AN2 Therapeutics, Inc. 10-K

Item 9A . Controls and Procedures. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Form 10-K. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our CEO and CFO have concluded that as of December 31, 2025, our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting, as described below. Notwithstanding the identified material weaknesses, management, including our CEO and CFO, have determined, based on the procedures we have performed, that the financial statements included in this Annual Report on Form 10-K were prepared in accordance with U.S. GAAP. Management’s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Management has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, management has concluded that as of December 31, 2025, our internal control over financial reporting was not effective due to material weaknesses in internal control over financial reporting, as described below. 81 During the course of preparing for our March 2022 IPO, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified were as follows, and continue to exist as of December 31, 2025: • We did not design and maintain an effective control environment commensurate with our financial reporting requirements. Specifically, we lacked a sufficient complement of resources with (i) an appropriate level of accounting knowledge, experience and training to appropriately analyze, record and disclose accounting matters timely and accurately, and (ii) an appropriate level of knowledge and experience to establish effective processes and controls. Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. This material weakness contributed to the following additional material weaknesses. • We did not design and maintain effective controls related to the period-end financial reporting process, including designing and maintaining formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures. Additionally, we did not design and maintain controls over the preparation and review of account reconciliations and journal entries, including maintaining appropriate segregation of duties. The above material weaknesses resulted in adjustments to accrued expenses balances, which were recorded prior to the issuance of the financial statements, as of and for the years ended December 31, 2019 and 2020. Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. • We did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of our financial statements. Specifically, we did not design and maintain (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel, (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. These IT deficiencies did not result in adjustments to the financial statements. However, the IT deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined the IT deficiencies in the aggregate constitute a material weakness. Attestation Report of Independent Registered Public Accounting Firm This Annual Report on Form 10-K does not include an attestation report from our independent registered public accounting firm on our internal control over financial reporting due to an exemption established by the JOBS Act for EGCs. Remediation of Prior Material Weakness Management previously identified a material weakness in the design and operating effectiveness of controls related to the accounting for certain non-routine or complex transactions, including the proper application of U.S. GAAP to such transactions. As of September 30, 2023, we finalized the design and were validating the effectiveness of controls to account for and disclose complex transactions. As of December 31, 2023, we validated the effectiveness of controls to account for and disclose complex transactions. The applicable controls have been in operation for a sufficient period of time, and management has concluded, through testing, that these controls are operating effectively. Accordingly, the material weakness associated with the accounting for certain non-routine or complex transactions, including the proper application of U.S. GAAP, was remediated as of December 31, 2023. 82 Remediation Plan for Remaining Material Weaknesses The Company is committed to remediating the material weaknesses in our internal control over financial reporting. We have implemented measures designed to improve our internal control over financial reporting to remediate these material weaknesses, and are refining the design and validating the effectiveness of these controls, including (i) ongoing hiring of additional accounting personnel; (ii) designing and implementing internal controls in our financial control environment, including establishing formal accounting policies and procedures and financial reporting controls; and (iii) implementing an accounting system upgrade with IT controls to ensure appropriate and restricted access to our accounting applications, programs, and data, including upgrading of our accounting system. Other than the material weakness associated with the accounting for certain non-routine or complex transactions, including the proper application of U.S. GAAP, which has been remediated, the remaining material weaknesses will not be considered remediated until the design requirements described above have been finalized, and the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Accordingly, the material weaknesses related to lack of sufficient resources, insufficient segregation of duties, lack of designing and maintaining formal accounting policies, procedures and controls and lack of designing and maintaining effective controls over IT, were not remediated as of December 31, 2025. Limitations on the Effectiveness of Controls In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B . Other Information. During the fourth quarter of 2025, none of our directors or officers (as defined in Section 16 of the Securities Exchange Act of 1934, as amended) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Re garding Foreign Jurisdictions that Prevent Inspections. Not applicable. 83 PA RT III Item 10 . Directors, Executive Officers and Corporate Governance. The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. We have adopted insider trading policies and procedures governing the purchase, sale and other dispositions of our securities by directors, officers and employees that are designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards, as well as procedures designed to further the foregoing purposes. A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1. Item 11 . Executive Compensation. The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 12 . Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 13 . Certain Relationships and Related Transactions, and Director Independence. The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. Item 14 . Principal Accounting Fees and Services. The information required by this item is incorporated by reference to the Proxy Statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2025. 84 PART IV Item 15 . Exhibits, Financial Statement Schedules. (a) The following documents are filed as a part of this Annual Report: (1) Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) F- 2 Balance Sheets as of December 31, 2025 and 2024 F- 3 Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 F- 4 Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024 F- 5 Statements of Cash Flows for the years ended December 31, 2025 and 2024 F- 6 Notes to the Financial Statements F- 7 (2) Financial Statement Schedules: All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. (3) Exhibits: The list of exhibits filed with this Annual Report on Form 10-K is set forth in the Exhibit Index preceding the signature page and is incorporated herein by reference or filed with this Annual Report, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K). Item 16 . Form 10-K Summary. None. 85 Exhibit Index Incorporated by Reference Exhibit Number Description Form File No. Exhibit Filing Date 3.1 Amended and Restated Certificate of Incorporation . 8-K 001-41331 3.1 June 24 2025 3.2  Amended and Restated Bylaws. S-1 333-263295 3.4 March 4, 2022 3.3 Certificate of Designations of Series A Junior Participating Preferred Stock of AN2 Therapeutics, Inc. filed with the Secretary of State of the State of Delaware on August 15, 2024. 8-K 001-41331 3.1 August 19, 2024 4.1 Form of Common Stock Certificate. S-1 333-263295 4.1 March 21, 2022 4.2 Amended and Restated Investors’ Rights Agreement, by and among the Registrant and certain of its stockholders, dated March 5, 2021. S-1 333-263295 4.2 March 4, 2022 4.3* Description of Securities. 4.4 Form of Pre-Funded Warrant. 8-K 001-41331 4.1 June 20, 2025 4.5 Form of 2026 Pre-Funded Warrant. 8-K 001-41331 4.1 March 10, 2026 10.1# AN2 Therapeutics, Inc. 2017 Equity Incentive Plan, as amended. S-1 333-263295 10.1 March 4, 2022 10.2# Forms of Stock Option Grant Notice, Stock Option Agreement and Notice of Exercise and Early Exercise Stock Purchase Agreement under the AN2 Therapeutics, Inc. 2017 Equity Incentive Plan. S-1 333-263295 10.2 March 4, 2022 10.3# AN2 Therapeutics, Inc. 2022 Equity Incentive Plan 10-K 001-41331 10.3 March 29, 2024 10.4# Forms of Stock Option Grant Notice, Stock Option Agreement and Notice of Exercise under the AN2 Therapeutics, Inc. 2022 Equity Incentive Plan. S-1 333-263295 10.4 March 4, 2022 10.5# Form of Restricted Stock Unit Grant Notice and Award Agreement under the AN2 Therapeutics, Inc. 2022 Equity Incentive Plan. 10-K 001-41331 10.5 March 29, 2024 10.6# AN2 Therapeutics, Inc 2022 Employee Stock Purchase Plan. 10-K 001-41331 10.6 March 29, 2024 10.7# AN2 Therapeutics, Inc. Amended and Restated 2022 Non-Employee Director Compensation Policy. 10-Q 001-41331 10.1 August 12, 2025 10.8# AN2 Therapeutics, Inc. Officer Severance Plan. S-1 333-263295 10.8 March 4, 2022 10.9# Form of Indemnity Agreement by and between the Registrant and its directors and executive officers. S-1 333-263295 10.9 March 4, 2022 10.10# Offer Letter by and between the Registrant and Eric Easom, dated November 19, 2019. S-1 333-263295 10.10 March 4, 2022 10.11#* Amended and Restated Offer Letter by and between the Registrant and Lucy Day, dated January 29, 2026. 10.12‡ License Agreement by and between the Registrant and Anacor Pharmaceuticals, Inc., dated November 20, 2019, as amended on December 3, 2021. S-1 333-263295 10.13 March 4, 2022 10.13‡ License Agreement by and between the Registrant and Brii Biosciences Limited, dated November 20, 2019. S-1 333-263295 10.14 March 4, 2022 10.14 Amended and Restated Global Health Agreement by and among the Registrant, Adjuvant Global Health Technology Fund L.P., and Adjuvant Global Health Technology Fund DE L.P., dated March 5, 2021. S-1 333-263295 10.15 March 4, 2022 86 Incorporated by Reference Exhibit Number Description Form File No. Exhibit Filing Date 10.15# Offer Letter by and between the Registrant and Joshua Eizen, dated September 19, 2022. 10-Q 001-41331 10.1 November 9, 2022 10.16 ‡ Exclusive Patent License Agreement, dated October 10, 2023, by and between the Registrant and the University of Georgia Research Foundation, Inc 10-K 001-41331 10.18 March 25, 2025 10.17 Securities Purchase Agreement, dated March 8, 2026, by and among AN2 Therapeutics, Inc. and the Purchasers. 8-K 001-41331 10.1 March 10, 2026 10.18 Registration Rights Agreement, dated March 10, 2025, by and among AN2 Therapeutics, Inc. and the investors party thereto. 8-K 001-41331 10.2 March 10, 2026 19.1 AN2 Therapeutics, Inc. 2022 Insider Trading Policy 10-K 001-41331 19.1 March 25, 2025 23.1* Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. 24.1* Power of Attorney (incorporated by reference to the signature page to this Annual Report on Form 10-K.) 31.1*  Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2*  Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1*†  Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2*†  Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Compensation Recovery Policy. 10-K 001-41331 97.1 March 29, 2024 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents** 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. # Indicates management contract or compensatory plan. ‡ Portions of this exhibit (indicated by [*]) have been omitted because the registrant has determined that the information is both not material and is the type that the registrant treats as private or confidential. ** The following materials are formatted in Inline XBRL (Extensible Business Reporting Language): (i) the cover page; (ii) the Balance Sheets as of December 31, 2025 and 2024; (iii) the Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024; (iv) the Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024; (vi) the Statements of Cash Flows for the years ended December 31, 2025 and 2024; (vii) Notes to Financial Statements tagged as blocks of text. † The certification attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Annual Report is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report, irrespective of any general incorporation language contained in such filing. 87 SIGNA TURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on March 17, 2026 . AN2 Therapeutics, Inc. By: /s/ Eric Easom Eric Easom Chief Executive Officer (Principal Executive Officer) By: /s/ Lucy O. Day Lucy O. Day Chief Financial Officer (Principal Financial Officer) By: /s/ Sarah Williams Sarah Williams Principal Accounting Officer POW ER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eric Easom and Lucy O. Day, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Signature Title Date /s/ Eric Easom Chief Executive Officer, Chair and Director (Principal Executive Officer) March 17, 2026 Eric Easom /s/ Lucy O. Day Chief Financial Officer (Principal Financial Officer) March 17, 2026 Lucy O. Day /s/ Sarah Williams Principal Accounting Officer March 17, 2026 Sarah Williams /s/ Maggie FitzPatrick Lead Independent Director March 17, 2026 Maggie FItzPatrick /s/ Kabeer Aziz Director March 17, 2026 Kabeer Aziz /s/ Gilbert L. Marks Director March 17, 2026 Gilbert L. Marks /s/ Patricia (Patty) Martin Director March 17, 2026 Patricia (Patty) Martin 88 /s/ Rob Readnour Director March 17, 2026 Rob Readnour /s/ Melvin Spigelman Director March 17, 2026 Melvin Spigelman /s/ Stephanie Wong Director March 17, 2026 Stephanie Wong /s/ Joseph Zakrzewski Director March 17, 2026 Joseph Zakrzewski 89 INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) F- 2 Balance Sheets as of December 31, 2025 and 2024 F- 3 Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 F- 4 Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024 F- 5 Statements of Cash Flows for the years ended December 31, 2025 and 2024 F- 6 Notes to the Financial Statements F- 7 F- 1 Report of Independent Re gistered Public Accounting Firm To the Board of Directors and Stockholders of AN2 Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of AN2 Therapeutics, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 , and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP San Jose, California March 17, 2026 We have served as the Company’s auditor since 2021, which includes periods before the Company became subject to SEC reporting requirements. F- 2 AN2 THERAPEUTICS, INC. BALAN CE SHEETS (in thousands, except share and per share amounts) December 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 19,941 $ 21,351 Short-term investments 38,060 62,267 Prepaid expenses and other current assets 1,936 2,644 Total current assets 59,937 86,262 Long-term investments 2,013 5,021 Other assets, long-term — 804 Total assets $ 61,950 $ 92,087 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 3,021 $ 3,317 Accrued compensation 2,418 1,676 Accrued liabilities 2,052 4,454 Other current liabilities 1,229 791 Total current liabilities 8,720 10,238 Other non-current liabilities 170 — Total liabilities 8,890 10,238 Commitments and contingencies (Note 7) Stockholders’ equity: Preferred stock, $ 0.00001 par value; 10,000,000 shares authorized at December 31, 2025 and December 31, 2024; no shares issued and outstanding at December 31, 2025 and December 31, 2024 — — Common stock, $ 0.00001 par value; 500,000,000 shares authorized at December 31, 2025 and December 31, 2024; 27,413,171 and 29,919,634 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively — — Additional paid-in capital 293,953 287,594 Accumulated other comprehensive gain 57 31 Accumulated deficit ( 240,950 ) ( 205,776 ) Total stockholders’ equity 53,060 81,849 Total liabilities and stockholders’ equity $ 61,950 $ 92,087 The accompanying notes are an integral part of these financial statements. F- 3 AN2 THERAPEUTICS, INC. STATEMENTS OF OPER ATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 Operating expenses: Research and development $ 24,769 $ 40,488 General and administrative 13,340 14,066 Restructuring charges — 2,234 Total operating expenses 38,109 56,788 Loss from operations ( 38,109 ) ( 56,788 ) Interest income 2,934 5,466 Other income 1 1 Net loss attributable to common stockholders $ ( 35,174 ) $ ( 51,321 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 1.16 ) $ ( 1.72 ) Weighted-average number of shares used in computing net loss per share, basic and diluted 30,215,747 29,828,227 Other comprehensive loss: Unrealized gain (loss) on investments 26 ( 244 ) Comprehensive loss $ ( 35,148 ) $ ( 51,565 ) The accompanying notes are an integral part of these financial statements. F- 4 AN2 THERAPEUTICS, INC. STATEMENTS OF STOCKHOL DERS’ EQUITY (in thousands, except share and per share amounts) Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Gain (Loss) Deficit Equity Balances at December 31, 2023 29,741,445 $ — $ 278,881 $ 275 $ ( 154,455 ) $ 124,701 Issuance of common stock under the ESPP 70,700 — 147 — — 147 Issuance of common stock upon exercise of stock options 28,930 — 225 — — 225 Vesting of early exercised stock options — — 3 — — 3 Issuance of common stock upon release of restricted stock units 38,556 — — — — — Issuance of common stock upon release of restricted stock awards 40,003 — — — — — Stock-based compensation — — 8,338 — — 8,338 Unrealized loss on available-for-sale investments — — — ( 244 ) — ( 244 ) Net loss — — — — ( 51,321 ) ( 51,321 ) Balances at December 31, 2024 29,919,634 — 287,594 31 ( 205,776 ) 81,849 Issuance of common stock under the ESPP 87,045 — 86 — — 86 Issuance of common stock upon exercise of stock options 63,124 — 27 — — 27 Issuance of common stock upon release of restricted stock units 295,368 — — — — — Stock-based compensation — 6,246 — — 6,246 Unrealized gain on available-for-sale investments — — — 26 — 26 Issuance of pre-funded warrants in exchange for common stock ( 2,952,000 ) — — — — — Net loss — — — — ( 35,174 ) ( 35,174 ) Balances at December 31, 2025 27,413,171 $ — $ 293,953 $ 57 $ ( 240,950 ) $ 53,060 The accompanying notes are an integral part of these financial statements. F- 5 AN2 THERAPEUTICS, INC. STATEMENTS OF CASH F LOWS (in thousands) Year Ended December 31, 2025 2024 Cash flows used in operating activities Net loss $ ( 35,174 ) $ ( 51,321 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 6,246 8,338 Net accretion of discount on investments ( 1,070 ) ( 3,279 ) Changes in operating assets and liabilities: Prepaid expenses and other assets 1,512 807 Accounts payable ( 296 ) 641 Accrued compensation 742 ( 2,342 ) Accrued liabilities ( 2,402 ) ( 2,227 ) Other current liabilities 438 126 Other non-current liabilities 170 — Net cash used in operating activities ( 29,834 ) ( 49,257 ) Cash flows from investing activities Purchases of investments ( 46,189 ) ( 46,751 ) Maturities of investments 74,500 101,340 Net cash provided by investing activities 28,311 54,589 Cash flows from financing activities Proceeds from issuance of common stock under the ESPP 86 147 Proceeds from exercise of stock options 27 225 Net cash provided by financing activities 113 372 Net (decrease) increase in cash and cash equivalents ( 1,410 ) 5,704 Cash and cash equivalents at the beginning of the period 21,351 15,647 Cash and cash equivalents at the end of the period $ 19,941 $ 21,351 The accompanying notes are an integral part of these financial statements. F- 6 AN2 Therapeutics, Inc. Not es to Financial Statements Note 1. Organization and Description of the Business Description of Business AN2 Therapeutics, Inc. (the “Company”) is 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, 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 unmet needs and improve health outcomes. The Company was incorporated in the state of Delaware in February 2017, began operations in November 2019, began trading on the Nasdaq Global Select Market on March 25, 2022 under the symbol “ANTX”, and is based in Menlo Park, California. Since launching operations in November 2019, the Company has devoted substantially all of its resources to performing research and development activities, including with respect to its initial product candidate, epetraborole, and other product candidates, business planning and restructuring, hiring personnel, raising capital, and providing general and administrative support for these operations. Financings At-The-Market Offering On April 6, 2023, the Company entered into a sales agreement (“Sales Agreement”) with Cowen and Company, LLC as the Company’s sales agent (“Agent”) to issue and sell up to an aggregate gross sales of $ 100.0 million in shares (“Shares”) of the Company’s common stock through an “at-the-market” equity offering program (“ATM Offering” ). The Company will pay commissions to the Agent of up to 3.0 % of the gross proceeds of the sale of the Shares sold under the Sales Agreement and reimburse the Agent for certain expenses. During the year ended December 31, 2023, the Company issued and sold 2,502,000 shares of common stock under the ATM Offering, resulting in net proceeds of $ 19.1 million, after deducting commissions and other offering costs. The Company did no t sell any shares of common stock through the ATM Offering during the year ended December 31, 2025. Underwritten Offering On August 15, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement” ) with Cowen and Company, LLC, Leerink Partners LLC and Evercore Group L.L.C., as representatives of several underwriters, to issue and sell 7,777,778 shares of common stock at an offering price of $ 9.00 per sh are, resulting in net proceeds of $ 65.5 million, after deducting commissions and other offering costs (the “Underwritten Offering”). Note 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. The prior year presentation of "other income, net" on the statements of operations and comprehensive loss has been separated to “interest income” and “other income” and conformed to reflect the current year's presentation. Risks and Uncertainties Liquidity Since inception, the Company has incurred significant losses and negative net cash flows from operations. During the years ended December 31, 2025 and 2024, the Company incurred a net loss of $ 35.2 million and $ 51.3 million, respectively, and had cash flows used in operating activities of $ 29.8 million and $ 49.3 million, respectively. The Company has an accumulated deficit of $ 241.0 million and $ 205.8 million as of December 31, 2025 and 2024, respectively, and will require substantial additional capital for research and development activities. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development. F- 7 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued As of December 31, 2025, the Company had cash, cash equivalents, short-term investments and long-term investments of $ 60.0 million. Management believes that its cash, cash equivalents and investments as of December 31, 2025 will be sufficient to fund its current operating plan through at least 12 months from the issuance date of these financial statements. Future capital requirements will depend on many factors, including the timing and extent of spending on research and development, including costs for preclinical and nonclinical studies, clinical trials, and clinical trial material manufacturing. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital, and reduce discretionary spending should additional capital not become available could have a material adverse effect on the Company’s ability to achieve its intended business objectives. Segments The Company operates and manages its business as one reportable and operating segment. For financial information related to the Company's one operating segment see Note 13 - Segment Reporting. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to research and development accruals, fair value of assets and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Research and Development Expenses All research and development costs, including work performed by third parties, are expensed as incurred. Research and development costs consist of salaries and other personnel-related expenses, including associated stock-based compensation, consulting fees, and facility costs, as well as fees paid to other entities that conduct certain research and development activities on behalf of the Company. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods are received or services are rendered. As part of the process of preparing its financial statements, the Company estimates its accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of services performed and the associated cost incurred for services for which the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses at the end of each reporting period based on the facts and circumstances known to the Company at that time. The significant estimates in the Company’s accrued research and development expenses relate to expenses incurred with respect to contract manufacturing and clinical and other research organizations, academic research centers and other vendors in connection with research and development activities for which the Company has not yet been invoiced. F- 8 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Stock-Based Compensation The Company measures and recognizes compensation expense for equity-classified stock-based awards made to employees, directors and non-employees based on the grant date estimated fair value of each award. Compensation expense for employee and director awards is recognized on a straight-line basis over the requisite service period which is generally the vesting period for the entire award. Expense is adjusted for forfeitures as they occur. Compensation expense for non-employee awards is recognized in the same period and manner as if the Company had paid cash for the goods or services provided. The valuation model used for calculating the fair value of stock options for stock-based compensation expense is the Black-Scholes option-pricing model (the “Black-Scholes model”). The Black-Scholes model requires management to make assumptions and judgments about the variables used in the calculation, including the expected term, the expected volatility of common stock, an assumed risk-free interest rate, and expected dividends the Company may pay. Management uses the simplified calculation (based on the mid-point between the vesting date and the end of the contractual term) of the expected term for its stock options as the Company has concluded that its stock option history does not provide a reasonable basis upon which to estimate expected term. Through November 2025, volatility is based on an average of the historical volatilities of the common stock of entities with characteristics similar to the Company’s. Beginning in December 2025, after sufficient trading data of the Company’s own stock on the Nasdaq Global Market became available, we adopted a blended volatility methodology that combines the Company’s historical volatility with that of a peer group, weighing the volatility of its peer group for the amount of time prior to the March 2022 IPO so that the blended volatility term equals the expected term of the related stock-based award. We will continue to utilize this blended volatility methodology until sufficient historical trading data of the Company's own stock is available. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses an assumed dividend yield of zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. For option awards that contain performance conditions, compensation cost is recognized in the period in which it becomes probable that the performance condition will be satisfied. For option awards that vest upon a liquidity event or a change in control, the performance condition is not probable of being achieved until the event occurs. As a result, no compensation expense would be recognized until the performance-based vesting condition is achieved. Warrants The Company accounts for warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). This assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. In addition, the Company determines if the warrants meet the definition of a derivative based on their contractual terms. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. The Company also evaluates if changes in contractual terms or other considerations would result in the reclassification of outstanding warrants from stockholders’ equity to liabilities (or vice versa). Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents, which consist of money market funds and commercial paper, are stated at fair value. As of December 31, 2025 and 2024, the Company had cash and cash equivalents of $ 19.9 million and $ 21.4 million, respectively. F- 9 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Investments Investments consist of U.S. Treasury securities, commercial paper, U.S. Government agency securities, and corporate debt securities. All of the Company’s investments are classified as available-for-sale and are carried at estimated fair values and reported in cash equivalents, short-term investments or long-term investments. Management determines the appropriate classification of the investments at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. Investments with contractual maturities greater than 12 months are considered long-term investments. The cost of investments sold, if any, is based on the specific identification method. Unrealized gains and losses on available-for-sale investments are reported in accumulated other comprehensive gain (loss) as a separate component of stockholders’ equity. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value and recognized in other income (expense) in the statements of operations and comprehensive loss. If neither criterion is met, the Company evaluates whether the decline in fair value is related to credit-related factors or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Credit-related impairment losses, limited by the amount that the fair value is less than the amortized cost basis, are recorded through an allowance for credit losses in other income. Any unrealized losses from declines in fair value below the amortized cost basis as a result of non-credit factors are recognized in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity, along with unrealized gains. Realized gains and losses and declines in fair value, if any, on available-for-sale securities are included in other income in the statements of operations and comprehensive loss. For purposes of identifying and measuring credit-related impairments, the Company’s policy is to exclude applicable accrued interest from both the fair value and amortized cost basis of the related security. The Company has elected to write-off uncollectible accrued interest receivable balances in a timely manner, which is defined by the Company as when interest due becomes 90 days delinquent. The accrued interest write-off will be recorded by reversing interest income. Accrued interest receivable is recorded to prepaid expenses and other current assets. There have been no uncollectible accrued interest write-offs in the years ended December 31, 2025 or 2024. As of December 31, 2025 and 2024, the Company had investments of $ 40.1 million and $ 67.3 million, respectively. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and investments. The Company’s cash is invested through financial institutions in the U.S. The Company’s investments consist of debt securities, issued by highly rated corporate entities or the U.S. government. The Company’s exposure to any individual corporate entity is limited by its investment policy. Deposits have and will continue to exceed federally insured limits. The Company invests its cash equivalents in highly rated money market funds. Through December 31, 2025, the Company has not experienced any credit losses in such accounts. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash to the extent recorded on the balance sheets. Through December 31, 2025 , the Company has no off-balance sheet concentrations of credit risk. F- 10 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Government Contract In September 2022, the Company received a cost-reimbursement contract award under which the Company is eligible to receive up to $ 17.8 million from the U.S. National Institute of Allergy and Infectious Diseases (“NIAID”) to support preclinical, Phase 1 studies and other activities to enable advancement of epetraborole into late-stage development for acute systemic melioidosis and other biothreat pathogens. In April 2025, the Company entered into a contract modification with NIAID for a $ 0.5 million increase and term extension to an existing NIAID contract option. In June 2025, as part of a U.S. Government cost efficiency initiative under a 2025 Executive Order, the Company was notified that the NIAID will not exercise certain remaining options under the contract, resulting in a total $ 9.0 million reduction to the $ 18.3 million contract, for a total cumulative contract funding of up to $ 9.3 million. With the completion of pivotal work under the contract, including the manufacture of drug product, the Company is engaged with federal agencies to fund a Phase 2 proof-of-concept clinical trial for acute melioidosis. This project will be funded in whole with Federal funds from the NIAID, National Institutes of Health, and Department of Health and Human Services Contract No. 75N93022C00059. Accounting for this contract does not fall under ASC 606, Revenue from Contracts with Customers, as NIAID will not benefit directly from the advancement of epetraborole. As there was no authoritative guidance under U.S. GAAP on accounting for government assistance to for-profit business entities at the inception of the NIAID contract, the Company applied International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, by analogy when accounting for the NIAID contract payments to the Company. The Company has not yet adopted Accounting Standards Update 2025-10, which was announced in December 2025 to address accounting for government assistance to for-profit business entities (see Recent Accounting Pronouncements Not Yet Adopted). Under IAS 20, government contract proceeds are recognized when there is reasonable assurance the conditions of the contract will be met and the contract funding will be received. For the NIAID contract, this occurs after the qualifying expenses related to the contract have been incurred, or the Company concludes the conditions of the contract have been substantially met. The income related to the reimbursement of operating expenses is then recorded as a reduction of those expenses (see Note 4 - Funding Arrangements). Grant Agreements The Company recognizes grant proceeds from the Gates Foundation, formerly the Bill and Melinda Gates Foundation, in accordance with ASC 958-605, Not-for-Profit Entities - Revenue Recognition. When qualifying costs are incurred and the conditions of the grant agreement have been met, the Company records a reduction to the research and development expenses incurred and a corresponding grant receivable. Cash received from grants in advance of incurring qualifying costs is recorded as a liability and recognized as a reduction to the qualifying research and development expenses incurred (see Note 4 - Funding Arrangements). Comprehensive Loss Comprehensive loss includes net loss and certain changes in stockholders’ equity that are excluded from net loss. The Company’s other comprehensive loss consists of net changes in unrealized gains and losses on its available-for-sale investments. For the years ended December 31, 2025 and 2024 , the Company had an insignificant amount of net unrealized gain and $ 0.2 million of net unrealized loss on available-for-sale investments, respectively. F- 11 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Net Loss Per Share Ba sic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, stock options, unvested restricted stock units (“RSUs”), common stock subject to repurchase related to unvested early exercise of stock options, and shares committed under the Company’s 2022 Employee Stock Purchase Plan (“ESPP”) are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities. The Company also considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of early exercised shares subject to repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. In June 2025, the Company entered into exchange agreements with certain existing stockholders to exchange 2,952,000 shares of the Company’s common stock for pre-funded warrants (the “Warrants”) for an equivalent number of shares of common stock at a nominal exercise price of $ 0.00001 per share. The shares of common stock into which the Warrants may be exercised are considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration, they are fully vested and the Warrants are immediately exercisable upon their issuance date. Because the Company has reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share for those periods because the impact of potentially dilutive securities would be anti-dilutive. Restructuring Charges Restructuring charges consist primarily of employee severance payments and other employee termination-related expenses. The Company records restructuring charges based on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. The Company accounts for on-going benefit arrangements, such as those documented by employment agreements or a pre-existing severance policy, in accordance with ASC 712, Nonretirement Postemployment Benefits. Under ASC 712, liabilities for postemployment benefits are recorded at the time the obligations are probable of being incurred and can be reasonably estimated. The Company accounts for one-time employment benefit arrangements in accordance with ASC 420, Exit or Disposal Cost Obligations. JOBS Act Accounting Election The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. The Company may take advantage of these provisions for up to five years (which is through March 2027), unless the Company ceases to be an emerging growth company at an earlier date. As a result, these financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. F- 12 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments, replacing the treasury stock method with the if-converted method for calculation of diluted earnings per share, and removing certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. ASU 2020-06 was effective for annual periods beginning after December 15, 2023, but was not applicable to the Company at that time. The Company adopted ASU 2020-06 on June 17, 2025 using the modified retrospective method in connection with accounting for the pre-funded warrant exchange (See Note 8 – Equity, Issuance of Pre-Funded Warrants in Exchange for Common Stock). Adoption of this standard did no t have an impact on the Company's financial statements or net loss per share amounts. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025 , prospectively. Newly required disclosures have been included in Note 10 - Income Taxes. On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (the “OBBBA”), which includes several changes to U.S. federal income tax law, including the temporary and permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017. Adoption of the relevant provisions of the OBBBA did not have a material impact on the Company's financial statements and related disclosures. The Company will continue to monitor the impact of the OBBBA in future periods. Recent Accounting Pronouncements Not Yet Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise noted, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial statements and disclosures. As an emerging growth company, it has been the Company's intention to take advantage of certain temporary exemptions from various reporting requirements, as well as taking advantage of additional transitional relief. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense s (“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of this standard on its financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832) (“ASU 2025-10”), which adds guidance to ASC 832, Government Assistance, on the recognition, measurement, and presentation of government grants. ASU 2025-10 is effective for fiscal years, including interim reporting periods within those fiscal years, beginning after December 15, 2028 and may be adopted on a modified prospective or modified or full retrospective basis. Early adoption is permitted. The Company is evaluating the impact of this standard on its financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (“ASU 2025-11”), which clarifies guidance on interim reporting. ASU 2025-11 is effective for interim periods within annual reporting periods beginning after December 15, 2027 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of this standard on its financial statements and related disclosures. F- 13 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Note 3. Fair Value Measurements The Company adopted ASU 2016-13 beginning January 1, 2023. The Company records certain financial assets and liabilities at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: • Level 1: Inputs which include quoted prices in active markets for identical assets and liabilities. • Level 2: Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s primary financial instruments include cash, cash equivalents and investments, prepaid expenses, accounts payable, and accrued liabilities. The carrying amounts of the Company’s financial instruments, other than cash equivalents and investments, approximate fair value due to their relatively short maturities. The following table presents the Company’s financial assets, which consist of cash equivalents and investments classified as available-for-sale investments, that are measured at fair value on a recurring basis (in thousands): December 31, 2025 Level Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash equivalents: Money market funds Level 1 $ 7,104 $ — $ — $ 7,104 Commercial paper Level 2 547 — — 547 Short-term investments: U.S. Treasury securities Level 1 22,792 49 — 22,841 U.S. Treasury securities Level 2 3,956 8 — 3,964 Commercial paper Level 2 6,812 2 ( 4 ) 6,810 U.S. Government agency securities Level 2 487 1 — 488 Corporate debt securities Level 2 3,958 — ( 1 ) 3,957 Long-term investments: U.S. Treasury securities Level 1 1,506 2 — 1,508 Corporate debt securities Level 2 505 — — 505 Total $ 47,667 $ 62 $ ( 5 ) $ 47,724 F- 14 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued December 31, 2024 Level Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Cash equivalents: Money market funds Level 1 $ 10,127 $ — $ — $ 10,127 Short-term investments: U.S. Treasury securities Level 1 25,906 24 — 25,930 Commercial paper Level 2 30,842 11 ( 14 ) 30,839 U.S. Government agency securities Level 2 3,499 6 — 3,505 Corporate debt securities Level 2 1,991 2 — 1,993 Long-term investments: U.S. Treasury securities Level 1 5,019 2 — 5,021 Total $ 77,384 $ 45 $ ( 14 ) $ 77,415 The Company classifies its money market funds and U.S. Treasury securities, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy. The Company classifies its investments in commercial paper, corporate debt securities, U.S. government agency securities and U.S. Treasury securities as Level 2 within the fair value hierarchy. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. There were no transfers of financial instruments between valuation levels during the year ended December 31, 2025. As of December 31, 2025 , no ne of the Company’s available-for-sale investments that were in an unrealized loss position had been in an unrealized loss position for more than 12 months. During the years ended December 31, 2025 and 2024 , the Company did no t sell any available-for-sale investments. The Company’s short-term investments had maturities of less than one year from the balance sheet date. The Company’s long-term investments had maturities of between one and two years from the balance sheet date. The Company does not intend to sell the securities in an unrealized loss position and does not expect they will be required to sell the securities before recovery of the unamortized cost basis. Additionally, the Company evaluated its securities for credit losses and considered the decline in market value to be primarily attributable to current economic and market conditions and not credit related. Accordingly, no allowance for credit losses has been recognized as of December 31, 2025 and 2024. During the years ended December 31, 2025 and 2024, the Company did no t recognize any impairment losses related to investments. As of December 31, 2025 and 2024, the Company had accrued interest receivable of $ 0.4 million and $ 0.3 million, respectively, which was included in prepaid expenses and other current assets on the balance sheets. F- 15 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Note 4. Funding Arrangements NIAID Contract In September 2022, the Company received a cost-reimbursement contract award from the NIAID to support preclinical, Phase 1 studies and other activities to enable the advancement of epetraborole into late-stage development for acute systemic melioidosis and other biothreat pathogens. Under the original award, the Company was eligible to receive up to $ 17.8 million in funding over a total term of 48 months , consisting of a base period and seven option periods. In July 2023 and May 2024, the NIAID exercised two of seven available options under the NIAID contract (No: 75N93022C00059), resulting in an increase in committed contract funding of $ 0.7 million and $ 3.8 million, respectively, for a cumulative total of $ 8.8 million. In April 2025, the Company entered into a contract modification with NIAID for a $ 0.5 million increase and term extension to an existing NIAID contract option. In June 2025, as part of a U.S. government cost efficiency initiative under a 2025 Executive Order, the Company was notified that the NIAID will not exercise certain remaining options under the contract, resulting in a total $ 9.0 million reduction to the $ 18.3 million contract, for a cumulative contract total of $ 9.3 million. Funding for the exercised options extends the estimated completion of the current contract by 29 months beyond the base period of 18 mont hs to August 2026 . As of December 31, 2025 , a total of $ 9.3 million of funding has been committed. As of December 31, 2025 and 2024 , the Company had recorded a receivable of $ 0.5 million and zero , respectively, which was included in prepaid expenses and other current assets on the balance sheets. During the years ended December 31, 2025 and 2024 , the Company recorded $ 3.4 million and $ 1.8 million, respectively, under the NIAID contract as a reduction in research and development operating expenses. UGARF Grant In September 2022, the Company entered into a subcontract agreement with the UGARF to conduct preclinical activities on behalf of UGARF (“UGARF Agreement”). The UGARF reimburses the Company under an award from Wellcome. The Company received $ 1.4 million from the UGARF to support preclinical development of a boron-containing small molecule for Chagas disease. In July 2024, the Company signed an amendment to the UGARF Agreement for additional funding in the amount of $ 0.2 million. During the years ended December 31, 2025 and 2024 , the Company recorded no income and income of $ 0.2 million, respectively, as a reduction in research and development operating expenses under the UGARF Agreement. Gates Foundation Grant In September 2023, the Company received a cost-reimbursement contract award from the Gates Foundation, formerly the Bill and Melinda Gates Foundation (“2023 BMGF Agreement”), under which the Company was awarded $ 1.8 million to support the discovery of novel, boron containing small molecules for the treatment of tuberculosis and malaria. The Company is required to apply the funds it receives under the 2023 BMGF Agreement solely toward direct costs related to this research program. The Company received $ 1.0 million of funding in advance and tracks and reports eligible expenses incurred to the Gates Foundation. In April 2024, the Company received $ 0.8 million in funding, making the grant fully funded. In September 2024, the Company entered into a second-year continuation cost-reimbursement contract award with the Gates Foundation (“2024 BMGF Agreement”), under which the Company was awarded $ 2.0 million to support an early-stage research program focused on delivering novel leads as starting points for new drugs that can be combined to deliver shorter, safer and simpler TB drug regimens. The Company is required to apply the funds it receives under the 2024 BMGF Agreement solely toward direct costs related to this research program. The Company received $ 1.1 million of funding in advance and tracks and reports eligible expenses incurred to the Gates Foundation. Any unspent funds and any funds spent that have not yet been incurred are recorded as part of other current liabilities on the balance sheets. In September 2025, the Company entered into a third-year continuation cost-reimbursement contract award with the Gates Foundation, formerly the Bill and Melinda Gates Foundation, (“2025 GF Agreement” ), under which the Company was awarded $ 1.9 million to support an early-stage research program focused on delivering an optimized lead compound for clinical development that can be combined with other compounds to deliver shorter, safer and simpler TB drug regimens. The Company is required to apply the funds it receives under the 2025 GF Agreement solely toward direct costs related to this research program. Any unspent funds and any funds spent that have not yet been incurred are recorded as part of other current liabilities on the balance sheets. F- 16 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued As of December 31, 2025 and 2024 , the Company recorded $ 1.2 million and $ 0.8 million, respectively, to other current liabilities on the balance sheets. During the year ended December 31, 2025 , the Company recorded income of $ 0.3 million as a reduction in research and development operating expenses under the 2025 GF Agreement. During the years ended December 31, 2025 and 2024 , the Company recorded income of $ 1.5 million and $ 1.7 million, respectively, as a reduction in research and development operating expenses under the 2024 and 2023 BMGF Agreements. Note 5. Collaboration and License Agreements Anacor Licensing Agreement In November 2019, the Company entered into an exclusive worldwide license agreement with Anacor Pharmaceuticals, Inc. (“Anacor”) for certain compounds and other intellectual property controlled by Anacor for the treatment, diagnosis, or prevention of all human diseases (the “Anacor License”). The Anacor License will expire upon expiration of the last to expire royalty term. Either party may terminate the Anacor License for the other party’s material breach following a cure period or immediately upon certain insolvency events relating to the other party. The Company has the right to terminate the agreement at its convenience upon 90-day written notice until the first regulatory approval or one-year notice thereafter. Furthermore, upon termination of the Anacor License for any of the foregoing reasons, the rights and licenses within will terminate. In exchange for the worldwide, sublicensable, exclusive right and licenses to develop, manufacture, and commercialize the specified compounds, the Company paid Anacor a non-refundable $ 2.0 million upfront payment and granted Anacor shares of Series A redeemable convertible preferred stock. The Company agreed to make further payments to Anacor upon achievement of various development milestones for an aggregate maximum of $ 2.0 million, upon achievement of various commercial and sales threshold milestones for an aggregate maximum payment of $ 125.0 million, and up to 50 % of royalties received under certain sublicensing arrangements. Royalties are subject to certain customary reductions, including lack of patent coverage and generic product entry. The Company also agreed to pay Anacor non-refundable, non-creditable sales royalties on a tiered marginal royalty rate based on the country’s status as a developing or developed country as defined in the license agreement. Sales royalties are a percentage of net sales, as specified in the Anacor License, and range from mid-single digits for developing countries (as classified by the World Bank) and single to mid-teens for all other countries or the China, Hong Kong, Taiwan, and Macau territories, upon reaching a minimum of net sales in the low-teen millions. The sales royalties are required to be paid on a product-by-product and country-by-country basis, until the latest to occur of 15 years following the date of first commercial sale of a product, the expiration of all regulatory or data exclusivity, or the date upon of the expiration of the last to expire valid claim of a licensed patent covering such product in such country. Currently, the date of the expiration of the last to expire valid claim of a licensed patent covering epetraborole in the licensed territory is June 2028. In addition, Anacor is entitled to certain milestone payments upon a change of control of the Company. In December 2021, the Company entered into an amendment to the Anacor License for certain compounds and other intellectual property controlled by Anacor for the treatment, diagnosis, or prevention of certain bacterial pathogens (the “Anacor License Amendment”). The Anacor License Amendment has no impact on the Anacor License financial terms. None of the development, regulatory, commercial or sales milestones or royalty payments were recognized during the years ended December 31, 2025 and 2024. F- 17 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Brii Biosciences Agreement In November 2019, the Company entered into a license agreement granting Brii Biosciences Limited the exclusive development and commercialization rights of certain compounds in China, Hong Kong, Taiwan, and Macau for the treatment of human diseases. The Company did no t receive an upfront payment but is eligible to receive up to $ 15.0 million in the aggregate for development and regulatory milestones and up to $ 150.0 million in commercial milestones upon achieving sales thresholds. The Company is also entitled to tiered mid-single digits to high-first decile percentage sales-based royalties. The sales royalties are required to be paid on a product-by-product and region-by-region basis, until the latest to occur of 15 years following the date of first commercial sale of a product, the expiration of all regulatory or data exclusivity, or the date upon the expiration of the last to expire claim of a licensed patent covering the composition of matter or approved use of such product in such region. The last to expire valid claim of a licensed patent covering the composition of matter or approved use of such product in the licensed territory is June 2028. Future milestone payments and royalties will be accounted for under ASC 606. Note 6. Balance Sheet Components Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, December 31, 2025 2024 Accrued research and development-related expenses $ 1,650 $ 1,974 Accrued clinical trial-related expenses 268 2,377 Accrued professional services expenses 84 52 Other 50 51 Total accrued liabilities $ 2,052 $ 4,454 Note 7. Commitments and Contingencies Contingencies From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings as of December 31, 2025 and 2024, and the Company is not currently a party to any legal proceeding that, if determined adversely to the Company, in management’s opinion, is currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, financial condition or results of operations taken as a whole. Guarantees and Indemnifications The Company, as permitted under Delaware law and in accordance with its certification of incorporation, as amended, and bylaws, and pursuant to indemnification agreements with certain of its officers and directors, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, which the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director and officer liability insurance. This insurance limits the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented. F- 18 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Adjuvant Global Health Agreement In conjunction with Adjuvant Global Health Technology Fund L.P.’s (“Adjuvant”) investment in the Company in 2019 and 2020, the Company entered into a Global Health Agreement with Adjuvant, pursuant to which the Company agreed to support the creation of innovative and affordable drugs to treat disease, through public health programs and private purchasers in Low and Lower-Middle-Income Countries (as such terms are defined by the World Bank and in the agreement). Adjuvant’s investment supports the development of the Company’s product candidate, epetraborole, for use in melioidosis-endemic and melioidosis-at-risk countries and in tuberculosis-endemic and tuberculosis-at-risk countries, as defined in the agreement as amended and restated. These global access commitments will remain in effect until the latter of either that Adjuvant ceases to be a shareholder of the Company, or ten years following epetraborole approval for the treatment of melioidosis by a regulatory authority. The Global Health Agreement contains various affirmative and negative covenants agreed to by the Company, including its use of reasonably diligent endeavors to develop the agreed-upon products using non-dilutive funding and make accessible to people in need in the target countries so long as the Company does not sell products at a loss. Other covenants include prohibition of use of investment for propaganda, attempt to influence legislation, influence of any public election or voter registration drive or promotion of terrorist activities, as well as compliance with certain environmental, social and governance requirements and anti-corruption requirements. Note 8. Equity Common Stock The Company’s certificate of incorporation, as amended, authorizes the Company to issue up to 500,000,000 shares of $ 0.00001 par value common stock. Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders of the Company. Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board. No dividends have been declared to date. In April 2023, the Company entered into a Sales Agreement with Cowen and Company, LLC as the Company’s Agent, to issue and sell up to an aggregate gross sales of $ 100.0 million in Shares of the Company’s common stock through the ATM Offering. During the year ended December 31, 2023, the Company issued and sold 2,502,000 shares of common stock under the ATM Offering, resulting in net proceeds of $ 19.1 million, after deducting commissions and other offering costs. The Company did no t sell any shares of common stock through the ATM Offering during the years ended December 31, 2025 or 2024. In August 2023, the Company entered into an Underwriting Agreement with Cowen and Company, LLC, Leerink Partners LLC and Evercore Group L.L.C. as representatives of several underwriters to issue and sell 7,777,778 shares of common stock at an offering price of $ 9.00 per share through the Underwritten Offering, resulting in net proceeds of $ 65.5 million, after deducting commissions and other offering costs. Shares of common stock reserved for future issuance, on an as-if-converted basis, as of December 31, 2025 and 2024, consists of the following: December 31, December 31, 2025 2024 Stock options, issued and outstanding 5,466,222 4,890,843 Pre-funded warrants 2,952,000 — Unvested restricted stock units 856,160 516,511 ESPP, authorized for future issuance 775,882 563,731 Stock options, authorized for future issuance 783,106 859,841 Total 10,833,370 6,830,926 F- 19 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Preferred Stock The Company’s certificate of incorporation, as amended, authorizes the Company to issue up to 10,000,000 shares of $ 0.00001 par value preferred stock. The preferred stock is not convertible. No shares of preferred stock were issued and outstanding at December 31, 2025 and 2024. Shareholder Rights Plan In August 2024, the Company entered into a Rights Agreement between the Company and Equiniti Trust Company, LLC as Rights Agent (as amended from time to time, the “Rights Agreement"), which was previously approved by the Board. In connection with the Rights Agreement, a dividend was declared of one preferred stock purchase right (individually, a “Right” and collectively, the “Rights”) for each share of the common stock, par value $ 0.00001 per share, of the Company outstanding at the close of business on August 29, 2024 (the “Record Date”). Each Right entitles the registered holder thereof, after the Rights become exercisable and until August 15, 2025 (or the earlier redemption, exchange or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.00001 per share (the “Series A Preferred”), of the Company at a price of $ 6.50 per one one-thousandth of a share of Series A Preferred, subject to adjustment. The Rights are not exercisable until the Distribution Date (as defined in the Rights Agreement”) and the Rights expired on August 15, 2025 , subject to the Company’s right to extend such date, unless earlier redeemed or exchanged by the Company or terminated. Additional information regarding the Rights Agreement is contained in a Current Report on Form 8-K filed with the SEC. The adoption of the Shareholder Rights Plan had no impact on the financial position of the Company. The Shareholder Rights Plan expired on August 15, 2025. Issuance of Pre-Funded Warrants in Exchange for Common Stock In June 2025, the Company entered into exchange agreements with certain existing stockholders pursuant to which the stockholders exchanged an aggregate of 2,952,000 shares of the Company’s common stock for Warrants to purchase up to an equivalent number of shares of common stock. Each Warrant has an exercise price of $ 0.00001 per share and does not have an expiration date. The Warrants include a beneficial ownership limitation that restricts the holder from exercising any portion of the Warrant to the extent that, following such exercise, the holder would own more than 9.99 % of the Company’s outstanding common stock. The ownership limitation may be increased by the holder to up to 19.99 % upon 61 days’ prior written notice to the Company. The exchange transactions were completed pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended, and no cash consideration was received by the Company. As there was no cash consideration and the exchange involved equity instruments, the transactions were accounted for as an equity-for-equity exchange with no gain or loss recognized. The Warrants meet the criteria for equity classification under ASC 815-40, because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, and (v) are indexed to the Company’s common stock. Accordingly, the transfer of common stock for warrants were recorded in additional paid-in capital within stockholders’ equity. The Company valued the Warrants at issuance, concluding that the closing stock price on the transaction close dates approximated their fair value. As of December 31, 2025 , all 2,952,000 shares under Warrants remained outstanding for the purposes of computing earnings per share and the Warrants remain unexercised. F- 20 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Note 9. Equity Incentive Plan and Stock-Based Compensation 2022 Equity Incentive Plan The Company adopted the 2022 Equity Incentive Plan (the “2022 Plan”) effective upon the closing of the IPO, which provides for the granting of incentive stock options (“ISOs”) to the Company's employees, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other forms of awards to employees, directors, and consultants. As of December 31, 2025 , no stock appreciation rights or performance awards were issued. The Company initially reserved for issuance 1,870,000 new shares of common stock pursuant to the 2022 Plan. The Company’s 2017 Equity Incentive Plan (the “2017 Plan”) was terminated in 2022; however, shares underlying outstanding stock awards granted under the 2017 Plan will continue to be governed by the 2017 Plan. Shares available under the 2017 Plan were added to the available shares in the 2022 Plan. Shares underlying outstanding stock awards granted under the 2017 Plan that expire or are repurchased by, forfeited to, cancelled or withheld by the Company will also be reserved for issuance under the 2022 Plan. The initial number of shares of the Company’s common stock that may be issued under the 2022 Plan will not exceed 4,423,920 shares of the Company's common stock, which is the sum of (i) 1,870,000 new shares, plus (ii) 2,553,920 shares related to the 2017 Plan. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2022 Plan will automatically increase on January 1 of each year for a period of ten years , beginning on January 1, 2023 and continuing through January 1, 2032, in an amount equal to (1) 4 % of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year, or (2) a lesser number of shares determined by the Company's board of directors no later than December 31 of the immediately preceding year. Accordingly, effective January 1, 2025, the number of shares in the 2022 Plan increased by 1,196,785 shares, representing 4 % of the prior yearend’s common stock outstanding . The maximum number of shares of the Company's common stock that may be issued on the exercise of stock options or vesting of RSUs and RSAs under the 2022 Plan is 13,271,760 shares. Since the date of incorporation and through December 31, 2025, the Company issued stock options, RSUs and RSAs to its employees, directors and consultants. As of December 31, 2025 , 783,106 shares of common stock remained available for future issuance under the 2022 Plan. ISOs granted to newly hired employees under the 2022 Plan generally vest 25 % after the completion of 12 months of service, and the balance vests in equal monthly installments over the next 36 months of service and expire ten years from the grant date, unless subject to provisions regarding 10% stockholders. ISOs granted to existing employees generally vest ratably over a 48 -month period of service and expire ten years from the grant date. NSOs vest in accordance with the terms of the specific agreement under which the options were provided and expire ten years from the date of grant. RSUs granted to employees generally vest annually over a two to four year period of service and expire ten years from the grant date. RSAs granted to non-employees generally vest at the time of grant and expire ten years from the grant date. Stock-Based Compensation Expense The following table summarizes the components of stock-based compensation expense recognized in the Company’s statements of operations and comprehensive loss during the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Research and development expenses $ 2,422 $ 3,798 General and administrative expenses 3,824 4,540 Total $ 6,246 $ 8,338 F- 21 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Valuation of Stock Options The Company estimated the fair value of stock options using the Black-Scholes option pricing model. The fair value of employee and non-employee stock options is being amortized on the straight-line basis over the requisite service period of the awards. The Black-Scholes option pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. These assumptions include: • Expected Term—The expected term represents the period that stock-based awards are expected to be outstanding. The expected term for option grants is determined using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual term of the stock-based awards. • Expected Volatility—Through November 2025, the Company used 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 its expected future stock price volatility, as the Company had limited trading history for its common stock. Beginning in December 2025, after sufficient historical trading data of the Company’s own common stock on the Nasdaq Global Market became available, the Company adopted a blended volatility methodology that combines its historical volatility with that of a peer group, weighing the volatility of its peer group for the amount of time prior to the March 2022 IPO so that the blended volatility term equals the expected term of the related stock-based award. The comparable companies were chosen based on their similar size, stage in the life cycle and area of specialty. For each grant, historical volatility is measured over a period equivalent to the expected term. • Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero-coupon issues in effect at the time of grant for periods corresponding with the expected term of option. • Expected Dividend Rate— The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero . The following weighted average assumptions were used to value options granted during the periods indicated: Year Ended December 31, 2025 Year Ended December 31, 2024 Expected term 6.20 years 5.94 years Expected volatility 109.0 % 110.6 % Risk-free interest rate 4.15 % 4.28 % Expected dividend yield — — Stock Option Activity A summary of the stock plan activity is as follows: Total Options Outstanding Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2024 4,890,843 $ 8.23 6.66 $ 330 Granted 1,216,313 1.14 Exercised ( 63,124 ) 0.42 Forfeited/expired ( 577,810 ) 9.93 Vested and expected to vest at December 31, 2025 5,466,222 $ 6.56 7.21 $ 170 Exercisable as of December 31, 2025 3,753,523 $ 7.93 6.63 $ 153 F- 22 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued As of December 31, 2025 , there was unrecognized stock-based compensation expense of $ 4.0 million related to unvested stock options which the Company expects to recognize over a weighted-average period of 1.8 years. Forfeited/expired options includes 77,379 prior forfeitures now expected to vest due to modifications related to the 2024 workforce reduction. Weighted-average grant-date fair value of the options granted during the year ended December 31, 2025 was $ 0.97 per share. RSU Activity RSUs entitle the holder to receive shares of the Company’s common stock upon vesting. The fair value of RSUs is based upon the closing sales price of the Company’s common stock on the grant date. A summary of the RSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Unvested at December 31, 2024 516,511 $ 2.54 Issued 588,371 1.14 Vested and released ( 295,368 ) 2.12 Forfeited 46,646 2.38 Unvested at December 31, 2025 856,160 $ 1.72 As of December 31, 2025 , there was unrecognized stock-based compensation expense of $ 0.9 million related to unvested restricted stock units which the Company expects to recognize over a weighted-average period of 2.3 years. Forfeited RSUs includes 51,840 prior forfeitures now expected to vest due to modifications related to the 2024 workforce reduction. 2022 Employee Stock Purchase Plan The Company’s 2022 Employee Stock Purchase Plan (“ESPP”) has two components: a component that is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to qualify (the “Non-423 Component”). The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15 % of their eligible compensation. At the end of each offering period, employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. Subject to adjustment in the case of certain capitalization events, 187,000 shares of the Company’s common stock were available for purchase at the adoption of the ESPP. Pursuant to the ESPP, the annual share increase pursuant to the evergreen provision is determined based on the least of (i) 1 % of the Company’s common stock outstanding as of December 31 of the immediately preceding year, (ii) 561,000 shares, or (iii) such number of shares as determined by the Board. Accordingly, effective January 1, 2025, the number of shares in the ESPP increased by 299,196 shares, representing 1 % of the prior year-end’s common stock outstanding . As of December 31, 2025 , 775,882 shares of common stock remained available for issuance under the ESPP. During the years ended December 31, 2025 and 2024 , the Company recognized zero and $ 0.1 million, respectively, in stock-based compensation expense related to the ESPP. Note 10. Income Taxes The Company is liable for income taxes in the U.S. For the years ended December 31, 2025 and 2024 , the Company did not have any income for income tax purposes and therefore, no tax liability or expense has been recorded in these financial statements. F- 23 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued The reconciliation of the effective income tax rate to the U.S. statutory rate is as follows (in thousands): December 31, 2025 Federal tax benefit at statutory rate $ ( 7,387 ) 21.0 % State and local income taxes, net of federal tax effect (a) ( 6,478 ) 18.4 % Changes in valuation allowance 7,960 ( 22.6 %) Tax Credits Research and development tax credits ( 718 ) 2.0 % Nontaxable or nondeductible items 84 ( 0.2 %) Changes in unrecognized tax benefit 6,539 ( 18.6 %) Effective Tax Rate $ — 0.0 % (a) The Company’s state income tax benefit for the current period is primarily attributable to California, which represents the Company’s principal state tax jurisdiction. The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate to the actual global effective income tax rate for the year ended December 31, 2024: December 31, 2024 Statutory rate $ ( 10,777 ) 21.0 % Stock-based compensation 360 ( 0.7 %) State taxes, net of the federal tax benefit ( 3,892 ) 7.6 % R&D credit benefit ( 1,980 ) 3.9 % Change in valuation allowance 16,289 ( 31.8 %) Effective Tax Rate $ — 0.0 % Recognition of deferred tax assets is appropriate when realization of such assets is more likely than not. Based upon the weight of available positive and negative evidence, which includes the Company’s historical operating performance and the U.S. cumulative net losses in all prior periods, the Company has provided a valuation allowance against its U.S. deferred tax assets. The valuation allowance decreased by $ 2.4 million from December 31, 2024 to December 31, 2025 due to reduction in historical state net operating losses. Deferred income taxes reflect the net tax effects of losses, credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the Company’s deferred tax assets are as follows (in thousands): December 31, 2025 2024 Deferred tax assets Net operating loss carryforwards $ 28,809 $ 28,682 Capital research expenditures 14,796 18,308 Tax credit carryforwards 7,727 6,788 Stock-based compensation 4,186 4,324 Other 228 5 Gross deferred tax assets 55,746 58,107 Valuation allowance ( 55,746 ) ( 58,107 ) Net deferred tax assets $ — $ — As of December 31, 2025 , the Company had $ 127.4 million of federal and $ 126.5 million of state net operating loss available to offset future taxable income. The federal net operating loss carryforwards do not expire. The state net operating loss carryforwards begin to expire in 2037 . The Company also has federal and California state research and development credits of $ 7.6 million and $ 2.6 million, respectively. The federal tax credit carryforwards will expire in 2041 if not utilized. The state tax credit carryforwards do not expire. F- 24 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Utilization of the net operating loss carryforwards is subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. A Section 382 ownership change generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. The Company is not currently in a taxable position and no net operating loss carryforwards or credits have been used to date. As of December 31, 2025 and 2024 , the Company has unrecognized tax benefits of $ 10.5 million and $ 2.1 million, respectively. As of December 31, 2025 , the total amount of unrecognized tax benefits would not affect the effective tax rate, if recognized, due to the valuation allowance that currently offsets deferred tax assets. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2025 and 2024 was as follows (in thousands): Year Ended December 31, 2025 2024 Balance at beginning of year $ 2,083 $ 1,461 Additions related to prior year positions 8,200 — Additions related to current year positions 249 622 Balance at end of year $ 10,532 $ 2,083 The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the statements of operations. Accrued interest and penalties are included within the related tax liability line in the balance sheet. No accrued interest and penalties have been recorded through December 31, 2025. The Company files income tax returns in the U.S. federal jurisdiction and California, Illinois, New York, South Carolina and Virginia state jurisdictions. The Company is not currently under audit by the Internal Revenue Service or other similar state or local authorities. Carryover attributes beginning December 31, 2022 and December 31, 2021, respectively, remain open to adjustment by the U.S. and state taxing authorities to which the Company is subject. The Company did no t have any significant income taxes paid or refunds received from any jurisdiction for the years ended December 31, 2025 or 2024 . Note 11. Net Loss Per Share The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except for per share amounts): Year Ended December 31, 2025 2024 Numerator: Net loss attributable to common stockholders $ ( 35,174 ) $ ( 51,321 ) Denominator: Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted 30,215,747 29,828,227 Net loss per share attributable to common stockholders, basic and diluted $ ( 1.16 ) $ ( 1.72 ) F- 25 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: December 31, 2025 2024 Options issued and outstanding 5,466,222 4,890,843 Unvested RSUs 856,160 516,511 Estimated shares issuable under the ESPP 31,200 39,228 Total 6,353,582 5,446,582 In June 2025, the Company entered into exchange agreements with certain existing stockholders to exchange 2,952,000 shares of the Company’s common stock for Warrants for an equivalent number of shares of common stock at a nominal exercise price of $ 0.00001 per share. The shares of common stock into which the Warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, they are fully vested and the Warrants are immediately exercisable upon their issuance date. Note 12. Restructuring Charges On August 8, 2024, the Company announced a reduction of approximately 50 % of the Company's workforce, which was approved by the Board in connection with the Company’s planned restructuring following discontinuation of the EBO-301 study and to further extend the Company’s operating capital. In connection with the workforce reduction, the Company recognized severance and other charges of $ 2.2 million for the year ended December 31, 2024, primarily related to severance payments and other employee termination-related expenses. The severance and other charges were recorded to restructuring charges on the statements of operations and comprehensive loss. The workforce reduction was complete by the end of 2024 . Cash payments for severance and other charges of $ 2.2 million were made in the year ended December 31, 2024 . Note 13. Segment Reporting The Company operates and manages its business as one reportable and operating segment. The determination of a single operating segment is consistent with the financial information regularly provided to the Company’s chief operating decision maker (the “CODM”). The Company's chief executive officer , who is the CODM, assesses performance for the single segment and decides how to allocate resources based on net loss that also is reported on the statements of operations and comprehensive loss. The monitoring of budgeted versus actual results are used in assessing performance of the segment, and making operating decisions, allocating resources, and planning and forecasting for future periods. The measure of segment assets is reported on the balance sheets as total assets. In addition to the significant expense categories included within net loss presented on the statements of operations and comprehensive loss, see below for disaggregated amounts that comprise research and development expenses: Year Ended December 31, 2025 2024 External research and development expenses: Other external research and development (1) $ 10,615 $ 6,911 Clinical trials expenses 2,783 15,626 Consulting and outside services 2,400 4,707 Total external research and development expenses 15,798 27,244 Internal research and development expenses: Personnel-related expenses 8,971 13,244 Total research and development expenses $ 24,769 $ 40,488 (1) Chemistry manufacturing controls, research and preclinical studies and other miscellaneous expenses. F- 26 AN2 Therapeutics, Inc. Notes to Financial Statements — Continued Note 14. Related Party Transactions During the year ended December 31, 2025, other than the addition of an existing stockholder who participated in the pre-funded warrant transaction as disclosed in Note 8, there were no additional material related party transactions. During the year ended December 31, 2024 , there were no material related party transactions . Note 15. Subsequent Events On March 8, 2026, the Company 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 the Company may receive upon exercise of the pre-funded warrants (the “Private Placement”.) The Private Placement closed on March 10, 2026 . F- 27