What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-17 compared with 2025-03-25 · 87 added, 87 removed, 209 unchanged (45% of the section changed)

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See also the section titled “Special Note Regarding Forward-Looking Statements.”

We are a biopharmaceutical company focused on discovering and developing novel small molecule therapeutics derived from our boron chemistry platform.

AN2 has a pipeline of boron-based compounds in development for Chagas disease, non-tuberculous mycobacterial (“NTM”) and melioidosis, along with early-stage programs focused on targets in infectious diseases and oncology.

Our lead candidate is epetraborole, which we are studying as a potential once-daily, oral treatment with a novel mechanism of action for patients with non-tuberculous mycobacterial (“NTM”) lung disease, a rare, chronic and progressive infectious disease caused by bacteria known as mycobacteria, which leads to irreversible lung damage and can be fatal.

Epetraborole is designed to produce broad-spectrum antimycobacterial activity through inhibition of an essential and universal step in bacterial protein synthesis.

Its novel mechanism of action is enabled by boron chemistry, our core technology approach.

We in-licensed the exclusive worldwide development and commercialization rights for epetraborole from Pfizer Inc.

Our lead development target in NTM is treatment-refractory MAC lung disease, a condition with high unmet need where the mycobacterial infection persists despite standard front-line therapies.

These patients represent complex cases for treatment, often presenting with structural lung damage, high levels of resistance to background therapies, and persistent symptoms that can significantly degrade quality of life.

In 2023, the FDA issued a Guidance for Industry recommending that new potential therapies demonstrate evidence of symptom improvement, measured with patient-reported outcome tools, as the primary endpoint for approval.

To date, no drugs have been approved by the FDA based on symptom improvement in a treatment refractory population.

The only approved therapy for treatment-refractory MAC lung disease received accelerated approval based on the surrogate endpoint of sputum culture conversion without demonstrating symptom improvement.

On August 8, 2024, we announced topline results from the Phase 2 part of EBO-301, a Phase 2/3 study evaluating epetraborole on top of optimized background regimen (“OBR”) in treatment-refractory MAC lung disease, and terminated the Phase 3 portion of the trial with 97 patients enrolled.

The Phase 2 part of the study met its primary objective of demonstrating the potential validation of a novel patient-reported outcome (PRO) tool and a higher PRO-based clinical response rate in the epetraborole + OBR arm (39.5%) vs.

placebo + OBR (25.0%;

treatment difference 13.9%, p=0.19).

However, sputum culture conversion at Month 6, a key secondary endpoint, was similar between treatment arms (13.2% in epetraborole + OBR vs.

10.0% placebo + OBR;

treatment difference 3.4%, p=0.64).

Epetraborole was generally well tolerated in the trial.

Consistent with the FDA’s 2023 Guidance, the primary purpose of the Phase 2 part of the EBO-301 study was to test the validity of multiple patient-reported outcome tools in a treatment refractory population, with the goal of identifying a PRO-based primary endpoint for the Phase 3 portion of the trial.

To that end, we recently submitted an amended statistical analysis plan to the FDA selecting the Quality of Life – Bronchiectasis (QOL-B) respiratory domain patient reported outcome (PRO) instrument as the primary efficacy endpoint for the Phase 3 part of the EBO-301 trial.

We anticipate releasing top-line Phase 3 data from the 97 Phase 3 patients in the second quarter of 2025.

If these Phase 3 data confirm the Phase 2 findings, we plan to meet with the FDA to discuss potential registrational pathways in TR-MAC.

We are also studying epetraborole for the treatment of acute melioidosis.

We completed enrollment in a 200-patient observational trial (non-epetraborole treatment) in October 2024 and expect to announce topline data in the second half of 2025.

These data will inform a Phase 2 proof of concept study that is planned to initiate start up activities in the second half of 2025.

Melioidosis is a deadly bacterial infection and global bioterrorism threat with a 90-day mortality rate of approximately 50% using standard of care (SOC) drugs ceftazidime or meropenem.

The aim of the program is to meaningfully lower the expected mortality rate by dosing epetraborole on top of SOC.

Beyond epetraborole, we are conducting Phase-1-enabling studies with AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease, and have several research programs targeting the development of novel compounds in oncology and infectious disease based on our boron chemistry platform.

We are a clinical stage biopharmaceutical company focused on the discovery and development of novel small molecule therapeutics derived from our boron chemistry platform.

Our development pipeline spans hematologic diseases, infectious diseases, and oncology with three Phase 2 studies expected to initiate in 2026 and two preclinical candidates, as well as advanced research programs focused on targets in oncology, bone disorders, and infectious diseases.

We are committed to delivering high-impact drugs to patients that address critical medical needs and improve health outcomes.

Epetraborole - Polycythemia vera

In March 2026, we announced our plan to expand the development of oral epetraborole into a Phase 2 proof-of-concept clinical study in adults with phlebotomy-dependent polycythemia vera (PV).

PV is a blood cancer characterized by overproduction of red blood cells in the bone marrow.

This overproduction increases hematocrit, which can lead to serious medical complications including arterial and venous thromboembolic events.

If untreated, PV can be life-threatening.

Despite available therapies, many patients experience uncontrolled hematocrit levels and persistent symptom burden, requiring long-term management to maintain adequate disease control.

PV is estimated to affect approximately 155,000 people in the U.S.

We are proceeding through the regulatory process and anticipate initiating a Phase 2 trial in India in the third quarter of 2026.

We expect to provide periodic data readouts beginning as early as the fourth quarter of 2026 and throughout 2027, subject to regulatory clearance and enrollment progress.

Epetraborole – M.

Building on the microbiological and safety data from our prior NTM study, we believe that epetraborole has the potential to address a critical unmet need in M.

abscessus lung disease, one of the most difficult to treat NTM infections for which no FDA-approved therapies exist.

The Company is supporting the design of an investigator-initiated trial (“IIT”) and anticipates that data from this potential study, if positive, could provide the clinical evidence of human proof-of-concept in M.

abscessus and inform the design of a subsequent pivotal trial.

NTM lung disease represents a growing global health concern.

It is estimated that approximately 120,000–150,000 people in the U.S.

are living with NTM lung disease, of which 10–15% are caused by M.

In December 2025, the U.S.

Food and Drug Administration (“FDA”) cleared an Investigational New Drug Application (“IND”) to proceed with a Phase 2 investigator-initiated study (“IIT”) in collaboration with Oregon Health and Sciences University (“OHSU”) evaluating epetraborole for the treatment of M.

abscessus lung disease.

This multicenter, randomized, double-blind, placebo-controlled, prospective clinical study will be led by Dr.

Kevin Winthrop, Professor of Public Health and Infectious Diseases at OHSU, in conjunction with other investigators across an estimated 10-15 sites in the U.S.

abscessus lung disease is a serious and difficult-to-treat non-tuberculous mycobacterial infection requiring prolonged therapy including with IV-only antibiotics, and characterized by limited treatment options and high rates of morbidity and 5-year mortality.

No FDA-approved drugs currently exist for its treatment.

We expect to initiate enrollment in the first quarter of 2026 and to report topline results in late 2027.

AN2-502998 - Chagas disease

In August 2025, as part of our Chagas disease clinical development program, we commenced our Phase 1 first-in-human trial of oral AN2-502998 (formerly known as AN15368), an investigational, boron-based small molecule in development for the treatment of chronic Chagas disease and we anticipate Phase 1 data in the first quarter of 2026 and initiation of a Phase 2 proof-of-concept study in patients with chronic Chagas disease in 2026, depending on the outcome and timing of completion of the Phase 1 study.

The Phase 1 study is evaluating the safety, tolerability, and pharmacokinetics of oral AN2-502998 for chronic Chagas disease, in healthy volunteers.

In October 2023, we announced an exclusive license agreement with the University of Georgia Research Foundation to advance the development of AN2-502998, originally discovered by researchers at Anacor, in close collaboration with the University of Georgia.

AN2-502998 is the only compound of which we are aware to have demonstrated curative activity in preclinical studies across multiple species, including in non-human primates with long-term, naturally acquired chronic infections of diverse T.

cruzi genetic types.

We anticipate initiating a Phase 1 study in 2025.

We also anticipate 1 to 2 new development candidates in oncology in 2025.

In August 2024, we also announced a reduction of approximately 50% of our workforce, which was approved by the Board in connection with our restructuring following discontinuation of the EBO-301 study and to further extend our operating capital.

Because NHP infections are naturally acquired in the environment, these efficacy data may be more predictive of efficacy in human clinical trials than other animal models.

There are no FDA approved treatments for adults with chronic Chagas disease.

In July 2025, we announced a collaboration with the non-profit medical research organization Drugs for Neglected Diseases initiative (“DNDi”) to advance clinical development of AN2-502998.

Through the collaboration, AN2 will leverage DNDi's extensive clinical trial network and expertise in Chagas disease to rapidly advance the clinical development of AN2-502998.

Our research and development initiatives - Oncology

We are pursuing a number of oncology targets where we believe boron chemistry offers a competitive advantage in terms of binding-site differentiation, pharmacodynamics, drug-like properties and IP, including initially ENPP1 and PI3K α .

The unique binding modes of boron-containing compounds enable the discovery of inhibitors with high ligand efficiency against targets considered undruggable or difficult to access with traditional chemistry approaches.

Boron chemistry has produced first-in-class molecules against a number of targets including CPSF3 (AN2-502998 and acoziborole) and LeuRS (epetraborole, ganfeborole and tavaborole).

The Company has discovered preclinical compounds with profiles that are sub-nanomolar, highly selective and have excellent oral pharmacokinetics.

We plan to advance two oncology candidates into development in 2026 targeting PI3Kα and ENPP1.

We are also studying epetraborole for the treatment of acute melioidosis, a highly lethal bacterial infection and recognized biothreat.

We completed enrollment in a 200-patient observational trial (non-epetraborole treatment) in October 2024 and in June 2025 announced key insights from the trial, which reinforce the high mortality of the disease, despite standard of care (SOC).

This study provided critical data which will allow the Company to optimize the design of upcoming clinical studies.

Discussions are underway with the U.S.

government to fund Phase 2 development of epetraborole in acute melioidosis.

Melioidosis has a 90-day mortality rate approaching 40%, despite SOC drugs, including ceftazidime or meropenem.

The aim of the program is to meaningfully lower the expected mortality rate by dosing epetraborole on top of SOC.

If approved for the treatment of melioidosis, we plan to seek a priority review voucher and could generate revenue from U.S.

and other governmental stockpiling, as well as from the use of treatment in disease-endemic countries.

Recent developments

In August 2024, we announced a reduction of approximately 50% of our workforce, which was approved by the Board in connection with our restructuring following discontinuation of the EBO-301 Phase 2/3 study of epetraborole in treatment refractory MAC lung disease and to further extend our operating capital.

In connection with the workforce reduction, we recognized severance and other charges of $2.2 million, primarily consisting of severance payments and other employee termination-related expenses.

Future funding requirements

We have incurred significant operating losses to date.

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As of December 31, 2025, we had an accumulated deficit of $241.0 million.

We have funded our operations from the sale and issuance of redeemable convertible preferred stock, proceeds from our initial public offering (“IPO”), “at-the-market” equity offering program (“ATM Offering”) and an underwritten offering (the “Underwritten Offering”).

We have funded our operations from the sale and issuance of redeemable convertible preferred stock and proceeds from our initial public offering (“IPO”), “at-the-market” equity offering program (“ATM Offering”) and an underwritten offering (the “Underwritten Offering”).

From November 2019 through October 2020, we raised an aggregate of $12.0 million from the sale of Series A redeemable convertible preferred stock.

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In August 2023, we raised gross proceeds of $70.0 million from the Underwritten Offering and net proceeds of $65.5 million, after deducting commissions and offering expenses.

In March 2026, we entered into a Securities Purchase Agreement with certain investors to sell through a private placement 8,245,611 shares of common stock at a price of $2.85 per share and pre-funded warrants to purchase up to 5,789,473 shares of common stock at a purchase price of $2.84999 per pre-funded warrant, resulting in aggregate gross proceeds of $40.0 million before deducting the placement agent’s fees and other offering expenses and excluding any proceeds we may receive upon exercise of the pre-funded warrants (the “Private Placement”).

Financial Operations Overview

As of December 31, 2025, we had cash, cash equivalents and investments of $60.0 million.

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Research and Development Expenses

Substantially all of our research and development expenses consist of expenses incurred in connection with the development of our initial product candidate, epetraborole, and other product candidates.

Substantially all of our research and development expenses consist of expenses incurred in connection with the development of our product candidates.

These expenses include fees incurred under arrangements with third parties, including CROs, CMOs, preclinical and nonclinical testing organizations, and academic and non-profit institutions.

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Interest income

*Change not meaningful

Research and Development Expenses

Research and development expenses, including related-party research and development expenses, were $40.5 million for the year ended December 31, 2024 compared to $54.9 million for the year ended December 31, 2023.

The decrease of $14.4 million was primarily due to decreases in clinical trial costs, chemistry manufacturing and controls (“CMC”) expenses, personnel-related expenses, allocated facilities and miscellaneous expenses, licensing fees, and consulting and outside services, partially offset by an increase in preclinical and research expenses.

Clinical trials expenses decreased by $5.6 million due to decreased costs associated with the termination of our Phase 2/3 clinical trial in treatment refractory NTM lung disease in August 2024 and completion of our Phase 1 clinical trials in 2023.

Costs related to CMC activities decreased by $4.4 million due to completion of certain activities related to epetraborole and the timing of non-dilutive funding expense offsets.

Personnel-related costs decreased by $3.3 million due to our restructuring activities.

Allocated facilities and miscellaneous expenses decreased by $0.9 million due to recognition of our qualified small business payroll tax credit and our non-dilutive funding expense offset.

Licensing fees decreased by $0.2 million and consulting and outside services decreased by $0.1 million.

These decreases were partially offset by $0.1 million increase due to the prioritization of certain research programs.

During the years ended December 31, 2024 and 2023, a total reimbursement of $3.7 million and $2.5 million, respectively, of operating expenses were recognized related to our funding arrangements.

Research and development expenses were $24.8 million for the year ended December 31, 2025 compared to $40.5 million for the year ended December 31, 2024.

The decrease of $15.7 million was primarily due to decreases in clinical trial expenses, personnel-related expenses, consulting and outside services expenses, chemistry manufacturing and controls (“CMC”) expenses, and facilities and miscellaneous expenses, partially offset by increased preclinical and research study expenses and other expenses.

Clinical trial expenses decreased by $12.8 million primarily due to the termination of the EBO-301 trial in August 2024, partially offset by the initiation of the Phase 1 trial in Chagas disease.

Personnel-related expenses decreased by $4.3 million primarily due to our restructuring activities in 2024.

Consulting and outside services expenses decreased by $2.3 million primarily due to reduced activities related to the clinical development of epetraborole in treatment-refractory NTM, completion of the melioidosis observational study, and the timing of non-dilutive contract offsets.

CMC expenses decreased by $1.3 million due to decreases in expenses related to epetraborole development in treatment-refractory NTM and the timing of when receipt of research contract offsets became reasonably assured, partially offset by increased CMC activities for our Chagas program.

Allocated facilities and miscellaneous expenses decreased by $0.1 million.

These decreases were partially offset by increased preclinical and research study expenses of $5.0 million resulting from the prioritization and increased activities of certain research programs and increased other expenses of $0.1 million.

During the years ended December 31, 2025 and 2024, reimbursement of $5.2 million and $3.7 million, respectively, of operating expenses was recognized related to our funding arrangements.

The following table shows our research and development expenses by type of activity:

(in thousands, except percentages)

Clinical trials expenses

Personnel-related expenses

Consulting and outside services

Preclinical and research study expenses

Clinical trials expenses

Consulting and outside services

Chemistry manufacturing and controls

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General and administrative expenses were $13.3 million for the year ended December 31, 2025 compared to $14.1 million for the year ended December 31, 2024.

The decrease of $0.7 million was primarily attributable to $0.4 million decrease in professional services expenses, $0.4 million decrease in facilities and miscellaneous expenses and $0.2 million decrease in D&O insurance expenses.

These decreases were partially offset by $0.3 million increase in personnel related expenses, primarily related to stock-based compensation expense.

The decrease of $0.8 million was primarily attributable to $0.6 million decrease in personnel-related expenses, primarily related to stock-based compensation expense, and a $0.3 million decrease in professional services expenses.

These decreases were partially offset by a $0.1 million increase in facilities and miscellaneous expenses.

Restructuring Charges

There were no restructuring charges for the year ended December 31, 2025.

Restructuring charges were $2.2 million for the year ended December 31, 2024, consisting of severance payments and other employee termination-related expenses.

We had no restructuring charges for the year ended December 31, 2023.

Interest Income

Interest Income was $2.9 million for the year ended December 31, 2025 compared to $5.5 million for the year ended December 31, 2024.

The increase of $0.6 million was due to higher interest rates despite lower cash, cash equivalents and short and long-term investment balances in 2024 as compared to 2023.

The decrease of $2.6 million was due to lower cash, cash equivalents and short and long-term investment balances and lower interest rates in 2025 as compared to 2024.

Liquidity and Capital Resources

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To date, we have funded our operations primarily through our Underwritten Offering, ATM Offering, IPO and private placements of our then existing redeemable convertible preferred stock.

In March 2026, we generated aggregate gross proceeds from the Private Placement of $40.0 million before deducting the placement agent’s fees and other offering expenses.

In August 2023, we generated approximately $65.5 million from the Underwritten Offering, after deducting commissions and offering expenses.

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Cash used in operating activities

Cash provided by (used in) investing activities

Cash provided by investing activities

Cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash Used in Operating Activities

Net cash used in operating activities was $29.8 million for the year ended December 31, 2025, which consisted of a net loss of $35.2 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $0.2 million in our net operating assets and liabilities, partially offset by a net increase of $5.2 million in non-cash charges.

The non-cash charges consisted of stock-based compensation expense of $6.2 million, partially offset by net accretion of discounts on investments of $1.0 million.

The net decrease in our operating assets and liabilities was primarily due to a decrease of $1.5 million in prepaid expenses and other current assets and increases of $0.7 million in accrued compensation, $0.4 million in other current liabilities, and $0.2 million in other non-current liabilities, partially offset by increases of $2.4 million in accrued liabilities and $0.3 million in accounts payable.

Net cash used in operating activities was $49.3 million for the year ended December 31, 2024, which consisted of a net loss of $51.3 million, primarily due to the use of funds to develop our product candidates, and a net decrease of $3.0 million in our net operating assets and liabilities offset by a net increase of $5.0 million in non-cash charges.

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The non-cash charges consisted of stock-based compensation expense of $8.3 million, partially offset by net accretion of discounts on investments of $3.3 million.

Net cash used in operating activities was $53.3 million for the year ended December 31, 2023, which consisted of a net loss of $64.7 million, due to the use of funds to develop our initial drug product candidate offset by a net increase of $5.8 million in our net operating assets and liabilities and $5.6 million in non-cash charges.

The net increase in our operating assets and liabilities was primarily due to an increase of $6.2 million in accounts payable, accrued compensation and accrued liabilities due to an increase in accrued research and development expenses, and an increase of $0.7 million in other current liabilities, partially offset by a decrease of $1.0 million in prepaid expenses and other current assets and a decrease of $0.1 million in operating lease liabilities.

The non-cash charges consisted of stock-based compensation expense of $8.4 million and non-cash operating lease expense of $0.1 million, partially offset by net accretion of discounts on investments of $2.9 million.

Cash Used in Investing Activities

Cash Provided by Investing Activities

Net cash provided by investing activities was $28.3 million for the year ended December 31, 2025, which primarily consisted of $74.5 million in proceeds from maturities of investments, partially offset by $46.2 million in purchases of investments.

Net cash used in investing activities was $43.3 million for the year ended December 31, 2023, which primarily consisted of $132.2 million in purchases of investments, partially offset by $88.9 million in proceeds from maturities of investments.

Net cash provided by investing activities was $54.6 million for the year ended December 31, 2024, which primarily consisted of $101.3 million in proceeds from maturities of investments, partially offset by $46.7 million in purchases of investments.

Cash Provided by Financing Activities

Net cash provided by financing activities was $0.1 million for the year ended December 31, 2025, which primarily consisted of net proceeds from the issuance of common stock under the ESPP and from the exercises of stock options.

Net cash provided by financing activities was $85.0 million for the year ended December 31, 2023, which primarily consisted of net proceeds from the issuance of common stock in our Underwritten Offering and ATM Offering.

Net cash provided by financing activities was $0.4 million for the year ended December 31, 2024, which primarily consisted of net proceeds from the issuance of common stock under the ESPP and from the exercises of stock options.

Contractual Obligations and Commitments

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These contracts generally provide for termination following a certain period after notice, and therefore we believe that our non-cancelable obligations under these agreements are not material.

Critical Accounting Policies, Significant Judgements, and Use of Estimates

Critical Accounting Policies, Significant Judgments, and Use of Estimates

Our financial statements have been prepared in accordance with U.S.

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The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported expenses incurred during the reporting periods.

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

Our estimates are based on our 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.

Actual results may differ from these estimates under different assumptions or conditions.

We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgements and estimates.

While our significant accounting policies are described in more detail in Part I, Note 2—Basis of Presentation and Summary of Significant Accounting Policies to our financial statements appearing elsewhere in this Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

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Research and development expenses represent costs incurred by us for the discovery and development of our product candidates and the development of our technology and include:

internal research and development expense, including employee-related expenses (such as salaries, bonus, benefits, travel and non-cash stock-based compensation expense);

internal research and development expense, including employee-related expenses (such as salaries, bonus, benefits and non-cash stock-based compensation expense);

external research and development expenses incurred under arrangements with third parties, such as CROs, preclinical testing organizations, CMOs, academic and non-profit institutions and consultants;

related-party milestone payments;

license fees;

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To date, we have not experienced material differences between our accrued expenses and actual expenses.

Stock-Based Compensation

We use a fair value-based method to account for all stock-based compensation arrangements with employees and non-employees, which include stock options.

The fair value of the option granted is recognized on a straight-line basis over the period during which an optionee is required to provide services in exchange for the option award, known as the requisite service period, which usually is the vesting period.

We account for forfeitures as they occur.

In determining fair value of the stock options granted, we use the Black–Scholes option pricing model, which requires the input of subjective assumptions.

These assumptions include:

the estimated length of time employees will retain their vested stock options before exercising them (expected term), the estimated volatility of our common stock price over the expected term (expected volatility), risk-free interest rate, and expected dividends.

See Note 9—Equity Incentive Plan and Stock-Based Compensation to our audited financial statements included elsewhere in this Form 10-K for information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the years ended December 31, 2024 and 2023.

Changes in the following assumptions can materially affect the estimate of fair value and ultimately how much stock-based compensation expense is recognized;

and the resulting change in fair value, if any, is recognized in our statement of operations and comprehensive loss during the period the related services are rendered.

These inputs are subjective and generally require significant analysis and judgment to develop.

• Fair Value of Common Stock—See the subsection titled “Common Stock Valuations” below.

• Expected Term—The expected term is calculated using the simplified method which is used when there is insufficient historical data about exercise patterns and post-vesting employment termination behavior.

The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting-tranche for awards with graded vesting.

The mid-point between the vesting date and the maximum contractual expiration date is used as the expected term under this method.

For awards with multiple vesting-tranches, the times from grant until the mid-points for each of the tranches may be averaged to provide an overall expected term.

• Expected Volatility—We use an average historical stock price volatility of a peer group of comparable publicly traded companies in biotechnology and pharmaceutical-related industries to be representative of our expected future stock price volatility, as we have limited trading history for our common stock.

For purposes of identifying these peer companies, we consider the industry, therapeutic area, stage of development, size and financial leverage of potential comparable companies.

For each grant, we measure historical volatility over a period equivalent to the expected term.

• Risk-Free Interest Rate—The risk-free interest rate is based on the implied yield currently available on U.S.

Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock award.

• Expected Dividend Rate—We have not paid and do not anticipate paying any dividends in the near future.

Accordingly, we estimate the dividend yield to be zero.

For the years ended December 31, 2024 and 2023, there was $0.2 million and an insignificant amount of cash received upon exercise of stock options, respectively.

Indemnification Agreements

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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