anti-dilutive impact for all periods presented.

Potential common shares issuable upon conversion, vesting, or exercise of unvested RSUs and stock options that are excluded from the computation of diluted weighted-average shares outstanding, as they are anti-dilutive, are as follows:

Three Months Ended

Common stock options

6 unchanged sentences

As part of the agreement, the Company is obligated to make payments of up to $ 80.0 million upon the achievement of specified worldwide net sales of all products developed using the technology acquired from Spitfire Pharma, Inc.

(the “Sales Milestone”) within ten years following the approval of a new drug application filed with the U.

(the “Sales Milestone”) within ten years following the approval of a new drug application filed with the U.S.

Food and Drug Administration (the “FDA”).

On May 6, 2024, a class action complaint was filed in federal district court in the District of Maryland, Southern Division, naming as defendants the Company and three of the Company’s executive officers, which is now captioned In re Altimmune, Inc.

Securities Litigation, No.

24-cv-01315 (D.

Md.) (the “Class Action”).

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder, by making false and misleading statements and omissions of material fact to the investing public including the plaintiff and class members, who purchased or otherwise acquired the Company’s common stock between December 1, 2023 and April 26, 2024.

The plaintiff and class members seek to have the action maintained as a class action under Rule 23 of the Federal Rules of Civil Procedure and for the defendants to pay damages, interest, and an award of costs, including attorneys’ fees.

A substantially similar complaint, captioned Campanile v.

Altimmune, Inc., et al.

8:24-cv-01918 (D.

Md.), was also filed in the same court by another plaintiff on July 1, 2024 against the Company and three of its executive officers, based upon the same general set of allegations and class period.

On October 2, 2024, the court consolidated the Campanile action with the Class Action for all purposes and appointed lead plaintiffs for the consolidated litigation.

On October 18, 2024, the court entered a scheduling order for the filing of an amended complaint on or by December 16, 2024 and any response to that amended complaint, including motions to dismiss, to follow thereafter.

The Company intends to vigorously defend against this class action litigation.

On June 4, 2024, a shareholder derivative complaint was filed in federal district court in the District of Delaware, purportedly on behalf of the Company, naming as defendants three of the Company’s executive officers and eight of the Company’s board members, which is now captioned In re Altimmune, Inc.

The contingent payments related to the Sales Milestones are predominately cash-based payments accounted for under FASB Accounting Standards Codification Topic 450, Contingencies.

Accordingly, the Company will recognize the Sales Milestones when the contingency is probable and the amount can be reasonably estimated.

On June 4, 2024, a shareholder derivative complaint was filed in federal district court in the District of Delaware, purportedly on behalf of the Company, naming as defendants three of the Company’s executive officers and eight of the

Company’s board members, which is now captioned In re Altimmune, Inc.

Stockholder Derivative Litigation , No.

1 unchanged sentence

Del.) (the “Derivative Action”).

The complaint is based upon allegations that are similar to those alleged in the Class Action and alleges claims for contribution, breaches of fiduciary duty, unjust enrichment, and waste of corporate assets based on the defendants purportedly making or causing to be made false and misleading statements and omissions

of material fact between December 1, 2023 and April 26, 2024.

The complaint is based upon allegations that are similar to those alleged in a class action complaint previously filed against us In re Altimmune, Inc.

Securities Litigation , No.

24-cv-01315 (D.

Md.) (the “Class Action”) and alleges claims for contribution, breaches of fiduciary duty, unjust enrichment, and waste of corporate assets based on the defendants purportedly making or causing to be made false and misleading statements and omissions of material fact between December 1, 2023 and April 26, 2024.

The complaint seeks unspecified monetary relief, exemplary damages, restitution, contribution, and costs, as well as equitable relief.

A similar shareholder derivative complaint, captioned Alaraidah v.

Garg, et al., No.

1:24-cv-00772 (D.

1 unchanged sentence

These actions were consolidated for all purposes on July 18, 2024 into the Derivative Action.

On September 12, 2024, the court stayed the Derivative Action until the earlier of the following:

(a) the Class Action is dismissed with prejudice, and all appeals related thereto have been exhausted;

or (b) defendants file an answer to any complaint in the Class Action.

The Company intends to vigorously defend against the Derivative Action.

On February 3, 2025, pursuant to a joint stipulation of the parties, the court ordered that the Derivative Action be dismissed without prejudice and the case was closed.

The Company is a party in various contracts and subject to disputes, litigation, and potential claims arising in the ordinary course of business none of which are currently reasonably possible or probable of material loss.

Segment Information

The Company is a late clinical stage biopharmaceutical company focused on developing novel peptide-based therapeutics for liver and cardiometabolic diseases.

The Company’s lead program is pemvidutide, a GLP-1/glucagon dual receptor agonist for the treatment of MASH, obesity, AUD and ALD.

To date, the Company has not generated any revenue from the sale of any products.

The chief operating decision maker assesses the performance of the Company and decides how to allocate resources based solely on net (loss) income, which is also reported on the consolidated statements of operations and consolidated loss as net (loss) income.

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

Subsequent Events

The Company evaluated subsequent events through the issuance date of the financial statements on this quarterly report on Form 10-Q.

During April 2025 and through the date of the issuance of the financial statements, the Company raised $ 16.3 million in net proceeds through the issuance of 3,278,902 shares of common stock pursuant to the 2025 Offering.

On May 13, 2025 (“Closing Date”), the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”) and the lenders party thereto, pursuant to which the lenders will make available up to four tranches of term loans in an aggregate principal amount of $ 100.0 million (the “Term Loan”), subject to certain terms and conditions.

The first Term Loan tranche was made on the Closing Date in an aggregate principal amount of $ 15.0 million.

Upon the achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement, (i) the second Term Loan tranche will be made available in an aggregate principal amount of up to $ 25.0 million and (ii) the third Term Loan tranche will be made available in an aggregate principal amount of up to $ 15.0 million.

The fourth Term Loan tranche will be made available in an aggregate principal amount of up to $ 45.0 million subject to the approval of the lenders.

The Term Loan will mature on June 1, 2029 (the “Maturity Date”).

The Term Loan bears interest equal to the greater of (a) the prime rate as reported in The Wall Street Journal plus 2.45 % and (b) (i) 9.95 % until December 31, 2025, and (ii) 9.45 % thereafter.

The Company may make interest-only payments for an initial period of up to 24 months from the Closing Date, which may be extended up to 42 months upon achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement (the “Interest-Only Period”).

After the Interest-Only Period, the Company will be required to repay in equal monthly installments the principal and interest until the Maturity Date.

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.